- Reported net sales of $403 million, above outlook
- Gross margins improved 250 basis points year-over-year
- Operating income of $10.1 million grew 49% year-over-year,
adjusted operating income of $24.3 million grew 8%
year-over-year
- EPS of ($0.04), adjusted EPS was $0.09, above outlook
- Net operating cash outflow improved $82 million from last year
driven by better working capital management
- Reiterates full year 2023 outlook supported by better than
expected first quarter results
ACCO Brands Corporation (NYSE: ACCO) today announced its first
quarter results for the period ended March 31, 2023.
"I am pleased with the solid execution by our team that allowed
us to exceed the top- and bottom-line expectations set in February.
Our results reflect the ongoing strength of our brands and the
impact of the actions we have taken to transform our business by
expanding our product categories, broadening our geographic reach,
bringing innovative new consumer-centric products to market and
streamlining our cost structure," said Boris Elisman, Chairman and
Chief Executive Officer of ACCO Brands.
“In 2023, our top priority remains to restore our margin
profile. We made significant progress on this in the first quarter,
aided by our pricing, productivity and restructuring programs. We
expect to build upon this momentum as we progress throughout the
year and deliver margin expansion and profit growth in 2023. After
a solid first quarter, we remain confident in our ability to
generate strong cash flow in 2023, which we intend to use to
support our quarterly dividend and reduce debt,” added Elisman.
First Quarter Results
Net sales declined 8.8 percent to $402.6 million from $441.6
million in 2022. Adverse foreign exchange reduced sales by $10.6
million, or 2.4 percent. Comparable sales fell 6.4 percent. Both
reported and comparable sales declines were due to reduced volume
reflecting a more challenging macroeconomic environment, the return
of normal seasonality in back-to-school purchasing by retailers in
North America and weaker sales of technology accessories. These
factors more than offset the effect of cumulative global price
increases and volume growth in the International segment.
Operating income increased to $10.1 million versus $6.8 million
in 2022, and adjusted operating income increased to $24.3 million
from $22.6 million in the prior year. Both increases reflect
improved gross margin from the effect of cumulative global pricing
initiatives and reduced SG&A expense due to strong cost
controls. Adverse foreign exchange reduced operating income by $0.2
million.
The Company reported a net loss of $3.7 million, or ($0.04) per
share, compared with a prior year net loss of $2.7 million, or
($0.03) per share. Adjusted net income was $8.5 million, or $0.09
per share, compared with $10.4 million, or $0.11 per share in 2022.
Both declines were due to higher interest and non-operating pension
costs.
Business Segment Results
ACCO Brands North America – First quarter segment net sales of
$176.7 million decreased 15.3 percent versus the prior year.
Adverse foreign exchange reduced sales by 0.7 percent. Comparable
sales of $178.2 million were down 14.6 percent. Both decreases
reflect reduced volumes due to a weaker macroeconomic environment,
lower early back-to-school purchases by retailers and lower demand
for technology accessories. In 2022, due to supply chain concerns
retailers purchased back-to-school product earlier than normal,
which did not occur at the same level in 2023.
First quarter operating income in North America was $5.2 million
versus $13.9 million a year earlier, and adjusted operating income
was $10.9 million compared to $19.8 million a year ago, with both
declines primarily reflecting the impact of lower sales, the
lagging effect of inflation, and negative fixed cost leverage.
ACCO Brands EMEA - First quarter segment net sales of $135.8
million decreased 13.0 percent versus the prior year. Adverse
foreign exchange reduced sales by 5.7 percent. Comparable sales of
$144.8 million decreased 7.3 percent versus the prior-year period.
Both reported and comparable sales declines reflect reduced demand
due to a weaker macroeconomic environment in the region and lower
demand for technology accessories. This more than offset the effect
of significant cumulative pricing actions.
First quarter operating income in EMEA was $7.8 million versus
$5.6 million a year earlier, and adjusted operating income was
$13.6 million compared to $9.1 million a year ago. The increases in
both reported operating income and adjusted operating income
reflect improved gross margins from the cumulative effect of price
increases and cost savings actions, more than offsetting negative
fixed cost leverage and higher costs for certain goods.
