ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2022 and 2021 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.
Overview of the Company
ACCO Brands designs, markets, and manufactures well-recognized consumer, school, technology and office products. Our widely known brands include AT-A-GLANCE®, Barrilito®, Derwent®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®, Leitz®, Marbig®, Mead®, NOBO®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, and TruSens®. Approximately 70 percent of our sales come from brands that occupy the No. 1 or No. 2 position in the product categories in which we compete. Our top 12 brands represented $1.5 billion of our 2021 net sales. We distribute our products through a wide variety of channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop. These channels include mass retailers; e-tailers; discount, drug/grocery and variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; wholesalers; contract stationers; technology specialty businesses; and our direct-to-consumer channel. Our products are sold primarily in the U.S., Europe, Australia, Canada, Brazil and Mexico.
We have transformed our business by investing in innovative branded consumer and technology products for use in businesses, schools, and homes, both organically and through acquisitions. This change should enable us to continue to organically grow sales and increase profitability by focusing our selling efforts on growing channels, as well as strategically managing declining customers and commoditized product categories, which remain important profit and cash generators. Our top five customers represented 36 percent of our sales in 2021.
Our business is consumer- and brand-centric, product differentiated, and geographically diverse. We have organically grown our PowerA® video gaming accessories, Kensington® computer accessories and Leitz® and Rexel® European range of shredders and organization product offerings. ACCO Brands remains a leading supplier of school products, including our top-selling Five Star® line of school notebooks in North America, laminating machines, and stapling and punching products, among others. We have also entered the wellness category with TruSens® branded air purifiers, which we plan to expand over the next few years.
We have made five major acquisitions over the past six years. These acquisitions have meaningfully expanded our portfolio of well-known brands, enhanced our competitive position from both a product and channel perspective, and added scale to our operations. Historically, our approach to acquisitions has focused on consolidation and geographic expansion opportunities that met our strategic and financial criteria. Strategically, we have targeted categories or geographies that provided opportunities for growth, leading brands, and channel diversity. More recently we have prioritized growing product categories, including adjacencies.
Our recent acquisition of PowerA in late 2020 allowed us to enter the attractive product category of third-party video gaming accessories, including controllers, power charging stations, and headsets. The addition of PowerA has meaningfully improved ACCO Brands' potential for organic sales growth and profitability and reinforced our presence in the faster growing mass and e-commerce channels. The Company plans to expand this business internationally, particularly in Europe and Asia, adding to organic growth over the longer term. PowerA® and Kensington® are now our two largest and fastest growing brands, representing approximately 25 percent of 2021 sales.
Our leading product category positions provide the scale to invest in marketing and product innovation to drive profitable growth. We expect to grow in mature markets in the gaming, technology, and branded school and office categories. We also anticipate continuing recovery in areas depressed from COVID-19.
29
We generate strong operating cash flow and will continue to leverage our cost structure through acquisitions, synergies and productivity savings to drive long-term profit and operating cash flow improvement.
Overview of Performance
The Company continued its 2021 momentum with a strong first quarter. Our net sales increased $31.1 million, or 7.6 percent, in the quarter, primarily as a result of price increases of 6.4 percent and higher volume of 4.7 percent. Our International segment delivered 18.8 percent sales growth as demand for school products increased in Brazil and Mexico following a return to in-person education. Our North America segment’s sales increased 10.4 percent due to higher prices and increased demand for school and business products, as well as computer accessories. EMEA net sales were down slightly as foreign exchange offset the 7.4 percent higher comparable sales. Foreign exchange reduced total sales $14.9 million, or 3.6 percent.
The Company recorded operating income of $6.8 million, a $7.9 million increase, compared with an operating loss of $1.1 million for the prior year's first quarter. Operating income of $6.8 million was negatively impacted by $2.6 million of contingent earn out expense related to our PowerA acquisition. We also recorded an additional $1.8 million of operating expenses related to our Russian business. The prior year's first quarter included $6.7 million of contingent earn out expense and $2.4 million of expense related to inventory step-up related to our PowerA acquisition. Gross margin declined 100 basis points as a decline in EMEA offset improvements in North America and International. Foreign exchange reduced operating income $1.2 million and reduced net income $0.3 million.
Our seasonal operating cash outflow for the first quarter of 2022 was $104.2 million, compared with operating cash outflow of $42.4 million last year, representing a $61.8 million year-over-year increase primarily due to increasing inventory earlier than we did in the prior period to mitigate supply chain issues and the timing of vendor payments. We also had higher incentive compensation payments this year.
