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Financial Release

OfficeMax Reports First Quarter 2009 Financial Results
    - First Quarter Net Income of $13.1 Million, or $0.17 Per Diluted Share

    - Adjusted Net Income of $17.4 Million, or $0.23 Per Diluted Share

    - Total Sales Decreased 17% to $1,911.7 Million

NAPERVILLE, Ill., April 30 /PRNewswire-FirstCall/ -- OfficeMax Incorporated (NYSE: OMX) today announced the results for its first quarter ended March 28, 2009. Total sales decreased 17.0% in the first quarter of 2009 to $1,911.7 million compared to the first quarter of 2008. Net income (available to OfficeMax common shareholders) decreased in the first quarter of 2009 to $13.1 million, or $0.17 per diluted share, from $62.4 million, or $0.81 per diluted share in the first quarter of 2008.

Sam Duncan, Chairman and CEO of OfficeMax, said, "Although our financial results declined in the first quarter versus the prior year period, we continued to make improvements to our business and to contain costs. We believe the actions we have been taking significantly benefited our company's performance this quarter. We improved Retail segment operating expense as a percentage of sales compared to the first quarter of 2008 as a result of reorganizing our management, more efficient execution, and tighter cost controls. Our efforts to streamline our business are enabling us to operate profitably and preserve cash and liquidity to carry us through this very challenging economic environment."

Results for the first quarter of 2009 and 2008 included certain charges and income that are not considered indicative of core operating activities. First quarter 2009 results included a $9.9 million pre-tax charge related to Retail store closures in the U.S. and Mexico, and a pre-tax benefit of $2.5 million recorded as other income related to tax distributions from the company's investment in Boise Cascade, L.L.C. First quarter 2008 results included a pre-tax $20.5 million benefit recorded as other income related to tax distributions from the company's investment in Boise Cascade, L.L.C., which was partly offset by a $4.2 million pre-tax charge related to the consolidation of manufacturing facilities in New Zealand and employee severance for restructuring the Retail field and ImPress print and document services management organization.

Excluding the items described above, adjusted net income in the first quarter of 2009 was $17.4 million, or $0.23 per diluted share, compared to adjusted net income of $52.6 million, or $0.68 per diluted share in the first quarter of 2008.

The company has calculated adjusted income and earnings per share which are non-GAAP financial measures that exclude the effect of certain charges and income described in footnotes to the accompanying financial statements. A reconciliation to the company's GAAP financial results is included in this press release.

Contract Segment Results

OfficeMax Contract segment sales decreased 22.4% (15.4% after adjusting for the foreign currency exchange impact) to $927.6 million in the first quarter of 2009 compared to the first quarter of 2008, reflecting a U.S. Contract operations sales decline of 18.9%, and an International Contract operations sales decline of 30.1% in U.S. dollars (a sales decrease of 7.6% in local currencies). U.S. Contract sales in the first quarter reflect weaker sales from existing corporate accounts and our continued discipline in account acquisition.

Contract segment gross margin decreased to 21.0% in the first quarter of 2009 from 22.7% in the first quarter of 2008, primarily due to softer market conditions and a sales mix shift to a higher percentage of lower-margin consumable items. Contract segment operating expense as a percentage of sales increased to 18.7% in the first quarter of 2009 from 17.5% in the first quarter of 2008, primarily due to deleveraging of fixed operating expenses from lower sales. Contract segment adjusted operating income decreased to $21.5 million, or 2.3% of sales, in the first quarter of 2009 compared to adjusted operating income of $62.0 million, or 5.2% of sales, in the first quarter of 2008.

Retail Segment Results

OfficeMax Retail segment sales decreased 11.2% to $984.1 million in the first quarter of 2009 compared to the first quarter of 2008, reflecting a same-store sales decrease of 12.7%, partially offset by sales from new stores. Retail same-store sales for the first quarter of 2009 declined across all major product categories primarily due to weaker small business and consumer spending.

Retail segment gross margin decreased to 27.5% in the first quarter of 2009 from 28.5% in the first quarter of 2008, primarily due to deleveraging of fixed occupancy costs from the same-store sales decrease and new stores, and a sales mix shift to a higher percentage of lower-margin technology category sales, partially offset by improved margins on certain products. Retail segment operating expense as a percentage of sales was 24.9% in the first quarter of 2009 compared to 25.7% in the first quarter of 2008, and reflects reduced payroll, targeted cost controls, and reduced depreciation expense as a result of store impairment charges incurred in 2008; partially offset by deleveraging of fixed operating expenses from lower sales. Retail segment adjusted operating income decreased to $25.3 million, or 2.6% of sales, in the first quarter of 2009 from adjusted operating income of $31.2 million, or 2.8% of sales, in the first quarter of 2008.

