[Eighth Amendment to Third Amended and Restated Credit Agreement](index=1&type=section&id=EIGHTH%20AMENDMENT%20TO%20THIRD%20AMENDED%20AND%20RESTATED%20CREDIT%20AGREEMENT) This section details the Eighth Amendment to the Credit Agreement, outlining its effective conditions, reaffirmations, and general provisions [Introduction and Parties](index=1&type=section&id=Introduction%20and%20Parties) This document, dated July 29, 2025, constitutes the Eighth Amendment to the Credit Agreement, entered into by ACCO Brands Corporation and various lenders - The Eighth Amendment to the Credit Agreement is dated July 29, 2025[2](index=2&type=chunk) - The amendment is made with the consent of the Required Lenders to modify the existing Credit Agreement[2](index=2&type=chunk)[4](index=4&type=chunk) [Amendments to Loan Documents](index=1&type=section&id=SECTION%20I.%20AMENDMENTS%20TO%20LOAN%20DOCUMENTS) This section details that the Credit Agreement will be amended on the Closing Date as specified in Exhibit A, showing all textual changes - The Credit Agreement is amended as set forth in Exhibit A, which shows deletions and additions to the text[5](index=5&type=chunk) [Conditions to Effectiveness](index=2&type=section&id=SECTION%20II.%20CONDITIONS%20TO%20THE%20EIGHTH%20AMENDMENT%20CLOSING%20DATE) The amendment's effectiveness on the "Eighth Amendment Closing Date" is contingent upon execution by all parties, receipt of corporate documents, and absence of defaults - The amendment's effectiveness is contingent upon its due execution by Holdings, the Borrowers, other Loan Parties, the Administrative Agent, and the Consenting Lenders[7](index=7&type=chunk) - Key deliverables to the Administrative Agent include organizational documents, resolutions, a solvency certificate, and a certificate of compliance with other conditions[8](index=8&type=chunk) - A critical condition is that no Default or Event of Default exists or would result from the amendment[12](index=12&type=chunk) - All accrued costs, fees, and expenses owed to the Administrative Agent must be paid[13](index=13&type=chunk) [Representations and Warranties](index=3&type=section&id=SECTION%20III.%20REPRESENTATIONS%20AND%20WARRANTIES) Loan Parties provide representations and warranties regarding their legal status, authorization, absence of conflicts, and reaffirm the accuracy of prior representations - Each Loan Party confirms its due organization, valid existence, and requisite power to execute the amendment and perform its obligations[15](index=15&type=chunk) - The execution of the amendment does not contravene the Loan Party's organizational documents, conflict with any material contracts, or violate any laws[15](index=15&type=chunk) - The representations and warranties contained in Article 5 of the Amended Credit Agreement are reaffirmed as true and correct[18](index=18&type=chunk) [Acknowledgment and Reaffirmation](index=4&type=section&id=SECTION%20IV.%20ACKNOWLEDGMENT%20AND%20CONSENT%3B%20REAFFIRMATION) Loan Parties and Guarantors acknowledge the amendment and reaffirm that their obligations and security interests under the original Loan Documents remain fully effective - Each Loan Party confirms that its pledges and grants of security interests under the existing Loan Documents are not impaired and continue in full force to secure all Obligations[16](index=16&type=chunk) - Each Guarantor consents to the amendment and confirms that their guarantees continue to cover all Obligations under the Amended Credit Agreement[17](index=17&type=chunk)[19](index=19&type=chunk) [Miscellaneous Provisions](index=5&type=section&id=SECTION%20V.%20MISCELLANEOUS) This section clarifies that the amendment is not a novation, designates it as a Loan Document, and specifies New York law as governing - The amendment is not a novation but an amendment of the pre-existing Credit Agreement[24](index=24&type=chunk) - The amendment and all related claims are governed by the law of the State of New York[23](index=23&type=chunk) - Except as specifically amended, the original Credit Agreement and other Loan Documents remain in full force and effect[22](index=22&type=chunk) [Third Amended and Restated Credit Agreement (Conformed)](index=19&type=section&id=THIRD%20AMENDED%20AND%20RESTATED%20CREDIT%20AGREEMENT) This section presents the conformed Third Amended and Restated Credit Agreement, incorporating all subsequent amendments [Article 1: Definitions and Accounting