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.

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 ~~October 31, 2022,~~April 27, 2023, the registrant had outstanding ~~94,260,926~~94,917,374 shares of Common Stock.

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.

Some of the factors that could affect our results or cause our plans, actions and results to differ materially from those expressed in the forward-looking statements contained in this Quarterly Report on Form 10-Q 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, ~~2021,~~2022, as well as in "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" and ~~"Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q and~~ from time to time in our other Securities and Exchange Commission (the "SEC") filings.

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.

As of ~~September 30, 2022,~~March 31, 2023, there was $~~173.9~~168.5 million in borrowings outstanding under the Revolving Facility. The remaining amount available for borrowings was $~~417.1~~419.6 million (allowing for $~~9.0~~11.9 million of letters of credit outstanding on that date).

As of ~~September 30, 2022,~~March 31, 2023, our Consolidated Leverage Ratio was approximately ~~3.91~~4.30 to 1.00 versus our maximum covenant of ~~4.00~~5.00 to 1.00.

Effective November 7, 2022, we entered into an amendment to our bank credit agreement, which increases our maximum Consolidated Leverage Ratio financial covenant, beginning with the fourth quarter of 2022 through December 2023 and the first and second quarters of each year thereafter, and favorably amends several other items.

On March 15, 2021, the Company completed a private offering of $575.0 million in aggregate principal amount of 4.25 percent Senior Unsecured Notes (the "Notes") due March 2029. Interest on the Notes is payable semiannually on March 15 and September 15 of each year. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of the Company's existing and future U.S. subsidiaries, other than certain excluded subsidiaries.

Generally, obligations under the Credit Agreement are guaranteed by certain of the Company’s existing and future subsidiaries, and are secured by substantially all of the Company’s and certain guarantor subsidiaries’ assets, subject to certain exclusions and limitations.

~~9. Restructuring~~

~~The Company recorded $2.3~~ ~~million and $4.2~~ ~~million of restructuring expense for the nine months ended September 30, 2022 and 2021, respectively. Restructuring expense for the three months ended September 30, 2022 and 2021 was $0.1~~ ~~million and $0.3~~ ~~million, respectively. Restructuring expenses were primarily for severance costs related to cost reduction initiatives in our North America and EMEA segments.~~

1715

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

9. Restructuring

The Company recorded $3.3 million and $0.3 million of restructuring expense for the three months ended March 31, 2023 and 2022, respectively. Restructuring expenses for the three months ended March 31, 2023, were primarily for severance costs related to cost reduction initiatives in our EMEA and International segments.

The summary of the activity in the restructuring liability for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, was as follows:


		Balance at						Non-cash Items /		Balance at		Balance at						Non-cash Items /		Balance at
(in millions)		December 31, 2021		Provision		Cash Expenditures		Currency Change		September 30, 2022		December 31, 2022		Provision		Cash Expenditures		Currency Change		March 31, 2023
Employee termination costs(1)	$	3.4	$	1.9	$	(3.4)	$	(0.2)	$	1.7	$	8.7	$	2.7	$	(2.6)	$	0.1	$	8.9
Termination of lease agreements(2)		1.1		—		(0.9)		—		0.2
Other		—		0.4		(0.4)		—		—
Other(2)												—		0.6		—		—		0.6
Total restructuring liability	$	4.5	$	2.3	$	(4.7)	$	(0.2)	$	1.9	$	8.7	$	3.3	$	(2.6)	$	0.1	$	9.5

(1)

We expect the remaining $~~1.7~~8.9 million employee termination costs to be substantially paid in the next ~~nine~~twelve months.

(2)

We expect the remaining $~~0.2~~0.6 million ~~lease termination~~of other costs to be substantially paid in the next ~~three~~twelve months.

The summary of the activity in the restructuring liability for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, was as follows:


		Balance at						Non-cash Items /		Balance at		Balance at						Non-cash Items /		Balance at
(in millions)		December 31, 2020		Provision		Cash Expenditures		Currency Change		September 30, 2021		December 31, 2021		Provision		Cash Expenditures		Currency Change		March 31, 2022
Employee termination costs	$	8.1	$	3.8	$	(8.0)	$	(0.1)	$	3.8	$	3.4	$	0.3	$	(1.0)	$	—	$	2.7
Termination of lease agreements		1.0		0.3		(0.9)		0.6		1.0		1.1		—		(0.6)		—		0.5
Other		0.2		0.1		(0.2)		(0.1)		—
Total restructuring liability	$	9.3	$	4.2	$	(9.1)	$	0.4	$	4.8	$	4.5	$	0.3	$	(1.6)	$	—	$	3.2

10. Income Taxes

For the three months ended ~~September 30,~~March 31, 2023, we recorded income tax expense of $0.4 million on a loss before taxes of $3.3 million. For the three months ended March 31, 2022, we recorded income tax expense of $~~4.1~~1.7 million on a loss before taxes of $~~64.6~~ ~~million. This reflects no income tax benefit on the non-deductible goodwill impairment charge of $98.7~~ ~~million. For the three months ended September 30, 2021, we recorded income tax expense of $10.0~~ ~~million on income before taxes of $30.2~~1.0 million. The $~~5.9~~1.3 million decrease in tax expense compared to the ~~prior year period~~three months ended March 31, 2022 was primarily driven by ~~the release of non-U.S. reserves for unrecognized tax benefits for which the time to assess has lapsed and by the merger of our Brazilian entities.~~a $

1.2

~~For the nine months ended September 30, 2022, we recorded~~ million decrease in discrete income tax expense during the first quarter of $~~18.2~~ ~~million on loss before taxes of $13.8~~ ~~million. For the nine months ended September 30, 2021, we recorded an income tax expense of $5.8~~ ~~million on income before taxes of $54.2~~ ~~million. The $12.4~~ ~~million increase in tax expense~~2023 compared to the ~~prior year period was driven by the tax benefit associated with the revaluation~~first quarter of ~~deferred tax assets due to changes in the enacted statutory rates which was recorded in the prior year, and the increase in income before taxes, prior to the goodwill impairment of $98.7~~ ~~million, during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.~~2022.

The U.S. federal statute of limitations remains open for the years ~~2018~~2019 and forward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 2 to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include Australia (~~2017~~2018 forward), Brazil (~~2015~~2016 forward), Canada (~~2017~~2018 forward), Germany (~~2016~~2017 forward), Sweden (~~2016~~2017 forward) and the U.K. (~~2019~~2020 forward). We are currently under examination in certain foreign jurisdictions.

Brazil Tax Assessments

In connection with our May 1, 2012, acquisition of the Mead Consumer and Office Products business ("Mead C&OP"), we assumed all of the tax liabilities for the acquired foreign operations including ~~Tilibra Produtos de Papelaria Ltda.~~its operating entity in Brazil ("~~Tilibra"~~ACCO Brazil"). In December of 2012, the Federal Revenue Department of the Ministry of Finance of Brazil ("FRD") issued a tax assessment against

ACCO ~~Brands Corporation and Subsidiaries~~

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

~~Tilibra,~~Brazil, challenging the tax deduction of goodwill from ~~Tilibra's~~ACCO Brazil's taxable income for the year 2007 (the "First Assessment"). A second assessment challenging the deduction of goodwill from ~~Tilibra's~~ACCO Brazil's taxable income for the years 2008, 2009 and 2010 was issued by FRD in October 2013 (the "Second Assessment" and together with the First Assessment, the "Brazil Tax Assessments").

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

The final administrative appeal of the Second Assessment was decided against the Company in 2017. In 2018, we challenged this decision to the first judicial level. In the fourth quarter of 2022, this case was decided against the Company by the first level judicial court. We have appealed this decision to the second judicial level. In the event we do not prevail at the judicial level, we will be required to pay an additional penalty representing attorneys' costs and fees; accordingly, in the first quarter of 2019, the Company recorded an additional reserve in the amount of $5.6 million. In connection with the judicial challenge, we were required to provide security to guarantee payment of the Second Assessment should we not prevail.

In the third quarter of 2020, the final administrative appeal of the First Assessment was decided against the Company and we determined that we would challenge this decision. In 2022, we challenged this adverse decision in the tax authority's lawsuit at the judicial level seeking to collect the tax. In connection with the judicial challenge, we were required to provide security to guarantee payment of the First Assessment should we not prevail.

We believe we have meritorious defenses and intend to vigorously contest both of the Brazil Tax Assessments; however, there can be no assurances that we will ultimately prevail. The ultimate outcome will not be determined until the Brazilian judicial process is ~~complete, which~~complete. It is ~~expected~~possible we could have a final decision regarding the Second Assessment in the next nine months to ~~take a number of~~three years. If the FRD's initial position is ultimately sustained, payment of the amount assessed would materially and adversely affect our cash flow in the year of settlement.

Because there is no settled legal precedent on which to base a definitive opinion as to whether we will ultimately prevail, we consider the outcome of these disputes to be uncertain. Since it is not more likely than not that we will prevail, in 2012, we recorded a reserve in the amount of $44.5 million (at December 31, 2012 exchange rates) in consideration of this contingency, of which $43.3 million was recorded as an adjustment to the purchase price and which included the 2007-2012 tax years plus penalties and interest through December 2012. Because the Brazilian courts have determined that we will have to pay the standard penalty of 75 percent if we do not prevail, we have used this assumption in the reserve calculation. We will continue to actively monitor administrative and judicial court decisions and evaluate their impact, if any, on our legal assessment of the ultimate outcome of our disputes. In addition, we will continue to accrue interest related to this contingency until such time as the outcome is known or until evidence is presented that we are more likely than not to prevail. During the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ we accrued additional interest as a charge to current income tax expense of $~~1.4~~0.4 million and $~~0.4~~0.3 million, respectively. At current exchange rates, our accrual through ~~September 30, 2022,~~March 31, 2023, including tax, penalties and interest is $~~29.3~~32.0 million (reported in "Other non-current liabilities").

11. Earnings per Share

Total outstanding shares as of ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ were ~~94.3~~94.9 million and ~~95.7~~96.8 million, respectively. ~~Under our stock repurchase program, during each of~~For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~we repurchased and retired~~ ~~zero~~ ~~and~~ ~~2.7~~ ~~million shares, respectively, and during each of the three and nine months ended September 30, 2021, we repurchased and retired~~ ~~zero~~ ~~shares. For the nine months ended September 30, 2022 and 2021,~~ we acquired 0.3 million and ~~0.1~~0.2 million shares, respectively, related to tax withholding for share-based compensation.

The calculation of basic earnings per share of common stock is based on the weighted-average number of shares of common stock outstanding in the year, or period, over which they were outstanding. Our calculation of diluted earnings per share of common stock assumes that any shares of common stock outstanding were increased by shares that would be issued upon exercise of those stock awards for which the average market price for the period exceeds the exercise price less the shares that could have been purchased by the Company with the related proceeds, including compensation expense measured but not yet recognized.

1917

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

The number of our weighted-average shares outstanding for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was as follows:


	Three months ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in millions)	2022		2021		2022		2021		2023		2022
Weighted-average number of shares of common stock outstanding - basic		94.5		95.6		95.6		95.4		94.9		96.2
Stock options		—		0.2		—		0.1		—		—
Restricted stock units		—		1.5		—		1.5		—		—
Weighted-average shares and assumed conversions - diluted (1)		94.5		97.3		95.6		97.0		94.9		96.2

(1)

Due to the net loss during the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, the denominator in the diluted earnings per share calculation does not include the effects of the stock awards for which the average market price for the period exceeds the exercise price, as it would result in a less dilutive computation. As a result, reporting diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are the same as basic earnings per share.

Awards of potentially dilutive shares of common stock, which have exercise prices that were higher than the average market price during the period, are not included in the computation of dilutive earnings per share as their effect would have been anti-dilutive. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 the number of anti-dilutive shares was approximately ~~10.1~~11.5 million and ~~9.0~~9.3 million, respectively. ~~For each of the three and nine months ended September 30, 2021, the number of anti-dilutive shares was approximately~~ ~~8.0~~ ~~million.~~

12. Derivative Financial Instruments

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions. We continually monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments.

When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis.

Forward Currency Contracts

We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. Our primary exposure to currency movements is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso.

Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada, Japan and New Zealand, and are designated as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated Other Comprehensive Income ("AOCI") until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the Consolidated Statements of Operations. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, we had cash flow foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $82.2 million and $108.3 million, respectively, which were designated as hedges.

2018

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $123.1~~ ~~million and $130.6~~ ~~million, respectively, which were designated as hedges.~~

Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other expense (income), net" in the Consolidated Statements of Operations and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, with some relating to intercompany loans which extend beyond ~~September 2023.~~March 2024. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, we had foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $~~118.7~~95.1 million and $~~84.2~~79.5 million, respectively, which were not designated as hedges.

The following table summarizes the fair value of our derivative financial instruments as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


	Fair Value of Derivative Instruments														Fair Value of Derivative Instruments
	Derivative Assets							Derivative Liabilities							Derivative Assets							Derivative Liabilities
(in millions)	Balance Sheet Location		September 30, 2022			December 31, 2021		Balance Sheet Location		September 30, 2022			December 31, 2021		Balance Sheet Location		March 31, 2023			December 31, 2022		Balance Sheet Location		March 31, 2023			December 31, 2022
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other current assets	$		11.7	$		5.6	Other current liabilities	$		—	$		0.1	Other current assets	$		1.7	$		3.6	Other current liabilities	$		1.1	$		1.9
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other current assets			0.7			0.7	Other current liabilities			1.5			0.6	Other current assets			0.4			0.7	Other current liabilities			0.6			0.7
Foreign exchange contracts	Other non-current assets			23.2			10.2	Other non-current liabilities			23.2			10.2	Other non-current assets			0.2			4.9	Other non-current liabilities			0.2			4.9
Total derivatives		$		35.6	$		16.5		$		24.7	$		10.9		$		2.3	$		9.2		$		1.9	$		7.5

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following tables summarize the pre-tax effect of our derivative financial instruments on the condensed consolidated financial statements for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements															The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the 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)								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,								Three Months Ended March 31,									Three Months Ended March 31,
(in millions)		2022			2021				2022				2021				2023				2022					2023				2022
Cash flow hedges:
Foreign exchange contracts	$		5.7	$		3.9	Cost of products sold	$		(4.3	)	$		(0.5	)	$		(0.6	)	$		(0.2	)	Cost of products sold	$		(0.5	)	$		(2.4	)

The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the 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)

2022

2021

2022

2021

Cash flow hedges:

Foreign exchange contracts

$

14.8

$

7.3

Cost of products sold
$

(10.1
)
$

2.3

~~ACCO Brands Corporation and Subsidiaries~~

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


	The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations															The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of (Loss) Income
	Location of (Gain) Loss Recognized in Income on Derivatives		Amount of (Gain) Loss Recognized in Income							Amount of (Gain) Loss Recognized in Income						Location of (Gain) Loss Recognized in Income on Derivatives		Amount of (Gain) Loss Recognized in Income
			Three months ended September 30,							Nine Months Ended September 30,								Three Months Ended March 31,
(in millions)			2022				2021			2022				2021				2023			2022
Foreign exchange contracts	Other expense, net	$		(2.6	)	$		0.3	$		(6.3	)	$		0.3	Other expense, net	$		1.7	$		(0.6	)

13. Fair Value of Financial Instruments

In establishing a fair value, there is a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The basis of the fair value measurement is categorized in three levels, in order of priority, as described below:


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

We utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

We have determined that our financial assets and liabilities described in "Note 12. Derivative Financial Instruments" are Level 2 in the fair value hierarchy. The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


(in millions)		September 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
Assets:
Forward currency contracts	$		35.6	$		16.5	$		2.3	$		9.2
Liabilities:
Forward currency contracts	$		24.7	$		10.9	$		1.9	$		7.5

Our forward currency contracts are included in "Other current assets," "Other current liabilities," "Other non-current assets," or "Other non-current liabilities." The forward foreign currency exchange contracts are primarily valued based on the foreign currency spot and forward rates quoted by banks or foreign currency dealers. As such, these derivative instruments are classified within Level 2.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

The fair values of cash and cash equivalents, notes payable to banks, accounts receivable and accounts payable approximate carrying amounts due principally to their short maturities. The carrying amount of total debt was $~~1,082.0~~1,099.4 million and $~~1,006.7~~1,004.9 million and the estimated fair value of total debt was $~~938.2~~1,001.6 million and $~~1,002.3~~910.0 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The fair values are determined from quoted market prices, where available, and from using current interest rates based on credit ratings and the remaining terms of maturity.

~~Contingent consideration:~~ ~~The PowerA acquisition included an earnout of up to $55.0~~ million in cash, contingent upon PowerA achieving one- and two-year sales and profit growth objectives. Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred in the related business combination and subsequent changes in fair value recorded in operating income on the condensed consolidated statements of income.Nonrecurring Fair Value Measurements

~~ACCO Brands Corporation and Subsidiaries~~

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

~~We use~~On a Monte Carlo simulation model for contingent earnout payments, which are then discounted to present value. We classify the contingent consideration liabilities as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes. There have been no transfers of assets or liabilities into or out of Level 3 ofnonrecurring basis, we remeasure the fair value ~~hierarchy.~~

~~The following table provides a reconciliation~~ of the ~~beginning~~goodwill of our reporting units and ~~ending balance~~our trade name indefinite-lived intangibles if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. The fair value of ~~the contingent consideration~~our reporting units and trade names are considered Level 3 measurements. Level 3 measurements require significant unobservable inputs that are reflected in our assumptions. See "Note 8. Goodwill and Identifiable Intangible Assets" for ~~the nine months ended September 30, 2022:~~more information on those assumptions.


~~(in millions)~~		~~Contingent Consideration~~
~~Balance at December 31, 2021~~	$		~~36.8~~
~~Change in fair value~~			(~~9.0~~	)
~~Other(1)~~			(~~0.8~~	)
~~Payments~~			(~~27.0~~	)
~~Balance at September 30, 2022~~	$		—

~~(1)~~

During the third quarter we reached an agreement with the former owner of the Lucid Sound business to settle the Lucid Sound contingent earnout liability which we assumed in the PowerA acquisition. This settlement was included in other current liabilities and will be paid during the fourth quarter of 2022.

14. Accumulated Other Comprehensive Income (Loss)

AOCI is defined as net income (loss) and other changes in stockholders’ equity from transactions and other events from sources other than stockholders. The components of, and changes in, AOCI were as follows:

(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, 2021
$

4.0

$

(342.2
)
$

(197.3
)
$

(535.5
)
Other comprehensive income (loss) before reclassifications, net of tax

10.5

(50.0
)

21.5

(18.0
)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax

(7.1
)

—

5.0

(2.1
)
Balance at September 30, 2022
$

7.4

$

(392.2
)
$

(170.8
)
$

(555.6
)

~~ACCO Brands Corporation and Subsidiaries~~

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


(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, 2022	$	1.1	$	(380.1)	$	(161.3)	$	(540.3)
Other comprehensive income (loss) before reclassifications, net of tax		(0.5)		8.9		(2.6)		5.8
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		(0.4)		—		1.1		0.7
Balance at March 31, 2023	$	0.2	$	(371.2)	$	(162.8)	$	(533.8)

The reclassifications out of AOCI for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were as follows:


		Three months ended September 30,								Nine Months Ended September 30,
(in millions)		2022				2021				2022				2021					2023		2022
Details about Accumulated Other Comprehensive Income (Loss) Components		Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Amount Reclassified from Accumulated Other Comprehensive Income (Loss)							Location on Income Statement		Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Location on Income Statement
Gain (loss) on cash flow hedges:
Foreign exchange contracts	$		4.3		$		0.5		$		10.1		$		(2.3	)	Cost of products sold	$	0.5	$	2.4	Cost of products sold
Tax (expense) benefit			(1.2	)			(0.2	)			(3.0	)			0.6		Income tax expense
Tax expense																			(0.1)		(0.7)	Income tax expense
Net of tax	$		3.1		$		0.3		$		7.1		$		(1.7	)		$	0.4	$	1.7
Defined benefit plan items:
Amortization of actuarial loss	$		(2.0	)	$		(2.5	)	$		(6.3	)	$		(7.7	)	(1)	$	(1.5)	$	(2.2)	(1)
Amortization of prior service cost			(0.1	)			(0.1	)			(0.2	)			(1.7	)	(1)		(0.1)		—	(1)
Total before tax			(2.1	)			(2.6	)			(6.5	)			(9.4	)			(1.6)		(2.2)
Tax benefit			0.5				0.7				1.5				2.3		Income tax expense		0.5		0.5	Income tax expense
Net of tax	$		(1.6	)	$		(1.9	)	$		(5.0	)	$		(7.1	)		$	(1.1)	$	(1.7)

Total reclassifications for the period, net of tax	$		1.5		$		(1.6	)	$		2.1		$		(8.8	)		$	(0.7)	$	—

(1)

These AOCI components are included in the computation of net periodic benefit (income) cost for pension and post-retirement plans. See "Note 5. Pension and Other Retiree Benefits" for additional details.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

15. Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount reflective of the consideration we expect to receive in exchange for those goods or services. Taxes we collect concurrent with revenue producing activities are excluded from revenue. Incidental items incurred that are immaterial in the context of the contract are expensed.

At the inception of each contract, the Company assesses the products and services promised and identifies each distinct performance obligation. To identify the performance obligations, the Company considers all products and services promised regardless of whether they are explicitly stated or implied within the contract or by standard business practices.

Freight and distribution activities performed before the customer obtains control of the goods are not considered promised services under customer contracts and therefore are not distinct performance obligations. The Company has chosen to account for shipping and handling activities as a fulfillment activity, and therefore accrues the expense of freight and distribution in "Cost of products sold" when products are shipped.

Service or Extended Maintenance Agreements ("EMAs"). As of December 31, ~~2021,~~2022, there was $~~2.4~~2.8 million of unearned revenue associated with outstanding EMAs, primarily reported in "Other current liabilities." During the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, $~~1.4~~ ~~million and $1.8~~1.2 million of the unearned revenue was earned and ~~recognized, respectively.~~recognized. As of ~~September 30, 2022,~~March 31, 2023, the amount of unearned revenue from EMAs was $~~3.0~~2.8 million. We expect to earn and recognize approximately $~~2.5~~2.4 million of the unearned amount in the next 12 months and $~~0.5~~0.4 million in periods beyond the next 12 months.

~~ACCO Brands Corporation and Subsidiaries~~

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

The following tables present our net sales disaggregated by regional geography(1), by reporting business segments and our net sales disaggregated by the timing of revenue recognition for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		Three months ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in millions)		2022			2021			2022			2021			2023			2022
United States	$		221.8	$		253.9	$		684.7	$		685.5	$		155.1	$		188.5
Canada			35.4			33.6			87.6			85.9			21.6			20.0
ACCO Brands North America			257.2			287.5			772.3			771.4			176.7			208.5

ACCO Brands EMEA(2)			130.3			161.1			424.3			475.0			135.8			156.1

Australia/N.Z.			32.8			35.3			89.0			96.8			28.3			30.0
Latin America			53.6			30.8			124.5			72.2			52.4			34.4
Asia-Pacific			11.7			12.0			38.1			39.6			9.4			12.6
ACCO Brands International			98.1			78.1			251.6			208.6			90.1			77.0
Net sales	$		485.6	$		526.7	$		1,448.2	$		1,455.0	$		402.6	$		441.6

(1) Net sales are attributed to geographic areas based on the location of the selling subsidiaries.

(2) ACCO Brands EMEA is comprised largely of Europe, but also includes export sales to the Middle East and Africa.


		Three months ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in millions)		2022			2021			2022			2021			2023			2022
Product and services transferred at a point in time	$		473.6	$		515.4	$		1,411.3	$		1,416.0	$		390.3	$		429.3
Product and services transferred over time			12.0			11.3			36.9			39.0			12.3			12.3
Net sales	$		485.6	$		526.7	$		1,448.2	$		1,455.0	$		402.6	$		441.6

2522

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

16. Information on Business Segments

The Company has three operating business segments, each of which is comprised of different geographic regions. The Company's three segments are as follows:


Operating Segment	Geography	Primary Brands	Primary Products
ACCO Brands North America	United States and Canada	PowerA®, Five Star®, AT-A-GLANCE®, Quartet®, Kensington®, Swingline®, GBC®, Mead®, Hilroy®	Computer and gaming accessories, school products, planners, storage and organization, dry erase boards and accessories, laminating, stapling and punching products.

