ACCO Brands Corporation (NYSE: ABD), a world leader in branded
office products, today reported its second quarter results for the
period ended June 30, 2011.
“We are very pleased with the strength of our results,” said
Robert J. Keller, chairman and chief executive officer. “Despite an
uncertain economic environment, we grew our top and bottom lines,
returned our European operations to profitability and significantly
improved our cash position. We are confident that we are
well-positioned to meet our financial targets for the year.”
Second Quarter Results
Net sales increased 8% to $330.2 million, compared to $305.2
million in the prior-year quarter. Foreign currency favorably
impacted sales by 6% and pricing added 2%. Volume was flat. Second
quarter income from continuing operations was $6.3 million, or
$0.11 per diluted share, compared to income of $4.3 million, or
$0.08 per diluted share, in the prior-year quarter. Using a
normalized effective tax rate of 30% in both periods, adjusted
income from continuing operations was $8.6 million, compared to
$4.3 million in the prior-year period, and $0.15 per share compared
to $0.08 per share in the prior-year period, an increase of
88%.
Reported second quarter operating income increased to $30.6
million, from $25.0 million in the prior-year quarter. EBITDA
increased to $42.2 million, from EBITDA of $36.6 million in the
prior year and included the benefit from foreign exchange
translation of $3.7 million. The company reduced its debt by $11
million in the quarter and ended the quarter with $92.7 million of
cash and no borrowings on its revolving credit facility.
During the quarter, the company sold its GBC - Fordigraph Pty
Ltd subsidiary, based in Sydney, Australia, to The Neopost Group,
based in Paris, France. The sale of GBC - Fordigraph had no impact
on ACCO Australia or the company's Pelikan Artline joint-venture,
which are ACCO Brands' two larger businesses servicing resale
channels in Australia.
GBC - Fordigraph had revenues of approximately $46 million,
operating income from continuing operations of approximately $5
million and earnings of approximately $4 million (or $0.07 per
share), for the year ended December 31, 2010. The company has
accounted for GBC - Fordigraph as a discontinued operation.
Business Segment Highlights
ACCO Brands Americas
ACCO Brands Americas second quarter net sales increased 3% to
$175.7 million, from $169.9 million in the prior-year quarter.
Volume increased modestly. Foreign currency translation and pricing
each impacted sales favorably by nearly 2%.
ACCO Brands Americas second quarter operating income was $14.5
million, compared to $14.4 million in the prior-year quarter.
Operating margin decreased to 8.3% from 8.5% as higher commodity
costs and incentive compensation were only partly offset by pricing
and manufacturing and distribution efficiencies.
ACCO Brands International
ACCO Brands International net sales increased 14% to $105.8
million, compared to $93.2 million in the prior-year quarter.
Foreign currency translation impacted sales favorably by 15% and
pricing added 3%. Volume decreased 4% principally due to reduced
demand in the U.K., partly offset by gains in shredder
placements.
ACCO Brands International reported operating income of $9.0
million, compared to $4.9 million in the prior-year quarter.
Operating margin increased to 8.5% from 5.3% primarily due to
freight and distribution efficiencies and lower selling, general
and administrative expenses in Europe.
Computer Products Group
Computer Products net sales increased 16% to $48.7 million,
compared to $42.1 million in the prior-year quarter. Volume
increased 8% mainly due to new products. Foreign currency
translation impacted sales favorably by 6% and pricing added
2%.
Computer Products operating income was $13.1 million, compared
to $10.7 million in the prior-year quarter. Operating margin
expanded to 26.9% from 25.4% due to the higher sales volume.
Six Month Results
Net sales increased 4% to $628.6 million, compared to $605.7
million in the prior-year period. Foreign currency translation
contributed 4% to sales growth and pricing added 2%. Volume
declined 2%. The company reported a loss from continuing operations
of $2.7 million, or $(0.05) per diluted share, for the six months
ended June 30, 2011, compared to a loss of $0.9 million, or $(0.02)
per diluted share, in the prior-year period. Using a normalized
effective tax rate of 30% in both periods, adjusted income from
continuing operations was $5.4 million, or $0.09 per share,
including $4.3 million of severance and related costs associated
with the rationalization of the company’s European operations,
compared to $5.2 million, or $0.09 per share in the prior-year
period.
