ACCO Brands Posts Record Sales and Strong Earnings Growth for Fourth Quarter and Full Year 2021|||

LAKE ZURICH, Ill.–(Business organisation WIRE)–ACCO Brands Corporation (NYSE: ACCO) today announced its fourth quarter and full year results for the catamenia ended December 31, 2021.

Total Yr

• Record internet sales were $ii.03 billion, up 22.4 pct; comparable sales up five.0 percentage
• EPS was $one.05, up 61.5 percent versus prior year; adapted EPS was $1.41, upwards 48.four percent
• Gross margin improved 70 bps
• Generated costless greenbacks flow of $138.four million (operating cash menstruation of $159.6 meg less $21.ii million of capex)
• Reduced debt $130.five million

Fourth Quarter

• Record cyberspace sales were $570.3 one thousand thousand, upwardly 24.0 per centum; comparable sales upwardly eight.iv percent, all segments posted increases
• EPS was $0.55, upwards 77.four percent versus prior year; adapted EPS was $0.54, up 38.5 pct
• Generated costless cash menstruation of $108.3 million (operating cash flow of $115.half dozen 1000000 less $seven.3 million of capex)
• Reduced debt $123.v million

“
Our strategy of shifting the business toward faster growing, consumer- and technology-centric categories and channels is bearing splendid results with record sales in the 4th quarter and full year 2021. We delivered stiff earnings and free cash menses in the quarter and for the yr, expanded margins, raised our dividend, and reduced debt. Our difficult work, investments, and portfolio changes over the past few years accept positioned us well for organic sales and profit growth. We take good business momentum and await similar comparable sales growth and continuing turn a profit and gratuitous greenbacks flow improvements in 2022,” said Boris Elisman, Chairman and Chief Executive Officer of ACCO Brands.

Full Year

Net sales increased 22.4 percent to $2.03 billion from $1.66 billion in 2020 primarily because of PowerA, which added $249.half-dozen million, or 15.1 pct. Comparable sales increased 5.0 pct driven by higher sales prices and increased book equally offices and schools reopened. Favorable foreign exchange added $38.one million, or 2.three percent.

Operating income was $151.0 million versus $112.4 million in 2020. Adjusted operating income was $227.9 million compared with $160.5 one thousand thousand in the prior year. Both increases were due to sales growth and improved gross margin. PowerA’s operating contribution was $49.8 1000000 before a charge of $xix.0 million related to the alter in fair value of the contingent consideration related to the earnout, and $15.4 million of acquittal. Restructuring costs were $iv.ix million lower and favorable foreign exchange added $4.5 meg.

Net income was $101.ix 1000000, or $i.05 per share, compared with $62.0 million, or $0.65 per share, in 2020 due to higher operating income, partly offset past $7.5 million of higher involvement expense. Adjusted net income was $136.8 meg compared with $91.5 million in 2020 due to higher adapted operating income. Adjusted earnings per share were $one.41 compared with $0.95 in 2020.

Business Segment Results

ACCO Brands Northward America –
Sales of $1,042.4 million increased 26.8 percent from $822.1 million in 2020, primarily due to PowerA, which added $199.viii million. Favorable strange exchange added $vii.iv one thousand thousand, or 0.9 percent. Comparable sales of $835.two million increased 1.half dozen percent due to higher sales prices. Volume was flat every bit a refuse in the first quarter related to COVID-xix impacts was starting time by subsequent improvement.

Operating income was $121.9 meg versus $83.0 million in 2020, upwards 46.nine percent. Adapted operating income of $154.6 one thousand thousand increased 49.7 percent from $103.3 one thousand thousand in 2020. Both increases primarily were due to long-term cost reductions and lower inventory charges, partially offset by normal SG&A expense equally the prior period benefited from many pandemic-related, brusque-term toll reduction measures. PowerA contributed $23.2 million and restructuring charges were $3.2 million lower. Higher sales prices were more than starting time past cost increases related to logistics and commodities. (The modify in the fair value of the contingent consideration for PowerA is non allocated confronting segment results.)

ACCO Brands EMEA –
Sales of $662.9 one thousand thousand increased 26.5 percent from $523.9 meg in 2020, primarily from higher demand due to economic recovery and marketplace share gains. PowerA added $37.5 meg and favorable foreign exchange added $22.1 meg, or 4.ii percent. Comparable sales of $603.3 meg increased 15.ane percent, mainly due to improved volume.