Terms](index=29&type=section&id=Article%201%20Definitions%20and%20Accounting%20Terms) This article defines key terms, including loan facilities, interest rates, financial ratios, and the "Covenant Relief Period" with its specific pricing grid - The **"Covenant Relief Period"** is defined as the period from the Eighth Amendment Closing Date (July 29, 2025) through and including December 31, 2026[142](index=142&type=chunk)[182](index=182&type=chunk) Applicable Rate During Covenant Relief Period (Post-8th Amendment) | Rate Type | Margin/Fee | | :--- | :--- | | Term SOFR / Daily SOFR / Agreed Currency Rate / etc. | 2.25% | | Base Rate | 1.25% | | Letter of Credit Fees (financial) | 0.50% | | Letter of Credit Fees (commercial) | 1.125% | Applicable Rate Post-Covenant Relief Period | Pricing Level | Consolidated Leverage Ratio | Term SOFR, etc. Margin | Base Rate Margin | Commitment Fee Rate | | :--- | :--- | :--- | :--- | :--- | | 1 | > 4.25 to 1.00 | 2.25% | 1.25% | 0.375% | | 2 | ≤ 4.25 to 1.00 and > 3.50 to 1.00 | 2.00% | 1.00% | 0.350% | | 3 | ≤ 3.50 to 1.00 and > 2.50 to 1.00 | 1.75% | 0.75% | 0.300% | | 4 | ≤ 2.50 to 1.00 | 1.50% | 0.50% | 0.250% | [Article 2: The Commitments and Credit Extensions](index=99&type=section&id=Article%202%20The%20Commitments%20and%20Credit%20Extensions) This article details credit facilities, including Term A Loans and a Revolving Credit Facility, outlining borrowing procedures, prepayments, and a new mandatory Euro Term A Loan repayment Credit Facilities Overview (as of 7th/8th Amendments) | Facility | Amount | | :--- | :--- | | Multicurrency Revolving Credit Facility | $467,500,000 | | EUR Term Loan A Facility | €122,890,001.85 | | Australian Dollar Term A Loan | AUD $61,000,000 | | U.S. Dollar Term A Loan | $100,000,000 | - A new mandatory repayment for the Euro Term A Loans is added, requiring a payment of the Euro equivalent of **$35,000,000** on or prior to September 30, 2025[566](index=566&type=chunk) - Mandatory prepayments are required from Net Cash Proceeds of certain asset dispositions (in excess of **$12 million/year**), incurrence of non-permitted Indebtedness, and Extraordinary Receipts (in excess of **$10 million/year**)[550](index=550&type=chunk)[552](index=552&type=chunk)[553](index=553&type=chunk) [Article 3: Taxes, Yield Protection and Illegality](index=132&type=section&id=Article%203%20Taxes%2C%20Yield%20Protection%20and%20Illegality) This article addresses tax obligations, lender compensation for increased costs due to law changes, and fallback provisions for unavailable benchmark interest rates - Loan Parties are obligated to make payments free and clear of any tax deductions or withholdings and must indemnify the Lenders for any Indemnified Taxes[633](index=633&type=chunk)[635](index=635&type=chunk) - If a change in law increases a Lender's cost of making or maintaining a loan, the Borrowers must pay additional amounts to compensate the Lender for such increased costs[662](index=662&type=chunk)[664](index=664&type=chunk) - The agreement includes detailed fallback provisions for determining interest rates if a benchmark rate like SOFR or EURIBOR becomes unavailable, allowing the Administrative Agent to implement a successor rate[650](index=650&type=chunk)[653](index=653&type=chunk)[657](index=657&type=chunk) [Article 4: Conditions Precedent](index=143&type=section&id=Article%204%20Conditions%20Precedent) This article specifies that credit extensions are contingent upon the accuracy of Loan Party representations and the absence of any Default or Event of Default - The obligation of each Lender to honor any Request for Credit Extension is subject to the condition that all representations and warranties of the Loan Parties are true and correct in all material respects[679](index=679&type=chunk) - A further condition for any credit extension is that no Default or Event of Default exists or would result from the proposed credit extension[680](index=680&type=chunk) [Article 5: Representations and Warranties](index=144&type=section&id=Article%205%20Representations%20and%20Warranties) This article details comprehensive representations and warranties by Loan Parties covering legal status, financial condition, compliance with laws, and collateral validity - Loan Parties represent they are in compliance with all applicable laws, including sanctions (OFAC), the Foreign Corrupt Practices Act (FCPA), and other anti-corruption