ACCO Brands Reports Third Quarter Results

• Reported net sales of $384 million
• Gross margin expanded; SG&A down compared to prior year
• Multi-year cost reduction program has yielded more than $50 million of savings
• Earnings per share of $0.04, adjusted earnings per share of $0.21, in line with the Company's outlook

ACCO Brands Corporation (NYSE:ACCO) today reported financial results for its third quarter and nine-months ended September 30, 2025.

"We delivered third quarter adjusted EPS in line with our outlook and expanded gross margin by 50 basis points as we continue to demonstrate strong operational discipline through continued execution of our $100 million cost reduction program. Sales were lower than expected in the quarter, as the demand environment for many of our categories remained soft globally. We expect sales trends to improve in the fourth quarter, reflecting the favorable impact of foreign exchange and growth in the technology accessories categories," stated ACCO Brands' President and Chief Executive Officer, Tom Tedford.

"We are confident in our ability to deliver future value creation for our shareholders. Our teams continue to execute on our cost management initiatives, while remaining focused on enhancing our revenue opportunities. Innovation is core to our strategy; the fourth quarter new product launches will help abate the secular headwinds, while we also evaluate strategic opportunities that align with our growth objectives. We believe our leading brands, combined with our optimized operational structure, give us a strong platform for growth," concluded Mr. Tedford.

Third Quarter Results

Net sales were $383.7 million, down 8.8 percent from $420.9 million in 2024. Favorable foreign exchange increased sales by $6.5 million, or 1.5 percent. Comparable sales decreased 10.3 percent. The decline in net sales reflects softer global demand for our products.

Operating income was $26.0 million, versus $26.3 million in 2024. Restructuring expense was $1.5 million, compared to $6.7 million in the prior year. Adjusted operating income was $39.2 million, compared to $44.7 million in 2024. The decline in adjusted operating income reflects lower sales volume, lower fixed-cost absorption, and tariff-related impacts, which were partially offset by cost savings and lower incentive compensation expense.

Net income was $4.0 million, or $0.04 per share, compared with prior-year net income of $9.3 million, or $0.09 per share. The decline in net income reflects items noted above in operating income, as well as discrete tax items and other expense of $5.5 million, compared to $0.2 million of a reversal in the prior year. Adjusted net income was $19.5 million, compared with adjusted net income of $22.5 million in 2024, and adjusted earnings per share were $0.21, compared with $0.23 in 2024.

Business Segment Results

ACCO Brands Americas – Third quarter segment net sales of $227.6 million decreased 12.2 percent from $259.1 million in the prior year. Net sales in the quarter were negatively impacted by softer demand for our product categories, partly offset by price increases.

Third quarter operating income was $24.7 million, compared to $25.9 million a year earlier. Restructuring expense associated with the multi-year cost reduction program was $0.6 million, compared to $3.4 million in the prior year. Adjusted operating income was $32.7 million, down from $36.7 million in the prior year. The decrease in adjusted operating income reflects lower sales volume, lower fixed-cost absorption and impacts from tariffs, partially offset by cost savings and price.

ACCO Brands International – Third quarter segment net sales of $156.1 million decreased 3.5 percent from $161.8 million in the prior year. Favorable foreign exchange increased sales by 3.8 percent. Comparable sales were $150.0 million, down 7.3 percent versus the prior year. Comparable sales declines reflect reduced demand for our product categories, partially offset by the benefit of price increases and the acquisition of Buro Seating.

Third quarter operating income was $10.5 million, compared to $9.5 million in the prior year. Restructuring expense associated with the multi-year cost reduction program of $1.1 million, compared to $3.3 million in the prior year. Adjusted operating income was $15.9 million, compared with $17.1 million in the prior year. The decrease in adjusted operating income reflects the impact of lower sales volume, partially offset by pricing actions and cost savings.

Nine Month Results

Net sales were $1,095.9 million, down 10.0 percent from $1,218.1 million in 2024. Net sales declines reflect the impact from softer global demand and tariff-related impacts.

Operating income was $52.3 million, versus an operating loss of $79.0 million in 2024, primarily due to non-cash impairment charges of $165.2 million related to goodwill and intangible assets within the Americas segment in the prior year. Restructuring expense of $13.2 million, compared to $6.1 million in the prior year. Current year operating income benefited from a gain on sale of assets of $6.9 million. Adjusted operating income was $93.2 million, down from $125.5 million in 2024. Adjusted operating income decline reflects lower sales volume and tariff related impacts, which were partially offset by cost savings and lower incentive compensation expense.

Net income was $20.0 million, or $0.21 per share, compared with a net loss of $122.2 million, or $(1.27) per share, in 2024. Net income in the nine-month period was positively impacted by the same items noted above in operating income. Current year net income was also positively impacted by the settlement of outstanding tax assessments in Brazil, resulting in a benefit of $13.1 million. The prior year loss reflects the items noted above in operating income. Adjusted net income was $43.3 million, compared with $61.7 million in 2024, and adjusted earnings per share were $0.46 per share, compared with $0.63 per share in 2024.