We have been experiencing substantial levels of inflation in the cost of our products. We have responded by increasing our selling prices more frequently than we have historically, but these increases continue to lag the cumulative impact of inflationary increases, particularly in EMEA. We expect both higher costs and supply chain disruptions to continue for some time.
Consolidated Results of Operations For the Three Months Ended March 31, 2022 and 2021
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|
|
Three Months Ended March 31, |
|
|
Amount of Change |
|
|
(in millions, except per share data) |
|
2022 |
|
|
2021 |
|
|
$ |
|
|
%/pts |
|
|
Net sales |
$ |
|
441.6 |
|
$ |
|
410.5 |
|
$ |
|
31.1 |
|
|
|
7.6 |
% |
|
Cost of products sold |
|
|
322.0 |
|
|
|
295.0 |
|
|
|
27.0 |
|
|
|
9.2 |
% |
|
Gross profit |
|
|
119.6 |
|
|
|
115.5 |
|
|
|
4.1 |
|
|
|
3.5 |
% |
|
Gross profit margin |
|
|
27.1 |
% |
|
|
28.1 |
% |
|
|
|
|
|
(1.0 |
) |
pts |
Selling, general and administrative expenses |
|
|
98.8 |
|
|
|
94.0 |
|
|
|
4.8 |
|
|
|
5.1 |
% |
|
SG&A% to net sales |
|
|
22.4 |
% |
|
|
22.9 |
% |
|
|
|
|
|
(0.5 |
) |
pts |
Amortization of intangibles |
|
|
11.1 |
|
|
|
12.0 |
|
|
|
(0.9 |
) |
|
|
(7.5 |
)% |
|
Restructuring charges |
|
|
0.3 |
|
|
|
3.9 |
|
|
|
(3.6 |
) |
|
|
(92.3 |
)% |
|
Change in fair value of contingent consideration |
|
|
2.6 |
|
|
|
6.7 |
|
|
|
(4.1 |
) |
|
|
(61.2 |
)% |
|
Operating income (loss) |
|
|
6.8 |
|
|
|
(1.1 |
) |
|
|
7.9 |
|
|
NM |
|
|
Operating income (loss) margin |
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|
1.5 |
% |
|
|
(0.3 |
)% |
|
|
|
|
|
1.8 |
|
pts |
Interest expense |
|
|
9.7 |
|
|
|
13.2 |
|
|
|
(3.5 |
) |
|
|
(26.5 |
)% |
|
Interest income |
|
|
(1.4 |
) |
|
|
(0.1 |
) |
|
|
(1.3 |
) |
|
NM |
|
|
Non-operating pension income |
|
|
(1.4 |
) |
|
|
(0.8 |
) |
|
|
(0.6 |
) |
|
|
75.0 |
% |
|
Other expense, net |
|
|
0.9 |
|
|
|
12.9 |
|
|
|
(12.0 |
) |
|
|
(93.0 |
)% |
|
Loss before income tax |
|
|
(1.0 |
) |
|
|
(26.3 |
) |
|
|
25.3 |
|
|
|
96.2 |
% |
|
Income tax expense (benefit) |
|
|
1.7 |
|
|
|
(5.9 |
) |
|
|
7.6 |
|
|
NM |
|
|
Effective tax rate |
|
|
(170.0 |
)% |
|
|
22.4 |
% |
|
|
|
|
|
(192.4 |
) |
pts |
Net loss |
|
|
(2.7 |
) |
|
|
(20.4 |
) |
|
|
17.7 |
|
|
|
86.8 |
% |
|
Weighted average number of diluted shares outstanding: |
|
|
96.2 |
|
|
|
95.1 |
|
|
|
1.1 |
|
|
|
1.2 |
% |
|
Diluted loss per share |
$ |
|
(0.03 |
) |
$ |
|
(0.21 |
) |
$ |
|
0.18 |
|
|
|
85.7 |
% |
|
Comparable net sales (Non-GAAP)⁽¹⁾ |
$ |
|
456.5 |
|
$ |
|
410.5 |
|
$ |
|
46.0 |
|
|
|
11.2 |
% |
|
(1)See reconciliation to GAAP, contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."
30
Foreign Exchange Rates
Approximately 57.3 percent of our net sales for the three months ended March 31, 2022, were transacted in a currency other than the U.S. dollar. Additionally, we source approximately 60 percent of our products mainly from China, Vietnam and other Far Eastern countries using U.S. dollars. As a result, the sales, profitability and cash flow of our foreign operations which transact business in their local currency are affected by the fluctuations in foreign currency rates relative to the U.S. dollar.