ACCO Brands International - First quarter segment sales of $90.1
million increased 17.0 percent versus the prior year. Adverse
foreign exchange reduced sales by 0.2 percent. Comparable sales of
$90.3 million increased 17.2 percent versus the year-ago period.
Both sales increases reflect price increases, as well as volume
gains in Mexico and Brazil from the improvement of in-person
education and return-to-work trends.
First quarter operating income in the International segment was
$9.0 million versus $4.2 million a year earlier, and adjusted
operating income was $11.7 million compared to $6.2 million a year
ago. Both increases were due primarily to increased sales and
improved cost leverage.
Capital Allocation and Dividend
For the quarter, the Company improved its operating net cash
outflow by $81.0 million to $23.2 million versus $104.2 million in
the prior year, with the improvement driven by working capital.
Free cash flow improved by $82.4 million and was an outflow of
$25.2 million versus an outflow of $107.6 million a year
earlier.
On April 28, 2023, ACCO Brands announced that its board of
directors declared a regular quarterly cash dividend of $0.075 per
share. The dividend will be paid on June 9, 2023, to stockholders
of record at the close of business on May 19, 2023.
Full Year 2023 and Second Quarter Outlook
The Company is reaffirming its full year 2023 outlook and
providing a 2Q outlook. For the full year, we expect comparable
sales to be flat to down 3 percent, reflecting a challenging
near-term demand environment. Foreign exchange is expected to be
neutral to reported revenue. Full year adjusted EPS is expected to
rise 4 percent to 8 percent, to $1.08 to $1.12, as double-digit
growth in adjusted operating income, is partially offset by higher
interest and non-cash non-operating pension expenses. The Company
is reiterating that it expects 2023 free cash flow to grow to at
least $100 million and to end the year with a consolidated leverage
ratio of 3.5x to 3.7x.
In the second quarter, we expect comparable sales to be down 4
percent to down 7 percent, with adjusted EPS within a range of
$0.29 to $0.32.
Webcast
At 8:30 a.m. ET on May 5, 2023, ACCO Brands Corporation will
host a conference call to discuss the Company's first quarter 2023
results. The call will be broadcast live via webcast. The webcast
can be accessed through the Investor Relations section of
www.accobrands.com. The webcast will be in listen-only mode and
will be available for replay following the event.
About ACCO Brands Corporation
ACCO Brands, the Home of Great Brands Built by Great People,
designs, manufactures and markets consumer and end-user products
that help people work, learn, play and thrive. Our widely
recognized brands include AT-A-GLANCE®, Five Star®, Kensington®,
Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More
information about ACCO Brands Corporation (NYSE: ACCO) can be found
at www.accobrands.com.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with
generally accepted accounting principles (GAAP), we have provided
certain non-GAAP financial information in this earnings release to
aid investors in understanding the Company's performance. Each
non-GAAP financial measure is defined and reconciled to its most
closely related GAAP financial measure in the "About Non-GAAP
Financial Measures" section of this earnings release.
Forward-Looking Statements
Statements contained herein, other than statements of historical
fact, particularly those anticipating future financial performance,
business prospects, growth, strategies, business operations and
similar matters, results of operations, liquidity and financial
condition, are “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements are based on the beliefs and assumptions of management
based on information available to us at the time such statements
are made. These statements, which are generally identifiable by the
use of the words “will,” “believe,” “expect,” “intend,”
“anticipate,” “estimate,” “forecast,” “project,” “plan,” and
similar expressions, are subject to certain risks and
uncertainties, are made as of the date hereof, and we undertake no
duty or obligation to update them. Because actual results may
differ materially from those suggested or implied by such
forward-looking statements, you should not place undue reliance on
them when deciding whether to buy, sell or hold the company’s
securities.
Our outlook is based on certain assumptions, which we believe to
be reasonable under the circumstances. These include, without
limitation, assumptions regarding the impact of the COVID-19
pandemic and the war in Ukraine; the impact of inflation and global
economic uncertainties, fluctuations in foreign currency exchange
rates and acquisitions; and the other factors described below.