Capital Allocation and Dividend

Year to date, operating cash flow was $38.1 million versus $95.5 million in the prior year. Adjusted free cash flow of $42.3 million compared to $86.9 million in the prior year. The Company's consolidated leverage ratio as of September 30, 2025 was 4.1x.

Year to date, the Company has paid dividends of $20.3 million. In the first quarter, the Company repurchased 3.2 million shares of common stock for $15.1 million.

On October 24, 2025, ACCO Brands announced that its board of directors declared a regular quarterly cash dividend of $0.075 per share. The dividend will be paid on December 10, 2025 to stockholders of record at the close of business on November 21, 2025.

Reaffirming Full Year 2025 Outlook

For the full year, the Company expects reported sales to be down in the range of 7.0% to 8.5%. Full year adjusted EPS is expected to be within the range of $0.83 to $0.90. The Company expects 2025 adjusted free cash flow to be within the range of approximately $90 million to $100 million, which includes $17 million in cash proceeds from the sale of two facilities.

"While we navigate the uncertain demand environment, we continue to focus on our faster growing categories. Our proven ability to manage costs and generate cash flow, combined with our market-leading brands and operational excellence, gives us confidence in our long-term value creation potential," concluded Mr. Tedford.

Webcast

At 8:30 a.m. ET on October 31, 2025, ACCO Brands Corporation will host a conference call to discuss the Company's third quarter 2025 results. The call will be broadcast live via webcast. The webcast can be accessed through the Investor Relations section of www.accobrands.com. The webcast will be in listen-only mode and will be available for replay following the event.

About ACCO Brands Corporation

ACCO Brands is the leader in branded consumer products that enable productivity, confidence and enjoyment while working, when learning and while playing. Our widely recognized brands, include AT-A-GLANCE^®, Five Star^®, Kensington^®, Leitz^®, Mead^®, PowerA^®, Swingline^®, Tilibra^® and many others. More information about ACCO Brands Corporation (NYSE:ACCO) can be found at www.accobrands.com.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this earnings release to aid investors in understanding the Company's performance. Each non-GAAP financial measure is defined and reconciled to its most directly comparable GAAP financial measure in the "About Non-GAAP Financial Measures" section of this earnings release.

Forward-Looking Statements

Statements contained herein, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, strategies, business operations and similar matters, results of operations, liquidity and financial condition, and those relating to cost reductions and anticipated pre-tax savings and restructuring costs 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," "future", "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. Forward-looking statements are subject to the occurrence of events outside the Company's control and actual results and the timing of events may differ materially from those suggested or implied by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements when deciding whether to buy, sell or hold the Company's securities.

Our outlook is based on certain assumptions which we believe to be reasonable under the circumstances. These include, without limitation, assumptions regarding consumer demand, tariffs, global geopolitical and economic uncertainties, and fluctuations in foreign currency exchange rates; and the other factors described below.

Among the factors that could cause our actual results to differ materially from our forward-looking statements are: changes in trade policy and regulations, including changes in trade agreements and the imposition of tariffs, and the resulting consequences; global political and economic uncertainties; a limited number of large customers account for a significant percentage of our sales; sales of our products are affected by general economic and business conditions globally and in the countries in which we operate; risks associated with foreign currency exchange rate fluctuations; challenges related to the highly competitive business environment in which we operate; our ability to develop and market innovative products that meet 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 financial, 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 assets, risks related to actuarial assumptions, changes in government regulations and changes in the unfunded liabilities of a multi-employer pension plan; any impairment of our intangible assets; our ability to secure, protect and maintain our intellectual property rights, and our ability to license rights from major gaming console makers and video game publishers to support our gaming accessories business; our ability to grow profitably through acquisitions, and successfully integrate them; our ability to successfully execute our multi-year restructuring and cost savings program and realize the anticipated benefits; continued disruptions in the global supply chain; risks associated with inflation and other changes in the cost or availability of raw materials, transportation, labor, and other necessary supplies and services and the cost of finished goods; risks associated with outsourcing production of certain of our products, information technology systems and other administrative functions; the failure, inadequacy or interruption of our information technology systems or their supporting infrastructure; risks associated with a cybersecurity incident or information security breach, including that related to a disclosure of personally identifiable information; risks associated with our indebtedness, including limitations imposed by restrictive covenants, our debt service obligations, and our ability to comply with financial ratios and tests; a change in or discontinuance of our stock repurchase program or the payment of dividends; product liability claims, recalls or regulatory actions; the impact of litigation or other legal proceedings; the impact of additional tax liabilities stemming from our global operations and changes in tax laws, regulations and tax rates; 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 qualified personnel; the volatility of our stock price; risks associated with circumstances outside our control, including those caused by telecommunication failures, labor strikes, power and/or water shortages, public health crises, such as the occurrence of contagious diseases, severe weather events, war, terrorism and other geopolitical incidents; and other risks and uncertainties described in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, and in other reports we file with the Securities and Exchange Commission.

