ACCO Brands Corporation announced its first quarter earnings for the period ended March 31, 2020.

The highlights include:

  • 1Q EPS of $0.08 versus $(0.01) in prior year
  • Adjusted 1Q EPS of $0.07 versus $0.08 in 2019
  • 1Q net sales $384.1 million, down 3% 
  • North America sales grew 5%
  • Declared dividend of $0.065 per share
  • Amended bank covenant to provide increased financial flexibility
  • Initiated broad incremental cost reduction actions

“Thanks to the hard work and sacrifices of the global ACCO Brands team, we delivered quarterly results that met our expectations despite the COVID-19-related disruptions. Moving forward, we are facing an uncertain environment with limited visibility due to government and business actions being taken in response to the pandemic. As a result, we have initiated many incremental cost reduction initiatives that will benefit our second quarter and beyond. While the near-term is challenging, we are well-positioned for the long term,” said Boris Elisman, chairman, president and chief executive officer of ACCO Brands.

“Looking at the second quarter, our back-to-school orders have remained solid while our commercial orders are very soft. Based on what we have seen thus far, we expect our second quarter sales and profits to be down significantly compared with last year. However, our balance sheet remains strong, we have good liquidity, and no debt maturities until May 2024. We also amended our bank debt maintenance covenant to give us additional financial flexibility to deal with the impact of COVID-19. We expect to continue to generate strong cash flow for the full year,” Elisman added.

ACCO Brands North America 

  • Sales of $167.8 million increased 4.6% from $160.4 million in 2019. 
  • Comparable sales increased 4.7%. 
  • The sales growth was largely from higher pricing and included growth in the Kensington®, Swingline®, Quartet®, and Five Star® brands. 
  • Gross margin decreased due to lower fixed cost absorption and unfavourable product and customer mix. 
  • Operating income of $7.6 million increased from $6.8 million in 2019 due to lower restructuring charges. 
  • Adjusted operating income of $7.6 million decreased 7.3% from $8.2 million in 2019 as a result of the lower gross margin, partially offset by lower incentive accruals.

“We remain confident in the long-term future of our company. We have an experienced leadership team and a resilient organization. That, combined with a strong balance sheet, good liquidity, and financial flexibility, will allow us to emerge stronger from these current challenges,” Elisman concluded.

Source: ACCO Brands