ACCO Brands Corporation has announced its fourth quarter and full year results for the period ended December 31, 2021. Highlights include:

Full Year

  • Record net sales were $2.03 billion, up 22.4%; comparable sales up 5.0% driven by higher sales prices and increased volume as offices and schools reopened
  • EPS was $1.05, up 61.5% versus prior year; adjusted EPS was $1.41, up 48.4%
  • Gross margin improved 70 bps
  • Generated free cash flow of $138.4 million (operating cash flow of $159.6 million less $21.2 million of capex)
  • Reduced debt $130.5 million

Fourth Quarter

  • Record net sales were $570.3 million, up 24.0%; comparable sales up 8.4%, all segments posted increases 
  • EPS was $0.55, up 77.4% versus prior year; adjusted EPS was $0.54, up 38.5%
  • Generated free cash flow of $108.3 million (operating cash flow of $115.6 million less $7.3 million of capex)
  • Reduced debt $123.5 million

“Our strategy of shifting the business toward faster growing, consumer- and technology-centric categories and channels is bearing excellent results with record sales in the fourth quarter and full year 2021. We delivered strong earnings and free cash flow in the quarter and for the year, expanded margins, raised our dividend, and reduced debt. Our hard work, investments, and portfolio changes over the past few years have positioned us well for organic sales and profit growth. We have good business momentum and expect similar comparable sales growth and continuing profit and free cash flow improvements in 2022,” said Boris Elisman, Chairman and Chief Executive Officer of ACCO Brands.

ACCO Brands North America Results

Sales of $1,042.4 million increased 26.8% from $822.1 million in 2020, primarily due to PowerA, which added $199.8 million. Favorable foreign exchange added $7.4 million, or 0.9%. Comparable sales of $835.2 million increased 1.6% due to higher sales prices. Volume was flat as a decline in the first quarter related to COVID-19 impacts was offset by subsequent improvement.

Operating income was $121.9 million versus $83.0 million in 2020, up 46.9%. Adjusted operating income of $154.6 million increased 49.7% from $103.3 million in 2020. Both increases primarily were due to long-term cost reductions and lower inventory charges, partially offset by normal SG&A expense as the prior period benefited from many pandemic-related, short-term cost reduction measures. PowerA contributed $23.2 million and restructuring charges were $3.2 million lower. Higher sales prices were more than offset by cost increases related to logistics and commodities. (The change in the fair value of the contingent consideration for PowerA is not allocated against segment results.)

Capital Allocation and Dividend

For the full year, the Company had $159.6 million of cash flow from operating activities, reduced debt $130.5 million, paid $25.8 million in dividends, and spent $21.2 million in capital expenditures. The Company’s strategy is to deploy cash to fund dividends, reduce debt, repurchase stock and make acquisitions.

For the fourth quarter, the Company generated $115.6 million in cash from operating activities, reduced debt $123.5 million, paid $7.2 million in dividends, and spent $7.3 million in capital expenditures.

On February 14, 2022, ACCO Brands’ board of directors declared a regular quarterly cash dividend of $0.075 per share. The dividend will be paid on March 29, 2022, to stockholders of record as of the close of business on March 18, 2022.

Outlook

“We are entering 2022 in excellent shape and with strong momentum. We expect to have another year of record sales and record adjusted earnings per share, significant free cash flow growth and winning market place performance,” concluded Elisman.

For the full year, sales are expected to grow in a range of 1% to 6%, including a 1% negative impact from foreign exchange. Adjusted earnings per share are expected to be in a range of $1.48 to $1.58, including a 2-cent adverse impact from foreign exchange.

In the first quarter, the Company expects a sales increase of approximately 2.5%, which includes a 2.5% negative impact from foreign exchange. Adjusted EPS is expected to be in a range of $0.06 to $0.10.

Management Transition

The Company also announced that Neal Fenwick, executive vice president and chief financial officer, plans to retire this year after a 37-year career with the Company. A search for his successor is underway. Mr. Fenwick will remain active full-time until his successor is named and will assist with the transition.

To view the full release, visit the ACCO website. 

Source: ACCO