Office Max announced the completion of an internal investigation into its accounting for vendor income in prior periods.
As a result of the investigation, and as previously announced, the company expects to restate quarterly income for each of the first three fiscal quarters of 2004.
The investigation began in December 2004 and was conducted under the direction of the company's audit committee. Subject to final review by the company's auditors, OfficeMax currently estimates that it overstated operating income in first quarter 2004 by approximately $7 million and understated operating income by approximately $1 million in each of the second and third quarters of 2004. The cumulative net operating income overstatement for the first nine months of 2004 is estimated to be approximately $4 to $5 million. Accordingly, the company expects to restate quarterly income for each of the first three fiscal quarters of 2004 and believes that its previously issued interim statements of operating results for those periods should no longer be relied upon.
OfficeMax believes that its financial statements as of and for the year ended December 31, 2003, were not materially impacted.
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