UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form			10-Q



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~March 31,~~September 30, 2020



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-08454



ACCO Brands Corporation
(Exact Name of Registrant as Specified in Its Charter)



Delaware			36-2704017
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)

Four Corporate Drive

Lake Zurich,, Illinois60047

(Address of Registrant’s Principal Executive Office, Including Zip Code)

(~~847~~) (847) 541-9500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ACCO	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of ~~April 27,~~October 22, 2020, the registrant had outstanding ~~94,462,147~~94,496,837 shares of Common Stock.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, including without limitation, statements concerning the impacts of the COVID-19 pandemic on the Company’s business, operations, results of operations, liquidity and financial condition, 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," "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. Because actual results may differ materially from those suggested or implied by such forward-looking statements, you should not place undue reliance on them 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 both the near-term and long-term impact of the COVID-19 pandemic on the ~~global~~ economy and our business, our customers and the end-users of our products, and other changes in the macro environment; changes in the competitive landscape, including ongoing uncertainties in the traditional office products channels; as well as the impact of fluctuations in foreign currency and acquisitions and the other factors described below.

Among the factors that could cause our actual results to differ materially from our forward-looking statements are: the scope and duration of the COVID-19 pandemic, government actions and other ~~third party~~third-party responses to it and the consequences for the global economy, as well as the regional and local economies in which we operate, uncertainties regarding when the risks of the pandemic will subside and how geographies, distribution channels and consumer behaviors will evolve over time in response to the pandemic, and its impact on our business, operations, results of operations and financial condition, including, among others, manufacturing, distribution and supply chain disruptions, reduced demand for our products and services, and the financial condition of our suppliers and customers, including their ability to fund their operations and pay their invoices. Additionally, many of the other risk factors affecting us are currently elevated by, and ~~may~~likely will continue to be elevated by, the COVID-19 pandemic.

Other factors that could affect our results or cause plans, actions and results to differ materially from current expectations are detailed in "Part I, Item 1. Business" and "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019, ~~as updated under~~in "Part II, Item 1A. Risk Factors" ~~of this~~in our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and the discussion under the heading "COVID-19 Impact" as well as the financial statement line item discussions set forth in "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q and from time to time in our other Securities and Exchange Commission (the "SEC") filings.

Website Access to Securities and Exchange Commission Reports

The Company’s Internet website can be found at www.accobrands.com. The Company makes available free of charge on or through its website its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the SEC.

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION			4
Item 1. Financial Statements			4
Condensed Consolidated Balance Sheets			4
Consolidated Statements of ~~Operations~~Income			5
Consolidated Statements of Comprehensive ~~Loss~~Income (Loss )			6
Condensed Consolidated Statements of Cash Flows			7
Consolidated Statement of Stockholders’ Equity			8
Notes to Condensed Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2931
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3843
Item 4. Controls and Procedures			3844
PART II — OTHER INFORMATION			3945
Item 1. Legal Proceedings			3945
Item 1A. Risk Factors			3945
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4145
Item 3. Defaults Upon Senior Securities			4146
Item 4. Mine Safety Disclosures			4146
Item 5. Other Information			4146
Item 6. Exhibits			4147
SIGNATURES			4348

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCO Brands Corporation and Subsidiaries

Condensed Consolidated Balance Sheets


	September 30, 2020		December 31, 2019
(in millions)	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	85.8	$	27.8
Accounts receivable, net	343.7		453.7
Inventories	300.5		283.3
Other current assets	35.0		41.2
Total current assets	765.0		806.0
Total property, plant and equipment	641.8		651.7
Less: accumulated depreciation	(402.0)		(384.6)
Property, plant and equipment, net	239.8		267.1
Right of use asset, leases	87.0		101.9
Deferred income taxes	117.3		119.0
Goodwill	723.4		718.6
Identifiable intangibles, net	726.8		758.6
Other non-current assets	36.5		17.4
Total assets	$	2,695.8	$	2,788.6
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$	5.8	$	3.7
Current portion of long-term debt	30.0		29.5
Accounts payable	171.4		245.7
Accrued compensation	41.9		48.5
Accrued customer program liabilities	76.9		99.7
Lease liabilities	20.1		21.8
Other current liabilities	124.2		139.9
Total current liabilities	470.3		588.8
Long-term debt, net	876.3		777.2
Long-term lease liabilities	76.4		89.8
Deferred income taxes	170.7		177.5
Pension and post-retirement benefit obligations	268.7		283.2
Other non-current liabilities	108.2		98.4
Total liabilities	1,970.6		2,014.9
Stockholders' equity:
Common stock	1.0		1.0
Treasury stock	(39.9)		(38.2)
Paid-in capital	1,878.9		1,890.8
Accumulated other comprehensive loss	(554.2)		(505.7)
Accumulated deficit	(560.6)		(574.2)
Total stockholders' equity	725.2		773.7
Total liabilities and stockholders' equity	$	2,695.8	$	2,788.6

March 31,
2020 December 31,
2019
(in millions) (unaudited)
Assets
Current assets:
Cash and cash equivalents $ 93.4
$ 27.8
Accounts receivable, net 298.9
453.7
Inventories 291.6
283.3
Other current assets 54.1
41.2
Total current assets 738.0
806.0
Total property, plant and equipment 631.6
651.7
Less: accumulated depreciation (381.0 ) (384.6 )
Property, plant and equipment, net 250.6
267.1
Right of use asset, leases 92.1
101.9
Deferred income taxes 109.2
119.0
Goodwill 717.7
718.6
Identifiable intangibles, net 725.9
758.6
Other non-current assets 19.7
17.4
Total assets $ 2,653.2
$ 2,788.6
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 15.7
$ 3.7
Current portion of long-term debt 51.5
29.5
Accounts payable 185.9
245.7
Accrued compensation 28.3
48.5
Accrued customer program liabilities 64.2
99.7
Lease liabilities 19.9
21.8
Other current liabilities 104.0
139.9
Total current liabilities 469.5
588.8
Long-term debt, net 856.9
777.2
Long-term lease liabilities 81.7
89.8
Deferred income taxes 167.3
177.5
Pension and post-retirement benefit obligations 268.9
283.2
Other non-current liabilities 91.0
98.4
Total liabilities 1,935.3
2,014.9
Stockholders' equity:
Common stock 1.0
1.0
Treasury stock (39.9 ) (38.2 )
Paid-in capital 1,874.3
1,890.8
Accumulated other comprehensive loss (545.1 ) (505.7 )
Accumulated deficit (572.4 ) (574.2 )
Total stockholders' equity 717.9
773.7
Total liabilities and stockholders' equity $ 2,653.2
$ 2,788.6

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statements of ~~Operations~~Income

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	2020		2019		2020		2019
Net sales	$	444.1	$	505.7	$	1,195.1	$	1,418.3
Cost of products sold	317.0		349.8		845.8		970.8
Gross profit	127.1		155.9		349.3		447.5
Operating costs and expenses:
Selling, general and administrative expenses	84.4		96.4		247.7		287.8
Amortization of intangibles	7.9		8.6		24.1		26.8
Restructuring charges	0.5		2.1		7.3		4.8

Total operating costs and expenses	92.8		107.1		279.1		319.4
Operating income	34.3		48.8		70.2		128.1
Non-operating expense (income):
Interest expense	10.2		11.5		28.7		33.6
Interest income	(0.2)		(0.7)		(0.8)		(2.9)

Non-operating pension income	(1.4)		(1.3)		(4.4)		(4.1)
Other expense (income), net	0.1		(0.9)		0.8		0.1
Income before income tax	25.6		40.2		45.9		101.4
Income tax expense	6.8		12.2		13.7		38.1


Net income	$	18.8	$	28.0	$	32.2	$	63.3

Per share:



Basic income per share	$	0.20	$	0.29	$	0.34	$	0.63



Diluted income per share	$	0.20	$	0.28	$	0.34	$	0.62

Weighted average number of shares outstanding:
Basic	94.5		97.6		95.0		100.4
Diluted	95.6		98.9		96.2		101.9

Three Months Ended March 31,
(in millions, except per share data) 2020 2019
Net sales $ 384.1
$ 393.9
Cost of products sold 271.9
268.1
Gross profit 112.2
125.8
Operating costs and expenses:
Selling, general and administrative expenses 86.1
95.9
Amortization of intangibles 8.4
9.3
Restructuring charges 0.3
2.7
Total operating costs and expenses 94.8
107.9
Operating income 17.4
17.9
Non-operating expense (income):
Interest expense 8.6
10.4
Interest income (0.3 ) (0.9 )
Non-operating pension income (1.5 ) (1.4 )
Other income, net (0.5 ) (0.2 )
Income before income tax 11.1
10.0
Income tax expense 3.1
10.6
Net income (loss) $ 8.0
$ (0.6 )

Per share:
Basic income (loss) per share $ 0.08
$ (0.01 )
Diluted income (loss) per share $ 0.08
$ (0.01 )

Weighted average number of shares outstanding:
Basic 96.0
102.3
Diluted 97.5
102.3

See Notes to Condensed Consolidated Financial Statements (Unaudited).

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~other things, the Company's financial position, results of operations, cash flows, debt covenant compliance, anticipated liquidity needs, and other factors.~~

~~Bank Amendment~~

On May 1, 2020, the Company entered into a Third Amendment (the "Third Amendment") to its Third Amended and Restated Credit Agreement, as amended (the "Credit Agreement"), among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto. Pursuant to the Third Amendment, the Credit Agreement was amended to, among other things:

~~Increase the maximum consolidated leverage ratio from 3.75:1.00 to 4.75:1.00, stepping back down to 3.75:1.00 for the first fiscal quarter ending after June 30, 2021.~~

Amend the pricing based on the Company’s consolidated leverage ratio, with a scaled increase in fees based on varying leverage ratios. Per the terms of the Third Amendment, pricing will be locked at LIBOR plus 200 bps until the Company publishes its financial results for the fiscal quarter ended June 30, 2020.

~~Reduce the Company’s capacity to incur certain other indebtedness, and impose additional limitations on certain restricted payments (other than dividends) and permitted acquisitions.~~

~~Require that the Company pay down any amounts on its revolving facility when cash and cash equivalents of the loan parties exceed $100 million.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.