Operating income of $61.7 million increased from $51.half-dozen one thousand thousand in 2020 due to $8.half dozen million from PowerA and $2.ane million from favorable foreign commutation. Adjusted operating income rose to $77.two million from $65.8 million in 2020 for the same reasons noted to a higher place. Stiff increases in operating income in the first half were partially first past declines in the second half primarily due to lower gross profit acquired by higher logistics and article costs. SG&A expenses were higher as the prior catamenia benefited from many pandemic-related, short-term cost reduction measures, including $2.ane million of college government assistance.

ACCO Brands International
– Sales of $320.0 million increased iii.5 percent from $309.2 million in 2020 due to $12.3 million from PowerA, and favorable foreign exchange of $8.6 meg. Comparable sales were $299.i one thousand thousand, down iii.3 percent, as higher pricing was offset by lower volume related to the continuing touch of COVID-19, specially in Brazil and Mexico.

Operating income of $31.half-dozen million increased from $15.6 million in 2020 due to lower reserves for bad debt and inventory expenses, the benefit of long-term cost reductions, and PowerA, which added $2.half-dozen one thousand thousand. Adjusted operating income of $40.half dozen million increased from $25.half-dozen million due to these aforementioned factors, which were partially start by higher expenses equally the prior year benefited from many pandemic-related, short-term price reduction measures, including $iv.0 meg of higher government assistance. Foreign commutation increased operating income $1.2 million.

Fourth Quarter Results

Net sales increased 24.0 percentage to $570.iii million from $460.1 million in 2020 primarily due to $79.4 million from PowerA and strong organic growth, partly offset past unfavorable foreign exchange of $vii.ix million, or one.seven percent. Comparable sales were $498.8 1000000, upwards 8.4 percent as a result of college pricing and improved consumer demand related to more in-person role and schoolhouse use.

Gross profit rose every bit a result of higher volume and long-term cost savings. Gross margin was flat equally increased pricing was start by higher logistics and commodity costs, particularly in EMEA where margins were lower.

The Company reported operating income of $63.6 one thousand thousand compared with $42.2 million in 2020. The increase primarily was due to higher sales, long-term toll reductions, and lower bad debt and inventory reserves. These factors were partially offset by normalized expenses. PowerA’due south operating contribution was $twenty.5 one thousand thousand before $3.1 1000000 of amortization and $two.5 1000000 related to the change in fair value of the contingent consideration related to the earnout.

Adjusted operating income was $79.one million, which excludes amortization and contingent consideration, compared with $58.1 million in 2020, primarily due to college sales, long-term cost reductions, and lower bad debt and inventory reserves, partially offset by normal expense levels.

Net income was $53.5 million, or $0.55 per share, compared with $29.8 million, or $0.31 per share, in 2020 due to college operating income and a lower income tax expense that reflected a reversal of a valuation allowance on strange tax credits. Adjusted net income was $53.1 1000000, or $0.54 per share, compared with $37.1 million, or $0.39 per share, in 2020 primarily due to higher adjusted operating income.

Capital Resource allotment and Dividend

For the total year, the Company had $159.vi million of cash period from operating activities, reduced debt $130.5 million, paid $25.8 million in dividends, and spent $21.2 million in upper-case letter 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.half dozen one thousand thousand in cash from operating activities, reduced debt $123.5 one thousand thousand, paid $seven.2 million in dividends, and spent $7.3 million in capital expenditures.

On February fourteen, 2022, ACCO Brands’ board of directors declared a regular quarterly cash dividend of $0.075 per share. The dividend volition be paid on March 29, 2022, to stockholders of tape as of the shut of business organization on March 18, 2022.

Outlook

“
We are inbound 2022 in excellent shape and with potent momentum. We look to accept some other year of record sales and tape adjusted earnings per share, significant gratis cash period growth and winning market place performance,” concluded Elisman.

For the full year, sales are expected to grow in a range of ane percent to 6 per centum, including a ane-percent negative impact from strange commutation. Adjusted earnings per share are expected to be in a range of $ane.48 to $1.58, including a 2-cent agin impact from foreign substitution.

The Company is projecting at least $165 million of costless greenbacks flow (at least $190 meg in operating greenbacks period minus approximately $25 one thousand thousand in majuscule expenditures). Due to the Visitor’due south normal seasonality, information technology generates the majority of its cash flow in the quaternary quarter.