Among the factors that could cause our actual results to differ
materially from our forward-looking statements are: our ability to
successfully execute our restructuring plans and realize the
benefits of our productivity initiatives; our ability to obtain
additional price increases and realize longer-term cost reductions;
the ongoing impact of the COVID-19 pandemic; a relatively limited
number of large customers account for a significant percentage of
our sales; issues that influence customer and consumer
discretionary spending during periods of economic uncertainty or
weakness; risks associated with foreign currency exchange rate
fluctuations; challenges related to the highly competitive business
environment in which we operate; our ability to develop and market
innovative products that meet consumer demands and to expand into
new and adjacent product categories that are experiencing higher
growth rates; our ability to successfully expand our business in
emerging markets and the exposure to greater financial,
operational, regulatory, compliance and other risks in such
markets; the continued decline in the use of certain of our
products; risks associated with seasonality; the sufficiency of
investment returns on pension assets, risks related to actuarial
assumptions, changes in government regulations and changes in the
unfunded liabilities of a multi-employer pension plan; any
impairment of our intangible assets; our ability to secure, protect
and maintain our intellectual property rights, and our ability to
license rights from major gaming console makers and video game
publishers to support our gaming accessories; continued disruptions
in the global supply chain; risks associated with inflation and
other changes in the cost or availability of raw materials,
transportation, labor, and other necessary supplies and services
and the cost of finished goods; the continued global shortage of
microchips which are needed in our gaming and computer accessories
businesses; risks associated with outsourcing production of certain
of our products, information technology systems and other
administrative functions; the failure, inadequacy or interruption
of our information technology systems or its supporting
infrastructure; risks associated with a cybersecurity incident or
information security breach, including that related to a disclosure
of personally identifiable information; our ability to grow
profitably through acquisitions; our ability to successfully
integrate acquisitions and achieve the financial and other results
anticipated at the time of acquisition, including planned
synergies; risks associated with our indebtedness, including
limitations imposed by restrictive covenants, our debt service
obligations, and our ability to comply with financial ratios and
tests; a change in or discontinuance of our stock repurchase
program or the payment of dividends; product liability claims,
recalls or regulatory actions; the impact of litigation or other
legal proceedings; our failure to comply with applicable laws,
rules and regulations and self-regulatory requirements, the costs
of compliance and the impact of changes in such laws; our ability
to attract and retain qualified personnel; the volatility of our
stock price; risks associated with circumstances outside our
control, including those caused by public health crises, such as
the occurrence of contagious diseases like COVID-19, severe weather
events, war, terrorism and other geopolitical incidents; and other
risks and uncertainties described in “Part I, Item 1A. Risk
Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2022, and in other reports we file with the Securities
and Exchange Commission.
ACCO Brands Corporation and
Subsidiaries
Condensed Consolidated Balance
Sheets
March 31, 2023
December 31, 2022
(in millions)
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
127.1
$
62.2
Accounts receivable, net
303.8
384.1
Inventories
422.5
395.2
Other current assets
41.2
40.8
Total current assets
894.6
882.3
Total property, plant and equipment
594.7
589.2
Less: accumulated depreciation
(414.8
)
(404.1
)
Property, plant and equipment, net
179.9
185.1
Right of use asset, leases
87.4
88.8
