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Press release from Business Wire

ACCO Brands Corporation Reports Third Quarter 2011 Results

<p class='bwalignc'> <i><b>Third Quarter 2011 Highlights</b></i> </p> <ul> <li class='bwlistitemmargb'> <i><b>Sales increase 6%</b></i> </li> <li class='bwlistitemmargb'> <i><b>Earnings per share from continuing operations of $0.21</b></i> </li> <li class='bwlistitemmargb'> <i><b>Comparable earnings up 60% to $0.24 excluding costs associated with bond repurchases and using a normalized effective tax rate of 30%</b></i> </li> <li class='bwlistitemmargb'> <i><b>Debt reduced by $49 million</b></i> </li> </ul>

Wednesday, October 26, 2011

ACCO Brands Corporation Reports Third Quarter 2011 Results07:00 EDT Wednesday, October 26, 2011 LINCOLNSHIRE, Ill. (Business Wire) -- ACCO Brands Corporation (NYSE: ABD), a world leader in branded office products, today reported its third quarter results for the period ended September 30, 2011. “Despite the challenging global macroeconomic environment, ACCO Brands continued to execute exceptionally well in the third quarter,” said Robert J. Keller, chairman and chief executive officer. “We once again grew our revenue, operating income, operating income margin and earnings per share. We also increased market share in important categories and channels, and we see opportunities for further share growth ahead of us. We are reiterating our full-year sales, earnings-per-share and free cash flow guidance.” Third Quarter Results Net sales increased 6% to $339.1 million, compared to $319.4 million in the prior-year quarter. Foreign currency favorably impacted sales by 4% and pricing added 2%. Volume was down modestly. Third quarter income from continuing operations was $11.9 million, or $0.21 per diluted share, compared to income of $4.4 million, or $0.08 per diluted share, in the prior-year quarter. Using a normalized effective tax rate of 30% in both periods and excluding $4.2 million of costs associated with the repurchase of the company's senior subordinated and senior secured notes in the current period, adjusted income from continuing operations was $13.7 million, compared to $8.7 million in the prior-year period, and $0.24 per diluted share compared to $0.15 per diluted share in the prior-year period, an increase of 60%. Reported third quarter operating income increased to $35.4 million from $30.0 million in the prior-year quarter. EBITDA increased to $48.1 million, from $41.6 million in the prior year, and included a benefit from foreign exchange translation of $3.4 million. The company reduced its debt by $48.9 million in the quarter through the redemption of bonds and ended the quarter with $41.3 million of cash and no borrowings under its revolving credit facility. Business Segment HighlightsACCO Brands Americas ACCO Brands Americas third quarter net sales increased 3% to $182.6 million, from $178.1 million in the prior-year quarter. Pricing and foreign currency translation favorably impacted sales by 2% and 1%, respectively. Volume decreased modestly. Operating income was even with the prior-year quarter at $16.5 million, and operating margin declined slightly to 9.0% from 9.3% primarily due to increased fuel costs. ACCO Brands International ACCO Brands International net sales increased 14% to $110.3 million, compared to $97.0 million in the prior-year quarter. Foreign currency translation and pricing favorably impacted sales by 11% and 5%, respectively. Volume declined 2% as reduced demand in Europe was partly offset by gains in shredder placements. Operating income increased to $14.6 million, compared to $5.3 million in the prior-year quarter, and operating margin increased to 13.2% from 5.5%. The increase was driven by strong improvements in the profitability of the European business resulting from price increases and operational improvements executed in the first half of the year. Computer Products Group Computer Products net sales increased 4% to $46.2 million, compared to $44.3 million in the prior-year quarter. Foreign currency translation impacted sales favorably by 4% while pricing was a reduction of 1%. Volume increased 1% driven by new products. Operating income was $11.1 million, compared to $12.6 million in the prior-year quarter, and operating margin decreased to 24.0% from a record-level 28.4% in the prior-year quarter due to unfavorable mix. Nine Month Results Net sales increased 5% to $967.7 million, compared to $925.1 million in the prior-year period. Foreign currency translation contributed 4% to sales growth and pricing added 2%. Volume declined 2%. Income from continuing operations was $9.2 million, or $0.16 per diluted share, for the nine months ended September 