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

Direction Transition

The Company also appear that Neal Fenwick, Executive Vice President and Chief Financial Officer, plans to retire this year afterwards a 37-year career with the Company. A search for his successor is underway. Mr. Fenwick will remain agile full-time until his successor is named and volition assist with the transition.

Webcast

At 8:30 a.m. EST on February 16, 2022, ACCO Brands Corporation will host a conference call to discuss the Company’south fourth quarter and total year 2021 results. The call will be broadcast live via webcast. The webcast tin can exist accessed through the Investor Relations department of www.accobrands.com. The webcast will be in listen-just mode and will exist available for replay post-obit the event.

About ACCO Brands Corporation

ACCO Brands Corporation is i of the world’s largest designers, marketers and manufacturers of branded academic, consumer and concern products. Our widely recognized brands include AT-A-GLANCE^®, Esselte^®, Five Star^®, GBC^®, Kensington^®, Leitz^®, Mead^®, PowerA^®, Quartet^®, Rapid^®, Rexel^®, Swingline^®, Tilibra^®, and many others. Our products are sold in more than 100 countries around the world. More than information near ACCO Brands, the Abode of Cracking Brands Built by Swell People, can be establish at www.accobrands.com.

Non-GAAP Fiscal Measures

In addition to financial results reported in accordance with mostly accustomed bookkeeping principles (GAAP), we take provided certain non-GAAP financial information in this earnings release to aid investors in agreement the Visitor’s performance. Each non-GAAP financial measure out is defined and reconciled to its most closely related GAAP financial measure in the “About Non-GAAP Financial Measures” department of this earnings release.

Forrad-Looking Statements

Statements contained in this earnings release, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, results of operations, liquidity and financial condition, are “frontward-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 the states 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 like expressions, are subject to certain risks and uncertainties, are fabricated as of the engagement 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.

Our outlook is based on sure assumptions, which nosotros believe to be reasonable nether the circumstances. These include, without limitation, assumptions regarding both the about-term and long-term touch of the COVID-19 pandemic on the economy and our business, our customers and the end-users of our products, and other changes in the macro surroundings; changes in the competitive landscape; bear upon of fluctuations in foreign currency; acquisitions and the other factors described beneath.

Amidst the factors that could cause our bodily results to differ materially from our forward-looking statements are: the telescopic and duration of the COVID-19 pandemic, government deportment and other 3rd-party responses to it and the consequences for global and regional economies, uncertainties regarding when the risks of the pandemic will subside and how geographies, distribution channels and consumer behaviors will evolve over time in response to the pandemic, and the adequacy of our cost-savings measures and our other deportment to manage the business through this uncertain period; the impacts of global supply chain disruptions, inflationary, commodity, and raw material cost increases and shortages of figurer chips on our operations, sales and profitability; a relatively express number of large customers account for a pregnant percent of our sales; risks associated with shifts in the channels of distribution for our products; problems that influence customer and consumer discretionary spending during periods of economical dubiousness or weakness; risks associated with foreign currency fluctuations; challenges related to the highly competitive business environment in which we operate; our power to develop and market place innovative products that run across consumer demands and to expand into new and adjacent product categories; our ability to successfully expand our business in emerging markets and the exposure to greater fiscal, operational, regulatory, compliance and other risks in such markets; the continued decline in the use of certain of our products; risks associated with seasonality; the sufficiency of investment returns on pension avails, risks related to actuarial assumptions, changes in government regulations and changes in the unfunded liabilities of a multi-employer pension plan; whatever harm of our intangible assets; our ability to secure, protect and maintain our intellectual property rights; our ability to abound profitably through acquisitions; our power to successfully integrate acquisitions and achieve the fiscal and other results anticipated at the fourth dimension of acquisition, including planned synergies; the failure, inadequacy or pause of our it systems or supporting infrastructure; risks associated with a cybersecurity incident or information security breach, including that related to a disclosure of personally identifiable data; risks associated with outsourcing product of certain of our products, information technology systems and other administrative functions; risks associated with changes in the cost or availability of raw materials, labor, transportation and other necessary supplies and services and the cost of finished goods; the defalcation or fiscal instability of our customers and suppliers; product liability claims, recalls or regulatory actions; risks associated with our indebtedness, including limitations imposed by restrictive covenants, our debt service obligations, our ability to comply with financial ratios and tests, and the stage out of the London Interbank Offered Rate; a change in or discontinuance of our stock repurchase program or the payment of dividends; risks associated with the changes to U.S. trade policies and regulations, including increased import tariffs and overall dubiousness surrounding international trade relations; the impact of negative and unexpected taxation consequences; the impact of litigation or other legal proceedings; our failure to comply with applicable laws, rules and regulations and self-regulatory requirements, the costs of compliance and the impact of changes in such laws; our ability to attract and retain fundamental employees; the volatility of our stock price; risks associated with circumstances outside our control, including those caused past public health crises, such as the occurrence of contagious diseases like COVID-19, war, terrorism and other geopolitical incidents; and other risks and uncertainties described in “Role I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year concluded December 31, 2020, “Function I, Item 1A. Run a risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June thirty, 2021, and in other reports nosotros file with the Securities and Substitution Commission.

