LINCOLNSHIRE, Ill.,
April 17, 2012 /PRNewswire/
-- ACCO Brands Corporation (NYSE: ABD), a world leader in
branded office products, today provided preliminary unaudited sales
and operating income results for the first quarter ended
March 31, 2012. The results are
being provided to facilitate the company's financing efforts
related to the proposed spin-off of MeadWestvaco Corporation's
(NYSE: MWV) Consumer & Office Products business and merger into
a wholly-owned subsidiary of ACCO Brands.
($MM)
unaudited
|
For the
three months ended March 31,
|
|
2012
|
2012
|
|
2011
|
|
Reported
|
Adjusted
|
|
Reported
|
Sales
|
$288.9
|
|
|
$298.4
|
|
|
|
|
|
Operating
Income
|
$4.0
|
$11.9
|
(1)
|
$13.3
|
|
|
|
|
|
Adjusted
supplemental EBITDA
|
|
$22.7
|
(2)
|
$24.1
|
The company said that sales were up in all major geographies
except Europe and Canada. As expected, sales were lower in
Europe, by more than $13 million, and also as expected, operating
income in the company's European business, excluding charges,
substantially improved compared to the prior year. Total
company operating income, excluding transaction-related costs and
restructuring, declined approximately $1
million due to lower sales in Europe and Canada; adverse product mix within the
Computer Products business; and lower gross profit margins due to
foreign exchange impacts on selling prices in Canada and Australia. The quarter
benefited from a $1.7 million change
in the timing of expense recognition, which reverses later this
year. This was offset by $1.8 million
of higher incentive compensation costs.
Business Outlook
The company reiterated its guidance for the full year for the
current standalone ACCO Brands business. For the first quarter, a
seasonally small earnings quarter, the company expects adjusted
earnings per share, excluding restructuring and transaction-related
costs, to be a loss of approximately $(0.05). For the full year, the company is
planning for sales to be flat, with modest growth at constant
currency offset by negative impacts of foreign currency
translation. Based on continued productivity improvements, the
company expects to grow adjusted earnings per share by
approximately 30%, excluding business restructuring and refinancing
costs. Targeted free cash flow, after interest, taxes, and capital
expenditures, and excluding transaction-related cash expenses, is
expected to be approximately $50-60
million.
In addition, the company issued indicative preliminary
guidance* for the combined business that assumes the
Mead Consumer & Office Products business was owned for all of
2012. Combined sales are expected to be flat in 2012,
compared to $2.1 billion in the
comparable prior-year period, with modest growth at constant
currency offset by negative impacts of foreign currency
translation. The company expects 2012 adjusted combined earnings
per share of approximately $1.06
compared to $1.00 in the comparable
prior-year period. The 2012 estimate assumes 2 cents of dilution due to higher share count, a
4 cent impact from adverse currency
and excludes cost synergies. The benefits from the refinancing are
included in both years. For 2013 the company expects adjusted
combined earnings per share to be around $1.25 per share, including cost synergies.
*Indicative preliminary guidance incorporates
assumptions related to certain accounting items for the combined
business. Certain assumptions are subject to change upon completion
of the transaction. Adjusted combined earnings per share excludes
restructuring and refinancing costs, transaction-related expenses,
inventory step-up and similar one-time accounting charges; and
assumes diluted shares of approximately 114 million, 116 million
and 117 million in 2011, 2012 and 2013, respectively, and a
normalized effective tax rate of 30% in 2011 and 2012 and
approximately 32% in 2013.
ACCO Brands Corporation will report results for the first
quarter of 2012 in a press release to be issued Thursday, May 10, 2012. The company will
host a conference call at 8:30 a.m.
ET on May 10, 2012 to discuss
the results. A webcast of the call can be accessed through the
Investor Relations section of www.accobrands.com.
(1)
Reconciliation of adjusted operating income:
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|
|
Q1
2012
|
|
Q1
2011
|
Operating
income
|
|
$
4.0
|
|
|
Add:
|
|
|
|
|
Restructuring charges(a)
|
|
6.1
|
|
|
Transaction-related expenses
|
|
1.8
|
|
|
Adjusted
Operating income
|
|
$
11.9
|
|
|
|
|
|
|
|
(2)
Reconciliation of adjusted supplemental EBITDA:
|
|
Operating
income
|
|
$
4.0
|
|
$
13.3
|
Add:
|
|
|
|
|
Depreciation expense
|
|
6.1
|
|
7.1
|
Amortization expense
|
|
1.5
|
|
1.7
|
Stock-based compensation
|
|
1.7
|
|
0.8
|
Joint venture income
|
|
1.5
|
|
1.2
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Restructuring charges(a)
|
|
6.1
|
|
-
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Transaction-related expenses
|
|
1.8
|
|
-
|
Adjusted
supplemental EBITDA
|
|
$
22.7
|
|
$
24.1
|
(a) ACCO Brands stand-alone charges related to severance and
related expenses for the streamlining of its sales and operations
functions in the U.S. and Europe
in the first quarter of 2012.
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 release contains certain statements that 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. The Company's 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 any 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, 2011, as amended,
under Item 1A, "Risk Factors," and in the company's other SEC
filings.
Forward-Looking Statements Relating to the Merger
Forward-looking statements relating to the proposed merger
involving ACCO Brands and the Consumer & Office Products
business of MeadWestvaco Corporation include, but are not limited
to: statements about the benefits of the proposed merger, including
future financial and operating results; ACCO Brands' plans,
objectives, expectations and intentions; the expected timing of
completion of the merger; and other statements relating to the
merger that are not historical facts. With respect to the
proposed merger, important factors could cause actual results to
differ materially from those indicated by such forward-looking
statements, including, but not limited to: the risk that a
condition to closing of the merger may not be satisfied; the length
of time necessary to consummate the merger; the risk that the cost
savings and any other synergies from the transaction may not be
fully realized or may take longer to realize than expected and the
impact of additional indebtedness. These risks, as well as
other risks associated with the proposed merger, are more fully
discussed in the proxy statement/prospectus included in the
registration statement on Form S-4 that ACCO Brands filed with the
United States Securities and Exchange Commission ("SEC") on
March 22, 2012 in connection with the
proposed merger.
Additional Information
In connection with the proposed merger, the registration
statement has been declared effective by the SEC. This registration
statement includes a proxy statement/prospectus of ACCO Brands that
has been mailed to the shareholders of ACCO Brands. Shareholders
are urged to read the proxy statement/prospectus and any other
relevant documents, because they contain important information
about ACCO Brands and the proposed merger. The proxy
statement/prospectus and other documents relating to the proposed
merger can be obtained free of charge from the SEC's website at
www.sec.gov. The proxy statement/prospectus and other documents can
also be obtained free of charge from ACCO Brands upon written
request to ACCO Brands Corporation, Investor Relations, 300 Tower
Parkway, Lincolnshire, Illinois
60069, or by calling (847) 484-3020.
This communication is not a solicitation of a proxy from any
security holder of ACCO Brands. However, ACCO Brands and certain of
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders in
connection with the proposed merger under the rules of the
SEC. Information about the directors and executive officers
of ACCO Brands may be found in its 2011 Annual Report on Form 10-K,
as amended, filed with the SEC on February
23, 2012, and its definitive proxy statement relating to its
2012 Annual Meeting of Shareholders filed with the SEC on
March 30, 2012.
SOURCE ACCO Brands Corporation