The company reported operating income of $43.9 million for the
six months ended June 30, 2011, compared to $45.5 million in the
prior-year period. EBITDA decreased 3% to $66.3 million, from $68.5
million in the prior year, and included the benefit from foreign
exchange translation of $5.3 million.
Business Outlook
The company reiterates its full-year 2011 sales guidance calling
for growth of 2-4% from continuing operations. The company revised
its full-year earnings–per-share guidance for continuing operations
to be at the high end of its previously stated 20-30% growth range,
on a normalized 30% tax rate basis. (Earnings guidance for
continuing operations adjusts for the impact of the GBC –
Fordigraph divestiture completed in the second quarter.) The
company expects free cash flow (after interest, taxes and capital
expenditures) of $100-110 million, including gross proceeds from
the sale of the GBC – Fordigraph business.
Webcast
At 8:30 a.m. Eastern Time today, ACCO Brands Corporation will
host a conference call to discuss the company’s 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 for one month following the event.
Non-GAAP Financial Measures
“Adjusted” results exclude all unusual tax items. Adjusted
supplemental EBITDA from continuing operations excludes other
non-operating items, including other income/expense and stock-based
compensation expense. Adjusted results and supplemental EBITDA from
continuing operations are non-GAAP measures. There could be
limitations associated with the use of non-GAAP financial measures
as compared to the use of the most directly comparable GAAP
financial measure. Management uses the adjusted measures to
determine the returns generated by its operating segments and to
evaluate and identify cost-reduction initiatives. Management
believes these measures provide investors with helpful supplemental
information regarding the underlying performance of the company
from year to year. These measures may be inconsistent with measures
presented by other companies.
About ACCO Brands Corporation
ACCO Brands Corporation is a world leader in branded office
products. Its industry-leading brands include Day-Timer®,
Swingline®, Kensington®, Quartet®, GBC®, Rexel, NOBO, Derwent,
Marbig and Wilson Jones®, among others. Under the GBC brand, the
company is also a leader in the professional print finishing
market.
Forward-Looking Statements
This press release contains statements which may constitute
"forward-looking" statements as that term is defined in the Private
Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to certain risks
and uncertainties, are made as of the date hereof and the company
assumes no obligation to update them.
ACCO Brands' ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Because actual
results may differ from those predicted by such forward-looking
statements, you should not place undue reliance on them when
deciding to buy, sell or hold the company’s securities. Among the
factors that could cause our plans, actions and results to differ
materially from current expectations are: fluctuations in the cost
and availability of raw materials; competition within the markets
in which the company operates; the effects of both general and
extraordinary economic, political and social conditions, including
continued volatility and disruption in the capital and credit
markets; the effect of consolidation in the office products
industry; the liquidity and solvency of our major customers; our
continued ability to access the capital and credit markets; the
dependence of the company on certain suppliers of manufactured
products; the risk that targeted cost savings and synergies from
previous business combinations may not be fully realized or take
longer to realize than expected; future goodwill and/or impairment
charges; foreign exchange rate fluctuations; the development,
introduction and acceptance of new products; the degree to which
higher raw material costs, and freight and distribution costs, can
be passed on to customers through selling price increases and the
effect on sales volumes as a result thereof; increases in health
care, pension and other employee welfare costs; as well as other
risks and uncertainties detailed in the company’s Annual Report on
Form 10-K for the year ended December 31, 2010, under Item 1A,
“Risk Factors,” and in the company's other SEC filings.
