ACCO Brands Corporation Reports Third Quarter 2005 Results.LINCOLNSHIRE Lincolnshire (lĭng`kənshĭr), county (1991 pop. 573,900), 2,662 sq mi (6,895 sq km), E England, on the Humber estuary, the North Sea, and The Wash. The county seat is Lincoln. , Ill. -- ACCO ACCO American College of Chiropractic Orthopedists ACCO Association of County Commissioners of Oklahoma ACCo American Cyanamid Company ACCO Adenoid Cystic Carcinoma Organization ACCO American Clip Company ACCO Assistant Central Control Officer Brands Corporation (NYSE NYSE See: New York Stock Exchange :ABD ABD n. A candidate for a doctorate who has completed all the requirements for the degree, such as courses and examinations, with the exception of the dissertation. [a(ll) b(ut) d(issertation).] ): --Net sales increase 39%, including former GBC GBC Game Boy Color GBC Global Business Coalition GBC Green Building Council GBC George Brown College GBC Great Basin College (Nevada) GBC General Binding Corporation GBC Greater Baltimore Committee GBC Goldey-Beacom College businesses --Cash position strong - $62 million cash available at end of quarter --Merger integration "on track," says CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. ACCO Brands Corporation (NYSE:ABD), a world leader in branded office products, reported its third quarter 2005 results today. The report is the first quarterly financial results disclosure since its formation on August 17, 2005, following the merger of the former ACCO World office products business unit of Fortune Brands, Inc., with General Binding Corporation ("GBC"). ACCO Brands reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $421.7 million for the third quarter, compared to $303.8 million in the prior year, an increase of 39%. The acquisition of GBC accounted for 33%, or $101.4 million of the growth, an additional five days of sales in ACCO North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. due to a change in reporting to calendar month-end added 3%, and the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of foreign currency translation accounted for 1%. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the quarter, before restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and restructuring-related charges, was flat, at $38.0 million. However, this amount included $2.4 million of higher corporate costs related to becoming an independent company and $5.4 million of operating income related to GBC's business. Net income in the third quarter decreased to $3.6 million, or $0.08 per share, compared to $38.5 million, or $1.10 per share, in the prior year quarter. The company partially completed a corporate reorganization to facilitate the merger of its international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , resulting in an additional income tax charge of $11.4 million. In addition, net income was impacted by transaction-related expenses and restructuring and restructuring-related costs, which, for the quarter, totaled $5.0 million, after tax. "We've we've Contraction of we have. we've have made substantial progress in bringing the businesses of ACCO and GBC together," said David D. Campbell, Chairman and Chief Executive Officer, ACCO Brands Corporation. "The integration is on track, and we've seen no surprises. We're we're Contraction of we are. we're we are confident that we will meet our annual target of $40 million in cost savings over the next three years, a portion of which we plan to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. in the business. "Because almost 85% of our sales are from brands with number-one or number-two market positions," Campbell continued, "we believe we are well-positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the future growth opportunities that result from combining our strong portfolio of brands and product lines." Highlights for the quarter include: --Achieving a $62 million net cash available position at quarter-end, accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. after paying our former parent, Fortune Brands, the ACCO cash as of March 15th as a dividend, transaction fees and investing in infrastructure and activities that support the future growth of the newly combined company. --Successfully merging the ACCO World and GBC businesses into a new, NYSE-listed company, ACCO Brands Corporation, including the distribution of ACCO Brands shares to Fortune Brands shareholders and former GBC shareholders. ACCO Brands Corporation is the only publicly traded "pure play" office products company. --Exploiting a solid back-to-school season with a substantial number of new and appealing products in the Office Products and Computer Products sectors. --Introducing several innovative products, including the GBC ProClick Pronto pron·to adv. Informal Without delay; quickly. [Spanish, from Latin pr  mptus; see prompt. line of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. binding systems for high-production binding environments; the Swingline Swingline is a division of ACCO Brands that specializes in manufacturing staplers and Hole punches. The company was formerly located in Long Island City, Queens, New York, United States, but is now headquartered with its parent company ACCO in Lincolnshire, Illinois. Optima Grip Compact Stapler sta·pler 1 n. One who deals in staple goods or staple fibers. stapler Noun a device used to fasten things