STAPLES,INC. (NASDAQ:SPLS) Files An 8-K Results of Operations and Financial Condition

STAPLES,INC. (NASDAQ:SPLS) Files An 8-K Results of Operations and Financial Condition
Item 2.02. Results of Operations and Financial Condition.

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In connection with a senior notes offering by Arch Merger Sub Inc. (“Merger Sub”) relating to the previously announced proposed acquisition of Staples,Inc. (“Staples” or “the Company”) by funds managed by Sycamore Partners Management, L.P. (collectively, the “Sponsor”) to the Agreement and Plan of Merger, dated as of June28, 2017 (the “Merger Agreement”), by and among the Company, Arch Parent Inc. (the “Parent”) and Merger Sub, providing for the merger of Merger Sub with and into the Company (the “Merger”), Staples is disclosing preliminary estimates of certain financial results for the thirteen weeks ended July29, 2017 to prospective investors.

Staples is currently finalizing its financial results for the thirteen weeks ended July29, 2017. The preliminary financial results provided below are not a comprehensive statement of the Company’s financial results for this period and reflect the Company’s estimates based solely upon information available to it as of the date hereof. The Company’s actual results are subject to its financial and operating closing procedures, and may differ materially from these estimates following the completion of such procedures. In addition, even if the Company’s actual results are consistent with these estimates, those results or developments may not be indicative of results or developments in subsequent periods. Therefore, you should not place undue reliance upon these preliminary financial results.

While complete financial information and operating data are not available, based on information currently available, the Company expects the following results with respect to the North American Delivery business of Staples (“NAD”):

NAD Sales

$

2,438

$2,400-$2,500

Other non-recurring items(a)

(5

)

Non-cash items(b)

Other(c)

(1

)

(3

)

Adjusted EBITDA

Pro Forma Cost savings initiatives(d)

Pro Forma Adjusted EBITDA

1,078

1,037

(a) Principally includes (i)litigation fees, (ii)restructuring charges and (iii)PNI data security incident costs.

(b) Principally includes (i)stock-based compensation, (ii)asset impairments, (iii)loss on extinguishment of debt and (iv)loss on disposal of assets.

(c) Principally includes (i)the removal of non-operating income, (ii)public company costs and (iii)acquisition costs.

(d) Represents estimated cost savings relating to vendor renegotiations, headcount reductions and elimination of wholesaler margins due to expansion of stocked SKUs.

Item 9.01 Financial Statements and Exhibits.

The exhibit listed on the ExhibitIndex immediately preceding such exhibit is furnished as part of this Current Report on Form8-K.

Additional Disclosures Regarding the Information Contained in this Form8-K

The information contained in this Current Report on Form8-K (including Exhibit99.1) constitutes only a portion of the information being made available to prospective investors and is intended to be considered in the context of the Company’s filings with the Securities and Exchange Commission and other public announcements that the Company may make, by press release or otherwise, from time to time. Such information does not represent a comprehensive statement of the financial results for the Company or the NAD business. Such information may vary from, and may not be directly comparable to, the historical financial information of

the NAD business, or the Company on a consolidated basis, prior to the Merger and any such differences may be material. Accordingly, investors and stockholders should not place undue reliance on such financial information. The Company disclaims any intention or obligation to update or revise any such information as a result of developments occurring after the date of this Current Report on Form8-K, except as required by law.

The information contained herein does not constitute an offer to sell, or the solicitation of an offer to buy, any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.

None of the information contained herein shall be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Presentation of Non-GAAP Information

The information contained herein includes financial measures of the Company that are not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company’s management believes that these non-GAAP financial measures provide meaningful supplemental information that enhances management’s, investors’ and prospective lenders’ ability to evaluate the Company’s operating results and ability to repay its obligations.

These non-GAAP financial measures are not intended to be used in isolation and should not be considered a substitute for any other performance measure determined in accordance with GAAP. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool, including that other companies may calculate similar non-GAAP financial measures differently than as defined in the attached materials, limiting their usefulness as a comparative tool. The Company compensates for these limitations by providing specific information regarding the GAAP amounts excluded from the non-GAAP financial measures. The Company further compensates for the limitations of its use of non-GAAP financial measures by presenting comparable GAAP measures. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures contained herein.