ACCO Brands Corporation Consolidated Statements of
Operations and Reconciliation of Adjusted Results
(Unaudited) (In millions of dollars, except per share
data) Three Months Ended June 30,
2011 2010 % Change
Net sales
$ 330.2 $ 305.2 8
% Cost of products sold
224.7
210.7 7 % Gross profit
105.5
94.5 12 % Operating costs and expenses:
Advertising, selling, general and administrative expenses
73.6 68.6 7 % Amortization of
intangibles
1.6 1.6 0 % Restructuring
income
(0.3 ) (0.7 )
57 % Total operating costs and expenses
74.9 69.5 8 %
Operating income
30.6 25.0 22 %
Non-operating expense (income): Interest expense
19.5
19.7 (1 )% Equity in earnings of joint
ventures
(1.2 ) (1.1 ) (9
)% Other expense (income), net
-
0.2 (100 )% Income from
continuing operations before income tax
12.3 6.2
98 % Income tax expense
6.0
1.9 216 % Income from continuing
operations
6.3 4.3 47 % Income from
discontinued operations, net of income taxes
37.4
0.6 NM Net income
$
43.7 $ 4.9 792 %
Per share: Basic earnings per share: Income from continuing
operations
$ 0.11 $ 0.08 38
% Income from discontinued operations
0.68
0.01 NM Basic earnings per share
$ 0.79
$ 0.09 778 % Diluted earnings
per share: Income from continuing operations
$ 0.11
$ 0.08 38 % Income from discontinued
operations
0.64 0.01 NM Diluted earnings per
share
$ 0.75 $ 0.09 733 %
Weighted average number of shares outstanding: Basic
55.2 54.8 Diluted
58.0 57.2
Reconciliation of Reported Consolidated Results to Adjusted
Results Three Months Ended Three Months
Ended June 30, 2011 June 30, 2010
Tax Tax Adjustment
Adjustment (in millions, except per share data)
Reported (A) Adjusted Reported
(A) Adjusted Income from continuing operations before
income tax
$ 12.3 $ - $ 12.3
$ 6.2 $ -
$ 6.2 Income tax expense (benefit)
6.0 (2.3 )
3.7
1.9 - 1.9 Income from
continuing operations
$ 6.3 $ 2.3 $ 8.6
$ 4.3 $ - $ 4.3 Diluted earnings per share:
Income from continuing operations
$ 0.11 $ 0.15
$ 0.08 $ 0.08 Weighted average number of
diluted shares outstanding
58.0 58.0
57.2 57.2
Note – “Adjusted” results are non-GAAP
measures. There could be limitations associated with the use of
non-GAAP financial measures as compared to the most directly
comparable GAAP financial measure. Management believes these
measures provide investors with helpful supplemental information
regarding the underlying performance of the Company from year to
year. These measures may be inconsistent with measures presented by
other companies.
Statistics (as a % of Net sales, except Income tax
rate) Three Months Ended June 30, 2011
2010 Reported
Adjusted Reported
Adjusted Gross profit (Net sales, less Cost of products
sold) 32.0 % 31.0 %
Advertising, selling, general and administrative 22.3 % 22.5 %
Operating income 9.3 % 8.2 % Income from continuing operations
before income tax 3.7 % 2.0 % Net income 13.2 % 13.9 % 1.6 % 1.6 %
Income tax rate 48.8 % 30.0 %
30.6 % 30.0 %
(A) The Company has incurred
significant operating losses in several jurisdictions in prior
periods. In accordance with GAAP, tax valuation allowances have
been recorded on certain of the Company’s deferred tax assets. As a
result, the operating results in these locations have recorded no
tax benefit or expense, which results in a high effective tax rate
for the current period. Assuming all the locations become
profitable in the future and valuation allowances were reversed,
the Company’s ongoing effective tax rate would approximate 30%.
This estimated long-term rate will be subject to variations from
the mix of earnings in the Company’s operating jurisdictions.
Reconciliation of Net Income to Adjusted Supplemental
EBITDA from Continuing Operations (Unaudited) (In
millions of dollars) Three Months
Ended June 30, 2011 2010 % Change
Net income $ 43.7 $ 4.9 NM Discontinued operations (37.4 ) (0.6 )
NM Income taxes, impact of adjustments 2.3 -
NM
Adjusted income from continuing operations 8.6 4.3
100 % Interest expense, net 19.5 19.7 (1 )% Adjusted income tax
expense 3.7 1.9 95 % Depreciation 6.8 7.3 (7 )% Amortization of
intangibles (B) 1.6 1.6 (0 )% Other (income) expense, net - 0.2
(100 )% Stock-based compensation expense 2.0
1.6 25 %
Adjusted supplemental EBITDA from continuing
operations $ 42.2 $ 36.6 15 % Adjusted
supplemental EBITDA from continuing operations as a % of Net Sales
12.8 % 12.0 % (B)
Amortization of intangibles for the three months ended June 30,
2010, excludes $0.1 million that has been included in discontinued
operations, which is excluded from adjusted income from continuing
operations.
