S&P: OfficeMax still on watch

Standard & Poor's said its ratings on OfficeMax Inc. remain on CreditWatch with negative implications following the company's announcement that the Securities and Exchange Commission has launched a formal investigation of its accounting for vendor income.

The agency said the company had completed its own internal investigation on accounting for vendor income in March, but that the result was not material and consisted of an overstatement of $4.3 million of its cumulative net operating income for the first three quarters of 2004.

S&P added that the ratings could be adversely affected with more material accounting issues and that the watch listing reflects the agency's concerns regarding OfficeMax's soft operating results at its retail division and uncertainty related to changes in management.

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