laws[724](index=724&type=chunk)[725](index=725&type=chunk)[727](index=727&type=chunk) - The company represents that it is **Solvent** and that its financial statements fairly present its financial condition in accordance with GAAP[691](index=691&type=chunk)[721](index=721&type=chunk) - It is represented that the Collateral Documents create a valid and enforceable first-priority lien on the Collateral, subject to Permitted Liens[722](index=722&type=chunk) [Article 6: Affirmative Covenants](index=151&type=section&id=Article%206%20Affirmative%20Covenants) This article outlines affirmative covenants requiring Borrowers to deliver financial statements, compliance certificates, and promptly notify the Agent of defaults or adverse events - The company must deliver annual audited financial statements within **90 days** of fiscal year-end and quarterly unaudited financial statements within **45 days** of each quarter-end[730](index=730&type=chunk) - A compliance certificate must be delivered concurrently with financial statements[733](index=733&type=chunk) - The company must promptly notify the Administrative Agent of any Default, Material Adverse Effect, or ERISA Event[737](index=737&type=chunk) [Article 7: Negative Covenants](index=158&type=section&id=Article%207%20Negative%20Covenants) This article imposes negative covenants restricting liens, indebtedness, investments, asset sales, and restricted payments, including financial ratios with temporary relief from the Eighth Amendment Financial Covenants | Covenant | Requirement | | :--- | :--- | | **Consolidated Interest Coverage Ratio** | ≥ 3.00 to 1.00 | | **Consolidated Leverage Ratio** | Varies by quarter, with specific higher levels permitted during the Covenant Relief Period (e.g., up to 4.75:1.00 for Q4 2025 - Q2 2026) | - The Eighth Amendment adjusts the Maximum Consolidated Leverage Ratio for fiscal quarters ending between September 30, 2025, and December 31, 2026, providing covenant relief[788](index=788&type=chunk) - Restrictions are placed on creating liens, incurring indebtedness, making investments, and making restricted payments, subject to specific baskets and exceptions[762](index=762&type=chunk)[765](index=765&type=chunk)[768](index=768&type=chunk)[780](index=780&type=chunk) [Article 8: Events of Default and Remedies](index=172&type=section&id=Article%208%20Events%20of%20Default%20and%20Remedies) This article defines Events of Default, such as non-payment or covenant violations, and outlines remedies including commitment termination and loan acceleration - Events of Default include failure to pay principal or interest, breach of covenants (with specified grace periods), and material misrepresentations[799](index=799&type=chunk) - A cross-default is triggered if the company defaults on other indebtedness exceeding an aggregate principal amount of **$40 million**[799](index=799&type=chunk)[439](index=439&type=chunk) - Upon an Event of Default, remedies include the termination of commitments and the acceleration of all outstanding Obligations, making them immediately due and payable[802](index=802&type=chunk) [Article 9: Administrative Agent](index=175&type=section&id=Article%209%20Administrative%20Agent) This article appoints Bank of America, N.A. as the Administrative Agent, defining its administrative role, exculpatory protections, and succession procedures - Bank of America, N.A. is appointed as the Administrative Agent and Collateral Agent to act on behalf of the Lenders[806](index=806&type=chunk)[807](index=807&type=chunk) - The Agent is protected by exculpatory provisions and is not liable for actions taken without gross negligence or willful misconduct[809](index=809&type=chunk)[810](index=810&type=chunk) - The Agent is authorized to release collateral or guarantors in connection with permitted transactions, such as asset sales, or upon the full repayment of all obligations[823](index=823&type=chunk) [Article 10: Debt Allocation Mechanism](index=182&type=section&id=Article%2010%20Debt%20Allocation%20Mechanism) This article describes the Debt Allocation Mechanism (DAM), which ensures pro-rata sharing of loan interests among lenders upon major default events - Upon a "DAM Exchange Date" (e.g., bankruptcy or acceleration), Lenders' interests in the various loan facilities are automatically exchanged[836](index=836&type=chunk) - The exchange results in each Lender holding a pro-rata interest (its "DAM Percentage") in the entire portfolio of Term Loans and Revolving