ACCO Brands Corporation Consolidated
Statements of Operations and Reconciliation of Adjusted
Results (Unaudited) (In millions of dollars, except per
share data) Six Months Ended June 30,
2011 2010 %
Change Net sales
$ 628.6 $ 605.7
4 % Cost of products sold
433.9
420.2 3 % Gross profit
194.7 185.5 5 % Operating costs
and expenses: Advertising, selling, general and administrative
expenses
147.9 137.4 8 % Amortization
of intangibles
3.3 3.4 (3 )%
Restructuring income
(0.4 ) (0.8
) 50 % Total operating costs and expenses
150.8 140.0 8
% Operating income
43.9 45.5 (4
)% Non-operating expense (income): Interest expense
38.7 39.2 (1 )% Equity in earnings of
joint ventures
(2.4 ) (2.3 ) (4
)% Other expense (income), net
(0.2 )
1.1 NM Income from continuing
operations before income tax
7.8 7.5 4
% Income tax expense
10.5
8.4 25 % Loss from continuing
operations
(2.7 ) (0.9 ) NM
Income from discontinued operations, net of income taxes
38.3 1.1 NM Net income
$ 35.6 $ 0.2 NM
Per share: Basic earnings (loss) per share: Loss from
continuing operations
$ (0.05 ) $
(0.02 ) NM Income from discontinued operations
0.69 0.02 NM Basic earnings (loss) per share
$ 0.65 $ - NM Diluted
earnings (loss) per share: Loss from continuing operations
$
(0.05 ) $ (0.02 ) NM
Income from discontinued operations
0.69 0.02
NM Diluted earnings (loss) per share
$ 0.65
$ - NM Weighted average number of
shares outstanding: Basic
55.1 54.7 Diluted
55.1 54.7 Reconciliation of Reported
Consolidated Results to Adjusted Results Six Months
Ended Six Months Ended June 30, 2011
June 30, 2010 Tax Tax
Adjustment Adjustment (in millions, except per
share data)
Reported (A) Adjusted
Reported (A) Adjusted Income from continuing
operations before income tax
$ 7.8 $ - $ 7.8
$
7.5 $ - $ 7.5 Income tax expense (benefit)
10.5 (8.1 ) 2.4
8.4
(6.1 ) 2.3 Income (loss) from continuing
operations
$ (2.7 ) $ 8.1 $ 5.4
$ (0.9 ) $ 6.1 $ 5.2 Diluted
earnings per share: Income (loss) from continuing operations
$ (0.05 ) $ 0.09
$ (0.02
) $ 0.09 Weighted average number of diluted shares
outstanding.
55.1 57.9
54.7 57.2
Note – “Adjusted” results are non-GAAP
measures. There could be limitations associated with the use of
non-GAAP financial measures as compared to the most directly
comparable GAAP financial measure. Management believes these
measures provide investors with helpful supplemental information
regarding the underlying performance of the Company from year to
year. These measures may be inconsistent with measures presented by
other companies.
Statistics (as a % of Net sales, except Income tax
rate) Six Months Ended June 30, 2011
2010 Reported
Adjusted Reported
Adjusted Gross profit (Net sales, less Cost of products
sold) 31.0 % 30.6 %
Advertising, selling, general and administrative 23.5 % 22.7 %
Operating income 7.0 % 7.5 % Income from continuing operations
before income tax 1.2 % 1.2 % Net income 5.7 % 7.0 % 0.0 % 1.0 %
Income tax rate NM 30.0 %
NM 30.0 %
(A) The Company has incurred
significant operating losses in several jurisdictions in prior
periods. In accordance with GAAP, tax valuation allowances have
been recorded on certain of the Company’s deferred tax assets. As a
result, the operating results in these locations have recorded no
tax benefit or expense, which results in a high effective tax rate
for the current period. Assuming all the locations become
profitable in the future and valuation allowances were reversed,
the Company’s ongoing effective tax rate would approximate 30%.
This estimated long-term rate will be subject to variations from
the mix of earnings in the Company’s operating jurisdictions.