ACCO Brands EMEA	Europe, Middle East and Africa	Leitz®, Rapid®, Kensington®, Esselte®, Rexel®, PowerA®, GBC®, NOBO®, Derwent®	Storage and organization products (lever-arch binders, sheet protectors, indexes), computer and gaming accessories, stapling, punching, shredding, laminating, do-it-yourself tools, dry erase boards and writing and art products.

ACCO Brands International	Australia/N.Z., Latin America and Asia-Pacific	Tilibra®, GBC®, Kensington®, Marbig®, Foroni®, Barrilito®, Artline®, PowerA®, Spirax® Australia/N.Z. only	School notebooks, storage and organization products (binders, sheet protectors and indexes), computer and gaming accessories, laminating, shredding, writing and arts products, janitorial supplies, dry erase boards, and stapling and punching products.

Customers

We distribute our products through a wide variety of 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, technology distributors, discount, drug/grocery and variety chains, warehouse clubs, hardware and specialty stores, independent office product dealers, office superstores, wholesalers, contract ~~stationers, and specialist technology businesses.~~stationers. We also sell directly through e-commerce sites and our direct sales organization.

Net sales by reportable business segment for the three months ended March 31, 2023 and 2022 were as follows:


(in millions)		2023			2022
ACCO Brands North America	$		176.7	$		208.5
ACCO Brands EMEA			135.8			156.1
ACCO Brands International			90.1			77.0
Net sales	$		402.6	$		441.6

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~Net sales by reportable business segment for the three and nine months ended September 30, 2022 and 2021 were as follows:~~

Three Months Ended September 30,

Nine Months Ended September 30,

(in millions)

2022

2021

2022

2021

ACCO Brands North America
$

257.2

$

287.5

$

772.3

$

771.4

ACCO Brands EMEA

130.3

161.1

424.3

475.0

ACCO Brands International

98.1

78.1

251.6

208.6

Net sales
$

485.6

$

526.7

$

1,448.2

$

1,455.0

Operating income ~~(loss)~~ by business segment for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was as follows:


		Three Months Ended September 30,								Nine Months Ended September 30,
(in millions)		2022				2021				2022				2021				2023				2022
ACCO Brands North America	$		(78.4	)	$		34.6		$		(13.8	)	$		87.7		$		5.2		$		13.9
ACCO Brands EMEA			4.9				13.4				9.0				40.1				7.8				5.6
ACCO Brands International			17.3				7.3				27.8				10.7				9.0				4.2
Segment Operating (loss) income			(56.2	)			55.3				23.0				138.5
Segment operating income																			22.0				23.7
Change in fair value of contingent consideration			2.2				(4.9	)			9.0				(16.5	)			—				(2.6	)
Corporate			(9.0	)			(11.8	)			(32.8	)			(34.6	)			(11.9	)			(14.3	)
Operating (loss) income⁽¹⁾			(63.0	)			38.6				(0.8	)			87.4
Operating income(1)																			10.1				6.8
Interest expense			12.1				11.2				32.6				36.0				13.9				9.7
Interest income			(2.6	)			(0.6	)			(6.2	)			(1.2	)			(2.4	)			(1.4	)
Non-operating pension income			(0.5	)			(2.3	)			(3.2	)			(5.6	)
Other (income) expense, net			(7.4	)			0.1				(10.2	)			4.0
(Loss) income before income tax	$		(64.6	)	$		30.2		$		(13.8	)	$		54.2
Non-operating pension expense (income)																			0.1				(1.4	)
Other expense, net																			1.8				0.9
Loss before income tax																	$		(3.3	)	$		(1.0	)

(1)

Operating income ~~(loss)~~ is defined as i) net sales; ii) less cost of products sold; iii) less selling, general and administrative expenses; iv) less amortization of intangibles; v) less restructuring charges; and vi) less change in the fair value of contingent consideration.

17. Commitments and Contingencies

Pending Litigation - Brazil Tax Assessments

In connection with our May 1, 2012, acquisition of the Mead C&OP business, we assumed all of the tax liabilities for the acquired foreign operations including ~~Tilibra.~~ACCO Brazil. For further information, see "Note 10. Income Taxes - Brazil Tax Assessments" for details on tax assessments issued by the FRD against ~~Tilibra~~ACCO Brazil challenging the tax deduction of goodwill from ~~Tilibra's~~ACCO Brazil's taxable income for the years 2007 through 2010. If the FRD's initial position is ultimately sustained, payment of the amount assessed would materially and adversely affect our cash flow in the year of settlement.

Brazil Tax Credits

In May 2021, the Supreme Court of Brazil issued its final ruling in a leading case related to the computation of certain indirect taxes which provides that the indirect tax base should not include the gross amount of the value-added tax known as “ICMS.” The Supreme Court further ruled that taxpayers can recognize future operating credits ("Tax Credits") for excess indirect tax payments from past periods due to the inclusion of ICMS in the indirect tax base to the extent the taxpayer had filed judicial

~~ACCO Brands Corporation and Subsidiaries~~

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

challenges seeking to recover excess tax payments prior to March 15, 2017 and for any excess tax payments made after March 15, 2017.

~~Tilibra~~ACCO Brazil filed legal actions requesting recovery of these excess tax payments by way of future Tax Credits covering various time periods prior to March 15, 2017. Some of these cases have been finally decided in a court of law in favor of ~~Tilibra,~~ACCO Brazil, while others are still pending. Finalization of the remaining legal actions ~~Tilibra~~ACCO Brazil has filed will result in additional Tax Credits of approximately $3.0 million. The Tax Credits will be utilized against future tax obligations.

Indústria Gráfica Foroni Ltda. ("Foroni"), in years prior to its acquisition by ~~Tilibra,~~ACCO Brazil, also filed a legal action in Brazil to recover these excess indirect tax payments and this legal action has been finalized. We are required under the quota purchase

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

agreement to remit any recovered tax credits, less the applicable tax, to the former owners of Foroni to the extent they relate to a tax period prior to the acquisition date.

~~For the nine months ended September 30, 2022, we recorded Tax Credits of $11.1~~ million, which is included in “Other (income) expense, net", on our Consolidated Statements of Income. Finalizing the remaining legal actions Tilibra has filed will likely result in additional Tax Credits at some time in the future. The Tax Credits will be utilized against future tax obligations.

Other Pending Litigation

We are party to various lawsuits and regulatory proceedings, primarily related to alleged patent infringement, as well as other claims incidental to our business. In addition, we may be unaware of third-party claims of intellectual property infringement relating to our technology, brands, or products, and we may face other claims related to business operations. Any litigation regarding patents or other intellectual property could be costly and time-consuming and might require us to pay monetary damages or enter into costly license agreements. We also may be subject to injunctions against development and sale of certain of our products.

It is the opinion of management that (other than the Brazil Tax Assessments) the ultimate resolution of currently outstanding matters will not have a material adverse effect on our financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition or cash flow. Further, future claims, lawsuits and legal proceedings could materially and adversely affect our business, reputation, results of operations and financial condition.

2825

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 ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ 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 is a leading global consumer, technology and business branded products company, providing well-known brands and innovative product solutions used in schools, homes and at work. Recently we have successfully increased the mix of our sales to higher growth product categories and sales channels, including retail and mass merchants, e-tailers, and technology specialists. We have an experienced management team with a proven ability to grow brands, integrate acquisitions, manage seasonal businesses, run lean organizations and navigate challenging environments. Our products are sold primarily in the U.S., Europe, Australia, Canada, Brazil and Mexico.

ACCO Brands has three operating business segments based in different geographic regions: North America, EMEA, and International. Each business segment designs, markets, sources, manufactures, and ~~markets well-recognized~~sells recognized consumer, ~~school,~~ technology and ~~office products. Our widely known brands include AT-A-GLANCE~~®~~, Barrilito~~®~~, Derwent~~®~~, Esselte~~®~~, Five Star~~®~~, Foroni~~®~~, GBC~~®~~, Hilroy~~®~~, Kensington~~®~~, Leitz~~®~~, Marbig~~®~~, Mead~~®~~, NOBO~~®~~, PowerA~~®~~, Quartet~~®~~, Rapid~~®~~, Rexel~~®~~, Swingline~~®~~, Tilibra~~®,business branded products used in schools, homes and ~~TruSens~~®~~. Approximately 70 percent of our 2021 net sales come from brands that occupy the No. 1 or No. 2 position~~at work. Product designs are tailored to end-user preferences in ~~the~~each geographic region, and where possible, leverage common engineering, design, and sourcing.

Our product categories ~~in which we compete. Our top 12 brands represented $1.5 billion of our 2021 net sales.~~include gaming and computer accessories; storage and organization; notebooks; shredding; laminating and binding machines; stapling; punching; planners; dry erase boards; and do-it-yourself tools, among others. We distribute our products through a wide variety of 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, technology distributors, discount, drug/grocery and variety ~~chains;~~chains, warehouse ~~clubs;~~clubs, hardware and specialty ~~stores;~~stores, independent office product ~~dealers;~~dealers, office ~~superstores; wholesalers;~~superstores, wholesalers, and contract ~~stationers; technology specialty businesses; and our direct-to-consumer channel. Our products are sold primarily in the U.S., Europe, Australia, Canada, Brazil and Mexico.~~stationers.

We have transformed our business by investing in innovative branded consumer and technology products for use in businesses, schools, and homes, both organically and through acquisitions. This change should enable us to continue to organically grow sales and increase profitability by focusing our selling efforts on growing channels, as well as strategically managing declining customers and commoditized product categories, which remain important profit and cash generators. Our top five customers represented 36 percent of our sales in 2021.

~~Our business is consumer- and brand-centric, product differentiated, and geographically diverse. ACCO Brands remains a leading supplier of school products, including our top-selling Five Star~~® ~~line of school notebooks in North America, laminating machines, and stapling and punching products, among others.~~

We have made five major acquisitions over the past six years. 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. We believe that these acquisitions have cumulatively set us up to achieve organic growth in the long-term. Historically, our approach to acquisitions has focused on consolidation and geographic expansion opportunities that met our strategic and financial criteria. Strategically, we have targeted categories or geographies that provided opportunities for growth, leading brands, and channel diversity. More recently we have prioritized debt reduction, but will still consider opportunistic acquisitions that focus on growing product categories, including adjacencies.

Our most recent acquisition of PowerA in late 2020 allowed us to enter the attractive product category of third-party video gaming accessories, including controllers, power charging stations, and headsets. The addition of PowerA has meaningfully improved ACCO Brands' potential for sustained organic sales growth and profitability and reinforced our presence in the faster growing mass and e-commerce channels. The Company plans to expand this business internationally, particularly in Europe and Asia, adding to organic growth over the longer term. PowerA® ~~and Kensington~~® ~~are our largest and fastest growing brands.~~

Our leading product category positions provide the scale to invest in marketing and product innovation to drive sustainable profitable growth. We expect to grow in mature markets in the gaming, technology, and branded school and office categories. We also anticipate ongoing sales recovery as the level of office use and in person education continues to increase globally.

We generate strong operating cash flow and will continue to leverage our cost structure through acquisitions, synergies and productivity savings to drive long-term profit and operating cash flow improvement.

