Financial Data and Key Metrics Changes - The company generated total revenue of $1.7 billion in Q1 2025, reflecting a 9% decline compared to the same quarter last year, but showing improvement in year-over-year trends compared to prior quarters [19] - Adjusted EBITDA for the quarter was $76 million, down from $91 million in the previous year, while adjusted free cash flow increased significantly to $45 million from $17 million [22][24] - GAAP operating loss was $32 million compared to a GAAP operating income of $41 million in the prior year, with adjusted operating income at $54 million, down from $66 million [20] Business Line Data and Key Metrics Changes - The consumer division, Office Depot, reported sales of $838 million, down 11% year-over-year, but showed a 500 basis point improvement in same-store sales metrics [24][25] - ODP Business Solutions reported revenue of $852 million, down 8% year-over-year, impacted by cautious business conditions and a large customer loss from the previous year [27] - The supply chain business, VARE, achieved over 85% year-over-year revenue growth from third-party customers, with third-party revenue reaching $17 million, up 89% [12][32] Market Data and Key Metrics Changes - The company is expanding into the hospitality market, which is valued at $16 billion, and has established partnerships with major suppliers to support this initiative [13][14] - The onboarding of new business contracts, including a significant contract with CoreTrust, is ongoing, with expectations for these to contribute more meaningfully in the second half of the year [11][28] Company Strategy and Development Direction - The company is focused on a B2B pivot and expanding into higher growth segments such as hospitality and supply chain services, while reducing reliance on retail [7][16] - The "Optimize for Growth" restructuring plan aims to realign organizational structure and reduce fixed costs, with nine retail stores closed during the quarter [17][20] - The company is actively managing its balance sheet and liquidity, ending the quarter with total liquidity of $653 million [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving trends within the consumer business and anticipates better performance in the B2B segment as new customers are onboarded [37][39] - The company is closely monitoring the evolving tariff situation and has taken proactive measures to mitigate potential impacts [36][41] - Management expects significant improvements in adjusted free cash flow generation compared to the previous year, with a focus on driving cash and margin [37][39] Other Important Information - The company has made significant progress in cash management, achieving a cash conversion improvement that contributed to the increase in adjusted free cash flow [13] - The company is evaluating the pace of store closures in light of improved retail performance and ongoing strategic initiatives [51] Q&A Session Summary Question: Insights into retail momentum and sales strategies - Management highlighted four key strategies driving improved performance, including enhanced customer engagement, a revised merchandising strategy, daily performance management, and targeted sales promotions [44][48] Question: Future pace of store closures - Management indicated that the "Optimize for Growth" plan will evaluate store performance to maximize cash flow and margin, with ongoing assessments of store closures [51][52] Question: Onboarding delays for new contracts - Management noted that onboarding delays are due to longer lead times in the hospitality sector and the complexity of large contracts like CoreTrust [55][56] Question: Categories showing strength in retail - Management reported success in non-tariff categories and a shift to a more value-oriented merchandising strategy, which has improved sales performance [63][64] Question: Impact of tariffs on business - Management believes they have mitigated most tariff impacts through diversified sourcing strategies and proactive pricing adjustments [66][68] Question: Converting new business pipeline into revenue - Management is focusing on bringing in qualified leadership, rigorous management systems, and frequent high-level meetings with new partners to drive conversion [90][91] Question: Update on stock buyback - Management stated that they continually evaluate stock repurchase opportunities and have confidence in the company's future [96]

Q120First Quarter 2025 Financial Results v Safe Harbor Statement The Private Securities Litigation Reform Act of 1995, as amended, (the "Act"), provides protection from liability in private lawsuits for "forward-looking" statements made by public companies under certain circumstances, provided that the public company discloses with specificity the risk factors that may impact its future results. The Company wants to take advantage of the "safe harbor" provisions of the Act. Certain statements made during th ...

ODP Corp. (ODP) came out with quarterly earnings of $1.06 per share, beating the Zacks Consensus Estimate of $0.65 per share. This compares to earnings of $1.05 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of 63.08%. A quarter ago, it was expected that this office supply retailer would post earnings of $0.80 per share when it actually produced earnings of $0.66, delivering a surprise of -17.50%. Over the last four quarters, ...