together with a staple Noun 1. , designed to maximize handheld handheld: see personal digital assistant. stapling sta·pling n. The fastening together of two tissues with a staple or staples. stapling the use of staples as surgical sutures and fixation. performance; Quartet Quartet™ Respiratory care A system for diagnosing and managing obstructive sleep apnea Modes Continuous, bi-level pressure, automatic 'smart' CPAP modes. See Obstructive sleep apnea. Street Sign Magnetic Dry-Erase Boards, for lockers, bedrooms, dorms and doorways; and the expansion of the award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" Kensington Kensington is a district of West London, England within the Royal Borough of Kensington and Chelsea, located 2.8 miles (4.5 km) west of Charing Cross. An affluent and densely-populated area, its commercial heart is Kensington High Street and it contains the well-known museum line of iPod A family of extremely popular digital media players from Apple, introduced in 2001 for the Mac and 2002 for Windows. iPods are noted for their well-designed, simple user interfaces that employ either a click wheel or touch screen (see click wheel and iPod touch). accessories. --Relocating approximately 330 ACCO Brands employees into consolidated office facilities in Lincolnshire, Illinois Lincolnshire is an affluent village in Lake County, Illinois, United States. The population was 6,108 at the 2000 census. It is the headquarters of Hewitt Associates, Quill Corporation, and Takeda Pharmaceuticals North America, as well as Newman/Haas Racing, an auto racing team in , and Aylesbury Aylesbury (ālz`bərē), city (1991 pop. 51,999), Buckinghamshire, central England. It is an agricultural market for the upper Thames valley and is famous for its ducks. , United Kingdom, to position our employees to support growth and facilitate the integration of the former ACCO World and GBC businesses, and closing a GBC office facility in Skokie Skokie (skō`kē), village (1990 pop. 59,432), Cook co., NE Ill., an industrial suburb adjacent to Chicago; inc. 1888. Its varied products include communications, computer, and electrical equipment; rubber, iron, and steel products; and tools. , Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. . --Finalizing plans to consolidate the company's office products businesses on both sides of the Atlantic, improve its supply chain processes, and take full advantage of the economies of scale the merger will afford it. --Securing $950 million in debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay at attractive interest rates, as well as an additional $150 million unused line of credit. "Strategically, we've made great strides in the quarter as we integrate the ACCO and GBC businesses," said Neal V. Fenwick Fenwick may be: A location in the United Kingdom:
"We're also pleased that we were able to end the quarter with a substantial cash position, notwithstanding the significant amount of merger-related costs incurred in the quarter," Fenwick concluded. ACCO Brands reported net sales of $973.7 million for the first nine months of 2005, compared to $843.4 million in the prior-year nine months, an increase of 15%. The acquisition of GBC was only included for six weeks and accounted for 12% of the increase, the change in accounting calendar accounted for 1%, and the favorable impact of foreign currency translation accounted for 2%. On a pro-forma basis, adjusted for the new accounting period and foreign currency translation, underlying year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales are up 2%. Operating income, excluding charges and $5.4 million income from GBC, was $83.3 million, compared to $83.2 million last year. However, it should be noted that the company invested $2.7 million in higher corporate costs related to becoming an independent company during the year. Net income in the current-year nine months was $30.2 million, compared to $40.6 million in the prior-year nine months. Net income includes transaction-related expenses and restructuring costs of $7.1 million and $27.3 million in the current and prior-year periods, respectively. Third-quarter and nine-month financial results include statements of operations for the former ACCO World business for the full quarter and nine-month periods, and financial results for the former GBC business from August 17, 2005, through the end of the quarter and nine-month period in 2005. Prior-period results are therefore not directly comparable. Results of Business Segments The company reports its results in four newly defined global segments: --Office Products Group --Computer Products Group --Commercial-Industrial Print Finishing Group --Other Commercial Office Products Group The Office Products Group reported net sales of $294.6 million in the third quarter, compared to net sales of $238.7 million, an increase of 23%. The acquisition of GBC accounted for $52 million, or 22% of the increase, the change in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. calendar added 3%, and foreign currency added 1%. Results in Office Products were driven by strong back-to-school volumes in the U.S. and sales improvements in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. , and Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . These broad gains were offset by the effects of competitive pricing, which resulted in the loss of a customer