Overview of the Company

ACCO Brands designs, markets and manufactures well-recognized consumer, school, and office products. Our widely known brands include AT-A-GLANCE^®, Barrilito^®, Derwent^®, Esselte^®, Five Star^®, Foroni^®, GBC^®, Hilroy^®, Kensington^®,Leitz^®, Marbig^®, Mead^®, NOBO^®, Quartet^®, Rapid^®, Rexel^®, Swingline^®, Tilibra^® and Wilson Jones^®. Approximately 75 percent of our net sales come from brands that occupy the No. 1 or No. 2 position in the product categories in which we compete. We distribute our products through a wide variety of retail and commercial channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop. These channels include mass ~~retailers, e-tailers,~~retailers; e-tailers; discount, drug/grocery and variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; wholesalers; and contract stationers. Our products are sold primarily in the U.S., Europe, Brazil, Australia, Canada, and Mexico. For the year ended December 31, 2019, approximately 43 percent of our net sales were in the U.S.

Our leading product category positions provide the scale to invest in marketing and product innovation to drive profitable growth. Over the long term, we expect to derive much of our growth from emerging markets such as Latin America and parts of Asia, the Middle East, and Eastern Europe. ~~These areas exhibit sales growth for our product categories.~~ In all of our markets, we see opportunities for sales growth through share gains, channel expansion, and product enhancements.

Our strategy is to grow our global portfolio of consumer brands, offer more innovative products, increase our presence in faster growing geographies and channels, and diversify our customer base. We plan to supplement organic growth with strategic acquisitions in both existing and adjacent product categories. We generate strong operating cash flow, and will continue to leverage our cost structure through synergies and productivity savings to drive long-term profit improvement.

In support of these strategic imperatives, we have been transforming our business by acquiring companies with consumer and other end-user demanded brands, diversifying our distribution channels and increasing our global presence. These acquisitions have meaningfully expanded our portfolio of well-known brands, enhanced our competitive position from both a product and channel perspective, and added scale to our operations. Today ACCO Brands is a global enterprise focused on developing innovative, branded consumer products for use in businesses, schools, and homes.

Overview of Performance

~~For~~As used in this Quarterly Report on Form 10-Q,"COVID-19 impacts" include the ~~three months ended March 31, 2020,~~operational, financial, and other effects on ACCO Brands, its customers and end users of its products, of school and business closures, work from home, remote and hybrid learning, government orders and manufacturing, distribution and supply chain and other disruptions resulting from COVID-19 and the actions ACCO Brands, its customers and end users have taken in response to the pandemic, including actions we have taken to manage our inventory and credit risk under the circumstances.

The COVID-19 impacts on our business have varied and continue to vary significantly by geographic region and country depending upon a range of factors, including how seriously the pandemic is affecting public health in the country and whether and to what degree businesses and schools are open, the general seasonality of our business in that country, the nature and level of government support, and the channel structure. During the third quarter, all segments were impacted by COVID-19, but EMEA experienced lower impacts and our International segment experienced, and continues to experience, the highest impacts, largely in Latin America due to the seriousness of the pandemic and the dependence of our Brazilian and Mexican businesses on the sale of school products. In North America, following good sell-in of back-to-school products in the second quarter, our third quarter sales were adversely affected by weaker sell through as many school districts chose to delay or not issue school purchase lists that normally drive back-to-school consumer demand.

Our third quarter net sales declined ~~$9.8~~$61.6 million, or ~~2.5~~12.2 percent primarily ~~driven by weakness in EMEA, particularly in March,~~ from COVID-19-related business closures and negative foreign exchange of $10.6 million, which was partially offset by sales from Foroni, which contributed $14.4 million to net sales. Excluding foreign exchange and Foroni, comparable net sales were down 3.5COVID-19 impacts. Operating income declined 29.7 percent, primarily due to the ~~weakness~~lower sales, partially offset by company-wide cost reductions and government assistance in ~~EMEA. Operating income declined 2.8 percent, primarily due to~~certain countries, generally in return for maintaining employment, pay and benefits. Foreign exchange had a

minimal impact on sales as the Euro, British pound, and Australian dollar moved favorably, while Latin American currencies deteriorated. From a profit perspective, foreign exchange ~~which impacted our operating income by $1.2 million.~~provided a $1 million benefit.

Operating cash ~~outflow~~inflow for the ~~three~~nine months ended ~~March 31,~~September 30, 2020, was ~~$25.2~~$21.8 million, ~~which was significantly better than~~compared with last year's operating cash ~~outflow~~inflow of ~~$61.3~~$75.1 million. The ~~$36.1~~$53.3 million year-over-year ~~improvement~~difference was due to ~~our decision in 2018 to purchase raw materials~~lower net income and ~~finished goods inventory~~more cash used for the 2019 year in late 2018 to secure supply and partially mitigate the effect of anticipated inflation and tariffs. These purchases were paid for in the first quarter of 2019. This year-end inventory build did not repeat in 2019.working capital.

COVID-19 Impact

~~As discussed in more detail in "Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q,~~ COVID-19 and the actions being taken by national, state and local governments, businesses, schools and others to address it (including work from home, quarantines, travel restrictions, business and school closure, remote learning, and cancellations of, and limitations on, public gatherings) have caused and continue to cause significant disruptions to normal business operations ~~both in and outside of affected areas~~ and have had, and are expected to continue to have, significant adverse impacts on ~~businesses~~our customers and ~~financial markets~~end-users worldwide. Similarly, our business, sales, earnings, and results of operations have been and will continue to be materially adversely affected

by these events, as well as the current and expected continued negative impact on the global economy and uncertainties regarding when the risks of the pandemic will subside and how geographies, distribution channels and consumer behaviors will evolve over ~~time.~~time in response to the pandemic.

Health and Safety of ~~our~~Our People

Our top priority is the health and safety of our employees and ~~in the face~~we continue to follow all of the ~~developing pandemic~~modified operating procedures we ~~immediately took actions~~implemented earlier this year to address their safety. ~~Those employees who could do their jobs from home began doing so. In~~We will continue to modify our ~~plants and distribution centers we made modifications to our normal~~ operations ~~because of the COVID-19 outbreak. These modifications vary from country to country depending~~based on local conditions and ~~government mandates but include taking workers’ temperatures daily, practicing social distancing, wearing protective equipment, quarantines~~ consistent with CDC and WHO guidelines, and adjusting schedules as appropriate to reduce unnecessary employee interaction. We also instituted heightened cleaning and sanitization standards. We will continue to monitor our operations and government ~~recommendations~~mandates regarding employee health and safety and make changes as appropriate.

During the third quarter, most of our office and administrative employees continued to work from home, but many employees outside North America, particularly in EMEA, began returning to work in our offices. We ~~are beginning~~have implemented modifications to ~~consider the policies~~our normal office procedures similar to those used at our plants and ~~procedures that will need~~distribution facilities to ~~be in place to ensure~~protect the health and safety of our employees returning to our office ~~and administrative employees when they return to the workplace.~~locations.

Facilities and Supply Chain

During the first quarter, COVID-19 impacted our Chinese supply chain and we experienced ~~and are continuing to experience~~ some out-of-stocks and lost sales, but we ~~have seen~~began to see improvement early in the second quarter and we had no significant supply chain issues in meeting our back-to-school orders in North America during the second or third quarter. During the third quarter, we continued ~~improvement since then.~~ manufacturing and shipping at reduced levels based on lower demand in our North America and International segments.

We currently believe the most significant facilities and supply chain issues are ~~largely~~ behind us, but there can be no assurance that there will not be future ~~supply chain~~ disruptions (including closures) or a reemergence of facilities and supply chain impacts as a result of COVID-19. While a small number of our manufacturing and distribution operations were or currently are closed temporarily, we have been declared an essential business in most jurisdictions and most of our facilities remain open and operating. We are shipping, but at a reduced level based on lower demand, particularly in the traditional office products area.

Our second and third quarters are heavily driven by the North America back-to-school season. We currently do not anticipate any significant supply chain issues in meeting back-to-school orders. We manufacture approximately 50 percent of our U.S. back-to-school supply domestically, and our manufacturing facilities are open and operating. Additionally, over the past two years we have moved a sizeable amount of manufacturing from China to Vietnam. Approximately 30 percent of back-to-school items now come from Vietnam and less than 20 percent come from China.

Cost Reductions

To begin to address the financial impact of the pandemic on our results of operations, we ~~have undertaken~~initially implemented temporary cost-cutting initiatives to better align our cost structure with the expected decline in 2020 sales. ~~We expect these~~Effective July 1, 2020, we reinstated employee salaries, which had been reduced as one of the temporary measures taken in April and most employees have returned from temporary furloughs; however, we continued the postponement of most 2020 merit increases and suspension of matching contributions for the U.S. 40l(k) plan during the third quarter. Likewise, actions to reduce discretionary spending and delay hiring and non-essential capital spending remain in effect and we continue to manage the number of employees working in our manufacturing and distribution facilities based upon demand. Finally, we have turned our attention to more permanent structural changes that are necessary in light of the anticipated longer-term impacts of COVID-19 on our business. Our worldwide headcount is down approximately 700 people, or 10 percent, compared with year end 2019. These cost reduction actions, when combined with our normal productivity savings, ~~to reduce~~reduced costs by approximately ~~$20~~$20 million for ~~the second~~the third quarter. ~~These actions include reducing discretionary spending such as travel, freezing hiring, delaying non-essential capital spending, as well as numerous actions~~We continue to reduce payroll and benefit costs. Among others, the payroll-related actions include: temporary salary reductions for most of the staff, ranging from 50 percent for the CEO, to 30 percent for executives, to 10 percent to 30 percent for most other global employees; a temporary 50-percent reduction to the Board of Directors' annual cash retainers; indefinite postponement of 2020 merit increases except where mandated by law; release of 2020 bonus accruals due to lack of achievement; temporary furloughs across the organization; the suspension of company match for the U.S. 401(k) plan; and layoffs of production and distribution employees commensurate with the drop in demand. We are doing everything we can in the short term to mitigateevaluate the impact of ~~the pandemic~~COVID-19 on our business and expect to ~~ensure the long-term health~~make additional structural changes and ~~prosperity of our company and our employees.~~take associated restructuring charges in future quarters.