CONTACT: Tim Perrott Investor Relations 561-438-4629 Tim.Perrott@theodpcorp.com The ODP Corporation Announces First Quarter 2025 Results First Quarter Revenue of $1.7 Billion with GAAP EPS of $(0.97); Adjusted EPS of $1.06 GAAP Operating Loss of $32 Million; Net Loss of $29 Million; Operating Cash Flow of $57 Million Adjusted EBITDA of $76 Million; Adjusted Free Cash Flow of $45 Million Announced Key Supplier Partnerships in Hospitality Industry Enhancing Foundation for Growth Exhibit 99.1 Announced New B2B ...

Company Performance - ODP Corp. closed at $13.55, with a daily increase of 1.35%, outperforming the S&P 500's gain of 0.58% [1] - The stock has decreased by 6.7% over the past month, underperforming the Retail-Wholesale sector's loss of 0.19% and the S&P 500's loss of 0.84% [1] Earnings Forecast - The upcoming earnings report is scheduled for May 7, 2025, with projected earnings per share (EPS) of $0.65, reflecting a 38.1% decrease from the same quarter last year [2] - The Zacks Consensus Estimate for revenue is $1.65 billion, down 11.86% from the previous year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $2.56 per share and revenue at $6.57 billion, indicating declines of 22.42% and 5.99% respectively from the previous year [3] - Recent analyst estimate revisions suggest changing business trends, with positive revisions indicating a potentially better business outlook [3][4] Valuation Metrics - ODP Corp. has a Forward P/E ratio of 5.23, which is a discount compared to the industry average of 13.72 [6] - The company's PEG ratio is currently 0.37, while the average PEG ratio for Retail - Miscellaneous stocks is 1.5 [6] Industry Ranking - The Retail - Miscellaneous industry has a Zacks Industry Rank of 188, placing it in the bottom 25% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - ODP Corp. stock closed at $12.43, with a +0.4% movement compared to the previous day, underperforming the S&P 500's daily gain of 1.67% [1] - The stock has dropped by 15.5% in the past month, compared to a loss of 4.21% in the Retail-Wholesale sector and a loss of 6.57% in the S&P 500 [1] Earnings Forecast - ODP Corp. is predicted to post an EPS of $0.65, indicating a 38.1% decline compared to the same quarter last year [2] - The revenue is estimated to be $1.65 billion, reflecting an 11.86% decrease compared to the same quarter of the previous year [2] - For the entire year, earnings are forecasted at $2.56 per share and revenue at $6.57 billion, indicating changes of -22.42% and -5.99% respectively compared to the previous year [3] Analyst Estimates and Rankings - Recent changes in analyst estimates for ODP Corp. are important as they reflect short-term business trends [4] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks ODP Corp. as 5 (Strong Sell) [6] - Over the last 30 days, the Zacks Consensus EPS estimate for ODP Corp. has remained unchanged [6] Valuation Metrics - ODP Corp. has a Forward P/E ratio of 4.85, which is a discount compared to the industry's average Forward P/E of 13.35 [7] - The company has a PEG ratio of 0.35, while the average PEG ratio for Retail - Miscellaneous stocks is 1.4 [7] Industry Context - The Retail - Miscellaneous industry is part of the Retail-Wholesale sector and currently holds a Zacks Industry Rank of 159, placing it in the bottom 36% of all industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Performance - ODP Corp. shares ended at $12.49, reflecting a -0.56% change from the previous close, underperforming the S&P 500, which lost 0.17% [1] - Over the past month, ODP Corp. has seen a significant decline of 20.86%, compared to a loss of 2.42% in the Retail-Wholesale sector and 3.94% in the S&P 500 [1] Upcoming Earnings - The upcoming EPS for ODP Corp. is projected at $0.65, indicating a 38.1% decrease from the same quarter last year [2] - Revenue is expected to be $1.65 billion, down 11.86% from the prior-year quarter [2] Full Year Estimates - For the full year, analysts expect earnings of $2.56 per share and revenue of $6.57 billion, representing declines of -22.42% and -5.99% respectively from the previous year [3] Analyst Estimates - Recent changes to analyst estimates for ODP Corp. suggest a shifting business landscape, with upward revisions indicating positive sentiment towards the company's operations [4] - The Zacks Rank system, which incorporates these estimate changes, currently rates ODP Corp. as a 5 (Strong Sell) [6] Valuation Metrics - ODP Corp. has a Forward P/E ratio of 4.92, which is significantly lower than the industry average of 12.81 [6] - The company also has a PEG ratio of 0.35, compared to the Retail - Miscellaneous industry's average PEG ratio of 1.4 [7] Industry Ranking - The Retail - Miscellaneous industry, to which ODP Corp. belongs, ranks in the bottom 43% of all industries, with a Zacks Industry Rank of 142 [7][8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Insights - CoreTrust has partnered with ODP Business Solutions to enhance savings on indirect spend for its 3,500+ members through an expanded supplier network [1][2] - The partnership allows CoreTrust members to access high-quality solutions from ODP Business Solutions, including furniture, technology, breakroom supplies, and print services [1][2] - CoreTrust leverages the aggregated buying power of its members, achieving over $7 billion in annual spend, resulting in an average savings of 20% on indirect spend [3][5] Company Overview - CoreTrust has been operational since 2006, serving as a group purchasing organization (GPO) that helps businesses save on indirect spend and improve portfolio performance for private equity firms [5] - The organization offers access to over 125 pre-negotiated contracts with top suppliers across various categories, including corporate services, facilities, HR, technology, travel, and supply chain [5] - Membership in CoreTrust is free, providing members with market-leading pricing, access to the CoreTrust Experience Platform (CXP), and tailored spend category recommendations [6] ODP Business Solutions - ODP Business Solutions has over 30 years of experience in providing workplace solutions and services, enhancing the procurement capabilities of CoreTrust members [2][7] - The company offers a diverse portfolio of products and services, including technology transformation, sustainability, and workspace design [7][8] - The collaboration with CoreTrust allows ODP Business Solutions to access a broader member base while creating new savings opportunities for CoreTrust members [2]

