Will Board of Directors Shakeup Affect The ODP's Share Price?

The ODP Corporation (NASDAQ: ODP) announced today that Marcus Dunlop, a partner at HG Vora, has stepped down from the company's board of directors, effective December 31, 2023. This follows the expiration of the January 2021 cooperation agreement between ODP and HG Vora.

Joseph S. Vassalluzzo, chairman of ODP's board, expressed appreciation for Dunlop's service, stating, "We greatly appreciate Marcus Dunlop's service as a board member over the past three years. The board thanks him for his insightful perspectives during his time as a director and respects his decision to step down at this time. HG Vora continues to be an important independent shareholder of ODP."

In response, Dunlop, the departing board member, remarked, "I have seen firsthand ODP's commitment to creating shareholder value through its focus on efficient operations. We remain supportive of the board's ongoing efforts to execute on its long-term strategy and shareholder-focused capital allocation plan."

HG Vora holds approximately 8% of ODP's outstanding common stock, equivalent to 3.0 million shares.

The ODP Corporation, a leading provider of products, services, and technology solutions, operates through an integrated business-to-business (B2B) distribution platform and omni-channel presence. Its operations include supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence, and a network of retail stores under the Office Depot and OfficeMax brands.

Following this announcement, ODP's stock experienced a -1.5% movement and is currently trading at a price of $54.85 per share.

The company's full 8-K submission is available here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $11,015 $9,667 $8,872 $8,465 $8,491 $8,131
Revenue Growth n/a -12.24% -8.22% -4.59% 0.31% -4.24%
Operating Margins 2% 2% 0% 3% 3% 4%
Net Margins 1% 1% -4% -2% 2% 2%
Net Income (MM) $104 $99 -$319 -$208 $166 $193
Net Interest Expense (MM) $121 $89 $42 $28 $16 $21
Depreciation & Amort. (MM) $192 $165 $157 $146 $131 $118
Earnings Per Share $1.86 $1.8 -$6.02 -$3.78 $3.39 $4.95
Diluted Shares (MM) 56 55 53 55 49 39
Free Cash Flow (MM) $429 $240 -$43 $273 $138 $312
Capital Expenditures (MM) $187 $140 $58 $73 $99 $107
Current Ratio 1.23 1.11 1.13 1.05 1.03 1.0
Total Debt (MM) $785 $681 $378 $248 $188 $173
Net Debt / EBITDA 0.28 -0.04 -2.15 -0.7 -0.57 -0.52

The ODP has declining revenues and decreasing reinvestment in the business, weak operating margins with a positive growth rate, and irregular cash flows. On the other hand, the company has low leverage working in its favor. Furthermore, The ODP has positive expected EPS Growth.

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