ACCO Brands Corporation and Subsidiaries Condensed Consolidated Balance Sheets
	(unaudited)
(in millions)	December 31, 2021				December 31, 2020
Assets
Electric current assets:
Greenbacks and cash equivalents	$	41.2			$	36.6
Accounts receivable, cyberspace		416.1				356.0
Inventories		428.0				305.one
Other current assets		39.vi				30.v
Full current assets		924.ix				728.2
Total belongings, constitute and equipment		656.four				657.8
Less: accumulated depreciation		(441.viii	)			(416.4	)
Property, plant and equipment, net		214.6				241.4
Right of utilise nugget, leases		105.2				89.ii
Deferred income taxes		115.9				136.5
Goodwill		802.five				827.4
Identifiable intangibles, net		902.2				977.0
Other non-current avails		26.0				49.0
Total avails	$	iii,091.3			$	3,048.7
Liabilities and Stockholders’ Disinterestedness
Current liabilities:
Notes payable	$	9.4			$	5.7
Electric current portion of long-term debt		33.six				70.8
Accounts payable		308.2				180.2
Accrued compensation		56.9				41.0
Accrued client program liabilities		101.4				91.four
Lease liabilities		24.4				22.6
Electric current portion of contingent consideration		24.8				10.4
Other current liabilities		149.9				134.viii
Total current liabilities		708.six				556.9
Long-term debt, net		954.ane				1,054.half-dozen
Long-term charter liabilities		89.0				76.5
Deferred income taxes		145.2				170.6
Pension and post-retirement benefit obligations		222.3				317.ane
Contingent consideration		12.0				7.8
Other non-current liabilities		95.three				122.5
Total liabilities		two,226.5				two,306.0
Stockholders’ equity:
Mutual stock		ane.0				one.0
Treasury stock		(40.9	)			(39.nine	)
Paid-in capital		ane,902.two				one,883.one
Accumulated other comprehensive loss		(535.v	)			(564.two	)
Accumulated deficit		(462.0	)			(537.3	)
Total stockholders’ equity		864.viii				742.7
Total liabilities and stockholders’ disinterestedness	$	three,091.3			$	3,048.vii

ACCO Brands Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) (In millions, except per share information)
	Three Months Ended December 31,											Twelve Months Concluded December 31,
	2021				2020				% Alter			2021				2020				% Change
Net sales	$	570.3			$	460.1			24.0	%		$	two,025.3			$	one,655.2			22.four	%
Price of products sold		392.ii				317.0			23.vii	%			i,410.4				ane,162.8			21.iii	%
Gross profit		178.1				143.1			24.5	%			614.9				492.4			24.9	%
Operating costs and expenses:
Selling, general and administrative expenses		99.1				88.6			eleven.9	%			392.6				336.iii			sixteen.7	%
Amortization of intangibles		11.one				8.seven			27.6	%			46.3				32.8			41.ii	%
Restructuring charges		1.8				3.half dozen			(50.0	)%			6.0				x.ix			(45.0	)%
Change in fair value of contingent consideration		2.five				—			NM				19.0				—			NM
Total operating costs and expenses		114.five				100.ix			13.5	%			463.ix				380.0			22.1	%
Operating income		63.half dozen				42.2			50.7	%			151.0				112.4			34.3	%
Not-operating expense (income):
Interest expense		10.3				10.1			2.0	%			46.3				38.8			xix.three	%
Interest income		(0.7	)			(0.2	)		NM				(ane.ix	)			(one.0	)		90.0	%
Not-operating pension income		(ii.iii	)			(1.ii	)		91.vii	%			(7.9	)			(five.half dozen	)		41.1	%
Other (income) expense, net		(0.9	)			0.viii			NM				3.1				one.6			93.8	%
Income before income tax		57.2				32.vii			74.ix	%			111.4				78.6			41.7	%
Income revenue enhancement expense		3.7				2.nine			27.six	%			9.five				16.half dozen			(42.viii	)%
Net income	$	53.v			$	29.8			79.five	%		$	101.9			$	62.0			64.4	%
Per share:
Basic income per share	$	0.56			$	0.31			80.6	%		$	1.07			$	0.65			64.half-dozen	%
Diluted income per share	$	0.55			$	0.31			77.4	%		$	1.05			$	0.65			61.5	%
Weighted boilerplate number of shares outstanding:
Basic		95.8				94.six							95.5				94.9
Diluted		97.5				96.0							97.1				96.1
Cash dividends declared per common share	$	0.075			$	0.065						$	0.270			$	0.260

