Delaware | 001-08454 | 36-2704017 |
(State or other jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Four Corporate Drive Lake Zurich, IL 60047 | 60047 | |
(Address of principal executive offices) | (Zip Code) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12) |
[ ] | Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c)) |
• | replaced the Company’s existing U.S.-dollar denominated Senior Secured Term A Loan, due May 2018, under the 2013 Credit Agreement (the “Existing Term A Loan”), which had an aggregate principal amount of $299 million outstanding immediately prior to the Effective Date, with a new U.S.-dollar denominated Senior Secured Term A Loan, with a maturity date as specified below, in an aggregate original principal amount of $300 million (the “Restated Term A Loan”); and |
• | replaced the $250 million revolving credit facility under the 2013 Credit Agreement with the Restated Revolving Facility, under which approximately $42 million was outstanding immediately following the Effective Date. |
Consolidated Leverage Ratio | Applicable Rate on Eurodollar Loans | Applicable Rate on Base Rate Loans | ||
> 4.00 to 1.00 | 2.50% | 1.50% | ||
≤ 4.00 to 1.00 and > 3.50 to 1.00 | 2.25% | 1.25% | ||
≤ 3.50 to 1.00 and > 3.00 to 1.00 | 2.00% | 1.00% | ||
≤ 3.00 to 1.00 and > 2.00 to 1.00 | 1.50% | 0.50% | ||
≤ 2.00 to 1.00 | 1.25% | 0.25% |
(i) | the greater of (a) $25 million and (b) 1.0% of the Company’s Consolidated Total Assets, plus |
(ii) | an aggregate amount not to exceed $60 million in any fiscal year; provided the Company’s consolidated leverage ratio after giving pro forma effect to the restricted payment is greater than 2.50:1.00 and less than or equal to 3.75:1.00, plus |
(iii) | an additional amount so long as the consolidated leverage ratio after giving pro forma effect to the restricted payment is less than or equal to 2.5 to 1.0, plus |
(iv) | any Net Equity Proceeds (as defined in the Restated Credit Agreement). |
Period | Maximum Consolidated Leverage Ratio | |
Through June 30, 2015 | 4.00:1.00 | |
July 1, 2015 and thereafter | 3.75:1.00 |
(d) | Exhibits |
99.1 | Press Release of the Company, dated April 29, 2015. |
ACCO Brands Corporation (Registrant) | ||||
Date: | April 29, 2015 | By: | /s/ Neal V. Fenwick | |
Name: Neal V. Fenwick | ||||
Title: Executive Vice President | ||||
and Chief Financial Officer |
99.1 | Press release, dated April 29, 2015. |
(unaudited) | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(in millions of dollars) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 90.8 | $ | 53.2 | ||||
Accounts receivable, net | 232.4 | 420.5 | ||||||
Inventories | 273.1 | 229.9 | ||||||
Deferred income taxes | 34.2 | 39.4 | ||||||
Other current assets | 39.5 | 35.8 | ||||||
Total current assets | 670.0 | 778.8 | ||||||
Total property, plant and equipment | 531.4 | 547.7 | ||||||
Less accumulated depreciation | (308.1 | ) | (312.2 | ) | ||||
Property, plant and equipment, net | 223.3 | 235.5 | ||||||
Deferred income taxes | 27.9 | 31.7 | ||||||
Goodwill | 518.9 | 544.9 | ||||||
Identifiable intangibles, net | 549.3 | 571.4 | ||||||
Other non-current assets | 57.1 | 64.1 | ||||||