OfficeMax ended the first quarter of 2009 with a total of 1,020 retail stores, consisting of 939 retail stores in the U.S. and 81 retail stores in Mexico. During the first quarter of 2009, OfficeMax opened 6 retail stores in the U.S., and closed 6 stores in the U.S. and 2 in Mexico. For the full year 2009, OfficeMax expects to open up to 12 retail stores, and to close between 15 and 25 retail stores.

Corporate and Other Segment Results

The OfficeMax Corporate and Other segment includes support staff services and certain other expenses that are not fully allocated to the Retail and Contract segments. Corporate and Other segment operating expense was $9.4 million in the first quarter of 2009.

Balance Sheet and Cash Flow

As of March 28, 2009, OfficeMax had total debt of $342.2 million, excluding $1,470.0 million of timber securitization notes, which have recourse limited to the timber installment notes receivable and related guarantees. As of March 28, 2009, OfficeMax had $149.3 million in cash and cash equivalents, and $486 million in available (unused) borrowing capacity under its $700 million revolving credit facility. The company's unused borrowing capacity as of March 28, 2009 reflects an available borrowing base of $551 million, no outstanding borrowings, and $65 million of letters of credit issued under the revolving credit facility.

During the first quarter of 2009, OfficeMax generated $3.1 million of cash from operations, a decrease from the first quarter of 2008 primarily due to lower net earnings and the timing and associated decrease of payables and accruals, mitigated by reduced inventory levels. OfficeMax invested $10.9 million for capital expenditures in the first quarter of 2009 compared to $33.3 million in the first quarter of 2008. OfficeMax expects capital expenditures for full year 2009 to be in the range of $50 million to $70 million.

Outlook

In the near-term, April sales trends, including the negative impact of the timing of the Easter holiday, are more unfavorable compared to the first quarter trends. With respect to the full year, given the projected weak economic outlook, OfficeMax remains cautious in its expectations for 2009. The company expects sales to decline in 2009 on a year-over-year basis as a result of the difficult economic environment. In addition, the company is cycling significant expense reductions completed in 2008. As a result of these factors, and based on the current outlook, OfficeMax expects continued deleveraging of costs and expenses for the remainder of 2009.

Mr. Duncan concluded, "We are committed to placing OfficeMax in a stronger position for when the macro economy and industry trends improve. To do this, we are executing important initiatives that are centered on three key areas: growth, differentiation, and productivity. Further, we are strictly managing capital and we remain confident in our ability to generate positive cash flow for the year. We believe that all of our efforts will help us navigate the current environment and strengthen our business for the long-term."

Forward-Looking Statements

Certain statements made in this press release and other written or oral statements made by or on behalf of the company constitute "forward-looking statements" within the meaning of the federal securities laws, including statements regarding the company's future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future. Management believes that these forward-looking statements are reasonable. However, the company cannot guarantee that future events will not impact the company's access to cash or the funds available under its revolving credit facility, or that its actual results will be consistent with the forward-looking statements and you should not place undue reliance on them. These statements are based on current expectations and speak only as of the date they are made. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. Important factors regarding the company which may cause results to differ from expectations are included in the company's Annual Report on Form 10-K for the year ended December 27, 2008, under Item 1A "Risk Factors", and in the company's other filings with the SEC.

Conference Call Information

OfficeMax will host a webcast and conference call with analysts and investors to review its first quarter 2009 financial results today at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). The live audio webcast of the conference call can be accessed via the Internet by visiting the OfficeMax website at http://investor.officemax.com. The webcast will be archived and available online for one year following the call and will be posted on the "Presentations" page located within the "Investors" section of the OfficeMax website.

About OfficeMax

OfficeMax Incorporated (NYSE: OMX) is a leader in both business-to-business office products solutions and retail office products. The OfficeMax mission is simple. We help our customers do their best work. The company provides office supplies and paper, in-store print and document services through OfficeMax ImPress(R), technology products and solutions, and furniture to consumers and to large, medium and small businesses. OfficeMax customers are served by over 30,000 associates through direct sales, catalogs, e-commerce and more than 1,000 stores. To find the nearest OfficeMax, call 1-877-OFFICEMAX. For more information, visit www.officemax.com.