About Non-GAAP Financial Measures

We explain below how we calculate each of our non-GAAP financial measures. This is followed by a reconciliation of our current period and historical non-GAAP financial measures to the most directly comparable GAAP financial measures.

We use our non-GAAP financial measures both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business. We believe our non-GAAP financial measures provide management and investors with a more complete understanding of our underlying operational results and trends, facilitate meaningful period-to-period comparisons and enhance an overall understanding of our past and future financial performance.

Our non-GAAP financial measures exclude certain items that may have a material impact upon our reported financial results such as restructuring charges, the impact of foreign currency exchange rate fluctuations, unusual tax items, goodwill and indefinite lived trade name impairments and charges, and other non-recurring items that we consider to be outside of our core operations. On an interim basis, we also calculate adjusted income tax expense using our estimated annual income tax rate. These measures should not be considered in isolation or as a substitute for, or superior to, the directly comparable GAAP financial measures and should be read in connection with the Company's financial statements presented in accordance with GAAP.

Our non-GAAP financial measures include the following:

Comparable Sales: Represents net sales excluding the impact of material acquisitions, if any, with current-period foreign operation sales translated at prior-year currency rates. We believe comparable sales are useful to investors and management because they reflect underlying sales and sales trends without the effect of material acquisitions and fluctuations in foreign exchange rates and facilitate meaningful period-to-period comparisons. We sometimes refer to comparable sales as comparable net sales.

Adjusted Operating Income (Loss)/Adjusted Income (Loss) Before Taxes/Adjusted Net Income (Loss)/Adjusted Net Income (Loss) Per Diluted Share: Represents operating income (loss), income (loss) before taxes, net income (loss), and net income (loss) per diluted share excluding restructuring and goodwill and indefinite lived trade name impairment charges, the amortization of intangibles, non-recurring items, other income/expense, adjustments to reflect the estimated annual tax rate and discrete income tax adjustments, including income tax related to the foregoing. We believe these adjusted non-GAAP financial measures are useful to investors and management because they reflect our underlying operating performance before items that we consider to be outside our core operations and facilitate meaningful period-to-period comparisons. Senior management's incentive compensation is derived, in part, using adjusted operating income and adjusted net income per diluted share, which is derived from adjusted net income. We sometimes refer to adjusted net income per diluted share as adjusted earnings per share or adjusted EPS.

Adjusted Income Tax Expense (Benefit): Represents income tax expense (benefit) excluding the tax effect of the items that have been excluded from adjusted income (loss) before taxes, unusual income tax items such as the impact of tax audits and changes in laws, and other discrete tax items. We believe our adjusted income tax expense (benefit) is useful to investors because it reflects our income tax calculated using the estimated annual tax rate before discrete tax items that we consider to be outside our core operations and facilitates meaningful period-to-period comparisons. For interim periods, the income tax expense (benefit) is calculated using the estimated annual income tax rate.

Adjusted EBITDA: Represents net income excluding the effects of depreciation, stock-based compensation expense, amortization of intangibles, interest expense, net, other (income) expense, net, and income tax expense, restructuring and goodwill and indefinite lived trade name impairment charges, and other non-recurring items. We believe adjusted EBITDA is useful to investors because it reflects our underlying cash profitability and adjusts for certain non-cash charges and other items that we consider to be outside our core operations and facilitates meaningful period-to-period comparisons. In addition, this calculation of adjusted EBITDA is used in our loan agreement to calculate our leverage ratio covenant.

Free Cash Flow/Adjusted Free Cash Flow: Free cash flow represents cash flow from operating activities less cash used for additions to property, plant and equipment. Adjusted free cash flow is free cash flow plus proceeds from the disposition of assets. We believe free cash flow and adjusted free cash flow are useful to investors because they measure our available cash flow for paying dividends, reducing debt, repurchasing shares and funding acquisitions.

Net Debt: Represents balance sheet debt plus unamortized debt origination costs and less any cash and cash equivalents.

Consolidated Leverage Ratio: Represents net debt divided by trailing twelve months adjusted EBITDA.

We also provide forward-looking non-GAAP comparable sales, adjusted earnings per share, free cash flow/adjusted free cash flow, adjusted EBITDA and historical and forward-looking consolidated leverage ratio. We do not provide a reconciliation of these forward-looking and historical non-GAAP measures to GAAP because the GAAP financial measure is not currently available and management cannot reliably predict all the necessary components of such non-GAAP measures without unreasonable effort or expense due to the inherent difficulty of forecasting and quantifying certain amounts that are necessary for such a reconciliation, including adjustments that could be made for restructuring, integration and acquisition-related expenses, the variability of our tax rate and the impact of foreign currency fluctuation and material acquisitions, and other charges reflected in our historical results. The probable significance of each of these items is high and, based on historical experience, could be material.

Notes to Reconciliations of GAAP to Adjusted Non-GAAP Information and Net Income (Loss) to Adjusted EBITDA (Unaudited)