Financial Performance - Consolidated sales decreased by $833 million, or 11%, in 2024 compared to 2023, with the ODP Business Solutions Division down 8% and the Office Depot Division down 14%[194]. - Total gross profit decreased by $316 million, or 18%, in 2024, with gross margin dropping from 23% in 2023 to 21% in 2024[197]. - Diluted earnings per share from continuing operations was $3.08 in 2024, down from $6.22 in 2023[197]. - The Office Depot Division's sales decreased by $526 million, or 14%, in 2024, primarily due to planned store closures and lower demand[207]. - The ODP Business Solutions Division's operating income fell by 36% to $112 million in 2024, impacted by lower sales and a decrease in gross margin[205]. - Cash provided by operating activities of continuing operations was $159 million in 2024, down from $360 million in 2023[199]. - The company recorded $47 million in merger, restructuring, and other operating expenses in 2024, compared to $4 million in 2023[197]. - The effective tax rate for 2024 was 27%, influenced by various tax benefits and adjustments[197]. Business Strategy and Restructuring - The company closed a total of 340 retail stores as part of the Maximize B2B Restructuring Plan, which aims to optimize costs and support business-to-business solutions[26]. - The Maximize B2B Restructuring Plan is expected to be completed by the end of 2024, focusing on cost savings and growth in the business-to-business platform[26]. - In 2024, the company announced organizational restructuring changes under Project Core aimed at enhancing operating results and increasing shareholder returns through cost improvement actions[68]. - The company re-aligned its business into three operating divisions in October 2024, following the sale of Varis, with a renewed focus on core office supplies and growth in these divisions[88]. Workforce and Employee Engagement - As of January 25, 2025, the company had approximately 19,000 full-time and part-time employees, a decrease from 20,000 the previous year due to planned store closures[31]. - The company’s employee engagement strategy includes multiple forums for feedback, which are used to improve workplace culture and employee satisfaction[34]. - The company’s 5C Culture, based on customer, commitment, change, caring, and creativity, drives exceptional performance across its operations[35]. - The potential for unionization has increased, with a recent election petition filed in May 2023, although employees voted against union representation[141]. Market and Competition - The company faces high competition in the office products market, with pressure on sales and margins due to increased price awareness among end-users[48]. - The company faces significant competition from various sectors, including office supply resellers, e-commerce platforms, and mass merchandisers, which may adversely impact financial performance[113]. - There is a notable shift in consumer behavior towards technology, resulting in decreased demand for traditional office supplies like paper and ink, necessitating growth in customer base and spending[114]. Supply Chain and Operations - The company has increasingly utilized global offerings to reduce product costs while maintaining quality, with a global sourcing office in Shenzhen, China, to manage product sourcing and logistics[41]. - The company operates 58 supply chain facilities in the continental United States and 10 in Canada as of December 28, 2024[167]. - The company holds trademark registrations and patents for various private branded products, enhancing its competitive position in the market[29]. - The company is dependent on key vendors for product availability and pricing, which could affect sales and customer satisfaction if disruptions occur[91]. Risks and Challenges - The company faces risks related to attracting and retaining qualified personnel, which could adversely impact operational efficiency and growth opportunities[79]. - The complexities of implementing cost reduction and restructuring activities may lead to delays in realizing expected efficiencies and benefits[70]. - The company’s transformation into an integrated distribution platform requires significant investment and carries risks that could impact revenue and profitability[72]. - Disruptions in relationships with key third-party partners or cyberattacks could impact revenues and operational costs, especially during peak periods[93]. - Global sourcing disruptions and evolving trade policies could negatively affect product costs and availability, particularly due to reliance on suppliers in Asia[95]. - Climate-related risks, including severe weather events, could lead to increased operational costs and disruptions in supply chains[123]. - The company is subject to various legal proceedings and regulatory compliance risks, which could result in significant liabilities and distract management[134]. Sustainability and Corporate Responsibility - The company’s sustainability strategy includes goals for greenhouse gas emissions reduction, plastic reduction, and achieving zero waste in a significant percentage of its DCs[52]. - Failure to meet customer demands for eco-conscious products and compliance with environmental standards could result in loss of market share[137]. Financial Management and Shareholder Returns - The company repurchased 8 million shares of common stock in 2024 for a total consideration of $300 million, with $725 million remaining available for stock repurchases under the current program[199]. - The company suspended its quarterly cash dividend in May 2020 and does not anticipate resuming dividends in the foreseeable future[149]. - The common stock price has experienced volatility, which may continue, potentially leading to substantial losses for shareholders[147].