    Media Contact     Investor Contacts
    Bill Bonner       Mike Steele           Tony Giuliano
    630 864 6066      630 864 6826          630 864 6820


                   OFFICEMAX INCORPORATED AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                                 (unaudited)
                                 (thousands)

                                                 March 28,     December 27,
                                                   2009            2008
                                                   ----            ----

    ASSETS
    Current assets:
      Cash and cash equivalents                 $149,255        $170,779
      Receivables, net                           573,873         566,846
      Inventories                                815,612         949,401
      Deferred income taxes and receivables      108,609         105,140
      Other current assets                        65,446          62,850
                                                  ------          ------
        Total current assets                   1,712,795       1,855,016

    Property and equipment:
      Property and equipment                   1,279,063       1,289,279
      Accumulated depreciation                  (811,459)       (798,551)
                                                --------        --------
        Property and equipment, net              467,604         490,728

    Intangible assets, net                        81,378          81,793
    Timber notes receivable                      899,250         899,250
    Deferred income taxes                        430,557         436,182
    Other non-current assets                     403,236         410,614
                                                 -------         -------

        Total assets                          $3,994,820      $4,173,583
                                              ==========      ==========

    LIABILITIES AND EQUITY
    Current liabilities:
      Current portion of debt                    $54,088         $64,452
      Income taxes payable                        15,077          18,288
      Accounts payable                           586,756         755,797
      Accrued liabilities and other              355,301         358,934
                                                 -------         -------
        Total current liabilities              1,011,222       1,197,471

    Long-term debt:
      Long-term debt, less current portion       288,133         289,922
      Timber notes securitized                 1,470,000       1,470,000
                                               ---------       ---------
        Total long-term debt                   1,758,133       1,759,922

    Other long-term obligations:
      Compensation and benefits                  497,862         502,447
      Other long-term liabilities                417,919         401,869
                                                 -------         -------
        Total other long-term liabilities        915,781         904,316


    Shareholders' equity:
      Preferred stock                             39,170          42,565
      Common stock                               190,723         189,943
      Additional paid-in capital                 921,336         925,328
      Accumulated deficit                       (587,668)       (600,095)
      Accumulated other comprehensive loss      (272,029)       (267,738)
                                                --------        --------
    Total shareholders' equity                   291,532         290,003
    Noncontrolling interest in joint venture      18,152          21,871
                                                  ------          ------
           Total equity                          309,684         311,874

    Total liabilities and equity              $3,994,820      $4,173,583
                                              ==========      ==========



                        OFFICEMAX INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF INCOME
                                    (unaudited)
                        (thousands, except per-share amounts)

                                                      Quarter Ended
                                                March 28,         March 29,
                                                  2009              2008

    Sales                                    $1,911,724        $2,302,921
    Cost of goods sold and occupancy costs    1,446,162         1,715,092
        Gross profit                            465,562           587,829

    Operating expenses:
      Operating and selling expenses            358,679           424,389
      General and administrative expenses        69,444            80,648
      Other operating expense (a)(b)              9,940             4,174
    Total operating expenses                    438,063           509,211

        Operating income                         27,499            78,618

    Other income (expense):
      Interest expense                          (19,348)          (29,680)
      Interest income                            10,462            21,899
      Other income (c)                            2,627            20,617

    Income before income taxes                   21,240            91,454
    Income tax expense                           (8,210)          (27,254)

    Net income attributable to OfficeMax
     and noncontrolling interest                 13,030            64,200
    Joint venture earnings attributable
     to noncontrolling interest (a)                 889              (857)
    Net income attributable to OfficeMax         13,919            63,343

    Preferred dividends                            (772)             (975)

    Net income available to OfficeMax
     common shareholders                        $13,147           $62,368

    Basic income per common share               $  0.17           $  0.82

    Diluted income per common share             $  0.17           $  0.81

    Weighted Average Shares
      Basic                                      76,128            75,646
      Diluted                                    77,141            76,553

    (a) First quarter of 2009 includes a charge recorded in our
    Retail segment of $9.9 million related to first quarter store
    closures in the U.S. and Mexico and includes income of $0.3
    million reflecting our venture partner's share of the charge.
    The cumulative effect of these items reduced net income by
    $5.9 million, or $0.08 per diluted share.

    (b) First quarter of 2008 includes a $2.4 million charge related
    to the consolidation of the Contract segment's manufacturing facilities
    in New Zealand, and a $1.8 million charge related to employee severance
    for restructuring the Retail field and Impress print and document
    services management organization. The cumulative effect of these two
    items was a reduction in net income of $2.7 million, or $0.03 per
    diluted share.