Deferred income taxes
101.2
99.7
Goodwill
671.9
671.5
Identifiable intangibles, net
842.4
847.0
Other non-current assets
15.4
20.3
Total assets
$
2,792.8
$
2,794.7
Liabilities and Stockholders'
Equity
Current liabilities:
Notes payable
$
9.1
$
10.3
Current portion of long-term debt
47.3
49.7
Accounts payable
204.5
239.5
Accrued compensation
31.9
38.3
Accrued customer program liabilities
74.2
103.3
Lease liabilities
21.1
21.2
Other current liabilities
116.3
126.7
Total current liabilities
504.4
589.0
Long-term debt, net
1,035.0
936.5
Long-term lease liabilities
73.8
75.2
Deferred income taxes
137.3
144.1
Pension and post-retirement benefit
obligations
152.9
155.5
Other non-current liabilities
79.6
84.3
Total liabilities
1,983.0
1,984.6
Stockholders' equity:
Common stock
1.0
1.0
Treasury stock
(45.0
)
(43.4
)
Paid-in capital
1,903.3
1,897.2
Accumulated other comprehensive loss
(533.8
)
(540.3
)
Accumulated deficit
(515.7
)
(504.4
)
Total stockholders' equity
809.8
810.1
Total liabilities and stockholders'
equity
$
2,792.8
$
2,794.7
ACCO Brands Corporation and
Subsidiaries
Consolidated Statements of
Loss (Unaudited)
(In millions, except per share
data)
Three Months Ended March
31,
2023
2022
% Change
Net sales
$
402.6
$
441.6
(8.8
)%
Cost of products sold
283.3
322.0
(12.0
)%
Gross profit
119.3
119.6
(0.3
)%
Operating costs and expenses:
Selling, general and administrative
expenses
95.0
98.8
(3.8
)%
Amortization of intangibles
10.9
11.1
(1.8
)%
Restructuring charges
3.3
0.3
NM
Change in fair value of contingent
consideration
—
2.6
NM
Total operating costs and expenses
109.2
112.8
(3.2
)%
Operating income
10.1
6.8
48.5
%
Non-operating expense (income):
Interest expense
13.9
9.7
43.3
%
Interest income
(2.4
)
(1.4
)
(71.4
)%
Non-operating pension expense (income)
0.1
(1.4
)
NM
Other expense, net
1.8
0.9
100.0
%
Loss before income tax
(3.3
)
(1.0
)
NM
Income tax expense
0.4
1.7
NM
Net loss
$
(3.7
)
$
(2.7
)
(37.0
)%
Per share:
Basic loss per share
$
(0.04
)
$
(0.03
)
(33.3
)%
Diluted loss per share
$
(0.04
)
$
(0.03
)
(33.3
)%
Weighted average number of shares
outstanding:
Basic
94.9
96.2
Diluted
94.9
96.2
Cash dividends declared per common
share
$
0.075
$
0.075
Statistics (as a % of Net sales, except
Income tax rate)
Three Months Ended March
31,
2023
2022
Gross profit (Net sales, less Cost of
products sold)
29.6
%
27.1
%
Selling, general and administrative
expenses
23.6
%
22.4
%
Operating income
2.5
%
1.5
%
Loss before income tax
(0.8
)%
(0.2
)%
Net loss
(0.9
)%
(0.6
)%
Income tax rate
(12.1
)%
(170.0
)%
ACCO Brands Corporation and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three Months Ended March
31,
(in millions)
2023
2022
Operating activities
Net loss
$
(3.7
)
$
(2.7
)
Loss on disposal of assets
1.1
—
Change in fair value of contingent
liability
—
2.6
Depreciation
9.0
9.9
Amortization of debt issuance costs
0.8
0.7
Amortization of intangibles
10.9
11.1
Stock-based compensation
5.6
4.9
Changes in operating assets and
liabilities:
Accounts receivable
88.6
84.1
Inventories
(25.0
)
(37.3
)
Other assets
3.6
(7.6
)
Accounts payable
(38.0
)
(87.5
)
Accrued expenses and other liabilities
(63.6
)
(76.5
)
Accrued income taxes
(12.5
)
(5.9
)
Net cash used by operating activities
(23.2
)
(104.2
)
Investing activities
Additions to property, plant and
equipment
(2.0
)
(3.4
)
Net cash used by investing activities
(2.0
)
(3.4
)
Financing activities
Proceeds from long-term borrowings
101.1
168.0
Repayments of long-term debt
(10.0
)
(5.0
)
Repayments of notes payable, net
(1.2
)
(5.3
)
Dividends paid
—
(7.3
)
Payments related to tax withholding for
stock-based compensation
(1.7
)
(1.2
)
Proceeds from the exercise of stock
options
—
4.3
Net cash provided by financing
activities
88.2
153.5
Effect of foreign exchange rate changes on
cash and cash equivalents
1.9
4.2
Net increase in cash and cash
equivalents
64.9
50.1
Cash and cash equivalents
Beginning of the period
62.2
41.2
End of the period
$
127.1
$
91.3
About Non-GAAP Financial Measures
We explain below how we calculate each of our non-GAAP financial
measures and a reconciliation of our current period and historical
non-GAAP financial measures to the most directly comparable GAAP
financial measures follows.