Reconciliation of Net Income to Adjusted Supplemental
EBITDA from Continuing Operations (Unaudited) (In
millions of dollars) Six Months
Ended June 30, 2011 2010 % Change
Net income $ 35.6 $ 0.2 NM Discontinued operations (38.3 ) (1.1 )
NM Income taxes, impact of adjustments 8.1 6.1
33 %
Adjusted income from continuing operations 5.4
5.2 4 % Interest expense, net 38.7 39.2 (1 )% Adjusted income tax
expense 2.4 2.3 4 % Depreciation (B) 13.9 14.9 (7 )% Amortization
of intangibles (C) 3.3 3.4 (3 )% Other (income) expense, net (0.2 )
1.1 NM Stock-based compensation expense 2.8
2.4 17 %
Adjusted supplemental EBITDA from continuing
operations $ 66.3 $ 68.5 (3 )% Adjusted
supplemental EBITDA from continuing operations as a % of Net Sales
10.5 % 11.3 % (B)
Depreciation expense for the six months ended June 30, 2010,
excludes $0.1 million that has been included in discontinued
operations, which is excluded from adjusted income from continuing
operations. (C) Amortization of intangibles for the six
months ended June 30, 2010, excludes $0.1 million that has been
included in discontinued operations, which is excluded from
adjusted income from continuing operations.
ACCO Brands
Corporation Supplemental Business Segment Information
(Unaudited) (In millions of dollars)
2011 2010 Changes Net
Sales Net Sales Margin Net Sales
OI OI Margin Net Sales OI OI Margin $ %
OI $ OI % Points
Q1: ACCO Brands
Americas $ 152.2 $ 5.5 3.6 % $ 158.6 $ 8.3 5.2 % $ (6.4 ) (4 )% $
(2.8 ) (34 )% (160 ) ACCO Brands International 104.9 4.1 3.9 %
102.2 9.1 8.9 % 2.7 3 % (5.0 ) (55 )% (500 ) Computer Products 41.3
9.3 22.5 % 39.7 8.1 20.4 % 1.6 4 % 1.2 15 % 210 Corporate -
(5.6 ) - (5.0 ) - (0.6 )
Total $ 298.4 $ 13.3 4.5 % $ 300.5 $ 20.5 6.8 % $
(2.1 ) (1 )% $ (7.2 ) (35 )% (230 )
Q2: ACCO Brands
Americas $ 175.7 $ 14.5 8.3 % $ 169.9 $ 14.4 8.5 % $ 5.8 3 % $ 0.1
1 % (20 ) ACCO Brands International 105.8 9.0 8.5 % 93.2 4.9 5.3 %
12.6 14 % 4.1 84 % 320 Computer Products 48.7 13.1 26.9 % 42.1 10.7
25.4 % 6.6 16 % 2.4 22 % 150 Corporate - (6.0 )
- (5.0 ) (1.0 ) Total $ 330.2 $ 30.6
9.3 % $ 305.2 $ 25.0 8.2 % $ 25.0 8 % $ 5.6
22 % 110
YTD: ACCO Brands Americas $ 327.9 $
20.0 6.1 % $ 328.5 $ 22.7 6.9 % $ (0.6 ) (0 )% $ (2.7 ) (12 )% (80
) ACCO Brands International 210.7 13.1 6.2 % 195.4 14.0 7.2 % 15.3
8 % (0.9 ) (6 )% (100 ) Computer Products 90.0 22.4 24.9 % 81.8
18.8 23.0 % 8.2 10 % 3.6 19 % 190 Corporate - (11.6 )
- (10.0 ) (1.6 ) Total $ 628.6 $ 43.9
7.0 % $ 605.7 $ 45.5 7.5 % $ 22.9 4 % $ (1.6 )
(4 )% (50 )
ACCO Brands Corporation Supplemental
Net Sales Growth Analysis (Unaudited)
Percent Change - Sales Net
Comparable Sales Currency Sales