Net Sales
For the three months ended March 31, 2022, net sales increased $31.1 million due to higher sales prices of 6.4 percent and increased volume of 4.7 percent mainly for back-to-school and business products, partially offset by unfavorable foreign exchange of $14.9 million, or 3.6 percent.
Cost of Products Sold
Cost of products sold includes all manufacturing, product sourcing and distribution costs, including depreciation related to assets used in manufacturing; procurement and distribution processes; allocation of certain information technology costs supporting those processes; inbound and outbound freight; shipping and handling costs; purchasing costs associated with materials and packaging used in the production processes; and inventory valuation adjustments.
For the three months ended March 31, 2022, cost of products sold increased $27.0 million, or 9.2 percent, primarily due to higher sales and inflation related to commodities, logistics and labor. Foreign exchange reduced cost of products sold $11.0 million, or 3.7 percent.
Gross Profit
For the three months ended March 31, 2022, gross profit increased $4.1 million, or 3.5 percent, primarily due to higher sales and lower charges related to the acquisition of PowerA of $2.4 million. Foreign exchange decreased gross profit $3.9 million, or 3.4 percent.
For the three months ended March 31, 2022, gross profit as a percent of net sales decreased 100 basis points. Gross profit margin declined primarily because the benefit of our sales price increases only offset our incremental cost inflation and, therefore, were dilutive to gross profit margin.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") include advertising, marketing, selling (including commissions), research and development, customer service, depreciation related to assets outside the manufacturing and distribution processes, and all other general and administrative expenses outside the manufacturing and distribution functions (e.g., finance, human resources, information technology).
For the three months ended March 31, 2022, SG&A increased $4.8 million, or 5.1 percent, due to increased sales and marketing expense as well as higher compensation costs. We also recorded $1.8 million of additional operating expenses related to our Russian business. Foreign exchange increased SG&A $2.4 million, or 2.6 percent.
For the three months ended March 31, 2022, SG&A as a percentage of net sales decreased primarily from higher sales.
Restructuring Charges
For the three months ended March 31, 2022, restructuring expense was $0.3 million, a decrease of $3.6 million from prior year.
31
Operating Income (Loss)
For the three months ended March 31, 2022, operating income increased to $7.9 million, primarily due to higher sales. Lower charges related to the acquisition of PowerA of $6.5 million and lower restructuring expense of $3.6 million also contributed to the higher operating income. Foreign exchange decreased operating income $1.2 million.
Interest Expense
For the three months ended March 31, 2022, the decrease in interest expense was primarily due to lower outstanding debt and lower interest rates versus the first quarter of 2021.
Other Expense, Net
For the three months ended March 31, 2022, other expense, net declined $12.0 million primarily due to charges related to the refinancing of our debt in first quarter of 2021 that did not recur. These charges consisted of a call premium of $9.8 million and a $3.7 million charge for the write-off of debt issuance costs.
Income Tax Expense (Benefit)
For the three months ended March 31, 2022, we recorded income tax expense of $1.7 million on a loss before taxes of $1.0 million. This compared with an income tax benefit of $5.9 million on a loss before taxes of $26.3 million for the three months ended March 31, 2021.
See "Note 11. Income Taxes" for more information.
Net Loss/Diluted Loss per Share
For the three months ended March 31, 2022, net loss decreased primarily due to higher operating income. Foreign exchange increased net loss $0.3 million, or 1.5 percent.
Segment Net Sales and Operating Income (Loss) For the Three Months Ended March 31, 2022 and 2021
ACCO Brands North America
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|
|
Three Months Ended March 31, |
|
|
Amount of Change |
|
|
(in millions) |
|
2022 |
|
|
2021 |
|
|
$ |
|
|
%/pts |
|
|
Net sales |
$ |
|
208.5 |
|
$ |
|
188.8 |
|
$ |
|
19.7 |
|
|
|
10.4 |
% |
|
Segment Operating income (loss)⁽¹⁾ |
|
|
13.9 |
|
|
|
(0.7 |
) |
|
|
14.6 |
|
|
NM |
|
|
Segment operating margin (loss) |
|
|
6.7 |
% |
|
|
(0.4 |
)% |
|
|
|
|
|
7.1 |
|
pts |
Comparable net sales (Non-GAAP)⁽²⁾ |
$ |
|
208.5 |
|
$ |
|
188.8 |
|
$ |
|
19.7 |
|
|
|
10.4 |
% |
|
(1)Segment operating income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Business Segments," for a reconciliation of total "Segment operating income" to "Income/(Loss) before income tax."