Where we qualify, we have ~~also sought to take~~taken full advantage of government assistance available to employers in the countries outside the U.S. where we operate. ~~We do not expect these cost reductions~~Most of this assistance is designed to ~~fully~~encourage and enable companies to sustain employment, including pay and working conditions of employees, by providing cash benefits to employers. In the third quarter, we received $3.5 million in government assistance to offset the ~~impact~~payroll and other costs of retaining our employees. This assistance was

accounted for on a cash-received basis and, therefore, our third quarter includes government assistance we qualified for based on our second quarter results. As the pandemic appears to be abating in some regions, these government assistance programs are being reduced ~~sales due~~or eliminated and there can be no assurance that government assistance programs will continue or that we will continue to ~~COVID-19 in~~meet the ~~second quarter. Further, there~~performance criteria to obtain benefits.

There can be no assurance that these cost-savings measures, and any additional cost-savings measures we may implement in the future, will be sufficient to offset the current and future adverse financial impacts of COVID-19 on our business, results of operation or financial condition. ~~Over the longer term, we will evaluate the need to extend, adjust or convert these actions into more permanent changes depending on the economic and business situation.~~

Liquidity, Capital Resources and Other Assets

We are in a strong financial position with ~~$93.4~~$85.8 million cash on hand and ~~$450.1~~$465.5 million available for borrowings under our $600 million committed revolving credit facility as of the end of the ~~first~~third quarter. ~~We also recently~~During the second quarter of 2020, we amended our bank debt maintenance covenant increasing the ~~net debt to EBITDA~~maximum consolidated leverage ratio from 3.75x to 4.75x, ~~from~~stepping back down to 3.75x ~~through~~for the first quarter ending after June 30, 2021. This ~~will provide~~provides us with additional financial flexibility to cover the anticipated financial impact of COVID-19 should we need it. As of ~~March 31,~~September 30, 2020, our ~~net~~consolidated leverage ratio was ~~2.8x.~~3.45x. We have no debt maturities before May 2024. ~~We also recently~~

Early in 2020, we announced that we do not intend to repurchase additional shares of our common stock during 2020. Our ~~planned use~~long-term strategy remains to deploy cash to fund dividends, reduce debt, make acquisitions and repurchase stock.

We are monitoring our working capital, including accounts receivable and inventory. We have and are continuing to experience an increased level of ~~cash~~late payments and potential bad debts in certain geographies as our customers deal with the COVID-19 impacts on their businesses. Our bad debt expense was $2.6 million higher in the current quarter than in the third quarter of 2019 and $6.3 million higher on a year-to-date basis than the prior year. We are actively managing our receivables and have restricted and will continue to restrict our own sales if necessary to mitigate our risk. In addition, the drop in demand has increased the need to make additional provisions for slow moving inventory. In the ~~remainder~~third quarter, we had a $5.7 million charge for inventory provisions, $0.5 million higher than the third quarter of ~~2020, after funding operating needs,~~2019 and $4.8 million higher on a year-to-date basis than the prior year. We anticipate that these trends for increased bad debt and inventory provisions will becontinue.

We continue to ~~pay dividends~~monitor the significant global impact and ~~reduce debt.~~

~~Given~~uncertainty as a result of COVID-19 to assess the outlook for demand for our products and the effect on our business and our overall financial performance. Although the full impact of COVID-19 on demand remains uncertain, with impact varying significantly by geographic region, we remain committed to taking the actions necessary to protect our long-term financial performance expectations and position the Company for long-term growth. We expect the macroeconomic environment will recover in the medium to long-term. Given our financial strength, we currently expect to be able to maintain adequate liquidity as we manage through the current environment. ~~We also believe~~

Outlook

For the fourth quarter, we expect the business impacts from COVID-19 will continue to vary significantly by geographic region and country depending upon a range of factors, including how seriously the pandemic is affecting public health in the country and whether and to what degree businesses and schools are open, the general seasonality of our business in that country, the nature and level of government support, and the channel structure. By way of example, our ~~seasonal borrowings could~~New Zealand and Asia businesses are currently experiencing a lower impact from the pandemic. However, many parts of Europe are currently experiencing a second wave. Likewise, we expect our Latin American businesses to continue to be ~~higher in~~significantly and adversely impacted by COVID-19 during the fourth quarter and the early part of 2021.

While the level of overall orders improved across all of our segments during the third quarter versus the second quarter, ~~because lower sales in April~~there can be no assurance that this will ~~result in lower collections from accounts receivables in the quarter.~~

Likewise, we are monitoring our working capital, including accounts receivable and inventory. We anticipate an increased level of late payments and potential bad debts as our customers deal with the COVID-19 impacts on their businesses from the prolonged period of closure. We are actively managing our receivables andcontinue, or that orders will ~~potentially restrict our own sales to mitigate our risk. In addition, we did~~ not ~~anticipate such a steep drop in demand when we placed orders for purchased finished goods earlier in the year, which is likely to result in elevated inventory levels at the end of the second quarter.~~

We continue to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for demand for our products and the impact on our business and our overall financial performance. This includes our risk of impairment losses to our goodwill and indefinite-lived intangible assets. Although the potential impact of COVID-19 related demand is uncertain, we remain committed to the strategic actions necessary to preserve the long-term forecasted financial performance and expect the macroeconomic environment will recover in the medium to long-term. As a result of our analysis, and consideration of events and circumstances, we concluded that there were no triggering events that would make it more likely than not that our goodwill or indefinite-lived intangible assets were impaired as of March 31, 2020.

~~Outlook~~

~~During the back half of March 2020, we began to experience a~~ decline in the ~~demand~~future. We have limited visibility for ~~our products resulting in decreased sales, particularly in our EMEA~~the fourth quarter and ~~International segments, which were the first to experience the full effects of COVID-19 and the government and business response to the pandemic. This trend has continued and expanded~~even less into ~~most of our markets and will continue to materially and negatively impact our sales, earnings and results of operations at least through year-end.~~

We expect demand in the second quarter to be down significantly due to business and school closures, with April anticipated to be the weakest month. While back-to-school sell-in to mass merchants and e-tailers is expected to be similar to last year, we anticipate that sales to our traditional office products customers and other retailers will be down with their customers not open and/or themselves not being operational. Our outlook for second quarter sales decline is a range of 25 percent to 40 percent, including 3 percent impact from adverse foreign exchange. For the full year, visibility is limited and2021, but we expect overall demand to continue to be down relative to 2019, ~~with~~especially for commercial products and for back-to-school products in Brazil. For North America, commercial products represent a ~~slowly improving demand level with a wide range~~larger share of sales ~~outcomes as the year progresses. There may be some variation~~mix, and EMEA has historically also seen very strong commercial sales in the ~~timing~~fourth quarter. There is great uncertainty as to how the recent increases in COVID-19 cases will impact potential sales outcomes for the balance of ~~school openings versus normal which could affect the timing of back-to-school sales, but we expect most schools will be open in the fall.~~2020 and beyond.

~~We have limited visibility beyond the second quarter, and we previously withdrew our full year guidance due to our inability to provide a longer-term outlook with confidence.~~ We expect that the pandemic will continue to materially and adversely affect our business, sales, and results of operations for some time, but we cannot reasonably estimate its financial impact beyond the ~~remainder of 2020; however, we~~fourth quarter at this time. We are also uncertain as to the magnitude of the ~~longer term~~longer-term impact on our results of operations, financial condition, liquidity, customers, consumers, suppliers, industry and employees. Even after the pandemic has subsided, we may experience materially adverse

impacts on our business due to any resulting economic recession or depression, a change in the competitive landscape or changes in the behavior of customers, consumers and other end users.

Acquisitions

Indústria Gráfica Foroni ~~Ltda~~Ltda. Acquisition

Effective August 1, 2019, we completed the acquisition (the "Foroni Acquisition") of Indústria Gráfica Foroni Ltda. ("Foroni"), a leading provider of ~~Foroni~~^®Foroni® branded notebooks and paper-based school and office products in Brazil. The purchase price was $41.5 million inclusive of working capital adjustments. We also assumed $7.6 million of debt. The Foroni Acquisition advanced our strategy to expand in faster growing geographies and product categories, add consumer-centric brands and diversify our customer base. The results of Foroni are included in the ACCO Brands International segment effective August 1, 2019.

For further information on the Foroni Acquisition, see "Note 3. Acquisitions" to the condensed consolidated financial statements contained in Item 1. of this Quarterly Report on Form 10-Q.

Foreign Exchange Rates

The quarterly and year-to-date average foreign exchange rates for the currencies in most of our major ~~currencies~~markets have declined relative to the U.S. dollar from the ~~prior-year~~prior-year-to-date period, although many currencies strengthened versus the U.S. dollar during the third quarter as detailed below:


	2020 3rd QTR Average Versus 2019 3rd QTR Average	2020 YTD Average Versus 2019 YTD Average
Currency	Increase/(Decline)	Increase/(Decline)
Euro	5%	—%
Brazilian real	(26)%	(23)%
Australian dollar	4%	(3)%
Canadian dollar	(1)%	(2)%
Mexican peso	(12)%	(11)%
Swedish krona	8%	—%
British pound	5%	—%
Japanese yen	1%	1%



		~~2020 1~~^ST ~~QTR Average Versus 2019 1~~^ST ~~QTR Average~~
~~Currency~~		~~Increase/(Decline)~~
~~Euro~~		~~(3)%~~
~~Brazilian real~~		~~(15)%~~
~~Australian dollar~~		~~(8)%~~
~~Canadian dollar~~		~~(1)%~~
~~Mexican peso~~		~~(3)%~~
~~Swedish krona~~		~~(5)%~~
~~British pound~~		~~(2)%~~
~~Japanese yen~~		1%

Consolidated Results of Operations for the Three and Nine Months Ended ~~March 31,~~September 30, 2020 and ~~March 31,~~ 2019