    (c) Other, net includes income related to the company's investment
    in Boise Cascade, L.L.C. of $2.5 million and $20.5 million in the first
    quarter of 2009 and 2008, respectively. The large distribution in 2008
    was primarily related to Boise's sale of a majority interest in their
    paper and packaging and newprint business. These items increased net
    income $1.6 million, or $0.02 per diluted share in 2009 and
    $12.5 million, or $0.16 per diluted share in 2008.


                          OFFICEMAX INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (unaudited)
                                       (thousands)

                                                      Quarter Ended
                                                March 28,         March 29,
                                                   2009              2008
    Cash provided by operations:
    Net income attributable to OfficeMax        $13,919           $63,343
    Items in net income not using
     (providing) cash:
      Depreciation and amortization              29,867            35,254
      Other                                       3,854             1,647
    Changes other than from acquisitions
     of business:
      Receivables and inventory                 117,108           144,169
      Accounts payable and accrued
       liabilities                             (161,948)          (91,160)
      Income taxes and other                        288           (10,827)
        Cash provided by operations               3,088           142,426

    Cash used for investment:
    Expenditures for property and equipment     (10,871)          (33,278)
    Proceeds from sale of assets                    348               303
        Cash used for investment                (10,523)          (32,975)

    Cash used for financing:
    Cash dividends paid                          (1,621)          (11,499)
    Changes in debt, net                         (9,788)          (30,451)
    Other                                        (2,806)           (8,380)
        Cash used for financing                 (14,215)          (50,330)

    Effect of exchange rates on cash
     and cash equivalents                           126              (399)
    Increase (decrease) in cash and
     cash equivalents                           (21,524)           58,722
    Cash and cash equivalents at
     beginning of period                        170,779           152,637

    Cash and cash equivalents at end
     of period                                 $149,255          $211,359


                        OFFICEMAX INCORPORATED AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                      (unaudited)
                         (millions, except per-share amounts)

                                            Quarter Ended
                            March 28, 2009                March 29, 2008

                       As      Adjust-    As         As      Adjust-   As
                    Reported   ments   Adjusted   Reported   ments   Adjusted

    Sales           $1,911.7     $-    $1,911.7   $2,302.9      $-   $2,302.9
    Cost of goods
     sold and
     occupancy
     costs           1,446.2      -     1,446.2    1,715.1       -    1,715.1
        Gross profit   465.5      -       465.5      587.8       -      587.8

    Operating expenses:
      Operating
       and selling
       expenses        358.7      -       358.7      424.4       -      424.4
      General and
       Administrative
       expenses         69.4      -        69.4       80.6       -       80.6
      Other
       Operating
       expense (a)(b)    9.9   (9.9)          -        4.2    (4.2)         -
    Total
     Operating
     expenses          438.0   (9.9)      428.1      509.2    (4.2)     505.0

        Operating
         income         27.5    9.9        37.4       78.6     4.2       82.8

    Other income
     (expense):
      Interest
       expense         (19.4)     -       (19.4)     (29.6)      -      (29.6)
      Interest
       income           10.5      -        10.5       21.9       -       21.9
      Other,
       income (c)        2.6   (2.5)        0.1       20.6   (20.5)       0.1

    Income
     (loss)
     before
     income
     taxes              21.2    7.4        28.6       91.5   (16.3)      75.2
    Income
     Tax
     (expense)
     benefit            (8.2)  (2.8)      (11.0)     (27.3)    6.5      (20.8)

    Net
     Income
     (loss)
     attributable
     to OfficeMax
     and non-
     controlling
     interest           13.0     4.6       17.6       64.2    (9.8)      54.4
    Joint
     venture
     earnings
     attributable
     to non-
     controlling
     interest (a)        0.9   (0.3)        0.6       (0.8)      -       (0.8)
    Net
     income
     (loss)
     attribu-
     table to
     OfficeMax          13.9    4.3        18.2       63.4    (9.8)      53.6

    Preferred
     dividends          (0.8)     -        (0.8)      (1.0)      -       (1.0)

    Net income
     (loss)
     available to
     OfficeMax
     common
     shareholders      $13.1   $4.3       $17.4      $62.4   $(9.8)     $52.6

    Basic income
     (loss) per
     common share      $0.17  $0.06       $0.23      $0.82  $(0.13)     $0.69

    Diluted income
     (loss) per
     common share      $0.17  $0.06       $0.23      $0.81  $(0.13)     $0.68


    Weighted
     Average
     Shares
      Basic           76,128             76,128     75,646             75,646
      Diluted         77,141             77,141     76,553             76,553


    (a) First quarter of 2009 includes a charge recorded in our Retail
    segment of $9.9 million related to first quarter store closures in the
    U.S. and Mexico and includes income of $0.3 million reflecting our
    venture partner's share of the charge. The cumulative effect of these
    items reduced net income by $5.9 million, or $0.08 per diluted share.