We use our non-GAAP financial measures both to explain our
results to stockholders and the investment community and in the
internal evaluation and management of our business. We believe our
non-GAAP financial measures 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.
Our non-GAAP financial measures exclude certain items that may
have a material impact upon our reported financial results such as
restructuring charges, transaction and integration expenses
associated with material acquisitions, the impact of foreign
currency exchange rate fluctuations and acquisitions, unusual tax
items, goodwill impairment charges, and other non-recurring items
that we consider to be outside of our core operations. These
measures should not be considered in isolation or as a substitute
for, or superior to, the directly comparable GAAP financial
measures and should be read in connection with the Company’s
financial statements presented in accordance with GAAP.
Our non-GAAP financial measures include the following:
Comparable Sales: Represents
net sales excluding the impact of material acquisitions with
current-period foreign operation sales translated at prior-year
currency rates. We believe comparable sales are useful to investors
and management because they reflect underlying sales and sales
trends without the effect of acquisitions and fluctuations in
foreign exchange rates and facilitate meaningful period-to-period
comparisons. We sometimes refer to comparable sales as comparable
net sales.
Adjusted Gross Profit:
Represents gross profit excluding the effect of the amortization of
the step-up in inventory from material acquisitions. We believe
adjusted gross profit is useful to investors and management because
it reflects underlying gross profit without the effect of inventory
adjustments resulting from acquisitions that we consider to be
outside our core operations and facilitates meaningful
period-to-period comparisons.
Adjusted Selling, General and
Administrative (SG&A) Expenses: Represents selling,
general and administrative expenses excluding transaction and
integration expenses related to material acquisitions. We believe
adjusted SG&A expenses are useful to investors and management
because they reflect underlying SG&A expenses without the
effect of expenses related to acquiring and integrating
acquisitions that we consider to be outside our core operations and
facilitate meaningful period-to-period comparisons.
Adjusted Operating Income/Adjusted
Income Before Taxes/Adjusted Net Income/Adjusted Net Income Per
Diluted Share: Represents operating income, income
before taxes, net income, and net income per diluted share
excluding restructuring and goodwill impairment charges, the
amortization of intangibles, the amortization of the step-up in
value of inventory, the change in fair value of contingent
consideration, transaction and integration expenses associated with
material acquisitions, non-recurring items in interest expense or
other income/expense such as expenses associated with debt
refinancing, a bond redemption, or a pension curtailment, and other
non-recurring items as well as all unusual and discrete income tax
adjustments, including income tax related to the foregoing. We
believe these adjusted non-GAAP financial measures are useful to
investors and management because they reflect our underlying
operating performance before items that we consider to be outside
our core operations and facilitate meaningful period-to-period
comparisons. Senior management’s incentive compensation is derived,
in part, using adjusted operating income and adjusted net income
per diluted share, which is derived from adjusted net income. We
sometimes refer to adjusted net income per diluted share as
adjusted earnings per share or adjusted EPS.
Adjusted Income Tax
Expense/Rate: Represents income tax expense/rate
excluding the tax effect of the items that have been excluded from
adjusted income before taxes, unusual income tax items such as the
impact of tax audits and changes in laws, significant reserves for
cash repatriation, excess tax benefits/losses, and other discrete
tax items. We believe our adjusted income tax expense/rate is
useful to investors because it reflects our baseline income tax
expense/rate before benefits/losses and other discrete items that
we consider to be outside our core operations and facilitates
meaningful period-to-period comparisons.