contract in a product category, as well as the loss of some ACCO World business to the former GBC. The company also recorded sales declines in the United Kingdom. Office Products operating income, excluding charges and $1.6 million of operating income related to GBC, declined 22% to $21.5 million, compared to $27.4 million in the prior-year quarter. Higher sales volumes were offset by unfavorable pricing established prior to the merger from price competition including certain categories where the former ACCO World and GBC businesses overlapped, together with higher freight and distribution costs distribution costs distribute npl → Vertriebskosten pl . This business is seeing further cost increases, and expects to recover margins with future actions. The Office Products Group includes four consumer categories: (1) workspace tools (staplers, punches, and shredders), (2) document communications solutions (lamination lamination a laminar structure or arrangement. and binding equipment and supplies), (3) visual communications products (presentation boards, markers, overhead projectors and related products), and (4) storage and organization products (binders, storage boxes, labels, folders, clips, fasteners fasteners In construction, connectors between structural members. Bolted connections are used when it is necessary to fasten two elements tightly together, especially to resist shear and bending, as in column and beam connections. , and other office essentials). Computer Products Group The Computer Products Group reported net sales of $57.9 million, an increase of 25%, compared to $46.2 million in the prior year quarter. The change in the North American reporting calendar added 4%. The strong sales growth was driven by new product launches, favorable industry dynamics, share gains in certain product categories, and favorable back-to-school volumes. Computer Products operating income increased 15%, to $11.4 million, compared to $9.9 million in the prior-year quarter. (Note: This segment was unaffected by the GBC merger.) The Computer Products Group includes the company's security locks and power adapters An external power supply for laptop computers and just about every portable or semi-portable electronic device on the market. Also called an "AC adapter," it contains a rectifier to convert AC current to DC and a transformer to convert voltage from 120 down to 9, 12, 15 or whatever is for laptop computers A portable computer that has a flat LCD screen and usually weighs less than eight pounds. Often called just a "laptop," it uses batteries for mobile use and AC power for charging the batteries and desktop use. Today's high-end laptops provide all the capabilities of most desktop computers. ; input devices, such as wireless mice and keyboards; computer cases; other computer accessories; and accessories for Apple iPod products. These devices are sold principally under the Kensington brand name. Commercial-Industrial Print Finishing Group The Commercial-Industrial Print Finishing Group reported net sales of $24.9 million and operating income of $2.0 million for the third quarter. These results represent net sales and operating income generated by this former GBC unit between August 17, 2005 and September September: see month. 30, 2005. Prior-period results, being pre-merger, are not reported. The Commercial-Industrial Print Finishing Group manufactures and markets specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. laminating lam·i·nate v. lam·i·nat·ed, lam·i·nat·ing, lam·i·nates v.tr. 1. To beat or compress into a thin plate or sheet. 2. To divide into thin layers. 3. films for book printing, packaging and digital print lamination, as well as high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. laminating and binding equipment, sold under the GBC brand. Other Commercial The Other Commercial segment reported net sales of $44.3 million in the third quarter, compared to $18.9 million in the prior year, an increase of 134%. The acquisition of GBC accounted for 128% of the growth, 6% was attributable to the change in reporting calendar, and the favorable impact of foreign currency translation accounted for 1%. Operating income for this segment was $6.5 million, including $3.1 million related to GBC, compared to $2.9 million in the prior-year quarter. Excluding the impact of GBC, operating income increased 17%. The Other Commercial segment includes the Day-Timers time management unit, which markets personal organizers : Top - 0–9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A
Business Outlook Long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , the company is influenced by macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. growth factors which currently enable the company to grow revenues in the low- to mid-single-digits, operating income in the mid- mid- pref. Middle: midbrain. to high-single-digits and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the low-double-digits. As a result of expected negative synergies in 2005 and 2006 due to the spin-out of ACCO World from Fortune Brands and the merger with GBC and subsequent integration, management expects operating income and earnings growth in 2005 and 2006 to be lower. Third-Quarter Results Conference Call At 8:30 a.m. Eastern Time today, ACCO Brands Corporation will host a conference call to discuss the company's third-quarter results. The