    (b) First quarter of 2008 includes a $2.4 million charge related to the
    consolidation of the Contract segment's manufacturing facilities in New
    Zealand, and a $1.8 million charge related to employee severance for
    restructuring the Retail field and Impress print and document services
    management organization. The cumulative effect of these two items was a
    reduction in net income of $2.7 million, or $0.03 per diluted share.

    (c) Other, net includes income related to the company's investment in
    Boise Cascade, L.L.C. of $2.5 million and $20.5 million in the first
    quarter of 2009 and 2008, respectively. The large distribution in 2008
    was primarily related to Boise's sale of a majority interest in their
    paper and packaging and newprint business. These items increased net
    income $1.6 million, or $0.02 per diluted share in 2009 and
    $12.5 million, or $0.16 per diluted share in 2008.


                        OFFICEMAX INCORPORATED AND SUBSIDIARIES
                         CONTRACT SEGMENT STATEMENTS OF INCOME
                                       (unaudited)
                         (millions, except per-share amounts)

                                             Quarter Ended
                                      March 28,           March 29,
                                         2009                2008

    Sales                              $927.6             $1,195.1
    Cost of goods sold and occupancy
     costs                              733.0                923.3
        Gross profit                    194.6     21.0%      271.8    22.7%

    Operating expenses:
    Operating expenses (a)              173.1     18.7%      209.8    17.5%
    Other operating expense                 -      0.0%        2.4     0.2%
    Total operating expenses            173.1     18.7%      212.2    17.7%

        Operating income                $21.5      2.3%      $59.6     5.0%

    Non-GAAP Reconciliation
        Operating income                $21.5      2.3%      $59.6     5.0%
    Other operating expense                 -      0.0%        2.4     0.2%
    Adjusted operating income           $21.5      2.3%      $62.0     5.2%

    (a) Operating expenses includes operating and selling expenses as well
    as general and administrative expenses.


                         OFFICEMAX INCORPORATED AND SUBSIDIARIES
                           RETAIL SEGMENT STATEMENTS OF INCOME
                                       (unaudited)
                         (millions, except per-share amounts)

                                             Quarter Ended
                                      March 28,           March 29,
                                         2009                2008

    Sales                             $984.1              $1,107.8
    Cost of goods sold and occupancy
     costs                             713.1                 791.7
        Gross profit                   271.0     27.5%       316.1     28.5%

    Operating expenses:
    Operating expenses (a)             245.7     24.9%       284.9     25.7%
    Other operating expense              9.9      1.0%         1.8      0.2%
    Total operating expenses           255.6     25.9%       286.7     25.9%

        Operating income               $15.4      1.6%       $29.4      2.6%

    Non-GAAP Reconciliation
        Operating income               $15.4      1.6%      $ 29.4      2.6%
    Other operating expense              9.9      1.0%         1.8      0.2%
    Adjusted operating income          $25.3      2.6%      $ 31.2      2.8%


    (a) Operating expenses includes operating and selling expenses as
    well as general and administrative expenses.

Reconciliation of non-GAAP Measures to GAAP Measures

We evaluate our results of operations before certain costs of store closure and severance related items, and income related to our investment in Boise Cascade, L.L.C., as they are not indicative of our core operating activities. We believe our presentation of financial measures before, or excluding, these items, which are non-GAAP measures, enhances our investors' overall understanding of our recurring operational performance and provides useful information to both investors and management to evaluate the ongoing operations and prospects of OfficeMax by providing better comparisons. Whenever we use non-GAAP financial measures, we designate these measures as "adjusted" and provide a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure. In the preceding tables, we reconcile our non-GAAP financial measures to our reported GAAP financial results for the first quarter of both 2009 and 2008.

Although we believe the non-GAAP financial measures enhance an investor's understanding of our performance, our management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The non-GAAP financial measures we use may not be consistent with the presentation of similar companies in our industry. However, we present such non-GAAP financial measures in reporting our financial results to provide investors with an additional tool to evaluate our operating results in a manner that focuses on what we believe to be our ongoing business operations.

SOURCE OfficeMax 04/30/2009
CONTACT: Media, Bill Bonner, 1-630-864-6066,
or Investors, Mike Steele, 1-630-864-6826,
or Tony Giuliano, 1-630-864-6820,
all of OfficeMax
Web Site: http://www.officemax.com (OMX)