UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number
(Exact Name of Registrant as Specified in Its Charter) |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification Number) |
(Address of Registrant’s Principal Executive Office, Including Zip Code)
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ |
Accelerated filer |
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Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of April 19, 2022, the registrant had outstanding
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, including without limitation, statements concerning the impacts of the COVID-19 pandemic on the Company's business, operations, 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.
Some of the factors that could affect our results or cause our plans, actions and results to differ materially from those expressed in the forward-looking statements contained in this Quarterly Report on Form 10-Q are detailed in "Part I, Item 1. Business" and "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, as well as the financial statement line item discussions as well as in "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q and from time to time in our other Securities and Exchange Commission (the "SEC") filings.
Website Access to Securities and Exchange Commission Reports
The Company’s Internet website can be found at www.accobrands.com. The Company makes available free of charge on or through its website its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the SEC.
2
TABLE OF CONTENTS
3
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACCO Brands Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
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March 31, |
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December 31, |
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(in millions) |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Accounts receivable, net |
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Inventories |
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Other current assets |
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Total current assets |
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Total property, plant and equipment |
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Less: accumulated depreciation |
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Property, plant and equipment, net |
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Right of use asset, leases |
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Deferred income taxes |
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Goodwill |
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Identifiable intangibles, net |
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Other non-current assets |
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Total assets |
$ |
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$ |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Notes payable |
$ |
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$ |
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Current portion of long-term debt |
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Accounts payable |
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Accrued compensation |
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Accrued customer program liabilities |
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Lease liabilities |
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Current portion of contingent consideration |
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Other current liabilities |
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Total current liabilities |
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Long-term debt, net |
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Long-term lease liabilities |
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Deferred income taxes |
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Pension and post-retirement benefit obligations |
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Contingent consideration |
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Other non-current liabilities |
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Total liabilities |
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Stockholders' equity: |
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Common stock |
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Treasury stock |
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Paid-in capital |
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Accumulated other comprehensive loss |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
4
ACCO Brands Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
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Three Months Ended |
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(in millions, except per share data) |
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2022 |
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2021 |
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Net sales |
$ |
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$ |
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Cost of products sold |
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Gross profit |
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Operating costs and expenses: |
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Selling, general and administrative expenses |
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Amortization of intangibles |
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Restructuring charges |
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Change in fair value of contingent consideration |
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Total operating costs and expenses |
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Operating income (loss) |
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Non-operating expense (income): |
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Interest expense |
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Interest income |
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( |
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( |
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Non-operating pension income |
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( |
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( |
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Other expense, net |
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Loss before income tax |
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( |
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( |
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Income tax expense (benefit) |
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( |
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Net loss |
$ |
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( |
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$ |
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( |
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Per share: |
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Basic loss per share |
$ |
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( |
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$ |
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( |
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Diluted loss per share |
$ |
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( |
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$ |
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( |
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Weighted average number of shares outstanding: |
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Basic |
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Diluted |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
5
ACCO Brands Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
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Three Months Ended |
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(in millions) |
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2022 |
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2021 |
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Net loss |
$ |
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( |
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$ |
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( |
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Other comprehensive income (loss), net of tax: |
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Unrealized (loss) income on derivative instruments, net of tax benefit (expense) of $ |
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( |
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Foreign currency translation adjustments, net of tax benefit (expense) of $ |
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( |
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Recognition of deferred pension and other post-retirement items, net of tax expense of $( |
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Other comprehensive income (loss), net of tax |
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( |
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Comprehensive income (loss) |
$ |
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$ |
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( |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
6
ACCO Brands Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Three Months Ended March 31, |
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(in millions) |
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2022 |
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2021 |
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Operating activities |
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Net loss |
$ |
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( |
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$ |
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( |
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Amortization of inventory step-up |
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Change in fair value of contingent liability |
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Depreciation |
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Amortization of debt issuance costs |
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Amortization of intangibles |
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Stock-based compensation |
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Loss on debt extinguishment |
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Changes in balance sheet items: |
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Accounts receivable |
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Inventories |
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( |
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( |
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Other assets |
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( |
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( |
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Accounts payable |
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( |
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Accrued expenses and other liabilities |
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( |
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( |
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Accrued income taxes |
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( |
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( |