Total assets | $ | 2,046.5 | $ | 2,226.4 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Notes payable | $ | 20.6 | $ | 0.8 | ||||
Current portion of long-term debt | 1.4 | 0.8 | ||||||
Accounts payable | 151.1 | 159.1 | ||||||
Accrued compensation | 20.9 | 36.6 | ||||||
Accrued customer program liabilities | 76.1 | 111.8 | ||||||
Accrued interest | 14.7 | 6.5 | ||||||
Other current liabilities | 55.3 | 79.8 | ||||||
Total current liabilities | 340.1 | 395.4 | ||||||
Long-term debt | 797.7 | 799.0 | ||||||
Deferred income taxes | 160.3 | 172.2 | ||||||
Pension and post-retirement benefit obligations | 93.0 | 100.5 | ||||||
Other non-current liabilities | 72.3 | 78.3 | ||||||
Total liabilities | 1,463.4 | 1,545.4 | ||||||
Stockholders' equity: | ||||||||
Common stock | 1.1 | 1.1 | ||||||
Treasury stock | (10.7 | ) | (5.9 | ) | ||||
Paid-in capital | 2,018.2 | 2,031.5 | ||||||
Accumulated other comprehensive loss | (366.6 | ) | (292.6 | ) | ||||
Accumulated deficit | (1,058.9 | ) | (1,053.1 | ) | ||||
Total stockholders' equity | 583.1 | 681.0 | ||||||
Total liabilities and stockholders' equity | $ | 2,046.5 | $ | 2,226.4 |
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net sales | $ | 290.0 | $ | 329.4 | |||
Cost of products sold | 209.8 | 240.9 | |||||
Gross profit | 80.2 | 88.5 | |||||
Operating costs and expenses: | |||||||
Advertising, selling, general and administrative expenses | 72.9 | 82.1 | |||||
Amortization of intangibles | 5.2 | 5.9 | |||||
Restructuring (credits) charges | (0.5 | ) | 1.1 | ||||
Total operating costs and expenses | 77.6 | 89.1 | |||||
Operating income (loss) | 2.6 | (0.6 | ) | ||||
Non-operating expense (income): | |||||||
Interest expense | 11.2 | 12.4 | |||||
Interest income | (1.1 | ) | (1.1 | ) | |||
Equity in earnings of joint ventures | (1.4 | ) | (1.2 | ) | |||
Other income, net | (0.4 | ) | — | ||||
Loss before income tax | (5.7 | ) | (10.7 | ) | |||
Income tax expense (benefit) | 0.1 | (2.9 | ) | ||||
Net loss | $ | (5.8 | ) | $ | (7.8 | ) | |
Per share: | |||||||
Basic loss per share | $ | (0.05 | ) | $ | (0.07 | ) | |
Diluted loss per share | $ | (0.05 | ) | $ | (0.07 | ) | |
Weighted average number of shares outstanding: | |||||||
Basic | 112.0 | 113.8 | |||||
Diluted | 112.0 | 113.8 |
Three Months Ended March 31, | |||||||
(in millions of dollars) | 2015 | 2014 | |||||
Operating activities | |||||||
Net loss | $ | (5.8 | ) | $ | (7.8 | ) | |
Loss on disposal of assets | 0.2 | 0.3 | |||||
Depreciation | 8.5 | 9.1 | |||||
Other non-cash charges | — | 0.3 | |||||
Amortization of debt issuance costs | 0.9 | 1.0 | |||||
Amortization of intangibles | 5.2 | 5.9 | |||||
Stock-based compensation | 3.0 | 3.1 | |||||
Equity in earnings of joint ventures, net of dividends received | 2.1 | 3.4 | |||||
Changes in balance sheet items: | |||||||
Accounts receivable | 157.2 | 187.8 | |||||
Inventories | (52.8 | ) | (42.9 | ) | |||
Other assets | (5.2 | ) | (17.3 | ) | |||
Accounts payable | (2.6 | ) | (8.5 | ) | |||
Accrued expenses and other liabilities | (55.5 | ) | (69.9 | ) | |||
Accrued income taxes | (5.3 | ) | (16.5 | ) | |||
Net cash provided by operating activities | 49.9 | 48.0 | |||||
Investing activities | |||||||
Additions to property, plant and equipment | (8.7 | ) | (6.8 | ) | |||