	Three Months Ended September 30,						Amount of Change					Nine Months Ended September 30,						Amount of Change
(in millions, except per share data)	2020			2019			$		%/pts			2020			2019			$		%/pts
Net sales	$	444.1		$	505.7		$	(61.6)	(12.2)	%		$	1,195.1		$	1,418.3		$	(223.2)	(15.7)	%
Cost of products sold	317.0			349.8			(32.8)		(9.4)	%		845.8			970.8			(125.0)		(12.9)	%
Gross profit	127.1			155.9			(28.8)		(18.5)	%		349.3			447.5			(98.2)		(21.9)	%
Gross profit margin	28.6		%	30.8		%			(2.2)		pts	29.2		%	31.6		%			(2.4)		pts
Selling, general and administrative expenses	84.4			96.4			(12.0)		(12.4)	%		247.7			287.8			(40.1)		(13.9)	%
SG&A % to net sales	19.0		%	19.1		%			(0.1)		pts	20.7		%	20.3		%			0.4		pts
Amortization of intangibles	7.9			8.6			(0.7)		(8.1)	%		24.1			26.8			(2.7)		(10.1)	%
Restructuring charges	0.5			2.1			(1.6)		(76.2)	%		7.3			4.8			2.5		52.1	%
Operating income	34.3			48.8			(14.5)		(29.7)	%		70.2			128.1			(57.9)		(45.2)	%
Operating income margin	7.7		%	9.6		%			(1.9)		pts	5.9		%	9.0		%			(3.1)		pts
Interest expense	10.2			11.5			(1.3)		(11.3)	%		28.7			33.6			(4.9)		(14.6)	%
Interest income	(0.2)			(0.7)			(0.5)		(71.4)	%		(0.8)			(2.9)			(2.1)		(72.4)	%

Non-operating pension income	(1.4)			(1.3)			0.1		7.7	%		(4.4)			(4.1)			0.3		7.3	%
Other expense (income), net	0.1			(0.9)			1.0		NM			0.8			0.1			0.7		NM
Income before income tax	25.6			40.2			(14.6)		(36.3)	%		45.9			101.4			(55.5)		(54.7)	%
Income tax expense	6.8			12.2			(5.4)		(44.3)	%		13.7			38.1			(24.4)		(64.0)	%
Effective tax rate	26.6		%	30.3		%			(3.7)		pts	29.8		%	37.6		%			(7.8)		pts
Net income	18.8			28.0			(9.2)		(32.9)	%		32.2			63.3			(31.1)		(49.1)	%
Weighted average number of diluted shares outstanding:	95.6			98.9			(3.3)		(3.3)	%		96.2			101.9			(5.7)		(5.6)	%
Diluted income per share	$	0.20		$	0.28		$	(0.08)	(28.6)	%		$	0.34		$	0.62		$	(0.28)	(45.2)	%
Comparable net sales	$	443.6		$	505.7		$	(62.1)	(12.3)	%		$	1,196.5		$	1,418.3		$	(221.8)	(15.6)	%

Three Months Ended March 31, Amount of Change
(in millions, except per share data) 2020 2019 $ %/pts
Net sales $ 384.1
$ 393.9
$ (9.8 ) (2.5 )%
Cost of products sold 271.9
268.1
3.8
1.4 %
Gross profit 112.2
125.8
(13.6 ) (10.8 )%
Gross profit margin 29.2 % 31.9 % (2.7)
pts
Selling, general and administrative expenses 86.1
95.9
(9.8 ) (10.2 )%
Amortization of intangibles 8.4
9.3
(0.9 ) (9.7 )%
Restructuring charges 0.3
2.7
(2.4 ) (88.9 )%
Operating income 17.4
17.9
(0.5 ) (2.8 )%
Operating income margin 4.5 % 4.5 % 0.0
pts
Interest expense 8.6
10.4
(1.8 ) (17.3 )%
Interest income (0.3 ) (0.9 ) (0.6 ) (66.7 )%
Non-operating pension income (1.5 ) (1.4 ) 0.1
7.1 %
Other income, net (0.5 ) (0.2 ) 0.3
150.0 %
Income before income tax 11.1
10.0
1.1
11.0 %
Income tax expense 3.1
10.6
(7.5 ) (70.8 )%
Effective tax rate 27.9 % 106.0 % (78.1)
pts
Net income (loss) 8.0
(0.6 ) 8.6
NM

Weighted average number of diluted shares outstanding: 97.5
102.3
(4.8 ) (4.7 )%
Diluted income (loss) per share $ 0.08
$ (0.01 ) $ 0.09
NM

Net Sales

For the three months ended September 30, 2020, net sales decreased primarily due to the COVID-19 impacts. While these impacts were overall less severe than in the second quarter, our International segment experienced the most significant impact. The impact in our North America segment was more modest and even smaller in our EMEA segment. Adverse foreign exchange contributed $0.5 million, or 0.1 percent, to the decline. Net sales ~~decreased 2.5 percent~~benefited from the Foroni Acquisition with the additional one month contributing $1.0 million to ~~$384.1 million~~net sales. Back-to-school sales in North America and Mexico declined because of low replenishment orders. Our commercial office product sales continued to exhibit the largest decline from $393.9 million in 2019 due to adverse foreign exchange of $10.6 million, or 2.7 percent. The Foroni acquisition added $14.4 million. Comparable sales decreased 3.5 percent driven by weakness in the EMEA and International segments, particularly in March from COVID-19-related business closures. These declines wereCOVID-19 impacts, partially offset by growth in ~~North America.~~Kensington® computer accessories, TruSens® air purifiers, Leitz® shredders, and Derwent® art supplies.

For the nine months ended September 30, 2020, net sales decreased primarily due to lower demand resulting from COVID-19 impacts in all three segments. Adverse foreign exchange was $18.1 million, or 1.3 percent. Net sales benefited from the Foroni Acquisition with the additional seven months contributing $16.7 million.

Cost of Products Sold

Cost of products sold includes all manufacturing, product sourcing and distribution costs, including depreciation related to assets used in manufacturing; procurement and distribution ~~process costs;~~process; allocation of certain information technology costs supporting those processes; inbound and outbound freight; shipping and handling costs; purchasing costs associated with materials and packaging used in the production processes; and inventory valuation adjustments.

~~Foreign~~For the three months ended September 30, 2020, foreign exchange reduced cost of products sold ~~$7.3~~$0.8 million, or ~~2.7~~0.2 percent, and the Foroni ~~acquisition~~Acquisition added ~~$12.0~~$1.0 million, or ~~4.5%.~~0.3 percent. Excluding Foroni and foreign exchange, cost of products sold decreased primarily due to lower comparable net ~~sales and~~sales. Additional factors included cost ~~savings,~~reductions, partially offset by lower ~~levels~~fixed cost absorption. We received $1.5 million in government assistance, primarily provided in return for maintaining employment and wages.

For the nine months ended September 30, 2020, foreign exchange reduced cost of products sold $13.6 million, or 1.4

percent, and the Foroni Acquisition added $15.7 million, or 1.6 percent. Excluding Foroni and foreign exchange, cost of products sold decreased, primarily due to lower comparable sales. Additional factors included cost reductions, partially offset by lower fixed cost absorption, ~~(primarily~~and $4.8 million of additional reserves for slow moving and obsolete inventory. We received $3.0 million in ~~the North America segment)~~government assistance, primarily provided in return for maintaining employment and ~~an unfavorable product mix (primarily in the EMEA segment).~~wages.

Gross Profit

We believe that gross profit and gross profit margin provide enhanced shareholder understanding of our underlying operating profit drivers.

~~Foreign~~For the three months ended September 30, 2020, foreign exchange increased gross profit $0.3 million, or 0.2 percent. Excluding foreign exchange, gross profit decreased primarily due to lower comparable sales.

For the three months ended September 30, 2020, gross profit as a percent of net sales decreased 220 basis points. Gross profit margin declined in the North America and International segments primarily due to an unfavorable customer and product mix, and lower fixed cost absorption.

For the nine months ended September 30, 2020, foreign exchange reduced gross profit ~~$3.3~~$4.5 million, or ~~2.6~~1.0 percent, and the Foroni ~~acquisition~~Acquisition added ~~$2.4~~$1.0 million, or ~~1.9%.~~0.2 percent. Excluding Foroni and foreign exchange, gross profit decreased primarily due to lower ~~net~~ comparable ~~sales, primarily in~~sales.

For the ~~EMEA and International segments.~~

~~Gross~~nine months ended September 30, 2020, gross profit as a percent of net sales decreased ~~to 29.2 percent from 31.9 percent, with 50~~240 basis ~~points of the decline attributable to Foroni. Excluding Foroni and foreign exchange, gross~~points. Gross profit margin declined in all segments, primarily due to an unfavorable customer and product mix, lower ~~levels of~~ fixed cost absorption, ~~(primarily in the North America segment)~~ and ~~an unfavorable product mix (primarily in the EMEA segment). International segment gross profit margin was flat.~~higher charges for slow moving and obsolete inventory.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") include advertising, marketing, selling (including commissions), research and development, customer service, depreciation related to assets outside the manufacturing and distribution processes and all other general and administrative expenses outside the manufacturing and distribution functions (e.g., finance, human resources, and information technology).

~~Foreign~~For the three months ended September 30, 2020, foreign exchange reduced SG&A ~~$1.9~~$0.7 million, or ~~2.0~~0.7 percent, and the Foroni ~~acquisition~~Acquisition added ~~$2.2~~$0.3 million, or ~~2.3%.~~0.3 percent. The current year includes ~~$0.3~~$0.1 million of integration costs related to the Foroni Acquisition. Excluding Foroni, integration costs, and foreign exchange, SG&A declined due to cost reductions, partially offset by an accrual for pay restitutions to our employees and $2.6 million of increased bad debt expense. SG&A benefited from $2.0 million in government assistance, primarily provided in return for maintaining employment and wages.

For the three months ended September 30, 2020, SG&A as a percentage of net sales increased, primarily due to lower net sales, partially offset by lower SG&A expense.

For the nine months ended September 30, 2020, foreign exchange reduced SG&A $5.0 million, or 1.7 percent, and the Foroni Acquisition added $3.2 million, or 1.1 percent. The current-year period includes $0.8 million of integration and transaction costs related to the Foroni ~~acquisition.~~Acquisition. The prior-year period included ~~$0.4~~$1.9 million in integration costs related to prior acquisitions. Excluding Foroni, integration and transaction costs, and foreign exchange, SG&A declined due to $7cost reductions, partially offset by $6.3 million of increased bad debt expense. SG&A benefited from $4.5 million in ~~lower incentive accruals~~government assistance, primarily provided in return for maintaining employment and ~~cost savings.~~wages.

For the nine months ended September 30, 2020, SG&A as a percentage of net sales ~~decreased to 22.4% from 24.3% last year,~~increased, primarily due to ~~the reasons mentioned above. Foroni accounted for 30 basis points of the decrease.~~lower net sales.

Restructuring Charges

~~Restructuring~~For the three months ended September 30, 2020, restructuring charges were ~~$0.3~~$0.5 million ~~down $2.4 million from $2.7 million last year. The current-year~~for severance expense in North America and International.