call will be broadcast live via webcast. The webcast can be accessed through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of www.accobrands.com. The webcast will be in listen-only mode and will be available for replay for one month following the event. About ACCO Brands Corporation ACCO Brands Corporation is a world leader in branded office products, with annual revenues of nearly $2 billion. Its industry-leading brands include Day-Timer Day-Timers Inc. (a.k.a. Day-Timer or Day Timers) is a corporation based in East Texas, PA. The primary product line consists of various styles of calendars and dated planners but they also provide many other products with a focus on time management. , Swingline, Kensington, Quartet, GBC, Rexel Rexel is a French company specializing in the distribution of electrical parts and supplies. It includes the Divisions of Page Data, Rexel Video, Ideal Electrical and John R Turk. It has offices internationally.
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains statements which may constitute "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are subject to certain risks and uncertainties, are made as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and the company assumes no obligation to update them. ACCO Brands' ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted depending on a variety of factors, including but not limited to fluctuations in cost and availability of raw materials; competition within the markets in which the company operates; the effects of both general and extraordinary economic, political and social conditions; the dependence of the Company on certain suppliers of manufactured products; the effect of consolidation in the office products industry; the risk that businesses that have been combined into the Company as a result of the merger with General Binding Corporation will not be integrated successfully; the risk that targeted cost savings and synergies from the aforesaid Before, already said, referred to, or recited. This term is used frequently in deeds, leases, and contracts of sale of real property to refer to the property without describing it in detail each time it is mentioned; for example,"the aforesaid premises. merger and other previous business combinations may not be fully realized or take longer to realize than expected; disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. from business combinations making it more difficult to maintain relationships with the Company's customers, employees or suppliers; foreign exchange rate fluctuations; the development, introduction and acceptance of new products; the degree to which higher raw material costs, and freight and distribution costs, can be passed on to customers through selling price increases and the effect on sales volumes as a result thereof; increases in health care, pension and other employee welfare costs; as well as other risks and uncertainties detailed from time to time in the Company's SEC filings. Non-GAAP Financial Measures Operating Income is a measure derived in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Operating income before charges (transaction-related expenses, restructuring, restructuring-related non-recurring costs and infrastructure investments) is a measure not derived in accordance with GAAP. Management uses this measure to determine the returns generated by its operating segments and to evaluate and identify cost-reduction initiatives. Management believes this measure provides investors with helpful supplemental information regarding the underlying performance of the company from year to year. This measure may be inconsistent with measures presented by other companies.
ACCO Brands Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions, except per-share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2005 (1) 2004 2005 (1) 2004
----------- ----------- ----------- -----------
Net sales $421.7 $303.8 $973.7 $843.4
----------- ----------- ----------- -----------
Cost of products
sold (2) 300.0 208.4 689.7 595.5
Advertising, selling,
general and
administrative
expenses (2) 88.5 59.0 202.0 182.7
Amortization of
intangibles 1.4 0.3 2.4 0.9
Restructuring charges 0.3 - 0.3 19.4
----------- ----------- ----------- -----------
Operating Income 31.5 36.1 79.3 44.9
Interest expense,
including allocation
from parent 7.9 2.1 12.0 6.0
Other expense, net (1.1) (0.5) 0.6 (4.0)
----------- ----------- ----------- -----------
Income before income
taxes and cumulative
effect of change in
accounting principle 24.7 34.5 66.7 42.9
Income taxes 21.1 (4.0) 38.1 2.3
----------- ----------- ----------- -----------
Net income before
change in
accounting
principle 3.6 38.5 28.6 40.6
Cumulative effect of
change in accounting
principle, net of tax - - 1.6 -
----------- ----------- ----------- -----------
Net income $3.6 $38.5 $30.2 $40.6
=========== =========== =========== ===========
Earnings per share:
Basic $0.08 $1.10 $0.80 $1.16
Diluted $0.08 $1.08 $0.79 $1.15
Weighted average
shares:
Basic 43,416,000 34,969,000 37,816,000 34,969,000
Diluted 44,364,000 35,508,000 38,491,000 35,508,000
Actual shares at end of
period 52,351,000 34,969,000 52,351,000 34,969,000
Fully diluted shares at
end of period 53,726,000 35,509,000 53,726,000 35,509,000
(1) The results of General Binding Corporation are included in the
Company's results from the acquisition date of August 17, 2005.
(2) Freight and distribution costs have been reclassified from
Advertising, selling, general and administrative expenses into
Cost of products sold.
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2005(1) 2004 2005(1) 2004
--------- --------- --------- ----------
Reconciliation of Non-GAAP
measures:
Operating income $31.5 $36.1 $79.3 $44.9
Plus: Restructuring charges 0.3 - 0.3 19.4
Merger and integration
related 7.7 - 8.6 -
Restructuring related
in COS (1.8) (0.1) (1.8) 8.7
Restructuring related
in SG&A 0.3 1.6 2.3 10.2
--------- --------- --------- ----------
Operating income before
restructuring and
restructuring-related
charges 38.0 37.6 88.7 83.2
Adjustments:
GBC income (5.4) - (5.4) -
--------- --------- --------- ----------
Operating income before
restructuring and
restructuring-related
charges, and GBC income $32.6 $37.6 $83.3 $83.2
========= ========= ========= ==========
Net income $3.6 $38.5 $30.2 $40.6
Plus: Charges, after tax 5.0 (3.9) 7.1 27.3
--------- --------- --------- ----------
Adjusted net income $8.6 $34.6 $37.3 $67.9
========= ========= ========= ==========
(1) The results of General Binding Corporation are included in the
Company's results from the acquisition date of August 17, 2005.
Non-GAAP Financial Measures: Operating Income is a measure derived in
accordance with GAAP. Operating income before charges (including
transaction-related expenses, restructuring, and restructuring-related
costs) and adjusted net income are measures not derived in accordance
with GAAP. Management uses these measures to determine the returns
generated by its operating segments and to evaluate and identify
cost-reduction initiatives. Management believes these measures provide
investors with helpful supplemental information regarding the
underlying performance of the company from year to year. These
measures may be inconsistent with measures presented by other
companies.
ACCO Brands Corporation
BUSINESS SEGMENT RESULTS (1)
(Unaudited)
(Dollars in millions)
Business segments (1) Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2005 (2) 2004 2005 (2) 2004
--------- --------- --------- ----------
Segment net sales
Office Products Group $294.6 $238.7 $727.2 $677.3
Computer Products Group 57.9 46.2 151.5 119.9
Commercial-Industrial
Print Finishing Group 24.9 - 24.9 -
Other Commercial 44.3 18.9 70.1 46.2
--------- --------- --------- ----------
Total Segment Net Sales $421.7 $303.8 $973.7 $843.4
========= ========= ========= ==========
Operating income
Office Products Group $24.1 $26.4 $56.3 $32.8
Computer Products Group 11.4 9.9 32.3 20.9
Commercial-Industrial
Print Finishing Group 2.0 - 2.0 -
Other Commercial 6.5 2.9 6.4 2.4
Corporate Expenses (12.5) (3.1) (17.7) (11.2)
--------- --------- --------- ----------
Operating income $31.5 $36.1 $79.3 $44.9
========= ========= ========= ==========
Charges (gains) included in
Operating income (3)
Office Products Group $(1.0) $1.0 $1.0 $34.6
Computer Products Group 0.1 0.9
Commercial-Industrial
Print Finishing Group - - - -
Other Commercial - - - 0.7
Corporate Expenses 7.5 0.4 8.4 2.1
--------- --------- --------- ----------
Operating income $6.5 $1.5 $9.4 $38.3
========= ========= ========= ==========
Operating income before
charges (3)
Office Products Group $23.1 $27.4 $57.3 $67.4
Computer Products Group 11.4 10.0 32.3 21.8
Commercial-Industrial
Print Finishing Group 2.0 - 2.0 -
Other Commercial 6.5 2.9 6.4 3.1
Corporate Expenses (5.0) (2.7) (9.3) (9.1)
--------- --------- --------- ----------
Operating income before
charges $38.0 $37.6 $88.7 $83.2
========= ========= ========= ==========
(1) The company reports its results under four newly defined segments:
Office Products Group, Computer Products Group,
Commercial-Industrial Print Finishing Group, and Other Commercial.
(2) General Binding Corporation's results are included in the
Company's Office Products, Commercial-Industrial Print Finishing
Group, and Other Commercial segment results from the acquisition
date of August 17, 2005 only.
(3) The Company incurred various charges, including
transaction-related expenses, and restructuring in the
current-year periods, and restructuring and restructuring-related
charges in the prior-year periods.
Non-GAAP Financial Measures: Operating Income is a measure derived in
accordance with GAAP. Operating income before charges (including
transaction-related expenses, restructuring, and restructuring-related
costs) is a measure not derived in accordance with GAAP. Management
uses this measure to determine the returns generated by its operating
segments and to evaluate and identify cost-reduction initiatives.
Management believes this measure provides investors with helpful
supplemental information regarding the underlying performance of the
company from year to year. This measure may be inconsistent with
measures presented by other companies.
ACCO Brands Corporation
SELECTED FINANCIAL INFORMATION
(Unaudited)
(Dollars in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2005 (1) 2004 2005 (1) 2004
--------- --------- --------- ----------
Depreciation expense $8.5 $6.5 $21.1 $21.2
--------- --------- --------- ----------
Capital expenditures $6.5 $4.3 $19.3 $16.0
--------- --------- --------- ----------
ACCO Brands Corporation
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
September 30, December 27,
2005 2004
------------- -------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $71.0 $79.8
Receivables, net 426.7 320.1
Inventories, net 280.9 172.5
Other 70.7 24.1
------------- -------------
Total current assets 849.3 596.5
Property and equipment, net 246.7 157.7
Goodwill, net 399.4 -
Intangibles, net 243.3 117.6
Other assets 126.5 112.7
------------- -------------
Total Assets $1,865.2 $984.5
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank notes payable $9.0 $0.1
Current portion of long-term debt 18.7 -
Accounts payable 154.9 120.6
Other 266.3 204.1
------------- -------------
Total current liabilities 448.9 324.8
Debt, less current portion 930.9 -
Post-retirement and other liabilities 73.1 42.9
Total stockholders' equity 412.3 616.8
------------- -------------
Total Liabilities and
Stockholders' Equity $1,865.2 $984.5
============= =============
ACCO Brands Corporation
UNAUDITED HISTORIC PROFORMA SALES
(Dollars in millions)
Three Months Ended Three Months Ended
March June
------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ----------
Segment pro forma net sales
Office Products Group $308.0 $309.3 $314.8 $306.5
Computer Products Group 43.3 34.8 50.3 38.9
Commercial-Industrial Print
Finishing Group 46.4 42.2 46.7 43.3
Other Commercial 54.6 55.1 54.3 54.2
--------- --------- --------- ----------
Total Segment Pro Forma
Net Sales $452.3 $441.4 $466.1 $442.9
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Three Months Ended Nine Months Ended
September September
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2005 2004 2005 2004
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Segment pro forma net sales
Office Products Group $338.7 $328.9 $961.5 $944.7
Computer Products Group 57.9 46.2 151.5 119.9
Commercial-Industrial Print
Finishing Group 45.3 42.3 138.4 127.8
Other Commercial 62.7 62.1 171.6 171.4
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Total Segment Pro Forma
Net Sales $504.6 $479.5 $1,423.0 $1,363.8
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