Proceeds from the disposition of assets | 0.1 | 0.8 | |||||
Net cash used by investing activities | (8.6 | ) | (6.0 | ) | |||
Financing activities | |||||||
Borrowings of notes payable, net | 19.8 | 0.6 | |||||
Repurchases of common stock | (14.6 | ) | — | ||||
Payments related to tax withholding for share-based compensation | (4.8 | ) | (1.4 | ) | |||
Net cash provided (used) by financing activities | 0.4 | (0.8 | ) | ||||
Effect of foreign exchange rate changes on cash and cash equivalents | (4.1 | ) | 0.6 | ||||
Net increase in cash and cash equivalents | 37.6 | 41.8 | |||||
Cash and cash equivalents | |||||||
Beginning of the period | 53.2 | 53.5 | |||||
End of the period | $ | 90.8 | $ | 95.3 |
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||
Adjusted | Adjusted | % Change | % Change | ||||||||||||||||||||||||||
Reported | Items (A) | Adjusted | Reported | Items (A) | Adjusted | Reported | Adjusted | ||||||||||||||||||||||
Net sales | $ | 290.0 | $ | 329.4 | (12 | )% | |||||||||||||||||||||||
Cost of products sold | 209.8 | 240.9 | (13 | )% | |||||||||||||||||||||||||
Gross profit | 80.2 | 88.5 | (9 | )% | |||||||||||||||||||||||||
Operating costs and expenses: | |||||||||||||||||||||||||||||
Advertising, selling, general and administrative expenses | 72.9 | 82.1 | (11 | )% | |||||||||||||||||||||||||
Amortization of intangibles | 5.2 | 5.9 | (12 | )% | |||||||||||||||||||||||||
Restructuring (credits) charges | (0.5 | ) | 0.5 | (A.1) | — | 1.1 | (1.1 | ) | (A.1) | — | NM | NM | |||||||||||||||||
Total operating costs and expenses | 77.6 | 0.5 | 78.1 | 89.1 | (1.1 | ) | 88.0 | (13 | )% | (11 | )% | ||||||||||||||||||
Operating income (loss) | 2.6 | (0.5 | ) | 2.1 | (0.6 | ) | 1.1 | 0.5 | NM | 320 | % | ||||||||||||||||||
Non-operating expense (income): | |||||||||||||||||||||||||||||
Interest expense | 11.2 | 12.4 | (10 | )% | |||||||||||||||||||||||||
Interest income | (1.1 | ) | (1.1 | ) | — | % | |||||||||||||||||||||||
Equity in earnings of joint ventures | (1.4 | ) | (1.2 | ) | 17 | % | |||||||||||||||||||||||
Other income, net | (0.4 | ) | — | NM | |||||||||||||||||||||||||
Loss before income tax | (5.7 | ) | (0.5 | ) | (6.2 | ) | (10.7 | ) | 1.1 | (9.6 | ) | 47 | % | 35 | % | ||||||||||||||
Income tax expense (benefit) | 0.1 | (2.3 | ) | (A.2) | (2.2 | ) | (2.9 | ) | (0.5 | ) | (A.2) | (3.4 | ) | NM | 35 | % | |||||||||||||
Net loss | $ | (5.8 | ) | $ | 1.8 | $ | (4.0 | ) | $ | (7.8 | ) | $ | 1.6 | $ | (6.2 | ) | 26 | % | 35 | % | |||||||||
Per share: | |||||||||||||||||||||||||||||
Diluted loss per share | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.05 | ) | 29 | % | 20 | % | |||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||||||||
Diluted | 112.0 | 113.8 |
Statistics (as a % of Net sales, except Income tax rate) | |||||||||||||||||||
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | ||||||||||||||||||
Reported | Adjusted | Reported | Adjusted | ||||||||||||||||
Gross profit (Net sales, less Cost of products sold) | 27.7 | % | 26.9 | % | |||||||||||||||
Advertising, selling, general and administrative | 25.1 | % | 24.9 | % | |||||||||||||||
Operating income (loss) | 0.9 | % | 0.7 | % | (0.2 | )% | 0.2 | % | |||||||||||
Loss before income tax | (2.0 | )% | (2.1 | )% | (3.2 | )% | (2.9 | )% | |||||||||||
