OfficeMax, the third largest U. S. office products retailer, saw a tough business environment during 2009. Even though the revenues of the company are taking a dent, the company is doing well to shore up its performance with the help of cost controls. The company also enters 2010 with a strong balance sheet.

In the fourth quarter of 2009, OfficeMax narrowed its loss to $3.2 million or 4 cents a share from $396.0 million or $5.21 a share, a year earlier. Analysts were expecting a loss of 7 cents per share.

Most importantly, for the fourth quarter, the company saw its year-over-year sales decrease moderate and it expanded gross margin. Gross margins rose from 24.2% to 24.4% in the latest quarter. Sales were down 4 percent. Weaker small business and lower consumer spending were the main reasons behind the sales declines.     

The company has no liquidity issues as its cash reserves are well above the total obligations of the company. Given the fact that an economic bottom is in sight, the company would see a faster recovery given its cost cutting initiatives and good balance sheet. We believe the OfficeMax train has pulled out of the station running at a high speed, yet there is still fuel in the tank to accelerate performance next year. OfficeMax also has been establishing itself as a key partner for both business and retail customers.

OfficeMax is now planning to invest in initiatives that will drive growth for the company. Successful execution of these initiatives is expected to benefit operations and financial results as the year progresses.