(2)See reconciliation to GAAP, contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."
|
|
|
FX Impact vs US$ |
|
2022 1st QTR Avg vs. 2021 1st QTR Avg |
Currency |
|
Increase/(Decline) |
Canadian dollar |
|
(1)% |
For the three months ended March 31, 2022, sales and comparable net sales increased, primarily due to sales price increases which added $13.9 million and volume increases in school and business products, and computer accessories, which were partly offset by lower sales of video gaming products.
For the three months ended March 31, 2022, operating income and operating margin increased, primarily due to higher sales and higher gross margins. The prior period included $2.4 million of inventory step-up related to PowerA.
32
ACCO Brands EMEA
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|
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|
|
Three Months Ended March 31, |
|
|
Amount of Change |
|
|
(in millions) |
|
2022 |
|
|
2021 |
|
|
$ |
|
|
%/pts |
|
|
Net sales |
$ |
|
156.1 |
|
$ |
|
156.9 |
|
$ |
|
(0.8 |
) |
|
|
(0.5 |
)% |
|
Segment Operating income⁽¹⁾ |
|
|
5.6 |
|
|
|
16.8 |
|
|
|
(11.2 |
) |
|
|
(66.7 |
)% |
|
Segment operating margin |
|
|
3.6 |
% |
|
|
10.7 |
% |
|
|
|
|
|
-7.1 |
|
pts |
Comparable net sales (Non-GAAP)⁽²⁾ |
$ |
|
168.5 |
|
$ |
|
156.9 |
|
$ |
|
11.6 |
|
|
|
7.4 |
% |
|
(1)Segment operating income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Business Segments," for a reconciliation of total "Segment operating income" to "Income/(Loss) before income tax."
(2)See reconciliation to GAAP, contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."
|
|
|
FX Impact vs US$ |
|
2022 1st QTR Avg vs. 2021 1st QTR Avg |
Currency |
|
Increase/(Decline) |
Euro |
|
(7)% |
Swedish krona |
|
(10)% |
British pound |
|
(3)% |
For the three months ended March 31, 2022, net sales decreased due to adverse foreign exchange of $12.4 million, or 7.9 percent. Comparable net sales increased mainly due to price increases which added $8.0 million and higher volume, primarily from computer accessories and business products. Additional price increases will be effective in the second quarter.
For the three months ended March 31, 2022, operating income and operating margin decreased due to inflation that exceeded the benefit of price increases, as well as $0.8 million from unfavorable foreign exchange.
ACCO Brands International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Amount of Change |
|
|
(in millions) |
|
2022 |
|
|
2021 |
|
|
$ |
|
|
%/pts |
|
|
Net sales |
$ |
|
77.0 |
|
$ |
|
64.8 |
|
$ |
|
12.2 |
|
|
|
18.8 |
% |
|
Segment Operating income⁽¹⁾ |
|
|
4.2 |
|
|
|
0.6 |
|
|
|
3.6 |
|
|
NM |
|
|
Segment operating margin |
|
|
5.5 |
% |
|
|
0.9 |
% |
|
|
|
|
|
4.6 |
|
pts |
Comparable net sales (Non-GAAP)⁽²⁾ |
$ |
|
79.5 |
|
$ |
|
64.8 |
|
$ |
|
14.7 |
|
|
|
22.7 |
% |
|
(1) Segment operating income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Business Segments," for a reconciliation of total "Segment operating income" to "Income/(Loss) before income tax."
(2) See reconciliation to GAAP, contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."
|
|
|
FX Impact vs US$ |
|
2022 1st QTR Avg vs. 2021 1st QTR Avg |
Currency |
|
Increase/(Decline) |
Brazilian real |
|
4 % |
Australian dollar |
|
(6)% |
Mexican peso |
|
(1)% |
Japanese yen |
|
(9)% |
For the three months ended March 31, 2022, net sales and comparable net sales rose as a result of increased volume of 16.8 percent, particularly in Brazil and Mexico due to a return to in-person education, as well as price increases, which added $4.4 million or 6.8 percent, partly offset by adverse foreign exchange of $2.5 million or 3.9 percent.