Statistics (as a % of Cyberspace sales, except Income revenue enhancement rate)
	Three Months Concluded December 31,						Twelve Months Ended December 31,
	2021			2020			2021			2020
Gross profit (Net sales, less Cost of products sold)	31.2	%		31.i	%		30.4	%		29.7	%
Selling, general and authoritative expenses	17.4	%		19.three	%		xix.4	%		20.3	%
Operating income	xi.two	%		9.2	%		7.5	%		6.8	%
Income before income tax	ten.0	%		7.1	%		5.5	%		four.7	%
Net income	ix.4	%		six.5	%		5.0	%		iii.7	%
Income taxation rate	6.5	%		eight.ix	%		8.5	%		21.1	%

ACCO Brands Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)
	Twelve Months Ended Dec 31,
(in millions)	2021				2020
Operating activities
Cyberspace income	$	101.ix			$	62.0
Amortization of inventory step-up		3.0				—
Loss on disposal of assets		0.1				0.2
Deferred income tax expense		(21.0	)			(vii.6	)
Change in fair value of contingent liability		19.0				—
Depreciation		39.four				37.9
Other not-cash items		—				1.1
Amortization of debt issuance costs		2.8				2.4
Amortization of intangibles		46.3				32.8
Stock-based compensation		15.2				6.5
Loss on debt extinguishment		3.7				—
Changes in balance sheet items:
Accounts receivable		(77.6	)			101.six
Inventories		(131.8	)			two.ii
Other assets		(1.2	)			fourteen.seven
Accounts payable		131.ii				(68.eight	)
Accrued expenses and other liabilities		26.three				(58.2	)
Accrued income taxes		2.3				(7.six	)
Net cash provided by operating activities		159.half dozen				119.2
Investing activities
Additions to property, plant and equipment		(21.two	)			(15.3	)
Price of acquisitions, net of greenbacks acquired		15.4				(339.4	)
Net cash used by investing activities		(5.8	)			(354.vii	)
Financing activities
Proceeds from long-term borrowings		659.7				438.6
Repayments of long-term debt		(766.3	)			(151.9	)
Proceeds of notes payable, net		3.seven				two.one
Payment for debt premium		(9.viii	)			—
Payments for debt issuance costs		(10.v	)			(three.2	)
Repurchases of common stock		—				(xviii.9	)
Dividends paid		(25.eight	)			(24.6	)
Payments related to revenue enhancement withholding for stock-based bounty		(0.9	)			(one.8	)
Payments of contingent consideration		(0.4	)			—
Proceeds from the exercise of stock options		3.1				4.4
Net cash (used) provided by financing activities		(147.ii	)			244.seven
Effect of foreign exchange charge per unit changes on cash and greenbacks equivalents		(2.0	)			(0.4	)
Net increase in cash and cash equivalents		4.6				8.viii
Cash and cash equivalents
Beginning of the period		36.6				27.8
End of the period	$	41.two			$	36.6

About Non-GAAP Financial Measures

This earnings release contains non-GAAP financial measures. We explain below how we calculate and use each of these non-GAAP financial measures and a reconciliation of our current period and historical non-GAAP fiscal measures to the almost direct comparable GAAP financial measures follows.

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