Loans, ensuring shared risk and recovery[836](index=836&type=chunk)[837](index=837&type=chunk) [Article 11: Miscellaneous](index=185&type=section&id=Article%2011%20Miscellaneous) This article covers standard provisions including amendment procedures, governing law (New York), jurisdiction, waiver of jury trial, and confidentiality - Amendments to the agreement generally require the consent of the Required Lenders, but fundamental changes like postponing payment dates or reducing principal require the consent of each affected Lender[848](index=848&type=chunk) - The agreement and all related disputes are governed by the laws of the State of New York, and all parties submit to the exclusive jurisdiction of New York courts[909](index=909&type=chunk)[910](index=910&type=chunk) - All parties irrevocably waive their right to a trial by jury in any legal proceeding related to the Loan Documents[913](index=913&type=chunk)

Group 1 - Cadiz (CDZI) focuses on acquiring and developing water-related land and agricultural assets, with a 40% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - ArriVent BioPharma, Inc. (AVBP) is a clinical-stage biopharmaceutical company targeting unmet medical needs in cancer treatment, experiencing a 7.3% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Acco Brands (ACCO) is a leading company in branded office products, with a 5.1% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Financial Performance - Net sales for Q1 2025 were $317.4 million, a decrease of 11.5% compared to $358.9 million in Q1 2024[19] - Gross profit for Q1 2025 was $99.6 million, down from $110.4 million in Q1 2024, reflecting a gross margin decline[19] - The company reported a net loss of $13.2 million in Q1 2025, compared to a net loss of $6.3 million in Q1 2024, indicating a worsening financial performance[19] - Operating cash flow for Q1 2025 was $5.5 million, significantly lower than $28.2 million in Q1 2024[24] - The company reported an operating loss of $6.7 million in Q1 2025, compared to operating income of $5.9 million in Q1 2024, primarily due to lower sales volume and higher restructuring expenses[154] - For Q1 2025, the company reported a net loss of $13.2 million, compared to a net loss of $6.3 million in Q1 2024[99] - Basic and diluted loss per share for Q1 2025 was $0.14, compared to $0.07 in Q1 2024[99] Assets and Liabilities - Total current assets increased to $742.7 million as of March 31, 2025, compared to $731.5 million at the end of 2024[17] - Total liabilities rose to $1,662.5 million as of March 31, 2025, up from $1,622.3 million at the end of 2024[17] - Cash and cash equivalents increased to $134.6 million at the end of Q1 2025, compared to $74.1 million at the end of 2024[17] - As of March 31, 2025, total debt increased to $936.5 million from $839.7 million as of December 31, 2024, representing an increase of approximately 11.5%[45] - The company’s long-term debt, net of current portion, increased to $897.8 million as of March 31, 2025, from $783.3 million as of December 31, 2024[45] Acquisitions and Investments - The company incurred $10.1 million in costs related to acquisitions during Q1 2025[24] - The company completed the acquisition of Buro Seating Limited Partnership for AU$16.2 million (US$10.1 million) on February 28, 2025, expanding its presence in Australia and New Zealand[41] - Cash used in investing activities included $10.1 million for the acquisition of Buro Seating and capital expenditures[185] Stock and Shareholder Actions - The company repurchased $15.0 million of common stock during Q1 2025[24] - During Q1 2025, the company repurchased and retired 3.2 million shares under its stock repurchase program[101] - The company repurchased a total of 3,205,344 shares during the quarter at an average price of $4.68 per share, with approximately $75.6 million remaining under the share repurchase authorization[204] Segment Performance - The Americas segment reported net sales of $173.9 million in Q1 2025, down from $197.2 million in Q1 2024, while the International segment saw a decline from $161.7 million to $143.5 million[138] - For the three months ended March 31, 2025, net sales decreased by $41.5 million, or 11.6%, driven by lower volume and adverse foreign exchange impacts[158] - Comparable sales for the same period were $329.1 million, reflecting a decrease of $29.8 million or 8.3%[190] Cost and Expense Management - Stock-based compensation expense