Net loss | (2.0 | )% | (1.4 | )% | (2.4 | )% | (1.9 | )% | |||||||||||
Income tax rate | (1.8 | )% | 35.0 | % | 27.1 | % | 35.0 | % |
A. | “Adjusted” results exclude all unusual tax items and restructuring (credits) charges, in order to provide a comparison of underlying results of operations; in addition, taxes have been recalculated at a normalized tax rate. |
1. | Represents restructuring (credits) costs. |
2. | Adjustment primarily reflects the tax effect of the adjustments outlined in item A.1 above and adjusts the company's effective tax rate to a normalized rate of 35%. The Company's estimated long-term rate remains subject to variations from the mix of earnings across the Company's operating jurisdictions. |
Three Months Ended March 31, | |||||||||||
2015 | 2014 | % Change | |||||||||
Operating income (loss) | $ | 2.6 | $ | (0.6 | ) | NM | |||||
Restructuring (credits) charges | (0.5 | ) | 1.1 | NM | |||||||
Adjusted operating income | 2.1 | 0.5 | 320 | % | |||||||
Depreciation | 8.5 | 9.1 | (7 | )% | |||||||
Amortization of intangibles | 5.2 | 5.9 | (12 | )% | |||||||
Stock-based compensation expense | 3.0 | 3.1 | (3 | )% | |||||||
Joint venture income | 1.4 | 1.2 | 17 | % | |||||||
Adjusted EBITDA | $ | 20.2 | $ | 19.8 | 2 | % | |||||
Adjusted EBITDA as a % of Net Sales | 7.0 | % | 6.0 | % |
Three Months Ended March 31, 2015 | |||
Net cash provided by operating activities | $ | 49.9 | |
Net cash (used) provided by: | |||
Additions to property, plant and equipment | (8.7 | ) | |
Proceeds from the disposition of assets | 0.1 | ||
Free cash flow | 41.3 |
2015 | 2014 | Changes | |||||||||||||||||||||||||||||||||||||||||||
Adjusted | Adjusted | ||||||||||||||||||||||||||||||||||||||||||||
Reported | Adjusted | Operating | Reported | Adjusted | Operating | Adjusted | Adjusted | ||||||||||||||||||||||||||||||||||||||
Operating | Operating | Income | Operating | Operating | Income | Operating | Operating | ||||||||||||||||||||||||||||||||||||||
Reported | Income | Adjusted | Income | (Loss) | Reported | Income | Adjusted | Income | (Loss) | Net Sales | Net Sales | Income | Income | Margin | |||||||||||||||||||||||||||||||
Net Sales | (Loss) | Items | (Loss) (A) | Margin (A) | Net Sales | (Loss) | Items | (Loss) (A) | Margin (A) | $ | % | (Loss) $ | (Loss) % | Points | |||||||||||||||||||||||||||||||
Q1: | |||||||||||||||||||||||||||||||||||||||||||||
ACCO Brands North America | $ | 166.7 | $ | 5.6 | $ | (0.5 | ) | $ | 5.1 | 3.1% | $ | 171.4 | $ | (1.5 | ) | $ | 0.3 | $ | (1.2 | ) | (0.7)% | $ | (4.7 | ) | (3)% | $ | 6.3 | NM | 380 | ||||||||||||||||
ACCO Brands International | 94.6 | 3.3 | — | 3.3 | 3.5% | 124.3 | 7.6 | 0.5 | 8.1 | 6.5% | $ | (29.7 | ) | (24)% | (4.8 | ) | (59)% | (300) | |||||||||||||||||||||||||||
Computer Products | 28.7 | 2.0 | — | 2.0 | 7.0% | 33.7 | 1.9 | 0.3 | 2.2 | 6.5% | $ | (5.0 | ) | (15)% | (0.2 | ) | (9)% | 50 | |||||||||||||||||||||||||||
Corporate | — | (8.3 | ) | — | (8.3 | ) | — | (8.6 | ) | — | (8.6 | ) | — | 0.3 | |||||||||||||||||||||||||||||||
Total | $ | 290.0 | $ | 2.6 | $ | (0.5 | ) | $ | 2.1 | 0.7% | $ | 329.4 | $ | (0.6 | ) | $ | 1.1 | $ | 0.5 | 0.2% | $ | (39.4 | ) | (12)% | $ | 1.6 | 320% | 50 | |||||||||||||||||