Overview of Performance

During the ~~third~~first quarter, our net sales decreased ~~$41.1~~$39.0 million, or ~~7.8~~8.8 percent, including ~~5.7~~2.4 percent from adverse foreign ~~exchange.~~exchange, compared with the prior year's first quarter. Comparable net sales decreased ~~2.1~~6.4 percent. Price increases added ~~8.7~~9.1 percent while volume declined ~~10.8~~15.5 percent. Our EMEA and North America segments reported sales declines of ~~19.1~~13.0 percent and ~~10.5~~15.3 percent, ~~respectively, which~~respectively. This decline was partially offset by ~~25.6~~17.0 percent sales growth in our International segment. ~~Sales declines were due to lower demand from retailers being more cautious about replenishing their inventory and the challenging macroeconomic conditions in many countries, especially within EMEA.~~

In the ~~third~~first quarter, we reported an operating ~~loss~~income of ~~$63.0~~$10.1 million, a ~~$101.6~~$3.3 million ~~decrease,~~increase, compared with operating income of ~~$38.6~~$6.8 million ~~for~~in the prior year's ~~third~~first quarter. The ~~decline~~increase in operating ~~results was primarily due to a non-cash goodwill impairment charge~~income reflects the impact of ~~$98.7 million for~~ our ~~North America reporting unit. Our operating results were also negatively affected by higher inflation that was not fully mitigated with~~cumulative global price increases and lower SG&A expense, which more than offset lower sales volume and adverse foreign ~~exchange of $1.9 million, partially offset by lower incentive compensation expense.~~exchange. Gross margin ~~declined 150~~increased 250 basis points ~~reflecting the margin erosion from higher costs despite multiple~~primarily due to cumulative global price increases, ~~which was particularly acute in EMEA.~~

~~We have been experiencing substantial levels of inflation in~~cost reduction actions within our North America and EMEA segments and improved cost of products. We have responded, and will continue to respond, by increasing selling prices more frequently than we have historically, but these increases continue to lag the cumulative impact of inflation. We expect inflationary pressures and supply chain disruptions to continue to impactleverage from volume growth within our ~~results for the remainder of the year.~~International segment.

Our operating cash flow for the first ~~nine~~three months was a use of cash of ~~$9.6~~$23.2 million, compared to cash ~~provided~~used of ~~$44.0~~$104.2 million in the prior ~~year.~~year due to improved working capital, primarily related to less cash used for payables, lower inventory purchases, and lower payments for incentive compensation. Our operating cash flow is seasonal with a historic pattern of outflow in the first half followed by strong inflows in both quarters of the second half. We anticipate ~~that~~the same seasonal cash flow pattern to ~~be repeated~~repeat again this year.

We ~~have seen~~continue to see volatility in most foreign currencies ~~significantly weaken~~ against the U.S. dollar, which ~~has also adversely~~ affected the sales, profitability and cash flow of our foreign operations which transact business in their local currency. During the first quarter, our EMEA segment was most negatively impacted. We expect foreign currency fluctuations to continue to ~~adversely~~ impact our results. Approximately 53 percent of our net sales for the nine months ended September 30, 2022, were transacted in a currency other than the U.S. dollar. Additionally, we source approximately 60 percent of our products mainly from China, Vietnam and other Far Eastern countries using U.S. dollars.

3026

Consolidated Results of Operations for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~


		Three Months Ended September 30,				Amount of Change				Nine Months Ended September 30,				Amount of Change				Three Months Ended March 31,				Amount of Change
(in millions, except per share data)		2022		2021		$	%/pts			2022		2021		$	%/pts			2023		2022		$	%/pts
Net sales	$	485.6	$	526.7	$	(41.1)	(7.8)%		$	1,448.2	$	1,455.0	$	(6.8)	(0.5)%		$	402.6	$	441.6	$	(39.0)	(8.8)%
Cost of products sold		348.2		369.5		(21.3)	(5.8)%			1,041.2		1,018.2		23.0	2.3 %			283.3		322.0		(38.7)	(12.0)%
Gross profit		137.4		157.2		(19.8)	(12.6)%			407.0		436.8		(29.8)	(6.8)%			119.3		119.6		(0.3)	(0.3)%
Gross profit margin		28.3 %		29.8 %			(1.5)	pts		28.1 %		30.0 %			(1.9)	pts		29.6 %		27.1 %			2.5	pts
Selling, general and administrative expenses		93.9		101.8		(7.9)	(7.8)%			284.3		293.5		(9.2)	(3.1)%			95.0		98.8		(3.8)	(3.8)%
SG&A% to net sales		19.3 %		19.3 %			—	pts		19.6 %		20.2 %			(0.6)	pts		23.6 %		22.4 %			1.2	pts
Amortization of intangibles		9.9		11.6		(1.7)	(14.7)%			31.5		35.2		(3.7)	(10.5)%			10.9		11.1		(0.2)	(1.8)%
Restructuring charges		0.1		0.3		(0.2)	(66.7)%			2.3		4.2		(1.9)	(45.2)%			3.3		0.3		3.0	NM
Goodwill impairment		98.7		—		98.7	NM			98.7		—		98.7	NM
Change in fair value of contingent consideration		(2.2)		4.9		(7.1)	NM			(9.0)		16.5		(25.5)	NM			—		2.6		(2.6)	NM
Operating (loss) income		(63.0)		38.6		(101.6)	NM			(0.8)		87.4		(88.2)	NM
Operating income																		10.1		6.8		3.3	48.5 %
Operating (loss) income margin		(13.0)%		7.3 %			(20.3)	pts		(0.1)%		6.0 %			(6.1)	pts		2.5 %		1.5 %			1.0	pts
Interest expense		12.1		11.2		0.9	8.0 %			32.6		36.0		(3.4)	(9.4)%			13.9		9.7		4.2	43.3 %
Interest income		(2.6)		(0.6)		(2.0)	NM			(6.2)		(1.2)		(5.0)	NM			(2.4)		(1.4)		(1.0)	71.4 %
Non-operating pension income		(0.5)		(2.3)		1.8	(78.3)%			(3.2)		(5.6)		2.4	(42.9)%
Other (income) expense, net		(7.4)		0.1		(7.5)	NM			(10.2)		4.0		(14.2)	NM
(Loss) income before income tax		(64.6)		30.2		(94.8)	NM			(13.8)		54.2		(68.0)	NM
Non-operating pension expense (income)																		0.1		(1.4)		1.5	NM
Other expense, net																		1.8		0.9		0.9	100.0 %
Loss before income tax																		(3.3)		(1.0)		(2.3)	NM
Income tax expense		4.1		10.0		(5.9)	(59.0)%			18.2		5.8		12.4	213.8 %			0.4		1.7		(1.3)	(76.5)%
Effective tax rate		(6.3)%		33.1 %			(39.4)	pts		(131.9)%		10.7 %			(142.6)	pts		(12.1)%		(170.0)%			157.9	pts
Net (loss) income		(68.7)		20.2		(88.9)	NM			(32.0)		48.4		(80.4)	NM
Net loss																		(3.7)		(2.7)		(1.0)	(37.0)%
Weighted average number of diluted shares outstanding:		94.5		97.3		(2.8)	(2.9)%			95.6		97.0		(1.4)	(1.4)%			94.9		96.2		(1.3)	(1.3)%
Diluted (loss) income per share	$	(0.73)	$	0.21	$	(0.94)	NM		$	(0.33)	$	0.50	$	(0.83)	NM
Comparable net sales (Non-GAAP)⁽¹⁾	$	515.5	$	526.7	$	(11.2)	(2.1)%		$	1,516.6	$	1,455.0	$	61.6	4.2 %
Diluted loss per share																	$	(0.04)	$	(0.03)	$	(0.01)	(33.3)%
Comparable net sales (Non-GAAP)(1)																	$	413.2	$	441.6	$	(28.4)	(6.4)%

(1)

See reconciliation to GAAP, contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."

Net Sales

For the three months ended ~~September 30, 2022, our~~March 31, 2023, net sales decreased ~~$41.1~~$39.0 million, or ~~7.8~~8.8 percent, including ~~$29.9~~$10.6 million, or ~~5.7~~2.4 percent, from adverse foreign exchange. Comparable net sales decreased ~~2.1~~6.4 percent. The sales decline was driven by lower volume, which was down ~~10.8~~15.5 percent, reflecting lower demand due to ~~lower demand from retailers being more cautious about replenishing their inventory as well as~~the challenging macroeconomic conditions, the return of typical seasonality in ~~many countries, especially within EMEA. The volume decline was partially offset~~back-to-school purchasing by ~~price increases which added 8.7 percent~~retailers in North America and ~~volume growth in our International segment.~~

~~For the nine months ended September 30, 2022, net~~weaker sales decreased $6.8 million, or 0.5 percent, including $68.4 million, or 4.7 percent, from adverse foreign exchange. Comparable net sales increased 4.2 percent. The sales decline was driven by lower volume which was down 3.6 percent,of technology accessories, partially offset by higher prices which added ~~7.8~~9.1 percent. ~~The decline in~~These sales declines more than offset cumulative global price increases and volume ~~was driven by lower demand, the challenging macroeconomic conditions~~growth within our ~~EMEA segment, and lower sales of gaming accessories in our North America~~International segment. ~~This was partially offset by increased volume in our International segment, primarily in Latin America from a return to in-person education.~~

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 processes; 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.

For the three months ended ~~September 30, 2022,~~March 31, 2023, cost of products sold decreased ~~$21.3~~$38.7 million, or ~~5.8~~12.0 percent, ~~as inflationary~~primarily due to lower net sales, global cost ~~increases related to logistics, purchased finished goods~~reduction actions and ~~raw materials were more than~~favorable foreign exchange, partially offset by ~~lower volume.~~lagging inflation. Foreign exchange reduced cost of products sold ~~$22.1~~by $7.6 million, or ~~6.0~~2.4 percent.

For the nine months ended September 30, 2022, cost of products sold increased $23.0 million, or 2.3 percent, primarily due to inflation related to logistics, purchased finished goods and raw materials. Foreign exchange reduced cost of products sold $50.8 million, or 5.0 percent.

Gross Profit

For the three months ended ~~September 30, 2022,~~March 31, 2023, gross profit decreased ~~$19.8~~$0.3 million, or ~~12.6~~0.3 percent. ~~Gross profit margin declined 150 basis points.~~ The reduction in gross profit ~~and gross~~includes adverse foreign exchange of $3.0 million, or 2.5 percent. Gross profit margin isincreased 250 basis points primarily due to the cumulative ~~incremental inflationary costs exceeding our sales~~effect of global price increases and ~~lower volume. Foreign exchange reduced gross profit $7.8 million, or 5.0 percent.~~global cost reduction actions, as well as improved cost leverage from volume growth within our International segment.

For the nine months ended September 30, 2022, gross profit decreased $29.8 million, or 6.8 percent. Gross profit margin decreased 190 basis points. The reduction in gross profit and gross profit margin is primarily due to the cumulative incremental inflationary costs exceeding our sales price increases, which was partially offset by a $3.0 million step-up charge related to the acquisition of PowerA which did not repeat. Foreign exchange reduced gross profit $17.6 million, or 4.0 percent.27

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, information technology).

For the three months ended ~~September 30, 2022,~~March 31, 2023, SG&A decreased ~~$7.9~~$3.8 million, or ~~7.8~~3.8 percent, primarily due to the favorable impact of foreign exchange which reduced SG&A by ~~$5.4~~$2.4 million, or ~~5.3~~2.4 percent. Excluding foreign exchange, expenses were ~~slightly~~ down ~~with lower administrative expense, including lower incentive compensation costs, partially offset by increased sales and marketing expense.~~due to strong cost controls. SG&A as a percentage of net sales ~~was flat.~~

~~For the nine months ended September 30, 2022, SG&A decreased $9.2 million, or 3.1 percent, primarily~~increased due to the favorable impact of foreign exchange which reduced SG&A by $12.2 million, or 4.2 percent. Excluding foreign exchange, expenses were slightly up due to increased sales and marketing expense and $0.8 million of additional operating expenses related to our Russian business. SG&A as a percentage of net sales decreased due to a higher rate of cost reduction on lower sales.

Restructuring Charges

For the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, restructuring expense ~~decreased $0.2~~increased $3.0 million ~~and $1.9 million, respectively~~ compared to prior year. Cost reduction programs ~~in the prior year were~~ primarily related to severance costs in ~~North America.~~EMEA and International.

Change in Fair Value of Contingent Consideration

~~For the three and nine months ended September 30, 2022,~~The prior period benefited from a $2.6 million reversal of accruals related to the change in fair value of the contingent consideration related to the ~~earnout for the~~ PowerA acquisition was a favorable change of $7.1 million and $25.5 million, respectively, due to the reversal of prior period accruals. The PowerA operations have been adversely impacted by a combination of factors that have reduced the expected financial results for the current year. We expect no additional earnout payments will be made.earnout.