For the three months ended March 31, 2022, operating income and operating margin improved primarily as a result of higher sales, lower reserves for bad debts due to improved collections and the benefit of long-term cost reductions. Foreign exchange decreased operating income $0.4 million.
Liquidity and Capital Resources
Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures, dividends and acquisitions. Our principal sources of liquidity are cash flows from operating activities, cash and cash equivalents held and seasonal borrowings under our $600 million multi-currency revolving credit facility (the "Revolving
33
Facility"). As of March 31, 2022, there was $208.3 million in borrowings outstanding under the Revolving Facility ($21.0 million reported in "Current portion of long-term debt" and $187.3 million reported in "Long-term debt, net"), we had $91.3 million in cash on hand, and the amount available for borrowings was $379.8 million (allowing for $11.9 million of letters of credit outstanding on that date). We maintain adequate financing arrangements at market rates.
As of March 31, 2022, our Consolidated Leverage Ratio was approximately 3.70 to 1.00 versus our maximum covenant of 4.25 to 1.00. We have no debt maturities before March 2026.
Our near-term use of cash will be to fund our dividend and reduce debt. Our long-term strategy remains to deploy cash to fund dividends, reduce debt, make acquisitions and repurchase stock.
During April 2022, we made a contingent purchase price payment of $27.0 million related to the acquisition of PowerA.
The $588.2 million of debt currently outstanding under our senior secured credit facilities has a weighted average interest rate of 2.05 percent as of March 31, 2022, and the $575.0 million outstanding principal amount of our senior unsecured notes due 2029 have a fixed interest rate of 4.25 percent.
Adequacy of Liquidity Sources
We believe that cash flow from operations, our current cash balance and other sources of liquidity, including borrowings available under our Revolving Facility, will be adequate to support our requirements for working capital, capital and restructuring expenditures and to service indebtedness for the foreseeable future.
Restructuring Activities
From time to time the Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.
The restructuring provision was $0.3 million and $3.9 million for the three months ended March 31, 2022 and 2021, respectively, primarily related to the Company's cost reduction programs representing expected severance costs mainly in North America. Additional charges were also taken in Brazil, EMEA and Mexico. For additional details, see "Note 10. Restructuring" to the condensed consolidated financial statements contained in "Part I, Item 1. Financial Information" of this Quarterly Report on Form 10-Q.
Cash Flow for the Three Months Ended March 31, 2022 and 2021
Cash Flow from Operating Activities
Cash used by operating activities during the three months ended March 31, 2022 was $104.2 million, an increase in cash outflow of $61.8 million compared to cash used by operating activities of $42.4 million during the prior year's first three months. The increase in cash used by operating activities was primarily due to higher investments in net working capital of $32.0 million, higher customer program payments of $8.3 million driven by higher sales and higher annual incentive payments of approximately $16.5 million.
The table below shows our cash flow used or provided by the components of net working capital for the three months ended March 31, 2022 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
(in millions) |
|
March 31, 2022 |
|
|
March 31, 2021 |
|
|
Amount of Change |
|
Accounts receivable |
$ |
|
84.1 |
|
$ |
|
34.4 |
|
$ |
|
49.7 |
|
Inventories |
|
|
(37.3 |
) |
|
|
(54.4 |
) |
|
|
17.1 |
|
Accounts payable |
|
|
(87.5 |
) |
|
|
11.3 |
|
|
|
(98.8 |
) |
Cash flow used by net working capital |
$ |
|
(40.7 |
) |
$ |
|
(8.7 |
) |
$ |
|
(32.0 |
) |
34
•Accounts receivable was a source of cash of $84.1 million during the three months ended March 31, 2022, a favorable change of $49.7 million compared to a source of cash of $34.4 million during the three months ended March 31, 2021. The $49.7 million favorable change was due to increased collections on a higher level of accounts receivable, primarily because the prior year included minimal collections related to PowerA as we did not purchase the outstanding accounts receivable at closing.
•Inventories was a use of cash of $37.3 million during the three months ended March 31, 2022, a favorable change of $17.1 million when compared with the $54.4 million cash used during the three months ended March 31, 2021. The favorable change was driven by the Company having increased inventory exiting the prior year to mitigate supply chain issues as well as to support the growth of PowerA.