Q2: | |||||||||||||||||||||||||||||||||||||||||||||
ACCO Brands North America | $ | 283.7 | $ | 49.0 | $ | 0.2 | $ | 49.2 | 17.3% | ||||||||||||||||||||||||||||||||||||
ACCO Brands International | 111.3 | 5.2 | — | 5.2 | 4.7% | ||||||||||||||||||||||||||||||||||||||||
Computer Products | 32.7 | 0.4 | — | 0.4 | 1.2% | ||||||||||||||||||||||||||||||||||||||||
Corporate | — | (10.7 | ) | (0.2 | ) | (10.9 | ) | ||||||||||||||||||||||||||||||||||||||
Total | $ | 427.7 | $ | 43.9 | $ | — | $ | 43.9 | 10.3% | ||||||||||||||||||||||||||||||||||||
Q3: | |||||||||||||||||||||||||||||||||||||||||||||
ACCO Brands North America | $ | 297.4 | $ | 50.5 | $ | (0.5 | ) | $ | 50.0 | 16.8% | |||||||||||||||||||||||||||||||||||
ACCO Brands International | 140.7 | 19.1 | 0.1 | 19.2 | 13.6% | ||||||||||||||||||||||||||||||||||||||||
Computer Products | 34.1 | 2.7 | 0.9 | 3.6 | 10.6% | ||||||||||||||||||||||||||||||||||||||||
Corporate | — | (10.5 | ) | — | (10.5 | ) | |||||||||||||||||||||||||||||||||||||||
Total | $ | 472.2 | $ | 61.8 | $ | 0.5 | $ | 62.3 | 13.2% | ||||||||||||||||||||||||||||||||||||
Q4: | |||||||||||||||||||||||||||||||||||||||||||||
ACCO Brands North America | $ | 253.5 | $ | 42.7 | $ | 3.3 | $ | 46.0 | 18.1% | ||||||||||||||||||||||||||||||||||||
ACCO Brands International | 170.6 | 31.0 | 0.5 | 31.5 | 18.5% | ||||||||||||||||||||||||||||||||||||||||
Computer Products | 35.8 | 3.2 | (0.1 | ) | 3.1 | 8.7% | |||||||||||||||||||||||||||||||||||||||
Corporate | — | (8.4 | ) | 0.2 | (8.2 | ) | |||||||||||||||||||||||||||||||||||||||
Total | $ | 459.9 | $ | 68.5 | $ | 3.9 | $ | 72.4 | 15.7% | ||||||||||||||||||||||||||||||||||||
Full Year: | |||||||||||||||||||||||||||||||||||||||||||||
ACCO Brands North America | $ | 166.7 | $ | 5.6 | $ | (0.5 | ) | $ | 5.1 | 3.1% | $ | 1,006.0 | $ | 140.7 | $ | 3.3 | $ | 144.0 | 14.3% | ||||||||||||||||||||||||||
ACCO Brands International | 94.6 | 3.3 | — | 3.3 | 3.5% | 546.9 | 62.9 | 1.1 | 64.0 | 11.7% | |||||||||||||||||||||||||||||||||||
Computer Products | 28.7 | 2.0 | — | 2.0 | 7.0% | 136.3 | 8.2 | 1.1 | 9.3 | 6.8% | |||||||||||||||||||||||||||||||||||
Corporate | — | (8.3 | ) | — | (8.3 | ) | — | (38.2 | ) | — | (38.2 | ) | |||||||||||||||||||||||||||||||||
Total | $ | 290.0 | $ | 2.6 | $ | (0.5 | ) | $ | 2.1 | 0.7% | $ | 1,689.2 | $ | 173.6 | $ | 5.5 | $ | 179.1 | 10.6% | ||||||||||||||||||||||||||
(A) See "Notes for Supplemental Reconciliation of Adjusted Results (Unaudited)" for a description of adjusted items on page 10. |
Percent Change - Sales | ||||||||||
GAAP | Non-GAAP | |||||||||
Constant | ||||||||||
Currency | ||||||||||
Net Sales | Currency | Net Sales | ||||||||
Change | Translation | Change (A) | Price | $ Volume/Mix | ||||||
Q1 2015: | ||||||||||
ACCO Brands North America | (2.7)% | (1.5)% | (1.2)% | 1.6% | (2.8)% | |||||
ACCO Brands International | (23.9)% | (11.6)% | (12.3)% | 4.3% | (16.6)% | |||||
Computer Products | (14.8)% | (8.9)% | (5.9)% | (0.3)% | (5.6)% | |||||
Total | (12.0)% | (6.1)% | (5.9)% | 2.4% | (8.3)% | |||||
(A) Current period foreign operation sales translated at prior year currency rates. |
)
M]G=A+-)&=WL[B12ZRL8[(F\D#RH$#_HPO0U+11,(M58Z#3=_D;_]O2?B_P#^
M5K_^!W[;]X_>VO\`RNNR_P#-[_JQ+UVE^_A_XBE[J?\`4L_[O&W]?0M]Y6=?