Adjusted EBITDA: Represents
net income excluding the effects of depreciation, stock-based
compensation expense, amortization of intangibles, the change in
fair value of contingent consideration, interest expense, net,
other (income) expense, net, and income tax expense, the
amortization of the step-up in value of inventory, transaction and
integration expenses associated with material acquisitions,
restructuring and goodwill impairment charges, non-recurring items
in interest expense or other income/expense such as expenses
associated with debt refinancing, a bond redemption, or a pension
curtailment and other non-recurring items. We believe adjusted
EBITDA is useful to investors because it reflects our underlying
cash profitability and adjusts for certain non-cash charges, and
items that we consider to be outside our core operations and
facilitates meaningful period-to-period comparisons.
Free Cash Flow/Adjusted Free Cash
Flow: Free cash flow represents cash flow from operating
activities less cash used for additions to property, plant and
equipment. Adjusted free cash flow represents free cash flow,
excluding cash payments made for contingent earnouts, plus cash
proceeds from the disposition of assets. We believe free cash flow
and adjusted free cash flow are useful to investors because they
measure our available cash flow for paying dividends, funding
strategic material acquisitions, reducing debt, and repurchasing
shares.
Consolidated Leverage Ratio:
Represents balance sheet debt, plus debt origination costs and less
any cash and cash equivalents divided by adjusted EBITDA. We
believe that consolidated leverage ratio is useful to investors
since the company has the ability to, and may decide to use, a
portion of its cash and cash equivalents to retire debt.
We also provide forward-looking non-GAAP comparable sales,
adjusted earnings per share, free cash flow, adjusted free cash
flow, adjusted EBITDA, and adjusted tax rate, and historical and
forward-looking consolidated leverage ratio. We do not provide a
reconciliation of these forward-looking and historical non-GAAP
measures to GAAP because the GAAP financial measure is not
currently available and management cannot reliably predict all the
necessary components of such non-GAAP measures without unreasonable
effort or expense due to the inherent difficulty of forecasting and
quantifying certain amounts that are necessary for such a
reconciliation, including adjustments that could be made for
restructuring, integration and acquisition-related expenses, the
variability of our tax rate and the impact of foreign currency
fluctuation and material acquisitions, and other charges reflected
in our historical results. The probable significance of each of
these items is high and, based on historical experience, could be
material.
ACCO Brands Corporation and
Subsidiaries
Reconciliation of GAAP to
Adjusted Non-GAAP Information (Unaudited)
(In millions, except per share
data)
The following tables set forth a
reconciliation of certain Consolidated Statements of Loss
information reported in accordance with GAAP to adjusted Non-GAAP
Information for the three months ended March 31, 2023 and 2022.
Three Months Ended March 31,
2023
SG&A
% of Sales
Operating Income
% of Sales
(Loss) Income before
Tax
% of Sales
Income Tax Expense (I)
Tax Rate
Net (Loss) Income
% of Sales
Reported GAAP
$
95.0
23.6 %
$
10.1
2.5 %
$
(3.3)
(0.8)%
$
0.4
(12.1)%
$
(3.7)
(0.9)%
Reported GAAP diluted income per share
(EPS)
$
(0.04)
Restructuring charges
—
3.3
3.3
0.9
2.4
Amortization of intangibles
—
10.9
10.9
2.9
8.0
Other asset write-off
(A)
—
—
1.1
0.3
0.8
Other discrete tax items
(B)
—
—
—
(1.0)
1.0
Adjusted Non-GAAP
$
95.0
23.6 %
$
24.3
6.0 %
$
12.0
3.0 %
$
3.5
29.4 %
$
8.5
2.1 %
Adjusted diluted income per share
(Adjusted EPS)
$
0.09
Three Months Ended March 31,
2022
SG&A
% of Sales
Operating Income
% of Sales
(Loss) Income before
Tax
% of Sales
Income Tax Expense (I)
Tax Rate
Net (Loss) Income
% of Sales
Reported GAAP
$
98.8
22.4 %
$
6.8
1.5 %
$
(1.0)
(0.2)%
$
1.7
(170.0)%
$
(2.7)
(0.6)%
Reported GAAP diluted income per share
(EPS)
$
(0.03)
Charge for Russia business
(C)
(1.8)
1.8
1.8
0.4
1.4
Restructuring charges
—
0.3
0.3
0.1
0.2
Amortization of intangibles
—
11.1
11.1
3.0
8.1
Change in fair value of contingent
consideration
(D)
—
2.6
2.6
0.7
1.9
Operating tax gains
(E)
—
—
(0.1)
—
(0.1)
Other discrete tax items
(B)
—
—
—
(1.6)
1.6
Adjusted Non-GAAP
$
97.0
22.0 %
$
22.6
5.1 %
$
14.7
3.3 %
$
4.3
29.0 %
$
10.4
2.4 %
$
0.11
See "Notes to Reconciliations of GAAP to
Adjusted Non-GAAP Information and Net Loss to Adjusted EBITDA
(Unaudited)" for further information regarding adjusted items.