~~Goodwill Impairment~~

For the three and nine months ended September 30, 2022, we recorded a non-cash goodwill impairment charge of $98.7 million for our North America reporting unit. Our goodwill balance could be at risk of further impairment if operating performance does not improve as expected.

~~See "Note 8. Goodwill and Identifiable Intangible Assets" for more information.~~

Operating ~~(Loss)~~ Income

For the three months ended ~~September 30, 2022,~~March 31, 2023, operating ~~loss~~income was ~~$63.0~~$10.1 million compared to ~~operating income of $38.6~~$6.8 million in the prior ~~year, primarily due to~~year. The increase of $3.3 million reflects the ~~non-cash goodwill impairment charge~~impact of ~~$98.7 million for our North America reporting unit. The decrease of $101.6 million also reflects lower gross profit, partially offset by a favorable change in our contingent earnout expense,~~cumulative global price increases, and lower SG&A expense, ~~and a decrease in amortization of $1.7 million.~~partly offset by higher restructuring charges. Adverse foreign exchange reduced operating income by ~~$1.9 million.~~

For the nine months ended September 30, 2022, operating loss was $0.8 million compared to operating income of $87.4 million in the prior year, primarily due to the non-cash goodwill impairment charge of $98.7 million for our North America reporting unit. The decrease of $88.2 million also included the favorable change in our contingent earnout expense, a decrease in amortization of $3.7 million, a decrease in restructuring expense of $1.9 million, and the decrease of SG&A expense. Adverse foreign exchange reduced operating income by $4.1$0.2 million.

Interest Expense

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the ~~decrease~~increase in interest expense of ~~$3.4~~$4.2 million was primarily due to ~~lower outstanding debt.~~

~~Other (Income) Expense, Net~~

~~For the three months ended September 30, 2022, other (income) expense, net increased $7.5 million due to an increase in Brazilian operating tax credits of $7.3 million in the current year compared to~~higher interest rates versus the prior year.

~~For the nine months ended September 30, 2022, other (income) expense, net~~ Our variable debt weighted average interest rate increased ~~$14.2 million primarily due~~ to ~~charges of $13.5 million related to the refinancing of our debt~~6.19 percent from 2.05 percent in ~~the prior year's first half that did not recur, and an increase in Brazilian operating tax credits of $2.0 million in the current year compared to~~ the prior year.

Income Tax Expense

For the three months ended ~~September 30, 2022,~~March 31, 2023, we recorded income tax expense of ~~$4.1~~$0.4 million on a loss before taxes of ~~$64.6 million. This reflects no income tax benefit on the non-deductible goodwill impairment charge of $98.7~~$3.3 million. This compared with an income tax expense of ~~$10.0 million on income before taxes of $30.2 million for the three months ended September 30, 2021.~~

~~For the nine months ended September 30, 2022, we recorded income tax expense of $18.2~~$1.7 million on a loss before taxes of $13.8 million. This reflects no income tax benefit on the non-deductible goodwill impairment charge of $98.7 million. This compared with an income tax expense of $5.8 million on income before taxes of $54.2$1.0 million for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

See "Note 10. Income Taxes" for more information.

Net ~~(Loss) Income/~~Loss/Diluted ~~(Loss) Income~~Loss per Share

For the three months ended ~~September 30, 2022,~~March 31, 2023, net loss was ~~$68.7~~$3.7 million compared to ~~net income of $20.2~~$2.7 million in the prior year, due primarily ~~due~~ to ~~the non-cash goodwill impairment charge of $98.7 million, partly offset by~~ higher ~~operating tax credits in Brazil~~interest and ~~a lower tax rate.~~non-operating pension costs.

For the nine months ended September 30, 2022, net loss was $32.0 million compared to net income of $48.4 million in the prior year, primarily due to the non-cash goodwill impairment charge of $98.7 million, partly offset by the non-repeat of prior year debt refinancing expenses and higher operating tax credits in Brazil.

3328

Segment Net Sales and Operating ~~(Loss)~~ Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

ACCO Brands North America


		Three Months Ended September 30,				Amount of Change			Nine Months Ended September 30,				Amount of Change			Three Months Ended March 31,				Amount of Change
(in millions)		2022		2021		$	%/pts		2022		2021		$	%/pts		2023		2022		$	%/pts
Net sales	$	257.2	$	287.5	$	(30.3)	(10.5)%	$	772.3	$	771.4	$	0.9	0.1 %	$	176.7	$	208.5	$	(31.8)	(15.3)%
Segment operating (loss) income⁽¹⁾		(78.4)		34.6		(113.0)	NM		(13.8)		87.7		(101.5)	NM
Segment operating (loss) income margin		-30.5%		12.0 %			NM		-1.8%		11.4 %			NM
Segment operating income⁽¹⁾																5.2		13.9		(8.7)	(62.6)%
Segment operating income margin																2.9 %		6.7 %			(3.8)	pts
Comparable net sales (Non-GAAP)⁽²⁾	$	258.5	$	287.5	$	(29.0)	(10.0)%	$	775.0	$	771.4	$	3.6	0.5 %	$	178.2	$	208.5	$	(30.3)	(14.6)%

(1)

Segment operating income excludes corporate costs. See "Part I, Item 1. Note 16. Information on Business Segments," for a reconciliation of total "Segment operating ~~(loss)~~ income" to ~~"(Loss) income~~"Loss before income tax."

(2)

See reconciliation to GAAP contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."

FX Impact vs US$

2022 3rd QTR Avg vs. 2021 3rd QTR Avg

2022 YTD Avg vs. 2021 YTD Avg
Currency

Increase/(Decline)

Increase/(Decline)
Canadian dollar

(3)%

(2)%

For the three months ended ~~September 30, 2022,~~March 31, 2023, net sales decreased ~~$30.3~~$31.8 million, or 10.5 percent. Lower volume of $45.2 million, or 15.7 percent, was primarily due to lower demand from retailers being more cautious about replenishing their inventory, and lower sales of gaming accessories which continue to be impacted by semiconductor chip shortages and lower industry-wide demand. The lower volume was partially offset by price increases which added $16.1 million, or 5.6 percent, and higher sales of computer accessories.

~~For the nine months ended September 30, 2022, net sales increased $0.9 million, or 0.1~~15.3 percent. Sales price increases added ~~$49.5~~$8.8 million, or ~~6.4~~4.2 percent, and were ~~partly~~more than offset by decreased volume of ~~$46.0~~$39.2 million, or ~~6.0~~18.8 percent. The volume decline is ~~primarily~~ due to a weaker macroeconomic environment, lower ~~sales of gaming accessories reflecting the continued impact of semiconductor chip shortages~~early back-to-school purchases by retailers and lower ~~industry-wide demand. The lower sales of gaming accessories were partly offset by increases~~demand for technology accessories. In 2022, due to supply chain concerns retailers purchased back-to-school product earlier in ~~sales of business and school products and computer accessories.~~the year than is typical to ensure product availability for the selling season, which did not occur at the same level in 2023.

For the three months ended ~~September 30, 2022,~~March 31, 2023, operating ~~loss~~income was ~~$78.4~~$5.2 million compared to ~~operating income of $34.6~~$13.9 million ~~primarily due to~~in the ~~non-cash goodwill impairment charge of $98.7 million.~~prior year. The ~~decrease~~decreases in operating ~~results~~income and operating margin ~~was also impacted by~~primarily reflect the impact of lower sales volume, the lagging effect of inflation, and ~~higher inflation on purchased finished goods and transportation, and increased sales and marketing expense.~~negative fixed cost leverage.

For the nine months ended September 30, 2022, operating loss was $13.8 million compared to operating income of $87.7 million, primarily due to the non-cash goodwill impairment charge of $98.7 million. The decrease in operating results and operating margin was also impacted by lower sales volume, which was partly offset by lower restructuring charges of $1.6 million. The prior period also included $3.0 million of inventory step-up related to PowerA which did not repeat.

ACCO Brands EMEA


		Three Months Ended September 30,				Amount of Change				Nine Months Ended September 30,				Amount of Change				Three Months Ended March 31,				Amount of Change
(in millions)		2022		2021		$	%/pts			2022		2021		$	%/pts			2023		2022		$	%/pts
Net sales	$	130.3	$	161.1	$	(30.8)	(19.1)%		$	424.3	$	475.0	$	(50.7)	(10.7)%		$	135.8	$	156.1	$	(20.3)	(13.0)%
Segment operating income⁽¹⁾		4.9		13.4		(8.5)	(63.4)%			9.0		40.1		(31.1)	(77.6)%			7.8		5.6		2.2	39.3 %
Segment operating income margin		3.8 %		8.3%			-4.6	pts		2.1%		8.4%			-6.3	pts		5.7%		3.6%			2.1	pts
Comparable net sales (Non-GAAP)⁽²⁾	$	154.4	$	161.1	$	(6.7)	(4.1)%		$	480.6	$	475.0	$	5.6	1.2 %		$	144.8	$	156.1	$	(11.3)	(7.3)%

(1)

(2)

See reconciliation to GAAP contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."

FX Impact vs US$

2022 3rd QTR Avg vs. 2021 3rd QTR Avg

2022 YTD Avg vs. 2021 YTD Avg
Currency

Increase/(Decline)

Increase/(Decline)
Euro

(15)%

(11)%
Swedish krona

(18)%

(14)%
British pound

(15)%

(9)%

For the three months ended ~~September 30, 2022,~~March 31, 2023, net sales decreased ~~$30.8~~$20.3 million, or ~~19.1~~13.0 percent, including ~~$24.1~~$9.0 million, or 15.0 percent, from adverse foreign exchange. Comparable net sales decreased due to lower volume of $25.7 million, or 16.0 percent, partially offset by price increases which added $19.1 million, or 11.9 percent. In Europe, the current energy crisis and higher inflation have created a challenging macroeconomic environment that has negatively impacted the segment's sales.

~~For the nine months ended September 30, 2022, net sales decreased $50.7 million, or 10.7 percent, including $56.3 million, or 11.9~~5.7 percent of adverse foreign exchange. Comparable net sales ~~increased~~decreased mainly due to lower volume of $33.0 million, or 21.1 percent, partly offset by price increases which added ~~$42.6~~$21.7 million, or ~~9.0 percent, but were partly offset by~~13.9 percent. The lower volume ~~of $36.9 million, or 7.8 percent,~~was primarily ~~from decreased sales of business products~~ driven by reduced demand due to a ~~challenging~~weaker macroeconomic ~~environment.~~environment and lower demand for technology accessories.

For the three months ended ~~September 30, 2022, the~~March 31, 2023, operating income ~~decrease of $8.5~~increased $2.2 million, or ~~63.4~~39.3 percent, which includes ~~adverse foreign exchange of $1.2~~$0.3 million, or 9.0 percent. Operating income and operating margin were negatively impacted by lower sales volume, negative fixed cost leverage, and cost inflation that exceeded the benefit of price increases. Cost increases in EMEA have been higher than in our other segments primarily due to significant inflation in locally sourced raw materials and transportation costs. We expect inflationary pressures and unfavorable foreign currency impacts to continue for the remainder of the year. Consequently, additional price increases have been and will continue to be taken as necessary.

~~For the nine months ended September 30, 2022, the operating income decrease of $31.1 million, or 77.6 percent, includes $2.4 million, or 6.0~~6.1 percent, of adverse foreign exchange. Operating income and operating margin ~~decreased substantially~~increased primarily due to ~~cost inflation that exceeded~~ the ~~benefit~~cumulative effect of price increases and ~~lower volume.~~cost saving actions, more than offsetting negative fixed cost leverage and higher costs of certain goods.