Growth Translation Growth
Price Volume Q1 2011: ACCO Brands
Americas (4.0 %) 1.4 % (5.4 %) 1.1 % (6.5 %) ACCO Brands
International 2.6 % 4.7 % (2.1 %) 1.2 % (3.3 %) Computer Products
4.0 % 1.3 % 2.7 % 1.8 % 0.9 % Total (0.7 %) 2.5 % (3.2 %) 1.2 %
(4.4 %)
Q2 2011: ACCO Brands Americas 3.4 % 1.5 % 1.9
% 1.5 % 0.4 % ACCO Brands International 13.5 % 14.6 % (1.1 %) 3.3 %
(4.4 %) Computer Products 15.7 % 5.8 % 9.9 % 1.7 % 8.2 % Total 8.2
% 6.1 % 2.1 % 2.1 % 0.0 %
2011 YTD: ACCO Brands
Americas (0.2 %) 1.5 % (1.7 %) 1.3 % (3.0 %) ACCO Brands
International 7.8 % 9.4 % (1.6 %) 2.2 % (3.8 %) Computer Products
10.0 % 3.6 % 6.4 % 1.7 % 4.7 % Total 3.8 % 4.3 % (0.5 %) 1.7 % (2.2
%)
ACCO Brands Corporation Key Stats and
Ratios (Unaudited) (In millions of dollars)
Net Debt Calculation
June 30, 2011
December 31, 2010
Current debt obligations, including current portion of long-term
debt $ 0.5 $ 0.2 Long-term debt obligations 716.8
727.4 Total outstanding debt 717.3 727.6 Less:
cash and cash equivalents 92.7 83.2 Net
debt $ 624.6 $ 644.4
Twelve Months Ended
Twelve Months Ended
Leverage Ratio (Debt to EBITDA from Continuing Operations)
June 30, 2011
June 30, 2010
Trailing twelve months (TTM) adjusted supplemental EBITDA from
Continuing Operations (A) $ 156.2 $ 154.8 Net debt $ 624.6 $ 691.6
Gross debt $ 717.3 $ 726.1 Total Leverage (net debt divided
by TTM adjusted supplemental EBITDA from Continuing Operations) 4.0
4.5
Senior-Secured Leverage (senior-secured
debt ($457.0 million as of June 30, 2011 and $454.8 million as of
June 30, 2010) divided by TTM adjusted supplemental EBITDA from
Continuing Operations)
2.9 2.9
As of and for the
As of and for the
Twelve Months Ended
Twelve Months Ended
Working Capital per Dollar Sales Ratio (Working Capital to
Sales)
June 30, 2011
June 30, 2010
Current assets, excluding cash and cash equivalents (B) $ 531.4 $
489.3 Current liabilities, excluding current debt obligations (C)
284.3 280.7 Net working capital $ 247.1
$ 208.6 Trailing twelve months (TTM) net sales (A) $ 1,307.5
$ 1,259.4 Working capital ratio (net working capital divided
by TTM net sales) (A) 18.9 % 16.6 %
(A) Management believes these measures provide investors
with helpful supplemental information regarding the underlying
performance of the Company from year to year. These measures may be
inconsistent with similar measures presented by other companies.
(B) Balance is comprised of receivables, inventories, current
deferred income taxes and other current assets. (C) Balance is
comprised of accounts payable, accrued compensation, accrued
customer programs and other current liabilities.