for the three months ended March 31, 2025, was $7.8 million, compared to $5.1 million for the same period in 2024[45] - The company recorded a net restructuring expense of $2.3 million for Q1 2025, primarily for severance and costs related to footprint rationalization[82] - The company anticipates annualized pre-tax cost savings of approximately $100.0 million by the end of 2026 from its multi-year restructuring program[179] Foreign Exchange and Derivatives - The company recognized a loss of $0.6 million in AOCI for cash flow hedges related to foreign exchange contracts for the three months ended March 31, 2025, compared to a gain of $1.0 million for the same period in 2024[111] - The fair value of derivative assets decreased from $13.3 million on December 31, 2024, to $3.6 million on March 31, 2025, while derivative liabilities decreased from $9.3 million to $2.7 million in the same period[116] - The company had foreign exchange contracts outstanding with a notional value of $47.2 million as of March 31, 2025, which were not designated as hedges[108] Legal and Regulatory Matters - Management believes that the resolution of ongoing legal proceedings, aside from the Brazil Tax Assessments, will not materially affect financial condition or results[198] - The company continues to monitor trade policies and tariffs, which have adversely impacted business and operating results, particularly concerning products sourced from China and Vietnam[202] Miscellaneous - The company is evaluating the impact of recent accounting standards on its financial disclosures, including ASU 2024-03 and ASU 2023-09[35][36] - The company’s disclosure controls and procedures were deemed effective as of March 31, 2025[195] - There were no changes in internal control over financial reporting that materially affected the company during the quarter[196]

Financial Data and Key Metrics Changes - First quarter sales were reported in line with expectations, while adjusted EPS exceeded outlook [6][20] - Overall demand environment remained soft, with reported sales decreasing approximately 12% and comparable sales down 8% excluding foreign exchange [20][21] - Gross profit for the first quarter was $100 million, a decrease of 10%, but gross margin rate expanded by 60 basis points [21] - The company generated free cash flow of $3 million, down from the previous year due to timing and performance of sales in Brazil [24] Business Line Data and Key Metrics Changes - In the Americas segment, sales declined 12%, with comparable sales down 8%, primarily due to lower sales of technology accessories and office products [22][23] - The international segment also saw comparable sales decline by 8%, although technology accessories experienced mid-single-digit growth driven by a large B2B sale [23][14] - Kensington brand had a strong quarter with mid-single-digit growth, while PowerA brand sales were down due to aging consoles and low consumer spending trends [16][20] Market Data and Key Metrics Changes - The demand environment was challenging, particularly in the Americas, impacted by soft consumer and business demand [12][20] - Brazil returned to volume growth, driven by strong performance in premium notebooks and products with popular licenses [14] - The company noted that about 60% of its business is outside the U.S., which is less impacted by the current tariff situation [11] Company Strategy and Development Direction - The company is focused on a $100 million multi-year cost reduction program, realizing $7 million in additional savings in the first quarter [6][19] - A "China plus one" strategy has been implemented to diversify the supplier base and reduce dependency on China [8][9] - The company is implementing price increases in North America in response to tariffs, with two increases communicated to customers [10][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties related to tariffs and consumer demand, emphasizing a strong balance sheet and proactive actions [11][29] - The company is not providing full-year guidance due to uncertainties surrounding customer demand and tariff impacts [25] - For the second quarter, reported sales are expected to decline by 8% to 12%, with adjusted EPS anticipated in the range of $0.28 to $0.32 [28][29] Other Important Information - The company repurchased $15 million in stock during the quarter and closed on a small acquisition in the Australia-New Zealand markets [7][19] - The company is