ACCO Brands Corporation (ACCO) Tops Q1 EPS by 7c, Revenues Beat; Offers 2Q EPS/Revenues Guidance Above Consensus

ACCO Brands Corporation (NYSE: ACCO) reported Q1 EPS of $0.10, $0.07 better than the analyst estimate of $0.03. Revenue for the quarter came in at $410.5 million versus the consensus estimate of $390.32 million.

• EPS was $(0.21) versus $0.08 in prior year
• Adjusted EPS was $0.10 versus $0.14 in 2020
• Net sales were $411 million, up 7 percent from 2020
• PowerA results exceeded expectations
• Strong EMEA performance continued
• Refinanced bond and bank debt to reduce interest cost/extend tenor

"Our first quarter results were better than we expected, as we posted strong results despite comparisons against a quarter last year that was minimally impacted by COVID-19. I am particularly pleased that we accelerated our growth in consumer and work-from-home product categories as we progressed with our strategy of transforming toward a more consumer-oriented business. We saw improvements in many of our businesses, led by outstanding results in PowerA and EMEA. We also took strategic restructuring and refinancing actions to further lower long-term costs, and extend the tenor and reduce interest costs on our debt. I believe we are well-positioned for solid growth as the world economies recover from the pandemic," said Boris Elisman, Chairman, President and Chief Executive Officer of ACCO Brands.

GUIDANCE:

ACCO Brands Corporation sees Q2 2021 EPS of $0.25-$0.30, versus the consensus of $0.20. ACCO Brands Corporation sees Q2 2021 revenue of $460-490 million, versus the consensus of $452 million.

Second quarter sales are expected to be in a range of $460 million to $490 million, with PowerA contributing $50 million to $60 million. Adjusted earnings per share are expected to be in a range of $0.25 to $0.30. The outlook includes a favorable foreign exchange impact of 5 percent on sales and $0.01 to $0.02 on adjusted EPS, as well as $0.09 from the exclusion of intangible amortization. For the full year, the Company is confident in its ability to generate at least $135 million of free cash flow (at least $165 million in operating cash flow minus capital expenditures of approximately $30 million).

As previously announced, beginning with the first quarter of 2021, the Company changed the way it calculates and reports its adjusted non-GAAP measures by excluding non-cash amortization of acquisition-related intangible assets. The Company has made several large acquisitions over the last few years, and has publicly committed to continue to transform its business through acquisitions in the future. As a result of its acquisition strategy, the Company has, and likely will continue to have in the foreseeable future, a large amount of acquisition-related amortization expense. The Company believes that this change will enhance the usefulness of its non-GAAP measures to its investors because it reflects the underlying operating results before amortization expense which is not associated with core operations, and facilitates meaningful period-to-period and peer comparisons.

For earnings history and earnings-related data on ACCO Brands Corporation (ACCO) click here.

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