M.=U[W[KW7__3W^/?NO=?/2_GD?\`;TGY0?\`E%/_`('?J3WBG[E?\KKO7_-G
M_JQ%U]&/W#__`!%+VK_ZF?\`W>-PZJ;]@7K+OKWOW7NO>_=>Z][]U[KWOW7N
MO>_=>Z][]U[KWOW7NO>_=>Z$O:]76RY&@^WAS,V6DS^)EI),9E\_2;BGW%+N
MFAD@&WZV.@JJ*@[&F@5A!6S`TJ4H8B)JO3=9`S%EH&,FH4H6#:M0^$T($GH3
MBGEJZ#&ZPP);7'B/`MH+>0,'CB:$0B!P?&4NK/9@TU1+WEZ#6(:T'/9F2B6H
MQ#3Y;'4^,3#8:/55UW98V9%LR7?.[I=QU%3B<-M;)9Z;XUT&5=GWAM^GC;/5
MV7DEJL9%+&TP0SMW`:,LX":1Q,FC1K?5@*6^G!_M4'>6JR`BM`'O=LYCO!'9
MR-=&:0]JV7U)N1:VXA"R23I$-Z>.@VZ[=A:16ZK%=.C!-1@ML93.J[PY3/;O
M2M&.ZGIJU=T;WW_D]RS[CFZAW!!TO%N3)8+:DV-R/9TU+,B]%9N!CB=A0O%3
MYZ2.FNWLU@>6I$DLFJD0.IW+:O";P=15:&2G^X3CM@%!*0O4=;K:V!57M=OL
MC!XE^R^!:VB0B$;C"=R,*2W`=+$,">:;5A]1NK!I-O5I:#HS>U,@S#$)_>3-
M2UT$?;]1BC5;EW;1[FFSM%U3M=>\8]GS9+;)IZ7L?$10LGR06N,]+V/B4G_N
MDS5$J/[.8'_L_P!9M0\6E6<-J$2^-HJN)!_RT-51<+7P,D'J+MVMP/K#^[(!
M;L=N$FF"W:`1-?S_`+K-P$GJUG(2#R:8M#[-<&/]\`1HPZ-]L$8>JIHGK9MA
M5.U:?:M#FLC-G*'+;JZAI^J\WO2FQO5=3F]J@XS<^=^$V1W?&B=)8(3Q[PZT
MWRL%=N65Z**I!/[7PV`UF(P!`3J!:+PF<"*JX9K,O_N&E1+;S4:8E0>H;Y@^
MMBD=8$W!=V:[:)!$T<&XF_BMF>_6*?\`4@BYF2W)/,UT4;;MZVLR0;8BSO$>
MK$>M=N967,XJ,[9W%+N./L!<8#D)=C4_=/\`I W>U/CS4;^*D,&
MO;@^).-8PXB)$".,-'"AZ17P>^0TOQ5^6717?)FJHL1L3?F-EW