3529

ACCO Brands International


		Three Months Ended September 30,				Amount of Change				Nine Months Ended September 30,				Amount of Change				Three Months Ended March 31,				Amount of Change
(in millions)		2022		2021		$	%/pts			2022		2021		$	%/pts			2023		2022		$	%/pts
Net sales	$	98.1	$	78.1	$	20.0	25.6 %		$	251.6	$	208.6	$	43.0	20.6 %		$	90.1	$	77.0	$	13.1	17.0 %
Segment operating income⁽¹⁾		17.3		7.3		10.0	137.0 %			27.8		10.7		17.1	159.8 %			9.0		4.2		4.8	NM
Segment operating income margin		17.6%		9.3%			8.3	pts		11.0%		5.1%			5.9	pts		10.0%		5.5%			4.5	pts
Comparable net sales (Non-GAAP)⁽²⁾	$	102.6	$	78.1	$	24.5	31.4 %		$	261.0	$	208.6	$	52.4	25.1 %		$	90.3	$	77.0	$	13.3	17.2 %

(1)

(2)

See reconciliation to GAAP contained in Part I, Item 2. "Supplemental Non-GAAP Financial Measure."

FX Impact vs US$

2022 3rd QTR Avg vs. 2021 3rd QTR Avg

2022 YTD Avg vs. 2021 YTD Avg
Currency

Increase/(Decline)

Increase/(Decline)
Brazilian real

(0)%

4 %
Australian dollar

(7)%

(7)%
Mexican peso

(1)%

(1)%
Japanese yen

(21)%

(14)%

For the three months ended ~~September 30, 2022,~~March 31, 2023, net sales increased ~~$20.0~~$13.1 million, or ~~25.6~~17.0 percent, including adverse foreign exchange of ~~$4.5~~$0.2 million, or 5.8 percent. Comparable net sales increased due to increased volume of $13.9 million, or 17.8 percent, due to a return to in-person education, particularly in Latin America, and higher prices which added $10.6 million or 13.6 percent.

~~For the nine months ended September 30, 2022, net sales increased $43.0 million, or 20.6 percent, including adverse foreign exchange of $9.4 million, or 4.5~~0.2 percent. Comparable net sales increased primarily due to ~~increased volume of $30.4 million, or 14.6 percent, due to a return to in-person education, particularly in Latin America, and~~ price increases which added ~~$22.0~~$9.7 million, or ~~10.6~~12.6 percent, and volume growth of $3.6 million, or 4.7 percent. Volume growth was primarily driven by Mexico and Brazil which benefited from the improvement of both in-person education and return-to-work trends.

For the three months ended ~~September 30, 2022,~~March 31, 2023, operating income increased ~~$10.0~~$4.8 million, ~~or 137.0 percent. The $10.0 million increase in operating income and improved operating margin were~~primarily due to higher sales and improved ~~expense leverage, a reduction of bad debt expense, and a reduction in operating tax reserves.~~cost leverage. Foreign exchange ~~decreased~~increased operating income ~~$0.6 million.~~

~~For the nine months ended September 30, 2022, operating income increased $17.1~~$0.3 million, or ~~159.8~~6.4 percent. The $17.1 million increase in operating income and improved operating margin were due to higher sales, the benefit of long-term cost reductions, and reductions in the reserves for operating taxes, bad debts, and obsolete inventory. Foreign exchange reduced operating income $1.4 million.

Liquidity and Capital Resources

Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures ~~dividends~~ and ~~acquisitions.~~dividends. Our principal sources of liquidity are cash flows from operating activities, cash and cash equivalents held, and seasonal borrowings under our $600 million multi-currency revolving credit facility (the "Revolving Facility"). As of ~~September 30, 2022,~~March 31, 2023, there was ~~$173.9~~$168.5 million in borrowings outstanding under the Revolving Facility ($~~4.9~~18.4 million reported in "Current portion of long-term debt" and ~~$169.0~~$150.1 million reported in "Long-term debt, net"), and the amount available for borrowings was ~~$417.1~~$419.6 million (allowing for ~~$9.0~~$11.9 million of letters of credit outstanding on that date). We had ~~$78.0~~$127.1 million in cash on hand. We maintain adequate financing arrangements at market rates.

As of ~~September 30, 2022,~~March 31, 2023, our Consolidated Leverage Ratio was approximately ~~3.91~~4.30 to 1.00 versus our maximum covenant of ~~4.00~~5.00 to 1.00. We have no debt maturities before March 2026.

Our near-term use of cash will be to fund our dividend and reduce debt. Our long-term strategy remains to deploy cash to fund dividends, reduce debt, make acquisitions and repurchase stock.

~~During the second quarter of 2022, we made a contingent payment of $27.0 million related to the acquisition of PowerA.~~

The ~~$507.0~~$524.4 million of debt ~~currently~~ outstanding as of March 31, 2023 under our senior secured credit facilities has a weighted average interest rate of ~~4.02~~6.19 percent, ~~as of September 30, 2022,~~ and the $575.0 million outstanding principal amount of our senior unsecured notes due 2029 has a fixed interest rate of 4.25 percent.

Adequacy of Liquidity Sources

We believe that cash flow from operations, our current cash balance and other sources of liquidity, including borrowings available under our Revolving Facility, will be adequate to support our requirements for working capital, capital and restructuring expenditures and to service indebtedness for the foreseeable future.

Restructuring Activities

From time to time the Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.

The restructuring provision was ~~$0.1 million and $2.3~~$3.3 million for the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023, primarily related to the Company's cost reduction programs representing expected severance costs mainly in ~~North America. Additional charges were also taken in EMEA.~~EMEA, related to our footprint rationalization, and

International. For additional details, see "Note 9. Restructuring" to the condensed consolidated financial statements contained in "Part I, Item 1. Financial Information" of this Quarterly Report on Form 10-Q.

Cash Flow for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2023 and 2022

During the three months ended March 31, 2023, our cash and ~~2021~~cash equivalents increased $64.9 million, as compared to an increase of $50.1 million in the first three months of the prior year. The increase in cash generated of $14.8 million was primarily due to timing of payments for inventory which reduced the use of cash for accounts payable by $49.5 million, decreased inventory purchases of $12.3 million, reduced incentive payments of $16.7 million, and more cash provided by accounts receivable of $4.5 million, which were partially offset by lower net borrowings of $67.8 million.

The following table summarizes our cash flows for the periods presented:


		Three Months Ended March 31,
(in millions)		2023		2022
Net cash flow (used in) provided by:
Operating activities	$	(23.2)	$	(104.2)
Investing activities		(2.0)		(3.4)

Net borrowings		89.9		157.7
Dividends paid		—		(7.3)
All other financing		(1.7)		3.1
Financing activities		88.2		153.5
Effect of foreign exchange rate changes on cash and cash equivalents		1.9		4.2
Net increase in cash and cash equivalents	$	64.9	$	50.1

Cash Flow from Operating Activities

~~Cash~~Operating activities used ~~by operating activities~~$23.2 million of cash during the ~~nine~~first three months ended ~~September 30, 2022 was $9.6~~March 31, 2023 resulting from a net loss of $3.7 million, ~~an increase~~net cash outflows from changes in our operating assets and liabilities of $46.9 million, partly offset by non-cash add backs of $27.4 million consisting primarily of the amortization of intangibles, depreciation, and stock-based compensation expense. The net cash ~~used~~outflows from changes in our operating assets and liabilities were primarily due to $43.8 million of ~~$53.6 million compared~~payments for interest, employee incentives, and taxes, as well as payments related to other current and non-current liabilities. These were partly offset by cash provided by ~~operating~~trade working capital of $25.6 million consisting of changes in accounts payable, inventory, and accounts receivable.

Operating activities used $104.2 million of ~~$44.0 million~~cash during the ~~prior year's~~ first ~~nine months. The increase~~three months ended March 31, 2022 resulting from a net loss of $2.7 million, net cash outflows from changes in ~~cash used by~~our operating ~~activities was primarily driven by lower net income~~assets and liabilities of ~~$80.4~~$130.7 million, partially offset by non-cash add backs of ~~$57.4~~$29.2 million consisting primarily ~~driven by a goodwill impairment charge~~of the amortization of intangibles, depreciation, and ~~a decrease~~stock-based compensation expense. The net cash outflows from changes in ~~the PowerA contingent earnout. Cash used was also up~~our operating assets and liabilities were primarily due to ~~higher annual incentive~~$52.5 million of payments ~~of $28.4 million, a contingent earnout payment of $9.2 million,~~for interest, employee incentives, and ~~an increase in~~taxes, as well as payments related to other current and non-current liabilities. We also used cash ~~used for customer programs and income taxes, partially offset by lower~~to fund investments in ~~net~~trade working capital of ~~$26.5 million.~~

~~The table below shows our cash flow used or provided by the components~~$40.7 million consisting of ~~net working capital for the nine months ended September 30, 2022 and 2021:~~

Nine Months Ended

(in millions)

September 30,
2022

September 30,
2021

Amount of Change

Accounts receivable
$

48.8

$

(18.3
)
$

67.1

Inventories

(20.9
)

(116.2
)

95.3

Accounts payable

(80.8
)

55.1

(135.9
)
Cash flow used by net working capital
$

(52.9
)
$

(79.4
)
$

26.5

•

Accounts receivable was a source of cash of $48.8 million during the nine months ended September 30, 2022, a favorable change of $67.1 million compared to a use of cash of $18.3 million during the nine months ended September 30, 2021. The $67.1 million favorable change was due to increased recovery of past due accounts and increased collections on a higher level of accounts receivable, primarily because the prior year included minimal collections related to gaming accessories as we did not purchase the outstanding accounts receivable at the closing of the acquisition of PowerA.

•

Inventories was a use of cash of $20.9 million during the nine months ended September 30, 2022, a favorable change of $95.3 million when compared with the $116.2 million cash used during the nine months ended September 30, 2021. The favorable change was primarily driven by a reductionchanges in ~~inventory levels when compared to the prior year during which significant safety stock was purchased to mitigate supply chain issues.~~

•

Accounts payable was a use of cash of $80.8 million during the nine months ended September 30, 2022, an unfavorable change of $135.9 million when compared to a source of cash of $55.1 million during the nine months ended September 30, 2021. The $135.9 million unfavorable change was due to increased payments on a higher level of accounts payable, ~~driven by higher~~inventory, and accounts ~~payable at the end of the prior year primarily associated with the timing of inventory purchases noted above, and increased accounts payable related to gaming accessories.~~

receivable.

Cash Flow from Investing Activities

Cash used by investing activities ~~was $11.6~~of $2.0 million ~~and cash provided~~during the first three months ended March 31, 2023, were due to capital expenditures.

Cash used by investing activities ~~was $1.5~~of $3.4 million ~~for~~during the ~~nine~~first three months ended ~~September 30,~~March 31, 2022, ~~and 2021, respectively. Cash used for~~were due to capital expenditures was down by $2.1 million. Cash provided by acquisitions decreased by $15.4 million primarily because the prior year period included a working capital adjustment received from the seller of PowerA that did not recur.expenditures.

Cash Flow from Financing Activities

Cash provided by financing activities ~~was $58.3 million~~during the first three months ended March 31, 2023, were primarily due to net borrowings of $89.9 million. Dividends for the ~~nine~~first three months ~~ended September 30, 2022, an increase~~ of ~~$80.8 million, compared with cash used~~the year were declared during the first quarter and were paid in the second quarter of ~~$22.5 million~~2023.

Cash provided by financing activities during the first ~~nine~~three months ~~of the prior year. The increase of $80.8 million~~ended March 31, 2022, were primarily ~~relates~~due to ~~an increase in cash provided by our incremental~~ net borrowings of ~~$100.3~~$157.7 million, ~~during the first nine months~~partly offset by dividends paid of 2022, compared to the prior year's first nine months. In addition, there were cash outflows of $20.3 million related to our debt refinancing during the first nine months of 2021. Partly offsetting the cash provided by financing activities was uses of cash for share repurchases of $19.4 million, and a contingent earnout payment of $17.8$7.3 million.

~~Credit Facilities and Notes Covenants~~

~~As of September 30, 2022, our Consolidated Leverage Ratio was approximately 3.91 to 1.00 versus our maximum covenant of 4.00 to 1.00.~~

~~Guarantees and Security~~

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 sales. Comparable sales represent net sales excluding the impact of material acquisitions and with current-period foreign operation sales translated at prior-year currency rates. We sometimes refer to comparable sales as comparable net sales.