ACCO Brands Corporation and
Subsidiaries
Reconciliation of Net Loss to
Adjusted EBITDA (Unaudited)
(In millions)
The following table sets forth a
reconciliation of net loss reported in accordance with GAAP to
Adjusted EBITDA.
Three Months Ended March
31,
2023
2022
% Change
Net loss
$
(3.7)
$
(2.7)
(37.0)%
Stock-based compensation
5.6
4.9
14.3 %
Depreciation
9.0
9.9
(9.1)%
Charge for Russia business
(A)
—
1.8
(100.0)%
Amortization of intangibles
10.9
11.1
(1.8)%
Restructuring charges
3.3
0.3
NM
Change in fair value of contingent
consideration
(B)
—
2.6
(100.0)%
Interest expense, net
11.5
8.3
38.6 %
Other expense, net
1.8
0.9
100.0 %
Income tax expense
0.4
1.7
(76.5)%
Adjusted EBITDA (non-GAAP)
$
38.8
$
38.8
— %
Adjusted EBITDA as a % of Net Sales
9.6 %
8.8 %
See "Notes to Reconciliations of
GAAP to Adjusted Non-GAAP Information and Net Loss to Adjusted
EBITDA (Unaudited)" for further information regarding adjusted
items.
Reconciliation of Net Cash
Used by Operating Activities to Free Cash Flow (Unaudited)
(In millions)
The following table sets forth a
reconciliation of net cash used by operating activities reported in
accordance with GAAP to Free Cash Flow.
Three Months Ended March 31,
2023
Three Months Ended March 31,
2022
Net cash provided by operating
activities
$
(23.2)
$
(104.2)
Net used by:
Additions to property, plant and
equipment
(2.0)
(3.4)
Free cash flow (non-GAAP)
$
(25.2)
$
(107.6)
Notes to Reconciliations of
GAAP to Adjusted Non-GAAP Information and Net Loss to Adjusted
EBITDA (Unaudited)
A.
Represents the write off of assets related
to a capital project.
B.
The adjustments to income tax expense
include the effects of the adjustments outlined above and discrete
tax adjustments.
C.
Represents an impact to operating expense
related to our Russia business.
D.
Represents the change in fair value of the
contingent consideration for the PowerA acquisition, which is
included as expense/income in the consolidated statements of
income.
E.
Represents gains related to the release of
unneeded reserves for certain operating taxes.