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $1.6 billion, down approximately 10% compared to the same quarter last year, primarily due to lower sales in the retail business and reduced consumer traffic [44][50] - GAAP operating income for Q4 was $20 million, down from $52 million in the prior year, with adjusted operating income at $32 million compared to $57 million [45][50] - Adjusted net income from continuing operations for Q4 was $20 million or $0.66 per diluted share, down from $43 million or $1.13 per diluted share in the prior year [47][50] - Full-year 2024 total company sales were $7 billion, down from $7.8 billion in 2023, with adjusted net income from continuing operations at $114 million or $3.30 per share, compared to $263 million or $6.61 per share in the prior year [49][51] Business Line Data and Key Metrics Changes - ODP Business Solutions revenue for Q4 was $827 million, down 9% year-over-year, influenced by a weak macroeconomic environment and reduced enterprise spending [54] - Office Depot's revenue for Q4 was $784 million, a 13% decline driven by fewer retail stores and lower consumer demand [58] - Veyor's third-party revenue increased by 150% year-over-year, reaching $20 million, while consolidated sales were $1.1 billion [63] Market Data and Key Metrics Changes - The hospitality industry represents a $16 billion market, with ODP securing a key supplier agreement, marking a significant entry into this growing sector [16][28] - The overall addressable market opportunity, including healthcare and other sectors, is estimated to exceed $60 billion [32] Company Strategy and Development Direction - The company is focusing on a B2B pivot, expanding beyond traditional office supplies into higher growth segments, including hospitality and healthcare [12][34] - An "optimized for growth" restructuring plan has been launched to accelerate revenue growth in B2B while reducing reliance on retail operations [34][36] - The company aims to leverage its supply chain and distribution capabilities to capture new business opportunities and enhance customer service [13][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024 due to macroeconomic factors and competitive pressures but expressed optimism about future growth opportunities [10][38] - The company expects to see benefits from its B2B initiatives and the hospitality sector, with a focus on long-term sustainable growth [41][78] Other Important Information - The company ended the quarter with total liquidity of $644 million and total debt of $279 million, maintaining a solid balance sheet [66] - Capital expenditures in Q4 were $25 million, flat with the prior year, primarily focused on growth investments [48] Q&A Session Summary Question: Can you discuss the genesis of the hospital deal? - The deal originated from an existing relationship, with the customer recognizing the need for a reliable supply chain, leading to ODP being selected as a preferred partner [81][82] Question: How should we think about the revenue ramp from this deal? - The revenue ramp will be a combination of exclusive products and a "hunting license" approach, with joint sales efforts expected to enhance growth [90] Question: What is the timeframe for the optimize for growth plan? - The plan is a multiyear initiative, expected to take three to four years to realize the projected EBITDA uplift [94] Question: Have you considered strategic alternatives for the retail business? - The company is always exploring ways to maximize shareholder value, including potential strategic alternatives for the retail segment [97] Question: What are your assumptions for growth in the B2B office suppliers market? - The B2B segment is expected to hold steady, with ongoing challenges in the office supply sector making market share difficult to gauge [106] Question: How much exposure does ODP have to the federal government? - ODP does not have significant exposure to federal business at this moment [112]