ACCO
Brands Corporation Reconciliation of Net Income (Loss) to
Adjusted Supplemental EBITDA from Continuing Operations
(Unaudited) (In millions of dollars)
Three Months Ended September
30, December 31, March 31, June 30,
Trailing
2010
2010
2011
2011
Twelve Months
Net sales $ 319.4 $ 359.5 $
298.4 $ 330.2 $ 1,307.5 Net
income (loss) $ 5.4 $ 6.8 $ (8.1 ) $ 43.7 $ 47.8 Discontinued
operations (1.0 ) (2.5 ) (0.9 ) (37.4 ) (41.8 ) Income taxes,
impact of adjustments 4.3 8.7
5.8 2.3 21.1
Adjusted income (loss) from continuing operations 8.7
13.0 (3.2 ) 8.6 27.1 Interest expense, net 19.7 19.4 19.2
19.5 77.8 Adjusted income tax expense (benefit) 3.8 5.5 (1.3 ) 3.7
11.7 Depreciation expense 7.5 7.1 7.1 6.8 28.5 Amortization of
intangibles 1.7 1.6 1.7 1.6 6.6 Other (income) expense, net 0.1 -
(0.2 ) - (0.1 ) Stock-based compensation expense 0.1
1.7 0.8 2.0
4.6
Adjusted supplemental EBITDA from
continuing operations
$ 41.6 $ 48.3 $ 24.1 $
42.2 $ 156.2
ACCO Brands Corporation and
Subsidiaries Condensed Consolidated Balance Sheets
June 30, December 31,
2011
2010
(in millions of dollars)
(unaudited) Assets Current assets:
Cash and cash equivalents $ 92.7 $ 83.2 Accounts receivable, net
269.4 274.8 Inventories 221.6 205.9 Deferred income taxes 8.8 9.1
Other current assets 31.6 24.0 Assets of discontinued operations
- 23.7 Total current assets 624.1 620.7
Total property, plant and equipment 487.9 474.1 Less
accumulated depreciation (328.7 ) (310.9 ) Property,
plant and equipment, net 159.2 163.2 Deferred income taxes 11.0
10.6 Goodwill 139.8 136.9 Identifiable intangibles, net 135.1 137.0
Other assets 66.6 71.8 Assets of discontinued operations -
9.4 Total assets $ 1,135.8 $ 1,149.6
Liabilities and Stockholders' Deficit Current
liabilities: Notes payable to banks $ 0.3 $ - Current portion of
long-term debt 0.2 0.2 Accounts payable 106.0 110.3 Accrued
compensation 19.7 23.9 Accrued customer program liabilities 61.0
72.8 Accrued interest 21.7 22.0 Other current liabilities 72.5 84.1
Liabilities of discontinued operations 3.4
14.6 Total current liabilities 284.8 327.9 Long-term
debt 716.8 727.4 Deferred income taxes 84.0 81.2 Pension and post
retirement benefit obligations 64.9 74.9 Other non-current
liabilities 13.6 12.7 Liabilities of discontinued operations
- 5.3 Total liabilities 1,164.1
1,229.4 Stockholders' deficit: Common stock
0.6 0.6 Treasury stock (1.7 ) (1.5 ) Paid-in capital 1,404.0
1,401.1 Accumulated other comprehensive loss (72.9 ) (86.1 )
Accumulated deficit (1,358.3 ) (1,393.9 ) Total
stockholders' deficit (28.3 ) (79.8 ) Total
liabilities and stockholders' deficit $ 1,135.8 $ 1,149.6
ACCO Brands Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited) Six Months Ended June
30, (in millions of dollars)
2011
2010
Operating activities Net income $ 35.6 $ 0.2 Asset
impairment and other non-cash charges - 0.4 (Gain) loss on sale of
assets (40.8 ) 0.1 Depreciation 13.9 15.0 Amortization of debt
issuance costs and bond discount 3.3 3.2 Amortization of
intangibles 3.3 3.5 Stock-based compensation 2.8 2.4 Changes in
balance sheet items:
Accounts receivable
15.7 10.4
Inventories
(10.2 ) (16.1 )
Other assets
(5.6 ) (9.6 )
Accounts payable
(7.7 ) 13.8
Accrued expenses and other liabilities
(42.2 ) (24.9 )
Accrued income taxes
0.6 3.3 Equity in earnings of joint ventures, net of dividends
received 2.4 2.0 Net cash provided
(used) by operating activities (28.9 ) 3.7
Investing
activities Additions to property, plant and equipment (7.1 )
(4.9 ) Assets acquired (1.4 ) (0.8 ) Proceeds (payments) from the
sale of discontinued operations 54.6 (3.7 ) Proceeds from the
disposition of assets 0.2 0.3 Other 0.6 -
Net cash provided (used) by investing activities 46.9 (9.1 )
Financing activities Repayments of long-term debt (11.0 )
(0.1 ) Borrowings (repayments) of short term debt, net 0.3 (0.1 )
Cost of debt issuance - (0.7 ) Other (0.2 ) (0.1 )
Net cash used by financing activities (10.9 ) (1.0 ) Effect of
foreign exchange rate changes on cash 2.4 (2.7
) Net increase (decrease) in cash and cash equivalents 9.5 (9.1 )
Cash and cash equivalents Beginning of period 83.2
43.6 End of period $ 92.7 $ 34.5
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