ACCO Brands Corporation and
Subsidiaries
Supplemental Business Segment
Information and Reconciliation (Unaudited)
(In millions)
2023
2022
Changes
Adjusted
Adjusted
Reported
Adjusted
Operating
Reported
Adjusted
Operating
Adjusted
Adjusted
Operating
Operating
Income
Operating
Operating
Income
Operating
Operating
Reported
Income
Adjusted
Income
(Loss)
Reported
Income
Adjusted
Income
(Loss)
Net Sales
Net Sales
Income
Income
Margin
Net Sales
(Loss)
Items
(Loss)
Margin
Net Sales
(Loss)
Items
(Loss)
Margin
$
%
(Loss) $
(Loss) %
Points
Q1:
ACCO Brands North America
$
176.7
$
5.2
$
5.7
$
10.9
6.2%
$
208.5
$
13.9
$
5.9
$
19.8
9.5%
$
(31.8)
(15.3)%
$
(8.9)
(44.9)%
(330)
ACCO Brands EMEA
135.8
7.8
5.8
13.6
10.0%
156.1
5.6
3.5
9.1
5.8%
(20.3)
(13.0)%
4.5
49.5%
420
ACCO Brands International
90.1
9.0
2.7
11.7
13.0%
77.0
4.2
2.0
6.2
8.1%
13.1
17.0%
5.5
88.7%
490
Corporate
—
(11.9)
—
(11.9)
—
(16.9)
4.4
(12.5)
—
0.6
Total
$
402.6
$
10.1
$
14.2
$
24.3
6.0%
$
441.6
$
6.8
$
15.8
$
22.6
5.1%
$
(39.0)
(8.8)%
$
1.7
7.5%
90
Q2:
ACCO Brands North America
$
306.6
$
50.7
$
6.5
$
57.2
18.7%
ACCO Brands EMEA
137.9
(1.5)
3.6
2.1
1.5%
ACCO Brands International
76.5
6.3
2.3
8.6
11.2%
Corporate
—
(0.1)
(9.7)
(9.8)
Total
$
521.0
$
55.4
$
2.7
$
58.1
11.2%
Q3:
ACCO Brands North America
$
257.2
$
(78.4)
$
104.2
$
25.8
10.0%
ACCO Brands EMEA
130.3
4.9
2.5
7.4
5.7%
ACCO Brands International
98.1
17.3
1.9
19.2
19.6%
Corporate
—
(6.8)
(2.8)
(9.6)
Total
$
485.6
$
(63.0)
$
105.8
$
42.8
8.8%
Q4:
ACCO Brands North America
$
225.7
$
8.9
$
9.8
$
18.7
8.3%
ACCO Brands EMEA
156.0
12.7
5.7
18.4
11.8%
ACCO Brands International
117.7
22.7
1.6
24.3
20.6%
Corporate
—
(8.7)
(0.4)
(9.1)
Total
$
499.4
$
35.6
$
16.7
$
52.3
10.5%
YTD:
ACCO Brands North America
$
176.7
$
5.2
$
5.7
$
10.9
6.2%
$
998.0
$
(4.9)
$
126.4
$
121.5
12.2%
ACCO Brands EMEA
135.8
7.8
5.8
13.6
10.0%
580.3
21.7
15.3
37.0
6.4%
ACCO Brands International
90.1
9.0
2.7
11.7
13.0%
369.3
50.5
7.8
58.3
15.8%
Corporate
—
(11.9)
—
(11.9)
—
(32.5)
(8.5)
(41.0)
Total
$
402.6
$
10.1
$
14.2
$
24.3
6.0%
$
1,947.6
$
34.8
$
141.0
$
175.8
9.0%
See "Notes to Reconciliations of GAAP to
Adjusted Non-GAAP Information and Net Loss to Adjusted EBITDA
(Unaudited)" for further information regarding adjusted items.
ACCO Brands Corporation and
Subsidiaries
Supplemental Net Sales Change
Analysis (Unaudited)
% Change - Net Sales
$ Change - Net Sales (in
millions)
GAAP
Non-GAAP
GAAP
Non-GAAP
Comparable
Comparable
Net Sales
Currency
Net Sales
Net Sales
Currency
Net Sales
Comparable
Change
Translation
Change
Change
Translation
Change
Net Sales
Q1 2023:
ACCO Brands North America
(15.3)%
(0.7)%
(14.6)%
$
(31.8)
$
(1.5)
$
(30.3)
$
178.2
ACCO Brands EMEA
(13.0)%
(5.7)%
(7.3)%
(20.3)
(9.0)
(11.3)
144.8
ACCO Brands International
17.0 %
(0.2)%
17.2 %
13.1
(0.2)
13.3
90.3
Total
(8.8)%
(2.4)%
(6.4)%
$
(39.0)
$
(10.6)
$
(28.4)
$
413.2
(A) Comparable net sales represents net
sales excluding material acquisitions and with current-period
foreign operation sales translated at the prior-year currency
rates.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005894/en/
Christopher McGinnis Investor Relations (847) 796-4320
Acco Brands (NYSE:ACCO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Acco Brands (NYSE:ACCO)
Historical Stock Chart
From Jul 2023 to Jul 2024