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Staples, Inc. Announces Third Quarter 2012 Performance

Staples, Inc. (Nasdaq: SPLS) announced today the results for its third quarter ended October 27, 2012. Total company sales for the third quarter of 2012 were $6.4 billion, a decrease of two percent in U.S. dollars and one percent on a local currency basis compared to the third quarter of 2011. As a result of previously announced charges, on a GAAP basis, the company reported a net loss of $569 million, or $0.85 per share, from continuing operations attributable to Staples, Inc., compared to net income of $324 million, or $0.46 per diluted share, achieved in the third quarter of 2011. Excluding the impairment of goodwill and other assets, as well as restructuring, accelerated amortization, and related tax charges incurred during the third quarter of 2012, the company reported non-GAAP net income from continuing operations attributable to Staples, Inc. of $310 million, or $0.46 per diluted share.

Third Quarter 2012 Financial Summary

     
(dollar amounts in millions, except per share data) Q3 2012 Q3 2011

Year over Year Change

Total company sales $6,353 $6,481 -2.0%
Total company sales growth on a local currency basis* -1.4%
 
GAAP operating (loss) income ($357) $529 ($886)
Non-GAAP operating income* $500 $529 ($29)
 
GAAP operating (loss) income rate (5.62%) 8.17% (1,379 basis points)
Non-GAAP operating income rate* 7.87% 8.17% (30 basis points)
 
GAAP (loss) income per share from continuing operations attributable to Staples, Inc. ($0.85) $0.46 ($1.31)
Non-GAAP earnings per diluted share from continuing operations attributable to Staples, Inc.*   $0.46   $0.46   $0.00

*Indicates a non-GAAP measure. Refer to “Presentation of Non-GAAP Information” and the accompanying reconciliations for more detailed information about these non-GAAP measures. Non-GAAP operating income, non-GAAP operating income rate, and non-GAAP earnings per diluted share from continuing operations attributable to Staples, Inc. exclude the impact of Q3 2012 charges related to the impairment of goodwill and other assets, restructuring charges and accelerated tradename amortization. Non-GAAP earnings per diluted share from continuing operations attributable to Staples, Inc. also excludes Q3 2012 tax charges. In total, these charges negatively impacted Q3 2012 GAAP earnings per share from continuing operations attributable to Staples, Inc. by $1.31.

“During the third quarter we launched a new strategic plan to become the product authority for businesses, restructured our organization, and generated solid earnings excluding charges,” said Ron Sargent, Staples’ chairman and chief executive officer. “Going forward, we are in a much stronger position to pursue our best growth opportunities.”

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