deferring most discretionary spending and pausing capital expenditures except for new product development and certain IT projects [19] Q&A Session Summary Question: Impact of the large B2B contract on future quarters - Management confirmed that the large B2B contract had a one-time impact in the first quarter and will not contribute to future sales [31] Question: Details on price increases in the international segment - Price increases of approximately 2% were communicated to customers in the international segment, with further increases anticipated in the U.S. due to tariffs [34][35] Question: Details on the recent acquisition - The acquisition was in ergonomic seating and business seating, aimed at entering a growing category in Australia and New Zealand [36][38] Question: Appetite for future acquisitions - Management indicated a cautious approach to acquisitions in the near term due to current trade dynamics, but still sees acquisitions as part of the long-term strategy [42] Question: Timing and revenue expectations from new product development - New products are being introduced throughout the year, with notable launches supporting the Nintendo Switch 2 expected in June [44][46] Question: Dynamics of international segment performance - The international segment faced challenges primarily in EMEA, with specific issues in Germany impacting sales [48][50]

Financial Data and Key Metrics Changes - First quarter sales were in line with expectations, while adjusted EPS exceeded outlook [5][18] - Reported sales decreased approximately 12%, with comparable sales down 8% excluding foreign exchange [18][19] - Gross profit for the first quarter was $100 million, a decrease of 10%, but gross margin expanded by 60 basis points [19] - Adjusted operating income for the first quarter was $7 million, down from $16 million a year ago [19][22] - The company ended the quarter with a leverage ratio of 3.65 times, well below the covenant of 4.5 times [6][22] Business Line Data and Key Metrics Changes - In the Americas segment, sales declined 12%, with comparable sales down 8% due to lower sales of technology accessories and office products [20][21] - The international segment also saw comparable sales decline by 8%, although technology accessories experienced mid-single-digit growth driven by a large B2B sale [21][13] - The computer and gaming accessories segment grew mid-single digits, while sales of office products remained sluggish across most markets [13][15] Market Data and Key Metrics Changes - The demand environment was challenging, particularly in the Americas, impacted by soft consumer and business demand [11][18] - Brazil returned to volume growth, driven by strong sales of premium notebooks and products with popular licenses [13] - The company noted that about 60% of its business is outside the U.S., which is less affected by the current tariff situation [10] Company Strategy and Development Direction - The company is focused on a $100 million multi-year cost reduction program, achieving $7 million in savings in the first quarter [5][17] - A "China plus one" strategy has been implemented to diversify the supplier base and reduce dependency on China [7][10] - The company is temporarily investing in inventory to mitigate financial impacts from tariffs and is implementing price increases in North America [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties related to tariffs and consumer demand [10][26] - The company is not providing full-year guidance due to the unpredictable economic environment and customer demand [23] - For the second quarter, reported sales are expected to decline by 8% to 12%, with adjusted EPS anticipated in the range of $0.28 to $0.32 [25][26] Other Important Information - The company repurchased $15 million in stock during the quarter and made a small acquisition in the Australia-New Zealand markets [6][22] - The acquisition focused on ergonomic seating and business seating, expanding the product portfolio in a growing category [34][36] Q&A Session Summary Question: Impact of the large B2B contract on future quarters - The large B2B contract had a one-time impact in the first quarter, with no incremental sales expected in subsequent quarters [28][29] Question: Details on price increases in the international segment - A 2% price increase was communicated to customers in the international segment, with additional increases anticipated in the U.S. due to tariffs [31][32] Question: Appetite for future acquisitions - The company remains open to acquisitions as part of its long-term strategy but will be cautious in the near term due to current trade dynamics [40] Question: Timing and revenue expectations from new product development - New products are being introduced throughout the year, with notable launches supporting the Nintendo Switch 2 expected in June [41][42] Question: Dynamics of sales pull forward for back-to-school orders - The pull forward of back-to-school orders was not significant for the overall season, and the company is well-prepared to support retailers [66][67] Question: Pricing actions in response to tariffs - The first round of price increases was in the single digits, while reciprocal tariffs could lead to increases up to 20% [80]

Financial Performance - ACCO Brands' Q1 2025 net sales were $317.4 million, a decrease of 11.6% compared to $358.9 million in Q1 2024[26, 86] - The company reported an adjusted loss per share of ($0.02) in Q1 2025, compared to an adjusted earnings per share of $0.03 in Q1 2024[26] - Free cash flow for Q1 2025 was $3 million, a decrease from $26 million in Q1 2024[15, 44] - The company's gross margin expanded by 60 basis points due to favorable sales mix and productivity[15] - SG&A costs decreased by 1.6% year-over-year, primarily due to cost savings initiatives[26] Segment Performance - ACCO Brands Americas' sales decreased by 11.8% to $173.9 million in Q1 2025 from $197.2 million in Q1 2024[30] - ACCO Brands International's sales decreased by 11.3% to $143.5 million in Q1 2025 from $161.7 million in Q1 2024[30] Cost Reduction Program - The company is executing a $100 million cost reduction program, with $32 million realized since inception[15, 23] - $7 million in savings were achieved in Q1 2025, and the company is on track to deliver $40 million in pre-tariff savings in 2025[25] Capital Structure and Allocation - As of March 31, 2025, the company had $135 million in cash on hand[40] - The company repurchased $15 million in stock during Q1 2025[15] - The consolidated leverage ratio was 3.65x at the end of Q1 2025[40] Outlook - The company expects Q2 2025 net sales to be in the range of $386 million to $403 million, representing a decrease of 8% to 12%[49] - Adjusted EPS for Q2 2025 is expected to be between $0.28 and $0.32[49]

Group 1: Earnings Performance - Acco Brands reported a quarterly loss of $0.02 per share, better than the Zacks Consensus Estimate of a loss of $0.04, and compared to earnings of $0.03 per share a year ago, indicating a 50% earnings surprise [1] - The company posted revenues of $317.4 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.43%, and down from year-ago revenues of $358.9 million [2] - Over the last four quarters, Acco has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Group 2: Stock Performance and Outlook - Acco shares have declined approximately 26.5% since the beginning of the year, while the S&P 500 has decreased by 5.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.34 on revenues of $404.1 million, and for the current fiscal year, it is $1.02 on revenues of $1.56 billion [7] Group 3: Industry Context - The Office Supplies industry, to which Acco belongs, is currently ranked in the bottom 12% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5][6]

Financial Performance - First quarter net sales were $317.4 million, down 11.6% from $358.9 million in 2024, with adverse foreign exchange reducing sales by $11.7 million, or 3.3%[5] - Adjusted loss per share was $0.02, better than the outlook, while net loss was $13.2 million, or $(0.14) per share, compared to a net loss of $6.3 million, or $(0.07) per share in the prior year[8] - First quarter operating loss was $6.7 million, compared to operating income of $5.9 million in 2024, with adjusted operating income at $6.9 million compared to $16.2 million in the prior year[7] - The company reported a net loss of $13.2 million for Q1 2025, which is a 109.5% increase in loss compared to a net loss of $6.3 million in Q1 2024[30] - Basic and diluted loss per share for Q1 2025 was $0.14, doubling from a loss of $0.07 per share in Q1 2024[30] - Adjusted EBITDA for Q1 2025 decreased to $20.9 million, down 26.1% from $28.3 million in Q1 2024, representing 6.6% of net sales[51] Cash Flow and Debt - Operating cash flow for the quarter was $5.5 million, down from $28.2 million in the prior year, and free cash flow was $3.3 