We use comparable 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 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. Comparable sales should not be considered in isolation or as a substitute for, or superior to, GAAP net sales 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 sales change:


	Comparable Net Sales - Three Months Ended September 30, 2022						Comparable Sales - Three Months Ended March 31, 2023
				Non-GAAP						Non-GAAP
		GAAP		Currency		Comparable		GAAP		Currency		Comparable
(in millions)		Net Sales		Translation		Net Sales		Net Sales		Translation		Net Sales
ACCO Brands North America	$	257.2	$	(1.3)	$	258.5	$	176.7	$	(1.5)	$	178.2
ACCO Brands EMEA		130.3		(24.1)		154.4		135.8		(9.0)		144.8
ACCO Brands International		98.1		(4.5)		102.6		90.1		(0.2)		90.3
Total	$	485.6	$	(29.9)	$	515.5	$	402.6	$	(10.6)	$	413.2


	Amount of Change - Three Months Ended September 30, 2022 compared to the Three Months Ended September 30, 2021						Amount of Change - Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022
	$ 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		Change		Change		Translation		Change
ACCO Brands North America	$	(30.3)	$	(1.3)	$	(29.0)	$	(31.8)	$	(1.5)	$	(30.3)
ACCO Brands EMEA		(30.8)		(24.1)		(6.7)		(20.3)		(9.0)		(11.3)
ACCO Brands International		20.0		(4.5)		24.5		13.1		(0.2)		13.3
Total	$	(41.1)	$	(29.9)	$	(11.2)	$	(39.0)	$	(10.6)	$	(28.4)


	% 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	Change		Change	Translation	Change
ACCO Brands North America		(10.5)%	(0.5)%	(10.0)%		(15.3)%	(0.7)%	(14.6)%
ACCO Brands EMEA		(19.1)%	(15.0)%	(4.1)%		(13.0)%	(5.7)%	(7.3)%
ACCO Brands International		25.6%	(5.8)%	31.4%		17.0%	(0.2)%	17.2%
Total		(7.8)%	(5.7)%	(2.1)%		(8.8)%	(2.4)%	(6.4)%

Comparable Net Sales - Nine Months Ended September 30, 2022

Non-GAAP

GAAP

Currency

Comparable
(in millions)

Net Sales

Translation

Net Sales
ACCO Brands North America
$
772.3
$
(2.7)
$
775.0
ACCO Brands EMEA

424.3

(56.3)

480.6
ACCO Brands International

251.6

(9.4)

261.0
Total
$
1,448.2
$
(68.4)
$
1,516.6

Amount of Change - Nine Months Ended September 30, 2022 compared to the Nine Months Ended September 30, 2021

$ Change - Net Sales

Non-GAAP

GAAP

Comparable

Net Sales

Currency

Net Sales
(in millions)

Change

Translation

Change
ACCO Brands North America
$
0.9
$
(2.7)
$
3.6
ACCO Brands EMEA

(50.7)

(56.3)

5.6
ACCO Brands International

43.0

(9.4)

52.4
Total
$
(6.8)
$
(68.4)
$
61.6

% Change - Net Sales

Non-GAAP

GAAP

Comparable

Net Sales

Currency

Net Sales

Change

Translation

Change
ACCO Brands North America

0.1%

(0.4)%

0.5%
ACCO Brands EMEA

(10.7)%

(11.9)%

1.2%
ACCO Brands International

20.6%

(4.5)%

25.1%
Total

(0.5)%

(4.7)%

4.2%

3932

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk" of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There have been no material changes to Foreign Exchange Risk Management or Interest Rate Risk Management in the quarter ended ~~September 30, 2022~~March 31, 2023 or through the date of this report.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation under the supervision of the Chief Executive Officer and the Chief Financial Officer, and with the participation of our Disclosure Committee, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~September 30, 2022.~~March 31, 2023.

(b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2022~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are various claims, lawsuits and pending actions against us incidental to our operations, including the income tax assessments against our Brazilian subsidiary, ~~Tilibra Produtos de Papelaria Ltda~~ACCO Brazil (the "Brazil Tax Assessments"), which is more fully described in "Part I, Item 1. Note 10. Income Taxes, Brazil Tax Assessments to the Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

~~Except as set forth below, there~~There have been no material changes in our risk factors from those disclosed in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Sales of our products have been, and we expect they will continue to be, adversely affected by factors that influence discretionary spending by our customers and consumers during periods of economic uncertainty or weakness.

Our business depends on discretionary spending, and, as a result, our performance is highly dependent on consumer and business confidence and the health of the economies in the countries in which we operate. Discretionary spending and the overall health of the economies in the countries in which we operate is affected by many factors outside of the Company’s control. During

periods of economic uncertainty or weakness, our reseller customers often reduce inventories both to reduce their own working capital investments and because demand for our products decreases as customers and consumers switch to private label and other branded and/or generic products that compete on price and quality, or forgo purchases altogether. Overall, adverse economic conditions and sustained periods of economic uncertainty or weakness in one or more of the geographic markets in which we operate, whatever the cause, have negatively affected, and we expect will continue to negatively affect, our sales and profitability, results of operations, cash flow and financial condition.

~~Impairment of goodwill and indefinite-lived intangible assets have had, and could in the future have, a material adverse effect on our financial results.~~

We have approximately $1.5 billion of goodwill and other specifically identifiable intangible assets as of September 30, 2022. During the third quarter of 2022, we recorded a $98.7 million non-cash goodwill impairment charge related to our North America reporting unit which resulted in the Company recording a net loss of $68.7 million for the quarter. Future events may occur that could adversely affect the reported value, or fair value, of our intangible assets that would require future impairment charges which negatively impact our financial results. Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on our sales and customer base, the unfavorable resolution of litigation, a material adverse change in our relationship with significant customers, or a sustained decline in our stock price. We continue to evaluate the impact of developments from our reporting units to assess whether impairment indicators are present. See also "Note 10. Goodwill and Identifiable Intangible Assets" to the consolidated financial statements contained in Part II, Item 8. of our Annual Report on Form 10-K for the year ended December 31, 2021 and “Note 8. Goodwill and Identifiable Intangible Assets” to the condensed consolidated financial statements contained in Part I, Item 1. of this report.

Our operating results have been, and continue to be, adversely affected by changes in the cost or availability of raw materials, transportation, labor, and other necessary supplies and services, including the cost of finished goods.

The price and availability of raw materials, transportation, labor, and other necessary supplies and services used in our business, as well as the cost of finished goods, can be volatile due to numerous factors beyond our control, including general economic and competitive conditions, and political instability, war and other geopolitical tensions. The ongoing global imbalance between the supply and demand for commodities, component parts, transportation and labor have impacted their availability and increased their cost. This has been exacerbated by the war in Ukraine which has also impacted the cost and availability of energy in EMEA. We have experienced and anticipate that we will continue to experience cost increases from our suppliers of raw materials, component parts and purchased finished goods as well as increased labor, energy and commodity costs in our own facilities. In particular, we are experiencing a significant increase in cost as well as limited availability of certain commodity paper which is used in our school and office products in both North America and Brazil which we expect to continue. Our third-party manufacturers are also affected by these inflationary pressures which has, in turn, resulted in an increase in the amount we pay for finished goods. Additionally, the disruptions in the global supply chain noted above have resulted in increased logistics costs and have affected the availability of imported products, raw materials and component parts we use in our domestic manufacturing.

During periods of rising costs, we manage this volatility through a variety of actions, including targeted advance or periodic purchases, future delivery purchases, long-term contracts, sales price increases and the use of certain derivative instruments. We have implemented price increases, and plan to implement additional price increases in 2023, in an effort to offset the inflationary and supply-chain related cost increases noted above which have and continue to negatively impacting our margins and overall profitability. To date, we have not been able to raise prices fast enough to effectively mitigate the adverse impact of these cost increases on our margins and there can be no assurance that we will be able to do so. Additionally, we have lost, and may continue to lose, sales as a result of lack of product availability or due to increasing our selling prices to our customers as we seek to offset these cost increases. We have also seen customers and consumers purchase lower cost products which generate lower margins

due to our price increases. Lastly, when these costs decline, customer insistence on lower prices will likely result in lower sales prices, absent other mitigating circumstances and, to the extent we have existing inventory, may result in lower margins.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable.

(b) Not applicable.

The following table provides information about our purchases of equity securities during the quarter ended ~~September 30, 2022:~~March 31, 2023:


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~~January 1, ~~2022~~2023 to ~~July~~January 31, ~~2022~~2023		—	$		—		—	$		105,645,579
~~August~~February 1, ~~2022~~2023 to ~~August 31, 2022~~February 28, 2023		—			—		—			105,645,579
~~September~~March 1, ~~2022~~2023 to ~~September 30, 2022~~March 31, 2023		—			—		—			105,645,579
Total		—	$		—		—	$		105,645,579

(1) ~~On February 14, 2018, the Company announced that its~~The Company's Board of Directors ~~had approved an authorization to~~has authorized the repurchase of up to ~~$100~~$200 million in shares of its common stock. ~~On August 7, 2019, the Company announced that its Board of Directors had approved an authorization to repurchase up to an additional $100 million in shares of its common stock.~~

The number of shares to be purchased, if any, and the timing of purchases will be based on the Company's stock price, leverage ratios, cash balances, general business and market conditions, and other factors, including alternative investment opportunities and working capital needs. The Company may repurchase its shares, from time to time, through a variety of methods, including open-market purchases, privately negotiated transactions and block trades or pursuant to repurchase plans designed to comply with ~~the~~ Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. Any stock repurchases will be subject to market conditions, SEC regulations and other considerations and may be commenced or suspended at any time or from time to time, without prior notice. Accordingly, there is no guarantee as to the number of shares, if any, that will be repurchased or the timing of such repurchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

4234

ITEM 6. EXHIBITS


Exhibit Number		Description of Exhibit

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*		Filed herewith.

**		Furnished herewith.

4335

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


REGISTRANT:

ACCO BRANDS CORPORATION

By:	/s/ Boris Elisman
Boris Elisman
Chairman and Chief Executive Officer (principal executive officer)

By:	/s/ Deborah A. O'Connor
Deborah A. O'Connor
Executive Vice President and Chief Financial Officer (principal financial officer)

By:	/s/ James M. Dudek, Jr.
James M. Dudek, Jr.
Senior Vice President, Corporate Controller and Chief Accounting Officer (principal accounting officer)

Date: ~~November 8, 2022~~May 5, 2023

4436


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


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


PART I — FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets	4
Consolidated Statements of ~~Operations~~Loss	5
Consolidated Statements of Comprehensive ~~(Loss)~~ Income	6
Condensed Consolidated Statements of Cash Flows	7
Consolidated Statement of Stockholders’ Equity	8
Notes to Condensed Consolidated Financial Statements	109
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2926
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4033
Item 4. Controls and Procedures	4033
PART II — OTHER INFORMATION	4033
Item 1. Legal Proceedings	4033
Item 1A. Risk Factors	4034
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4234
Item 3. Defaults Upon Senior Securities	4234
Item 4. Mine Safety Disclosures	4234
Item 5. Other Information	4234
Item 6. Exhibits	4335
SIGNATURES	4436