For the nine months ended September 30, 2020, restructuring charges ~~related to incremental costs~~were $7.3 million. Costs associated with ~~cost reduction programs initiated at~~severance expense in North America were $5.0 million. The remainder of the ~~end of 2019~~severance charges were in ~~all of our segments.~~Mexico, Brazil, EMEA and Australia. The ~~prior year~~prior-year charges related to severance costs associated with ~~additional~~ changes in the operating structure of our North America and International segments.

Operating Income

~~Operating~~For the three months ended September 30, 2020, operating income ~~was $17.4 million, a decrease of $0.5 million, from $17.9 million in 2019,~~decreased, primarily due to lower ~~comparable~~net sales from ~~the impact of COVID-19-related business closures. The Foroni acquisition was immaterial.~~COVID-19 impacts, which were partially offset by cost reductions. Foreign exchange ~~reduced~~benefited operating income ~~$1.2~~$1.0 million, ~~and~~or 2.0 percent. Foroni contributed a loss of $1.5 million.

For the nine months ended September 30, 2020, operating income decreased, primarily due to lower ~~restructuring charges~~net sales from COVID-19 impacts, which were partially offset by cost reductions. Foreign exchange benefited operating income $1.0 million, or 0.8 percent. Foroni contributed a ~~$2.4 million benefit.~~loss of $3.9 million.

Interest Expense and Income

~~The~~For both the three and nine months ended September 30, 2020, the decrease in interest expense ~~of $1.8 million,~~ was primarily due to lower average debt outstanding and lower interest rates on our variable rate debt. The decrease in interest income was primarily due to lower cash balances being held in Brazil.

Income Tax Expense

~~Income tax expense was $3.1 million on income before taxes of $11.1 million, or an~~For the three months ended September 30, 2020, the decrease in the effective tax rate in 2020 was primarily driven by an accrual made in the prior year of ~~27.9 percent. The~~$1.6 million of Brazilian income taxes on a contingent gain.

For the nine months ended September 30, 2020, the decrease in effective tax rate for the period was primarily due to ~~a reduction in nondeductible interest expense in the current year, and~~ an increase in reserves for uncertain tax positions in the prior year, Brazilian income taxes accrued on a contingent gain and a decrease in non-deductible interest in the current year.

For the ~~prior year, income tax expense was $10.6 million on income before taxes of $10.0 million, or an effective tax rate of 106.0 percent. The~~nine months ended September 30, 2019, the high effective tax rate for the prior-year period ~~was~~was primarily due to ~~recording of (i) additional~~the Company increasing its reserves for uncertain tax positions related to the Brazil Tax Assessments ($5.6 million), (ii) deferred state taxes on unremitted non-U.S. earnings ($0.8 million) and (iii) reserves related to various tax contingencies. The increase of $5.6 million in the reserve related to uncertain tax positions in connection with the Brazil Tax Assessments ~~was recorded~~(see Brazil Tax Assessments below) in the ~~first quarter~~amount of ~~2019, although~~$5.6 million, the ~~increase should have been recorded~~accrual of the previously mentioned $1.6 million of Brazilian income taxes on a contingent gain, and the recording of deferred state taxes on unremitted non-U.S. earnings in ~~2018 when we decided~~the amount of $0.8 million and other reserves related to ~~appeal an administrative decision to the judicial level.~~various tax contingencies.

See "Note 11. Income Taxes - Brazil Tax Assessments" to the condensed consolidated financial statements contained in Item 1. of this report for additional details on the Brazil Tax Assessments.

Net Income/Diluted Income per Share

~~Net~~For the three months ended September 30, 2020, net income ~~was $8.0~~decreased primarily due to lower operating income. Foreign exchange increased net income $0.9 million, or $0.08 per share, compared with a net loss in 2019 of $(0.6) million, or $(0.01) per share, because of an unusually high tax rate and higher restructuring charges and integration and transaction costs in 2019.3.2 percent. Diluted income per share benefited from fewer outstanding shares.

For the nine months ended September 30, 2019, net income decreased primarily due to lower operating income. Foreign exchange increased net income $0.9 million, or 1.4 percent. Diluted income per share benefited from fewer outstanding shares.

Segment Net Sales and Operating Income for the Three and Nine Months Ended ~~March 31,~~September 30, 2020 and ~~March 31,~~ 2019

Three Months Ended March 31, 2020 Amount of Change Compared to the Three Months Ended March 31, 2019
Net Sales Segment Operating Income (A) Segment Operating Income Margin Net Sales Net Sales Segment Operating Income (A) Segment Operating Income Margin Points

(in millions) $ % $ %
ACCO Brands North America $ 167.8
$ 7.6
4.5 % $ 7.4
4.6% $ 0.8
11.8 % 30
ACCO Brands EMEA 127.5
12.0
9.4 % (19.0 ) (13.0)% (3.9 ) (24.5 )% (150 )
ACCO Brands International 88.8
5.9
6.6 % 1.8
2.1% 0.3
5.4 % 20
Total $ 384.1
$ 25.5
$ (9.8 ) $ (2.8 )

Three Months Ended March 31, 2019
Net Sales Segment Operating Income (A) Segment Operating Income Margin

(in millions)
ACCO Brands North America $ 160.4
$ 6.8
4.2 %
ACCO Brands EMEA 146.5
15.9
10.9 %
ACCO Brands International 87.0
5.6
6.4 %
Total $ 393.9
$ 28.3

ACCO Brands North America

~~(A)~~


	Three Months Ended September 30,						Amount of Change					Nine Months Ended September 30,						Amount of Change
(in millions)	2020			2019			$		%/pts			2020			2019			$		%/pts
Net sales	$	238.5		$	272.4		$	(33.9)	(12.4)	%		$	638.0		$	740.7		$	(102.7)	(13.9)	%
Segment operating income(1)	22.9			33.7			(10.8)		(32.0)	%		67.9			101.1			(33.2)		(32.8)	%
Segment operating income margin	9.6		%	12.4		%			(2.8)		pts	10.6		%	13.6		%			(3.0)		pts
Comparable net sales	$	239.0		$	272.4		$	(33.4)	(12.2)	%		$	639.3		$	740.7		$	(101.4)	(13.7)	%

(1) Segment operating income excludes corporate costs. See "Part I, Item 1.Note 17. Information on Business ~~Segments"~~Segments," for a reconciliation of total "~~Segment~~"Segment operating ~~income~~"income" to "~~Income~~"Income before income ~~tax~~.tax."

~~ACCO Brands North America~~

~~Net~~For the three months ended September 30, 2020, net sales ~~and comparable sales increased~~decreased primarily from ~~higher pricing and included~~lower demand due to COVID-19 impacts. The segment saw very strong growth in sales of Kensington^®~~, Swingline~~^®~~, Quartet~~^®~~, and Five Star~~^® ~~brands.~~computer accessories, which included its largest ever single contract shipment, more than doubling its sales in the quarter from last year. Sales of TruSens® air purifiers and Derwent® art supplies also posted good growth. This was offset by a weak back-to-school sell-out as approximately 70 percent of students were partly or fully learning remotely, which caused customers and consumers to reduce purchases. We expect an elongated back-to-school season that will extend into the fourth quarter, as retailers continue to sell through a larger-than-normal inventory overhang. Excluding the growth in computer accessories, we continue to experience more significant sales reductions with our commercial and office superstore customers, and we expect this trend to continue. Sales to these customers collectively were down approximately 30 percent compared with the prior year while our sales to mass/retail/e-tail customers, which are heavily weighted to back to school, were only down approximately 11 percent relative to the prior year. Unfavorable foreign exchange reduced net sales ~~$0.2~~$0.5 million, or ~~0.1~~0.2 percent.

~~Operating income and operating margin increased~~For the nine months ended September 30, 2020, net sales decreased primarily from lower demand due to ~~lower restructuring charges~~COVID-19 impacts. The segment saw very good growth in Kensington® and TruSens® branded products. Back-to-school sales for the second and third quarters combined were approximately 5 percent below 2019 primarily due to a reduction in the ~~current year. The benefits~~total back-to-school market. In addition, we reduced both our sales of ~~higher~~private label products and sales ~~and lower SG&A from reduced incentive accruals were offset by adverse gross margin due~~ to ~~lower fixed cost absorption, unfavorable~~certain retailers. We have experienced the more severe COVID-19 impacts in our commercial product ~~and customer mix, and increased reserves for obsolete inventory.~~

~~ACCO Brands EMEA~~

~~Net~~lines while sales ~~and comparable sales declined primarily as the result of COVID-19-related customer closures in March.~~to mass/retail/e-tail customers remained flat. Unfavorable foreign exchange reduced net sales ~~$4.3~~$1.3 million, or ~~2.9~~0.2 percent.

~~Operating~~For the three months ended September 30, 2020, operating income and operating margin ~~both declined~~decreased primarily due to lower ~~sales. In addition, gross~~sales related to COVID-19 impacts and unfavorable customer and product mix. Partially offsetting these factors were cost reductions and $0.4 million in Canadian government assistance, primarily provided in return for maintaining employment and wages.

For the nine months ended September 30, 2020, operating income and operating margin ~~also declined~~decreased primarily due to lower sales related to COVID-19 impacts, unfavorable customer and product mix, lower fixed cost absorption and increased reserves for slow moving and obsolete inventory. Restructuring charges were $5.3 million versus $1.5 million in the ~~impact of the stronger U.S. dollar on purchased Asian-sourced products partially offset by~~prior year. Partially offsetting these factors were cost ~~savings, including lower incentive accruals. Foreign exchange reduced operating income $0.5 million, or 3.1 percent.~~reductions, and $1.6 million in Canadian government assistance, primarily provided in return for maintaining employment and wages.