million compared to $25.9 million in the prior year[9] - Total debt as of March 31, 2025, was $931.7 million, a decrease from $954.8 million in Q1 2024, resulting in a net debt of $801.9 million[54] - Cash and cash equivalents at the end of Q1 2025 were $134.6 million, up from $124.6 million at the end of Q1 2024[32] - Proceeds from long-term borrowings increased to $106.3 million in Q1 2025, compared to $61.4 million in Q1 2024[32] Sales and Market Segments - ACCO Brands Americas segment net sales decreased 11.8% to $173.9 million, while the International segment net sales decreased 11.3% to $143.5 million[11][14] - Net sales for ACCO Brands Americas decreased by 11.8% year-over-year, resulting in a $23.3 million decline[60] - Net sales for ACCO Brands International also fell by 11.3%, leading to an $18.2 million decrease[60] - Net sales for the three months ended March 31, 2025, were $317.4 million, a decrease of 11.6% compared to $358.9 million in 2024[30] Expenses and Margins - First quarter gross margins expanded by 60 basis points, while SG&A expenses decreased compared to the prior year[5] - Gross profit margin improved to 31.4% in Q1 2025 from 30.8% in Q1 2024, despite a decline in gross profit to $99.6 million[30] - The adjusted operating income margin for the total company was 2.2% in Q1 2025, down from 4.5% in Q1 2024[58] - Stock-based compensation increased by 52.9% to $7.8 million in Q1 2025 from $5.1 million in Q1 2024[51] - Interest expense decreased by 21.9% to $8.9 million in Q1 2025, down from $11.4 million in Q1 2024[51] Future Outlook - The company expects reported sales in the second quarter to decline in a range of 8.0% to 12.0%, with adjusted EPS projected between $0.28 and $0.32[17] - The company has not provided a full-year outlook for 2025 due to increased market uncertainties driven by global trade dynamics[16] Other Financial Activities - ACCO Brands repurchased 3.2 million shares of common stock for $15 million during the quarter[9] - The company incurred $10.1 million in costs related to acquisitions in Q1 2025, with net cash used by investing activities totaling $12.3 million[32] - The income tax rate for Q1 2025 was 20.0%, compared to a benefit of (18.9)% in Q1 2024[30] - The company reported a restructuring expense of $2.3 million in Q1 2025, compared to a benefit of $0.3 million in Q1 2024[51]

Core Viewpoint - Dividend-paying stocks are perceived as stable investments, providing passive income through regular payments, with blue-chip companies like Coca-Cola and Procter & Gamble being prime examples [1] Group 1: Global Self Storage - Global Self Storage has a dividend yield of 5.89% and an annual dividend of $0.29, with a 3-year annualized dividend growth of 0.71% [3] - The company has a high dividend payout ratio of 161.11%, indicating potential risks of overpaying dividends [5] - Despite a nearly 7% decline year-to-date, Global Self Storage has outperformed the S&P 500 as of April 11, 2025 [4] Group 2: ACCO Brands - ACCO Brands offers a high dividend yield of 8.21% and an annual dividend of $0.30, with a 3-year annualized dividend growth of 3.57% [7] - The company has faced declining revenues and negative net income due to impairment charges, but generates substantial free cash flows of at least $100 million annually [8] - ACCO's shares are down about 30% year-to-date, resulting in a low price-to-sales ratio of 0.2, making it potentially attractive to investors [9] Group 3: Mativ Holdings - Mativ Holdings has the highest dividend yield among the three companies at 8.27%, with an annual dividend of $0.40, but has experienced a 55% share price decline year-to-date [11][12] - The company faces significant tariff risks and has had negative annualized 3-year dividend growth of -38.97% [11] - Analysts have upgraded Mativ from Hold to Buy, setting a price target of $10, which is more than double its current share price [12]

Core Insights - ACCO Brands Corporation's share price dropped by 20% after the release of its Q4/2024 earnings report, indicating significant market reaction to the financial results [1] - The company's revenues have been on a steady decline since 2021, highlighting ongoing challenges in its financial performance [1] - The macroeconomic environment has been described as soft, which has negatively impacted the company's operations [1] - Tariffs have also been identified as a contributing factor to the company's financial difficulties [1]