		September 30, 2022				December 31, 2021				March 31, 2023				December 31, 2022
(in millions)		(unaudited)								(unaudited)
Assets
Current assets:
Cash and cash equivalents	$		78.0		$		41.2		$		127.1		$		62.2
Accounts receivable, net			351.3				416.1				303.8				384.1
Inventories			431.0				428.0				422.5				395.2
Other current assets			53.9				39.6				41.2				40.8
Total current assets			914.2				924.9				894.6				882.3
Total property, plant and equipment			577.5				656.4				594.7				589.2
Less: accumulated depreciation			(392.3	)			(441.8	)			(414.8	)			(404.1	)
Property, plant and equipment, net			185.2				214.6				179.9				185.1
Right of use asset, leases			88.5				105.2				87.4				88.8
Deferred income taxes			98.4				115.9				101.2				99.7
Goodwill			666.9				802.5				671.9				671.5
Identifiable intangibles, net			838.5				902.2				842.4				847.0
Other non-current assets			37.5				26.0				15.4				20.3
Total assets	$		2,829.2		$		3,091.3		$		2,792.8		$		2,794.7
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$		1.3		$		9.4		$		9.1		$		10.3
Current portion of long-term debt			27.3				33.6				47.3				49.7
Accounts payable			214.4				308.2				204.5				239.5
Accrued compensation			39.4				56.9				31.9				38.3
Accrued customer program liabilities			88.9				101.4				74.2				103.3
Lease liabilities			20.9				24.4				21.1				21.2
Current portion of contingent consideration			—				24.8
Other current liabilities			111.4				149.9				116.3				126.7
Total current liabilities			503.6				708.6				504.4				589.0
Long-term debt, net			1,045.0				954.1				1,035.0				936.5
Long-term lease liabilities			75.1				89.0				73.8				75.2
Deferred income taxes			139.2				145.2				137.3				144.1
Pension and post-retirement benefit obligations			176.9				222.3				152.9				155.5
Contingent consideration			—				12.0
Other non-current liabilities			108.1				95.3				79.6				84.3
Total liabilities			2,047.9				2,226.5				1,983.0				1,984.6
Stockholders' equity:
Common stock			1.0				1.0				1.0				1.0
Treasury stock			(43.4	)			(40.9	)			(45.0	)			(43.4	)
Paid-in capital			1,895.2				1,902.2				1,903.3				1,897.2
Accumulated other comprehensive loss			(555.6	)			(535.5	)			(533.8	)			(540.3	)
Accumulated deficit			(515.9	)			(462.0	)			(515.7	)			(504.4	)
Total stockholders' equity			781.3				864.8				809.8				810.1
Total liabilities and stockholders' equity	$		2,829.2		$		3,091.3		$		2,792.8		$		2,794.7


	Common Stock			Treasury Stock		Net Shares
Shares at December 31, 2021		100,118,494			4,300,548		95,817,946
Common stock issued, net of shares withheld for employee taxes		1,128,030			106,598		1,021,432
Shares at March 31, 2022		101,246,524			4,407,146		96,839,378
Common stock issued, net of shares withheld for employee taxes		330,408			183,509		146,899
Common stock repurchases		(2,742,589	)		—		(2,742,589	)
Shares at June 30, 2022		98,834,343			4,590,655		94,243,688
Common stock issued, net of shares withheld for employee taxes		17,238			—		17,238
Shares at September 30, 2022		98,851,581			4,590,655		94,260,926


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


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


																								Common Stock					Treasury Stock				Accumulated Other
(in millions)		Common Stock			Paid-in Capital				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Accumulated Deficit				Total			Shares		Value		Paid-in Capital	Shares		Value		Comprehensive (Loss) Income		Accumulated Deficit		Total
Balance at December 31, 2021	$		1.0	$		1,902.2		$		(535.5	)	$		(40.9	)	$		(462.0	)	$		864.8
Balance at December 31, 2022																								98.9	$	1.0	$	1,897.2	4.6	$	(43.4)	$	(540.3)	$	(504.4)	$	810.1
Net loss			—			—				—				—				(2.7	)			(2.7	)	—		—		—	—		—		—		(3.7)		(3.7)
Loss on derivative financial instruments, net of tax			—			—				(1.4	)			—				—				(1.4	)	—		—		—	—		—		(0.9)		—		(0.9)
Translation impact, net of tax			—			—				15.3				—				—				15.3		—		—		—	—		—		8.9		—		8.9
Pension and post-retirement adjustment, net of tax			—			—				4.8				—				—				4.8		—		—		—	—		—		(1.5)		—		(1.5)
Stock-based compensation			—			4.9				—				—				(0.1	)			4.8		—		—		6.2	—		—		—		(0.6)		5.6
Common stock issued, net of shares withheld for employee taxes			—			4.3				—				(1.2	)			—				3.1		0.9		—		—	0.3		(1.7)		—		—		(1.7)
Dividends declared, $0.075 per share			—			—				—				—				(7.3	)			(7.3	)	—		—		—	—		—		—		(7.1)		(7.1)
Other			—			0.1				—				—				—				0.1		—		—		(0.1)	—		0.1		—		0.1		0.1
Balance at March 31, 2022	$		1.0	$		1,911.5		$		(516.8	)	$		(42.1	)	$		(472.1	)	$		881.5
Net income			—			—				—				—				39.4				39.4
Gain on derivative financial instruments, net of tax			—			—				3.9				—				—				3.9
Translation impact, net of tax			—			—				(37.2	)			—				—				(37.2	)
Pension and post-retirement adjustment, net of tax			—			—				10.8				—				—				10.8
Common stock repurchases			—			(19.4	)			—				—				—				(19.4	)
Stock-based compensation			—			2.6				—				—				(0.2	)			2.4
Common stock issued, net of shares withheld for employee taxes			—			—				—				(1.3	)			—				(1.3	)
Dividends declared, $0.075 per share			—			—				—				—				(7.1	)			(7.1	)
Other			—			—				—				—				(0.1	)			(0.1	)
Balance at June 30, 2022	$		1.0	$		1,894.7		$		(539.3	)	$		(43.4	)	$		(440.1	)	$		872.9
Net loss			—			—				—				—				(68.7	)			(68.7	)
Gain on derivative financial instruments, net of tax										0.9												0.9
Translation impact										(28.1	)											(28.1	)
Pension and post-retirement adjustment, net of tax										10.9												10.9
Stock-based compensation						0.6																0.6
Dividends declared, $0.075 per share																		(7.1	)			(7.1	)
Other						(0.1	)															(0.1	)
Balance at September 30, 2022	$		1.0	$		1,895.2		$		(555.6	)	$		(43.4	)	$		(515.9	)	$		781.3
Balance at March 31, 2023																								99.8	$	1.0	$	1,903.3	4.9	$	(45.0)	$	(533.8)	$	(515.7)	$	809.8


Quarter Ended		Maximum Consolidated Leverage Ratio
December 2022		4.50:1.00
March 2023		5.00:1.00
June 2023		5.00:1.00
September 2023		4.75:1.00
December 2023		4.25:1.00


~~Quarter Ended~~		~~Maximum Consolidated Leverage Ratio~~
~~March 2021~~		~~5.25:1.00~~
~~June 2021~~		~~5.25:1.00~~
~~September 2021~~		~~4.75:1.00~~
~~December 2021~~		~~4.25:1.00~~
~~March 2022~~		~~4.25:1.00~~
~~June 2022~~		~~4.25:1.00~~
~~September 2022~~ increase the Company’s flexibility under the restricted payments baskets; and ~~thereafter~~		~~4.00:1.00~~


Consolidated Leverage Ratio	Applicable Rate on Euro/AUD/CDN Dollar Loans	Applicable Rate on Base Rate Loans	Undrawn Fee
> 4.50 to 1.00	2.50 %	1.50 %	0.500 %
≤ 4.50 to 1.00 and > 4.00 to 1.00	2.25 %	1.25 %	0.375 %
≤ 4.00 to 1.00 and > 3.50 to 1.00	2.00 %	1.00 %	0.350 %
≤ 3.50 to 1.00 and > 3.00 to 1.00	1.75 %	0.75 %	0.300 %
≤ 3.00 to 1.00 and > 2.00 to 1.00	1.50 %	0.50 %	0.250 %
≤ 2.00 to 1.00	1.25 %	0.25 %	0.200 %


		Nine Months Ended September 30,						Three Months Ended March 31,
(in millions, except lease term and discount rate)		2022			2021			2023				2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$		23.7	$		23.8	$		7.4		$		8.5
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$		7.8	$		15.0	$		3.4		$		5.2

Weighted average remaining lease term:
Operating leases								6.1 years

Weighted average discount rate:
Operating leases									4.6	%


	~~As of September 30, 2022~~
~~Weighted average remaining lease term:~~
~~Operating leases~~	~~6.4~~ ~~years~~

~~Weighted average discount rate:~~
~~Operating leases~~		~~4.6~~	%


(in millions)		Operating Leases
2023	$		19.2
2024			20.9
2025			17.6
2026			13.9
2027			9.4
2028			8.9
Thereafter			20.4
Total minimum lease payments			110.3
Less imputed interest			15.4
Future minimum payments for leases, net of sublease rental income and imputed interest	$		94.9


		Three Months Ended September 30,																								Three Months Ended March 31,
		Pension																Post-retirement								Pension																Post-retirement
		U.S.								International																U.S.								International
(in millions)		2022				2021				2022				2021				2022				2021				2023				2022				2023				2022				2023				2022
Service cost	$		—		$		—		$		0.2		$		0.4		$		—		$		—		$		—		$		—		$		0.1		$		0.3		$		—		$		—
Interest cost			1.2				1.2				2.3				1.5				—				—				2.0				1.2				4.9				2.5				—				—
Expected return on plan assets			(2.7	)			(2.9	)			(4.2	)			(4.7	)			—				—				(3.0	)			(2.7	)			(5.3	)			(4.6	)			—				—
Amortization of net loss (gain)																											0.6				0.9				1.0				1.4				(0.1	)			(0.1	)
Amortization of prior service cost			—				—				0.1				0.1				—				—				—				—				0.1				—				—				—
Amortization of net loss (gain)			0.9				0.9				1.2				1.7				(0.1	)			(0.1	)
Special termination benefit(1)			—				—				0.8				—				—				—
Net periodic benefit (income) cost (3)	$		(0.6	)	$		(0.8	)	$		0.4		$		(1.0	)	$		(0.1	)	$		(0.1	)
Net periodic benefit (income) cost (1)																									$		(0.4	)	$		(0.6	)	$		0.8		$		(0.4	)	$		(0.1	)	$		(0.1	)


		September 30, 2022										December 31, 2021										March 31, 2023										December 31, 2022
(in millions)		Gross Carrying Amounts			Accumulated Amortization				Net Book Value			Gross Carrying Amounts			Accumulated Amortization				Net Book Value			Gross Carrying Amounts			Accumulated Amortization				Net Book Value			Gross Carrying Amounts			Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names(1)	$		401.5	$		(44.5	)	$		357.0	$		417.6	$		(44.5	)	$		373.1	$		295.1	$		(44.5	)	$		250.6	$		410.6	$		(44.5	)	$		366.1
Amortizable intangible assets:
Trade names			363.0			(118.0	)			245.0			373.2			(110.5	)			262.7			491.0			(127.9	)			363.1			369.7			(123.0	)			246.7
Customer and contractual relationships			346.4			(186.8	)			159.6			366.5			(182.4	)			184.1			359.5			(204.7	)			154.8			356.9			(198.2	)			158.7
Vendor relationships			82.4			(9.9	)			72.5			82.4			(5.7	)			76.7			82.4			(12.6	)			69.8			82.4			(11.2	)			71.2
Patents			7.7			(3.3	)			4.4			8.6			(3.0	)			5.6			8.2			(4.1	)			4.1			8.1			(3.8	)			4.3
Subtotal			799.5			(318.0	)			481.5			830.7			(301.6	)			529.1			941.1			(349.3	)			591.8			817.1			(336.2	)			480.9
Total identifiable intangibles	$		1,201.0	$		(362.5	)	$		838.5	$		1,248.3	$		(346.1	)	$		902.2	$		1,236.2	$		(393.8	)	$		842.4	$		1,227.7	$		(380.7	)	$		847.0


	September 30, 2022		March 31, 2023
(in millions, except weighted average years)	Unrecognized Compensation Expense	Weighted Average Years Expense To Be Recognized Over	Unrecognized Compensation Expense	Weighted Average Years Expense To Be Recognized Over
Stock options	$4.2	2.2	$1.7	1.7
RSUs	$4.9	2.0	$4.9	2.7
PSUs	$1.6	1.0	$10.2	2.3


FX Impact vs US$	2022 3rd QTR Avg vs. 2021 3rd QTR Avg	2022 YTD Avg vs. 2021 YTD Avg
Currency	Increase/(Decline)	Increase/(Decline)
Canadian dollar	(3)%	(2)%


		Nine Months Ended
(in millions)		September 30, 2022				September 30, 2021				Amount of Change
Accounts receivable	$		48.8		$		(18.3	)	$		67.1
Inventories			(20.9	)			(116.2	)			95.3
Accounts payable			(80.8	)			55.1				(135.9	)
Cash flow used by net working capital	$		(52.9	)	$		(79.4	)	$		26.5