ACCO Brands ~~International~~EMEA

~~Net~~


	Three Months Ended September 30,						Amount of Change					Nine Months Ended September 30,						Amount of Change
(in millions)	2020			2019			$		%/pts			2020			2019			$		%/pts
Net sales	$	136.4		$	133.1		$	3.3	2.5	%		$	352.2		$	407.9		$	(55.7)	(13.7)	%
Segment operating income(1)	16.7			13.8			$	2.9	21.0	%		26.9			37.1			$	(10.2)	(27.5)	%
Segment operating income margin	12.2		%	10.4		%			1.8		pts	7.6		%	9.1		%			(1.5)		pts
Comparable net sales	$	130.3		$	133.1		$	(2.8)	(2.1)	%		$	352.5		$	407.9		$	(55.4)	(13.6)	%

For the three months ended September 30, 2020, net sales increased ~~as a result of the Foroni acquisition which added $14.4 million, or 16.6 percent, partially offset by unfavorable~~due to favorable foreign exchange of $6.1 million, or ~~7.0~~4.6 percent. Comparable sales declined 2.1 percent primarily from lower demand related to COVID-19 impacts. These impacts were largely offset by growth in sales of Leitz® personal shredders, TruSens® air purifiers, DIY tools, and computer accessories. EMEA experienced a much stronger level of demand in the third quarter compared with the second quarter as many COVID-19 restrictions were lifted and commercial businesses and consumers were less adversely impacted. Given the recent resurgence of the COVID-19 pandemic throughout Europe, there can be no assurance this demand will continue in the fourth quarter.

For the nine months ended September 30, 2020, net sales and comparable sales decreased primarily from lower demand due to COVID-19 impacts. Unfavorable foreign exchange reduced net sales $0.3 million, or 0.1 percent.

For the three months ended September 30, 2020, operating income and margin improved primarily from a higher gross margin (50 basis points) and lower SG&A costs (100 basis points), as well as $0.3 million of lower restructuring charges. EMEA received $1.2 million in governments' assistance, primarily provided in return for maintaining employment and wages. Foreign exchange increased operating income $0.7 million, or 5.1 percent.

For the nine months ended September 30, 2020, operating income and operating margin declined primarily due to lower sales from COVID-19 impacts, lower fixed cost absorption, and higher bad debt expense. Partially offsetting these factors were cost reductions and $2.7 million in governments' assistance, primarily provided in return for maintaining employment and wages. Foreign exchange increased operating income $0.6 million, or 1.6 percent.

ACCO Brands International


	Three Months Ended September 30,						Amount of Change					Nine Months Ended September 30,						Amount of Change
(in millions)	2020			2019			$		%/pts			2020			2019			$		%/pts
Net sales	$	69.2		$	100.2		$	(31.0)	(30.9)	%		$	204.9		$	269.7		$	(64.8)	(24.0)	%
Segment operating income(1)	3.7			10.8			$	(7.1)	(65.7)	%		5.2			20.5			$	(15.3)	(74.6)	%
Segment operating income margin	5.3		%	10.8		%			(5.5)		pts	2.5		%	7.6		%			(5.1)		pts
Comparable net sales	$74.3			$	100.2		$	(25.9)	(25.8)	%		$204.7			$	269.7		$	(65.0)	(24.1)	%

For the three months ended September 30, 2020, net sales decreased primarily as a result of lower demand due to COVID-19 impacts, which were felt in all markets, but most severely in Mexico, Brazil, and Chile (representing 70 percent of the segment decline). Outside of Latin America, the largest impact on demand was from the lockdown in the state of Victoria, Australia. Net sales benefited from the Foroni Acquisition with the additional one month contributing $1.0 million to net sales. Unfavorable foreign exchange was $6.1 million, or 6.1 percent. Excluding Foroni and foreign exchange, comparable ~~net~~ sales decreased ~~$6.5~~$25.9 million, or ~~7.5~~25.8 percent, primarily due to ~~slowing~~lower demand ~~due~~from COVID-19 impacts.

For the nine months ended September 30, 2020, net sales and comparable sales decreased primarily as a result of lower demand related to ~~COVID-19-related business closures and supply chain disruptions in China.~~

~~Adverse~~COVID-19 impacts. Net sales benefited from the Foroni Acquisition with the additional seven months contributing $16.7 million, or 6.2 percent, which was largely offset by unfavorable foreign exchange ~~reduced~~of $16.5 million, or 6.1 percent.

For the three months ended September 30, 2020, foreign exchange increased operating income ~~$0.7~~$0.3 million, or ~~12.5~~2.8 percent. Operating income included a $1.5 million loss from Foroni. Excluding Foroni and foreign exchange, the decrease in operating income was primarily driven by lower sales, adverse customer and product mix, higher bad debt expense, and lower

fixed cost absorption. Partially offsetting these factors were cost reductions and $1.9 million in government assistance, primarily provided in return for maintaining employment and wages. Restructuring charges in the quarter were $0.3 million versus $0.1 million in the prior year.

For the nine months ended September 30, 2020, foreign exchange increased operating income $0.6 million, or 2.9 percent. Foroni contributed ~~an immaterial operating loss.~~a loss of $3.9 million. Excluding Foroni and foreign exchange, operating income ~~increased due to lower restructuring charges and SG&A, including reduced incentive accruals, partially offset by~~decreased primarily from lower sales, ~~due to COVID-19.~~lower fixed cost absorption and higher bad debt expense. Partially offsetting these factors were cost reductions and $3.2 million in government assistance, primarily provided in return for maintaining employment and wages. Restructuring charges were $1.5 million versus $1.2 million in the prior year.

Supplemental Non-GAAP Financial Measure

To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), we provide investors with certain non-GAAP financial measures, including comparable net sales. Comparable net sales ~~represents~~represent net sales excluding the impact of acquisitions and with current-period foreign operation sales translated at prior-year currency rates. We sometimes refer to comparable net sales as comparable sales.

We use comparable net sales both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business. We believe comparable net sales 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. ~~We sometimes refer to comparable net sales as comparable sales.~~ Comparable net sales should not be considered in isolation or as a substitute for, or superior to, the directly comparable GAAP financial measure and should be read in connection with the Company's financial statements presented in accordance with GAAP.

The following tables provide a reconciliation of GAAP net sales change as reported to non-GAAP comparable net sales change:


	Comparable Net Sales - Three Months Ended September 30, 2020
		Non-GAAP
	GAAP		Currency		Comparable
(in millions)	Net Sales		Translation	Acquisition	Net Sales
ACCO Brands North America	$238.5		$(0.5)	$—	$239.0
ACCO Brands EMEA	136.4		6.1	—	130.3
ACCO Brands International	69.2		(6.1)	1.0	74.3
Total	$444.1		$(0.5)	$1.0	$443.6

	Amount of Change - Three Months Ended September 30, 2020 compared to the Three Months Ended September 30, 2019
	$ Change - Net Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
(in millions)	Change		Translation	Acquisition	Change
ACCO Brands North America	$(33.9)		$(0.5)	$—	$(33.4)
ACCO Brands EMEA	3.3		6.1	—	(2.8)
ACCO Brands International	(31.0)		(6.1)	1.0	(25.9)
Total	$(61.6)		$(0.5)	$1.0	$(62.1)

	% Change - Net Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change
ACCO Brands North America	(12.4)%		(0.2)%	—%	(12.2)%
ACCO Brands EMEA	2.5%		4.6%	—%	(2.1)%
ACCO Brands International	(30.9)%		(6.1)%	1.0%	(25.8)%
Total	(12.2)%		(0.1)%	0.2%	(12.3)%


							Comparable Net Sales - Nine Months Ended September 30, 2020
								Non-GAAP
							GAAP		Currency		Comparable
(in millions)						(in millions)	Net Sales		Translation	Acquisition	Net Sales
ACCO Brands North America						ACCO Brands North America	$638.0		$(1.3)	$—	$639.3
ACCO Brands EMEA						ACCO Brands EMEA	352.2		(0.3)	—	352.5
ACCO Brands International						ACCO Brands International	204.9		(16.5)	16.7	204.7
Total						Total	$1,195.1		$(18.1)	$16.7	$1,196.5

	Amount of Change - Three Months Ended March 31, 2020 compared to the Three Months Ended March 31, 2019						Amount of Change - Nine Months Ended September 30, 2020 compared to the Nine Months Ended September 30, 2019
	$ Change - Net Sales						$ Change - Net Sales
		Non-GAAP						Non-GAAP
	GAAP				Comparable		GAAP				Comparable
	Net Sales		Currency		Net Sales		Net Sales		Currency		Net Sales
(in millions)	Change		Translation	Acquisition	Change	(in millions)	Change		Translation	Acquisition	Change
ACCO Brands North America	$7.4		$(0.2)	$—	$7.6	ACCO Brands North America	$(102.7)		$(1.3)	$—	$(101.4)
ACCO Brands EMEA	(19.0)		(4.3)	—	(14.7)	ACCO Brands EMEA	(55.7)		(0.3)	—	(55.4)
ACCO Brands International	1.8		(6.1)	14.4	(6.5)	ACCO Brands International	(64.8)		(16.5)	16.7	(65.0)
Total	$(9.8)		$(10.6)	$14.4	$(13.6)	Total	$(223.2)		$(18.1)	$16.7	$(221.8)

	% Change - Net Sales						% Change - Net Sales
		Non-GAAP						Non-GAAP
	GAAP				Comparable		GAAP				Comparable
	Net Sales		Currency		Net Sales		Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change		Change		Translation	Acquisition	Change
ACCO Brands North America	4.6%		(0.1)%	—%	4.7%	ACCO Brands North America	(13.9)%		(0.2)%	—%	(13.7)%
ACCO Brands EMEA	(13.0)%		(2.9)%	—%	(10.1)%	ACCO Brands EMEA	(13.7)%		(0.1)%	—%	(13.6)%
ACCO Brands International	2.1%		(7.0)%	16.6%	(7.5)%	ACCO Brands International	(24.0)%		(6.1)%	6.2%	(24.1)%
Total	(2.5)%		(2.7)%	3.7%	(3.5)%	Total	(15.7)%		(1.3)%	1.2%	(15.6)%



	Three Months Ended March 31,
(in millions)	2020			2019
Net income (loss)	$	8.0		$	(0.6	)
Other comprehensive income (loss), net of tax:
Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(0.9) and $0.4, respectively	2.4			(1.1		)

Foreign currency translation adjustments, net of tax benefit (expense) of $2.1 and $(3.8), respectively	(49.7		)	(3.1		)

Recognition of deferred pension and other post-retirement items, net of tax (expense) benefit of $(2.4) and $0.4, respectively	7.9			(1.1		)
Other comprehensive loss, net of tax	(39.4		)	(5.3		)

Comprehensive loss	$	(31.4	)	$	(5.9	)


	Nine Months Ended September 30,
(in millions)	2020		2019
Operating activities
Net income	$	32.2	$	63.3

Amortization of inventory step-up	0		0.2


Depreciation	28.2		26.3
Other non-cash items	0.5		0.2
Amortization of debt issuance costs	1.7		1.7
Amortization of intangibles	24.1		26.8
Stock-based compensation	5.2		6.3
Loss on debt extinguishment	0		0.3

Changes in balance sheet items:
Accounts receivable	78.7		54.0
Inventories	(28.4)		34.8
Other assets	(1.0)		(2.6)
Accounts payable	(67.1)		(102.1)
Accrued expenses and other liabilities	(47.3)		(40.8)
Accrued income taxes	(5.0)		6.7
Net cash provided by operating activities	21.8		75.1
Investing activities
Additions to property, plant and equipment	(11.8)		(21.9)


Proceeds from the disposition of assets	0		0.1
Cost of acquisitions, net of cash acquired	0.6		(42.1)
Other assets acquired	0		(5.2)
Net cash used by investing activities	(11.2)		(69.1)
Financing activities
Proceeds from long-term borrowings	231.5		325.9
Repayments of long-term debt	(146.4)		(272.0)
Proceeds/repayments of notes payable, net	2.5		(8.6)
Payments for debt issuance costs	(1.6)		(3.3)
Dividends paid	(18.4)		(18.1)
Repurchases of common stock	(18.9)		(56.8)
Payments related to tax withholding for stock-based compensation	(1.8)		(4.3)

Proceeds from the exercise of stock options	1.7		3.1
Net cash provided (used) by financing activities	48.6		(34.1)
Effect of foreign exchange rate changes on cash and cash equivalents	(1.2)		(1.2)
Net increase (decrease) in cash and cash equivalents	58.0		(29.3)
Cash and cash equivalents
Beginning of the period	27.8		67.0
End of the period	$	85.8	$	37.7
Cash paid during the year for:
Interest	$	21.4	$	27.6
Income taxes	$	20.1	$	38.6



	Three Months Ended March 31,
(in millions)	2020			2019
Operating activities
Net income (loss)	$	8.0		$	(0.6	)
Amortization of inventory step-up	—			0.1
Loss on disposal of assets	—			0.1
Depreciation	8.6			8.8
Amortization of debt issuance costs	0.5			0.5
Amortization of intangibles	8.4			9.3
Stock-based compensation	0.9			2.0
Changes in balance sheet items:
Accounts receivable	112.0			108.1
Inventories	(26.2		)	(57.3		)
Other assets	(13.8		)	(10.1		)
Accounts payable	(45.2		)	(79.9		)
Accrued expenses and other liabilities	(72.1		)	(41.1		)
Accrued income taxes	(6.3		)	(1.2		)
Net cash used by operating activities	(25.2		)	(61.3		)
Investing activities
Additions to property, plant and equipment	(6.9		)	(7.2		)
Proceeds from the disposition of assets	—			0.1
Cost of acquisitions, net of cash acquired	0.6			—
Other assets acquired	—			(5.4		)
Net cash used by investing activities	(6.3		)	(12.5		)
Financing activities
Proceeds from long-term borrowings	117.4			123.7
Repayments of long-term debt	(5.3		)	—
Borrowings of notes payable, net	12.4			4.8
Dividends paid	(6.2		)	(6.2		)
Repurchases of common stock	(18.9		)	(10.5		)
Payments related to tax withholding for stock-based compensation	(1.7		)	(4.2		)
Proceeds from the exercise of stock options	1.5			—
Net cash provided by financing activities	99.2			107.6
Effect of foreign exchange rate changes on cash and cash equivalents	(2.1		)	(0.3		)
Net increase in cash and cash equivalents	65.6			33.5
Cash and cash equivalents
Beginning of the period	27.8			67.0
End of the period	$	93.4		$	100.5
Cash paid during the year for:
Interest	$	2.9		$	4.3
Income taxes	$	10.1		$	11.4


	Common Stock	Treasury Stock	Net Shares
Shares at December 31, 2019	100,412,933	3,967,445	96,445,488
Common stock issued, net of shares withheld for employee taxes	898,664	206,243	692,421
Common stock repurchases	(2,690,292)	—	(2,690,292)
Shares at March 31, 2020	98,621,305	4,173,688	94,447,617
Common stock issued, net of shares withheld for employee taxes	26,957	12,427	14,530

Shares at June 30, 2020	98,648,262	4,186,115	94,462,147
Common stock issued, net of shares withheld for employee taxes	35,465	775	34,690

Shares at September 30, 2020	98,683,727	4,186,890	94,496,837



	Common Stock		Treasury Stock	Net Shares
Shares at December 31, 2019	100,412,933		3,967,445	96,445,488
Common stock issued, net of shares withheld for employee taxes	898,664		206,243	692,421
Common stock repurchases	(2,690,292	)	—	(2,690,292	)
Shares at March 31, 2020	98,621,305		4,173,688	94,447,617



	March 31, 2020			December 31, 2019
(in millions)	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	93.4		$	27.8
Accounts receivable, net	298.9			453.7
Inventories	291.6			283.3
Other current assets	54.1			41.2
Total current assets	738.0			806.0
Total property, plant and equipment	631.6			651.7
Less: accumulated depreciation	(381.0		)	(384.6		)
Property, plant and equipment, net	250.6			267.1
Right of use asset, leases	92.1			101.9
Deferred income taxes	109.2			119.0
Goodwill	717.7			718.6
Identifiable intangibles, net	725.9			758.6
Other non-current assets	19.7			17.4
Total assets	$	2,653.2		$	2,788.6
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$	15.7		$	3.7
Current portion of long-term debt	51.5			29.5
Accounts payable	185.9			245.7
Accrued compensation	28.3			48.5
Accrued customer program liabilities	64.2			99.7
Lease liabilities	19.9			21.8
Other current liabilities	104.0			139.9
Total current liabilities	469.5			588.8
Long-term debt, net	856.9			777.2
Long-term lease liabilities	81.7			89.8
Deferred income taxes	167.3			177.5
Pension and post-retirement benefit obligations	268.9			283.2
Other non-current liabilities	91.0			98.4
Total liabilities	1,935.3			2,014.9
Stockholders' equity:
Common stock	1.0			1.0
Treasury stock	(39.9		)	(38.2		)
Paid-in capital	1,874.3			1,890.8
Accumulated other comprehensive loss	(545.1		)	(505.7		)
Accumulated deficit	(572.4		)	(574.2		)
Total stockholders' equity	717.9			773.7
Total liabilities and stockholders' equity	$	2,653.2		$	2,788.6


(in millions)	Common Stock		Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Accumulated Deficit		Total
Balance at December 31, 2019	$	1.0	$	1,890.8	$	(505.7)	$	(38.2)	$	(574.2)	$	773.7
Net income	—		—		—		—		8.0		8.0
Gain on derivative financial instruments, net of tax	—		—		2.4		—		—		2.4
Translation impact, net of tax	—		—		(49.7)		—		—		(49.7)
Pension and post-retirement adjustment, net of tax	—		—		7.9		—		—		7.9
Common stock repurchases	—		(18.9)		—		—		—		(18.9)
Stock-based compensation	—		0.9		—		—		—		0.9
Common stock issued, net of shares withheld for employee taxes	—		1.5		—		(1.7)		—		(0.2)
Dividends declared, $.065 per share	—		—		—		—		(6.2)		(6.2)

Balance at March 31, 2020	1.0		1,874.3		(545.1)		(39.9)		(572.4)		717.9
Net income	—		—		—		—		5.4		5.4
Loss on derivative financial instruments, net of tax	—		—		(2.4)		—		—		(2.4)
Translation impact, net of tax	—		—		(7.6)		—		—		(7.6)
Pension and post-retirement adjustment, net of tax	—		—		1.9		—		—		1.9

Stock-based compensation	—		2.6		—		—		(0.1)		2.5

Dividends declared, $.065 per share	—		—		—		—		(6.1)		(6.1)


Balance at June 30, 2020	1.0		1,876.9		(553.2)		(39.9)		(573.2)		711.6
Net income	—		—		—		—		18.8		18.8
Loss on derivative financial instruments, net of tax	—		—		(0.6)		—		—		(0.6)
Translation impact	—		—		3.6		—		—		3.6
Pension and post-retirement adjustment, net of tax	—		—		(4.0)		—		—		(4.0)

Stock-based compensation	—		1.9		—		—		(0.1)		1.8
Common stock issued, net of shares withheld for employee taxes	—		0.1		—		—		—		0.1
Dividends declared, $.065 per share	—		—		—		—		(6.1)		(6.1)


Balance at September 30, 2020	$	1.0	$	1,878.9	$	(554.2)	$	(39.9)	$	(560.6)	725.2


(in millions)	At August 1, 2019
Calculation of Goodwill:
Purchase price, net of working capital adjustment	$	41.5



Plus fair value of liabilities assumed:
Accounts payable and accrued liabilities	13.9
Deferred tax liabilities	5.4
Debt	7.6
Lease liabilities	5.3
Other non-current liabilities	1.5
Fair value of liabilities assumed	$	33.7

Less fair value of assets acquired:
Cash acquired	0
Accounts receivable	17.5
Inventory	12.5
Property and equipment	8.8
Identifiable intangibles	11.1
Deferred tax assets	2.7
Right of use asset, leases	5.3
Other assets	3.6
Fair value of assets acquired	$	61.5

Goodwill	$	13.7


Leverage Ratio	Applicable Rate	Undrawn Fee
> 4.25 to 1.00	2.75%	0.500%
≤ 4.25 to 1.00 and > 4.00 to 1.00	2.50%	0.500%
≤ 4.00 to 1.00 and > 3.50 to 1.00	2.25%	0.375%
≤ 3.50 to 1.00 and > 3.25 to 1.00	2.00%	0.375%
≤ 3.25 to 1.00 and > 3.00 to 1.00	1.75%	0.300%
≤ 3.00 to 1.00 and > 2.00 to 1.00	1.50%	0.250%
≤ 2.00 to 1.00	1.25%	0.200%


	Nine Months Ended September 30,
(in millions, except lease term and discount rate)	2020			2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21.5		$	22.4


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	3.3			25.6


	As of
	September 30, 2020
Weighted average remaining lease term:
Operating leases	6.7 years


Weighted average discount rate:
Operating leases	5.3		%


(in millions)
2020	$	6.1
2021	23.8
2022	19.3
2023	14.7
2024	12.6
2025	9.4
Thereafter	31.6
Total minimum lease payments	117.5

Less imputed interest	21.1
Future minimum payments for leases, net of sublease rental income and imputed interest	$	96.4



(in millions)
2020	$	18.9
2021	22.0
2022	18.0
2023	13.8
2024	11.8
2025	8.8
Thereafter	31.0
Total minimum lease payments	124.3
Less imputed interest	22.7
Future minimum payments for leases, net of sublease rental income and imputed interest	$	101.6


	Three Months Ended September 30,
	Pension								Post-retirement
	U.S.				International
(in millions)	2020		2019		2020		2019		2020		2019
Service cost	$	0.4	$	0.3	$	0.4	$	0.3	$	0	$	0
Interest cost	1.5		1.8		2.4		3.3		0		0.1
Expected return on plan assets	(2.8)		(2.9)		(4.7)		(5.1)		0		0
Amortization of net loss (gain)	0.8		0.6		1.3		0.9		(0.1)		(0.1)
Amortization of prior service cost	0.1		0.1		0.1		0.1		0		0


Net periodic benefit income(1)	$	0	$	(0.1)	$	(0.5)	$	(0.5)	$	(0.1)	$	0

	Nine Months Ended September 30,
	Pension								Post-retirement
	U.S.				International
(in millions)	2020		2019		2020		2019		2020		2019
Service cost	$	1.2	$	1.0	$	1.1	$	0.9	$	0	$	0
Interest cost	4.4		5.5		7.2		10.1		0.1		0.2
Expected return on plan assets	(8.5)		(8.7)		(13.8)		(15.4)		0		0
Amortization of net loss (gain)	2.4		1.6		3.7		2.6		(0.4)		(0.3)
Amortization of prior service cost	0.3		0.3		0.2		0.1		0		0


Net periodic benefit income(1)	$	(0.2)	$	(0.3)	$	(1.6)	$	(1.7)	$	(0.3)	$	(0.1)


~~(1)~~	~~The components, other than service cost, are included in the line "Non-operating pension income" in the Consolidated Statements of Operations.~~


	September 30, 2020
	Unrecognized	Weighted Average
	Compensation	Years Expense To Be
(in millions, except weighted average years)	Expense	Recognized Over
Stock options	$4.1	1.9
RSUs	$6.9	1.9
PSUs	$0.6	2.3



	March 31, 2020
	Unrecognized	Weighted Average
	Compensation	Years Expense To Be
(in millions, except weighted average years)	Expense	Recognized Over
Stock options	$6.9	2.4
RSUs	$9.3	2.3
PSUs	$3.2	2.5


(in millions)	ACCO Brands North America		ACCO Brands EMEA		ACCO Brands International		Total

Balance at December 31, 2019	$	375.6	$	165.7	$	177.3	$	718.6
Acquisitions	0		0		3.9		3.9
Foreign currency translation	0		5.2		(4.3)		0.9
Balance at September 30, 2020	$	375.6	$	170.9	$	176.9	$	723.4


	September 30, 2020							December 31, 2019
(in millions)	Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value
Indefinite-lived intangible assets:
Trade names	$	458.5	$	(44.5)	(1)	$	414.0	$	467.3	$	(44.5)	(1)	$	422.8
Amortizable intangible assets:
Trade names	315.2		(93.3)			221.9		316.7		(83.7)			233.0
Customer and contractual relationships	245.2		(158.3)			86.9		241.0		(142.3)			98.7
Patents	5.8		(1.8)			4.0		5.5		(1.4)			4.1
Subtotal	566.2		(253.4)			312.8		563.2		(227.4)			335.8
Total identifiable intangibles	$	1,024.7	$	(297.9)		$	726.8	$	1,030.5	$	(271.9)		$	758.6


~~(1)~~	~~Accumulated amortization prior to the adoption of authoritative guidance on goodwill and other intangible assets, at which time further amortization ceased.~~


~~(2)~~	Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets and other events.


(in millions)	Balance at December 31, 2019		Provision		Cash Expenditures		Non-cash Items/ Currency Change		Balance at September 30, 2020
Employee termination costs(1)	$	10.7	$	6.7	$	(8.4)	$	(0.1)	$	8.9
Termination of lease agreements(2)	0.6		0.1		(0.5)		0		0.2

Other(3)	0.5		0.5		(0.5)		(0.4)		0.1
Total restructuring liability	$	11.8	$	7.3	$	(9.4)	$	(0.5)	$	9.2


(in millions)	Balance at December 31, 2018		Provision		Cash Expenditures		Non-cash Items/ Currency Change		Balance at September 30, 2019
Employee termination costs	$	7.9	$	4.1	$	(7.2)	$	(0.2)	$	4.6
Termination of lease agreements	1.8		0.1		(1.6)		0		0.3
Other	0		0.6		(0.1)		0		0.5

Total restructuring liability	$	9.7	$	4.8	$	(8.9)	$	(0.2)	$	5.4


	Fair Value of Derivative Instruments
	Derivative Assets					Derivative Liabilities
(in millions)	Balance Sheet Location	September 30, 2020		December 31, 2019		Balance Sheet Location	September 30, 2020		December 31, 2019
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other current assets	$	1.0	$	0.4	Other current liabilities	$	2.1	$	0.9
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other current assets	1.3		7.6		Other current liabilities	1.1		8.6
Foreign exchange contracts	Other non-current assets	19.6		0		Other non-current liabilities	19.6		0
Total derivatives		$	21.9	$	8.0		$	22.8	$	9.5


	The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
	Amount of Gain (Loss) Recognized in AOCI (Effective Portion)				Location of (Gain) Loss Reclassified from AOCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
	Three Months Ended September 30,					Three Months Ended September 30,
(in millions)	2020		2019			2020		2019
Cash flow hedges:
Foreign exchange contracts	$	(2.1)	$	2.7	Cost of products sold	$	1.3	$	(0.7)

	The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
	Amount of Gain (Loss) Recognized in AOCI (Effective Portion)				Location of (Gain) Loss Reclassified from AOCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
	Nine Months Ended September 30,					Nine Months Ended September 30,
(in millions)	2020		2019			2020		2019
Cash flow hedges:
Foreign exchange contracts	$	0.3	$	2.3	Cost of products sold	$	(1.2)	$	(3.6)


		The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements												The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income
		Amount of Gain (Loss) Recognized in AOCI (Effective Portion)				Location of (Gain) Loss Reclassified from AOCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)							Location of (Gain) Loss Recognized in Income on Derivatives	Amount of (Gain) Loss Recognized in Income				Amount of (Gain) Loss Recognized in Income
		Three Months Ended March 31,					Three Months Ended March 31,								Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)		2020		2019			2020			2019			(in millions)		2020		2019		2020		2019
Cash flow hedges:
Foreign exchange contracts	Foreign exchange contracts	$	4.5	$	0.2	Cost of products sold	$	(1.2	)	$	(1.7	)	Foreign exchange contracts	Other expense (income), net	$	2.8	$	(0.2)	$	(2.4)	$	(0.7)



Level 1			Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2			Unadjusted quoted prices in active markets for similar assets or liabilities, or
			Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
			Inputs other than quoted prices that are observable for the asset or liability
Level 3			Unobservable inputs for the asset or liability


(in millions)	Derivative Financial Instruments		Foreign Currency Adjustments		Unrecognized Pension and Other Post-retirement Benefit Costs		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2019	$	(0.2)	$	(299.5)	$	(206.0)	$	(505.7)
Other comprehensive income (loss) before reclassifications, net of tax	0.3		(53.7)		0.9		(52.5)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	(0.9)		0		4.9		4.0
Balance at September 30, 2020	$	(0.8)	$	(353.2)	$	(200.2)	$	(554.2)


~~(1)~~	~~These AOCI components are included in the computation of net periodic benefit cost for pension and post-retirement plans. See "Note 6. Pension and Other Retiree Benefits" for additional details.~~


~~(1)~~	Operating income as presented in the segment table above is defined as i) net sales; ii) less cost of products sold; iii) less selling, general and administrative expenses; iv) less amortization of intangibles; and v) less restructuring charges.



	Three Months Ended March 31, 2020						Amount of Change Compared to the Three Months Ended March 31, 2019
	Net Sales		Segment Operating Income (A)		Segment Operating Income Margin		Net Sales			Net Sales	Segment Operating Income (A)			Segment Operating Income		Margin Points
							Net Sales			Net Sales	Segment Operating Income (A)			Segment Operating Income
(in millions)							$			%	$			%
ACCO Brands North America	$	167.8	$	7.6	4.5	%	$	7.4		4.6%	$	0.8		11.8	%	30
ACCO Brands EMEA	127.5		12.0		9.4	%	(19.0		)	(13.0)%	(3.9		)	(24.5	)%	(150	)
ACCO Brands International	88.8		5.9		6.6	%	1.8			2.1%	0.3			5.4	%	20
Total	$	384.1	$	25.5			$	(9.8	)		$	(2.8	)

	Three Months Ended March 31, 2019
	Net Sales		Segment Operating Income (A)		Segment Operating Income Margin

(in millions)
ACCO Brands North America	$	160.4	$	6.8	4.2	%
ACCO Brands EMEA	146.5		15.9		10.9	%
ACCO Brands International	87.0		5.6		6.4	%
Total	$	393.9	$	28.3


	Nine Months Ended				Amount of Change
(in millions)	September 30, 2020		September 30, 2019
Accounts receivable	$	78.7	$	54.0	$	24.7
Inventories	(28.4)		34.8		(63.2)
Accounts payable	(67.1)		(102.1)		35.0
Cash flow used by net working capital	$	(16.8)	$	(13.3)	$	(3.5)



	Three Months Ended						Amount of Change
(in millions)	March 31, 2020			March 31, 2019			Amount of Change
Accounts receivable	$	112.0		$	108.1		$	3.9
Inventories	(26.2		)	(57.3		)	31.1
Accounts payable	(45.2		)	(79.9		)	34.7
Cash flow provided (used) by net working capital	$	40.6		$	(29.1	)	$	69.7


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1)
July 1, 2020 to July 31, 2020	—	$	—	—	$	125,045,248
August 1, 2020 to August 31, 2020	—	—		—	125,045,248
September 1, 2020 to September 30, 2020	—	—		—	125,045,248
Total	—	$	—	—	$	125,045,248


~~10.1~~	~~2019 ACCO Brands Corporation Incentive Plan Nonqualified Stock Option Agreement~~*


~~10.2~~	~~2019 ACCO Brands Corporation Incentive Plan Nonqualified Stock Option Agreement - Non-U.S. Employees~~*