Additional Information and Where to Find It

This filing may be deemed solicitation material in respect of the proposed acquisition of the Company by the Parent. The Company filed a definitive Proxy Statement with the SEC in connection with the transaction, including a form of proxy card, on August3, 2017. The definitive Proxy Statement and form of proxy card have been mailed to the Company’s stockholders. This filing does not constitute a solicitation of any vote or approval. The Proxy Statement contains important information about the Parent, the Company, the Merger and related matters. Investors and security holders are urged to read the Proxy Statement carefully.

Investors and security holders can obtain free copies of the Proxy Statement and other documents filed with the SEC by the Parent and the Company through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders can obtain free copies of the Proxy Statement from the Company by contacting Staples Investor Relations department at [email protected] In addition, the proxy statement and our annual reports on Form10-K, quarterly reports on Form10-Q, current reports on Form8-K and amendments to those reports filed or furnished to section 13(a)or 15(d)of the Securities Exchange Act of 1934 are available free of charge through our website at investor.staples.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

The Company, and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s stockholders with respect to the transactions contemplated by the Merger Agreement. Information regarding the Company’s directors and executive officers, including their ownership of the Company’s securities, is contained in the Company’s Annual Report on Form10-K for the year ended January28, 2017 and its proxy statement dated April20, 2017, and in the Proxy Statement dated August3, 2017, each of which is filed with the SEC. Investors and security holders may obtain additional information regarding the direct and indirect interests of the Company and its directors and executive officers in the proposed transaction by reading the Proxy Statement and other public filings referred to above.

Safe Harbor for Forward-Looking Statements

Statements in this document regarding the Company’s expected results for the thirteen weeks ended July29, 2017, the proposed transaction between the Parent and the Company, the Parent’s proposed financing, the expected timetable for completing the transaction and any other statements about the Parent and the Company managements’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any

statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward looking statements, although not all forward-looking statements contain these identifying words. Readers should not place undue reliance on these forward-looking statements. The Company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the Company may not be able to predict and may not be within the Company’s control. Factors that could cause such differences include, but are not limited to, (i)the risk that the proposed Merger may not be completed in a timely manner, or at all, which may adversely affect the Company’s business and the price of its common stock, (ii)the failure to satisfy all of the closing conditions of the proposed Merger, including the adoption of the Merger Agreement by the Company’s stockholders and the receipt of certain governmental and regulatory approvals in the U.S. and in foreign jurisdictions, (iii)the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (iv)the effect of the announcement or pendency of the proposed Merger on the Company’s business, operating results, and relationships with customers, suppliers, competitors and others, (v)risks that the proposed Merger may disrupt the Company’s current plans and business operations, (vi)potential difficulties retaining employees as a result of the proposed Merger, (vii)risks related to the diverting of management’s attention from the Company’s ongoing business operations, (viii)the outcome of any legal proceedings instituted against the Company related to the Merger Agreement or the proposed Merger, and (ix)any adjustments to the preliminary results that are identified in the process of closing the Company’s books for the quarter ended July29, 2017 or during the review of the Company’s financial statements by its independent registered public accounting firm. There are a number of important, additional factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including the factors described in the Company’s Annual Report on Form10-K for the year ended January28, 2017 and its most recent quarterly report filed with the SEC. The Company disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this filing, except as required by law.


STAPLES INC Exhibit
EX-99.1 2 a17-19049_5ex99d1.htm EX-99.1 Exhibit 99.1   UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION   The following unaudited pro forma condensed consolidated financial information is presented to illustrate the estimated effects of the pending acquisition of the outstanding ownership interest of Staples,…
To view the full exhibit click here

About STAPLES,INC. (NASDAQ:SPLS)

Staples, Inc. is a provider of products and services for business customers and consumers. The Company offers a selection of products, Websites and mobile platforms, and a range of copy, print and technology services. The Company operates through three business segments, which include North American Stores & Online, North American Commercial and International Operations. The North American Stores & Online segment includes its retail stores and Staples.com businesses in the United States and Canada. The North American Commercial segment consists of the United States and Canadian businesses that sell and deliver products and services directly to businesses, including Staples Advantage and Quill.com. The International Operations segment consists of businesses in approximately 25 countries in Europe, Australia, South America and Asia. It serves businesses of all sizes and consumers in North America, Europe, Australia, South America and Asia.

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