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Net cash used by operating activities |
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( |
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( |
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Investing activities |
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Additions to property, plant and equipment |
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( |
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( |
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Cost of acquisitions, net of cash acquired |
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Net cash (used) provided by investing activities |
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( |
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Financing activities |
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Proceeds from long-term borrowings |
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Repayments of long-term debt |
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( |
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( |
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(Repayments) proceeds of notes payable, net |
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( |
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Payment for debt premium |
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( |
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Payments for debt issuance costs |
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( |
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Dividends paid |
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( |
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( |
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Payments related to tax withholding for stock-based compensation |
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( |
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( |
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Proceeds from the exercise of stock options |
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Net cash provided by financing activities |
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Effect of foreign exchange rate changes on cash and cash equivalents |
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( |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents |
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Beginning of the period |
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End of the period |
$ |
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$ |
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Cash paid during the year for: |
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Interest |
$ |
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$ |
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Income taxes |
$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
7
ACCO Brands Corporation and Subsidiaries
Consolidated Statement of Stockholders' Equity
(Unaudited)
(in millions) |
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Common Stock |
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Paid-in Capital |
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Accumulated Other Comprehensive |
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Treasury Stock |
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Accumulated Deficit |
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Total |
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Balance at December 31, 2021 |
$ |
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$ |
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$ |
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( |
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$ |
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( |
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$ |
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( |
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$ |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Loss on derivative financial instruments, net of tax |
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( |
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( |
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Translation impact, net of tax |
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Pension and post-retirement adjustment, net of tax |
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Stock-based compensation |
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( |
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Common stock issued, net of shares withheld for employee taxes |
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( |
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Dividends declared, $ |
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( |
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( |
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Other |
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— |
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— |
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— |
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— |
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Balance at March 31, 2022 |
$ |
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$ |
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$ |
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( |
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$ |
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( |
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$ |
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( |
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$ |
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Shares of Capital Stock
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Common Stock |
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Treasury Stock |
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Net Shares |
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Shares at December 31, 2021 |
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Common stock issued, net of shares withheld for employee taxes |
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Shares at March 31, 2022 |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
8
ACCO Brands Corporation and Subsidiaries
Consolidated Statement of Stockholders' Equity
Continued (Unaudited)
(in millions) |
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Common Stock |
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Paid-in Capital |
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Accumulated Other Comprehensive |
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Treasury Stock |
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Accumulated Deficit |
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Total |
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Balance at December 31, 2020 |
$ |
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$ |
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$ |
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( |
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$ |
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( |
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$ |
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( |
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$ |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Gain on derivative financial instruments, net of tax |
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— |
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— |
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— |
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— |
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Translation impact, net of tax |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Pension and post-retirement adjustment, net of tax |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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( |
) |
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Common stock issued, net of shares withheld for employee taxes |
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— |
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— |
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( |
) |
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— |
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Dividends declared, $ |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Other |
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— |
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( |
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— |
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— |
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— |
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( |
) |
Balance at March 31, 2021 |
$ |
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$ |
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$ |
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( |
) |
$ |
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( |
) |
$ |
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( |
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$ |
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Shares of Capital Stock
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Common Stock |
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Treasury Stock |
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Net Shares |
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Shares at December 31, 2020 |
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Common stock issued, net of shares withheld for employee taxes |
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Shares at March 31, 2021 |
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See Notes to Condensed Consolidated Financial Statements (Unaudited).
9
ACCO Brands Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
As used in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, the terms "ACCO Brands," "ACCO," the "Company," "we," "us," and "our" refer to ACCO Brands Corporation and its consolidated subsidiaries.
The management of ACCO Brands Corporation is responsible for the accuracy and internal consistency of the preparation of the condensed consolidated financial statements and notes contained in this Quarterly Report on Form 10-Q.
The condensed consolidated interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Although the Company believes the disclosures are adequate to make the information presented not misleading, certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to those rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
The Condensed Consolidated Balance Sheet as of March 31, 2022 and the related Consolidated Statements of Income, Consolidated Statements of Comprehensive Income (Loss), and Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2022 and 2021, and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 are unaudited. The December 31, 2021 Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all annual disclosures required by GAAP. The financial statements included herein were prepared by management and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of results of operations and cash flows for the interim periods ended March 31, 2022 and 2021, and the financial position of the Company as of March 31, 2022. Interim results may not be indicative of results for a full year.
On April 1, 2021, we completed the acquisition of Franken Planungs-und Organisationsmittel GmbH (“Franken”) for a purchase price of €
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates.