ACCO Q2 moves into profit

 

6 August 2007 — Lincolnshire (IL): ACCO Brands has reported a Q2 profit on lower restructuring charges than the previous year.

 

The company reported Q2 earnings of $4.5 million, or EPS of $0.08, compared with a loss of $9.8 million, or EPS of $0.18, in the same period a year earlier.

 

The latest quarter includes $7.2 million in restructuring expenses, compared with $13.1 million in the prior year. Excluding these one-time charges, net income was $11.7 million, or EPS of $0.21, up from $3.3 million, or EPS of $0.06 cents per share.

 

The firm’s OP segment saw operating income of $12.6 million, compared to an operating loss of $6.4 million in the prior year. ACCO reported a 2 percent fall in Q2 OP sales to $228.3 million, from $231.9 million a year earlier but — adjusting for the exit of non-strategic business and currency — OP sales increased 2 percent, driven by pricing as volumes declined 2 percent. The firm put the decline in volume down to weakness in the US.

 

An increase in product outsourcing to lower-cost locations, price increases, and a favourable product mix from the exit of low-margin products drove the margin improvement. Favourable results were partly offset by continuing infrastructure investments in marketing, product development, and distribution realignment.

 

David Campbell, chairman and CEO, said: "ACCO Brands grew both its top and bottom lines in Q2. This performance reflects the continued progress we are making in positioning ACCO Brands for consistent long-term growth and profitability. Despite a challenging environment, we drove sales growth across all of our segments, excluding exited businesses."

 

For the first six months of the year net sales fell by 2 percent to $910.8 million, from $931.2 million a year earlier. Reported net income increased by 147 percent to $4.7 million, while adjusted net income increased 92 percent to $18.2 million.

 

ACCO said it remains optimistic about the balance of 2007. "Sales growth for will be impacted by the approximately $75 million planned exit from non-strategic businesses. However, due to price increases, as well as progress thus far in executing integration plans and the resulting significant merger synergies that will be achieved in 2007, the company remains confident that its plans for 2007 are on track," the firm said.

 

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