•Accounts payable was a use of cash of $87.5 million during the three months ended March 31, 2022, an unfavorable change of $98.8 million when compared to a source of cash of $11.3 million during the three months ended March 31, 2021. The $98.8 million unfavorable change was due to increased payments on a higher level of accounts payable, partly because the prior year included minimal payments related to PowerA as we did not acquire the outstanding PowerA accounts payable at closing. In addition, high levels of accounts payable at the end of the prior year associated with the timing of inventory purchases noted above also drove higher vendor payments in the first quarter of the current year.
Cash Flow from Investing Activities
Cash used by investing activities was $3.4 million and cash provided by investing activities was $14.4 million for the three months ended March 31, 2022 and 2021, respectively. Cash used for capital expenditures was down slightly by $0.4. Cash provided by acquisitions decreased by $18.2 million primarily because the prior year period included a working capital adjustment received from the seller of PowerA that did not recur.
Cash Flow from Financing Activities
Cash provided by financing activities was $153.5 million for the three months ended March 31, 2022, an increase of $85.2 million, compared with cash provided of $68.3 million by financing activities during the first three months of the prior year. The increase of $85.2 million primarily relates to an increase in cash provided by our incremental net borrowings of $64.7 million during the first three months of 2022, compared to the prior year’s first three months. In addition, there were cash outflows of $19.5 million related to our debt refinancing in the first quarter of 2021.
Credit Facilities and Notes Covenants
As of March 31, 2022, our Consolidated Leverage Ratio was approximately 3.70 to 1.00 versus our maximum covenant of 4.25 to 1.00.
Guarantees and Security
Generally, obligations under the Credit Agreement are guaranteed by certain of the Company’s existing and future subsidiaries, and are secured by substantially all of the Company’s and certain guarantor subsidiaries’ assets, subject to certain exclusions and limitations.
Supplemental Non-GAAP Financial Measure
To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), we provide investors with certain non-GAAP financial measures, including comparable net sales. Comparable net sales represent net sales excluding the impact of material acquisitions and with
35
current-period foreign operation sales translated at prior-year currency rates. We sometimes refer to comparable net sales as comparable sales.
We use comparable net sales both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business. We believe comparable net sales provide management and investors with a more complete understanding of our underlying operational results and trends, facilitate meaningful period-to-period comparisons and enhance an overall understanding of our past and future financial performance. Comparable net sales should not be considered in isolation or as a substitute for, or superior to, GAAP net sales and should be read in connection with the Company's financial statements presented in accordance with GAAP.
The following tables provide a reconciliation of GAAP net sales change as reported to non-GAAP comparable net sales change:
|
|
|
|
|
|
|
|
Comparable Net Sales - Three Months Ended March 31, 2022 |
|
|
|
|
Non-GAAP |
|
|
GAAP |
|
Currency |
|
Comparable |
(in millions) |
|
Net Sales |
|
Translation |
|
Net Sales |
ACCO Brands North America |
$ |
208.5 |
$ |
— |
$ |
208.5 |
ACCO Brands EMEA |
|
156.1 |
|
(12.4) |
|
168.5 |
ACCO Brands International |
|
77.0 |
|
(2.5) |
|
79.5 |
Total |
$ |
441.6 |
$ |
(14.9) |
$ |
456.5 |
|
|
|
|
|
|
|
|
Amount of Change - Three Months Ended March 31, 2022 compared to the Three Months Ended March 31, 2021 |
|
$ Change - Net Sales |
|
|
|
|
Non-GAAP |
|
|
GAAP |
|
|
|
Comparable |
|
|
Net Sales |
|
Currency |
|
Net Sales |
(in millions) |
|
Change |
|
Translation |
|
Change |
ACCO Brands North America |
$ |
19.7 |
$ |
— |
$ |
19.7 |
ACCO Brands EMEA |
|
(0.8) |
|
(12.4) |
|
11.6 |
ACCO Brands International |
|
12.2 |
|
(2.5) |
|
14.7 |
Total |
$ |
31.1 |
$ |
(14.9) |
$ |
46.0 |
|
|
|
|
|
|
|
|
% Change - Net Sales |
|
|
|
|
Non-GAAP |
|
|
GAAP |
|
|
|
Comparable |
|
|
Net Sales |
|
Currency |
|
Net Sales |
|
|
Change |
|
Translation |
|
Change |
ACCO Brands North America |
|
10.4% |
|
—% |
|
10.4% |
ACCO Brands EMEA |
|
(0.5)% |
|
(7.9)% |
|
7.4% |
ACCO Brands International |
|
18.8% |
|
(3.9)% |
|
22.7% |
Total |
|
7.6% |
|
(3.6)% |
|
11.2% |