30, 2011, compared to income of $3.5 million, or $0.06 per diluted share, in the prior-year period. Using a normalized effective tax rate of 30% in both periods, and excluding $4.2 million of costs associated with the company's repurchase of bonds in the current period, adjusted income from continuing operations was $19.1 million, or $0.33 per share, which includes $4.5 million of costs associated with the rationalization of the company's European operations, compared to $13.9 million, or $0.24 per share in the prior-year period. Operating income increased 5% to $79.3 million for the nine months ended September 30, 2011, including the $4.5 million of additional costs in Europe, compared to operating income of $75.5 million in the prior-year period. EBITDA increased 4% to $114.4 million, from $110.1 million in the prior-year period, and included the benefit from foreign exchange translation of $8.7 million. Business Outlook The company is reiterating its full-year 2011 guidance, calling for sales growth from continuing operations of 2-4% and earnings–per-share growth from continuing operations at the high end of its previously stated 20-30% range. Guidance is based on a normalized 30% tax rate, excludes costs associated with the repurchase of its bonds and adjusts for the impact of the GBC – Fordigraph divestiture completed in the second quarter. The company expects free cash flow (after interest, taxes and capital expenditures) of $100-$110 million, including gross proceeds from the sale of the GBC – Fordigraph business. Webcast At 8:30 a.m. Eastern Time today, ACCO Brands Corporation will host a conference call to discuss the company's results. The call will be broadcast live via webcast. The webcast can be accessed through the Investor Relations section of www.accobrands.com. The webcast will be in listen-only mode and will be available for replay for one month following the event. Non-GAAP Financial Measures “Adjusted” results exclude all unusual tax items. Adjusted supplemental EBITDA from continuing operations excludes other non-operating items, including other income/expense and stock-based compensation expense. Adjusted results and supplemental EBITDA from continuing operations are non-GAAP measures. There could be limitations associated with the use of non-GAAP financial measures as compared to the use of the most directly comparable GAAP financial measure. Management uses the adjusted measures to determine the returns generated by its operating segments and to evaluate and identify cost-reduction initiatives. Management believes these measures provide investors with helpful supplemental information regarding the underlying performance of the company from year to year. These measures may be inconsistent with measures presented by other companies.About ACCO Brands Corporation ACCO Brands Corporation is a world leader in branded office products. Its industry-leading brands include Day-Timer®, Swingline®, Kensington®, Quartet®, GBC®, Rexel, NOBO, Derwent, Marbig and Wilson Jones®, among others. Under the GBC brand, the company is also a leader in the professional print finishing market. Forward-Looking Statements This press release contains statements which may constitute "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties, are made as of the date hereof and the company assumes no obligation to update them. ACCO Brands' ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Because actual results may differ from those predicted by such forward-looking statements, you should not place undue reliance on them when deciding to buy, sell or hold the company's securities. Among the factors that could cause our plans, actions and results to differ materially from current expectations are: fluctuations in the cost and availability of raw materials; competition within the markets in which the company operates; the effects of both general and extraordinary economic, political and social conditions, including any volatility and disruption in the capital and credit markets; the effect of consolidation in the office products industry; the liquidity and solvency of our major customers; our continued ability to access the capital and credit markets; the dependence of the company on certain suppliers of manufactured products; the risk that targeted cost savings and synergies from previous business combinations may not be fully realized or take longer to realize than expected; future goodwill and/or impairment charges; foreign exchange rate fluctuations; the development, introduction and acceptance of new products; the degree to which higher raw material costs, and freight and distribution costs, can be passed on to customers through selling price increases and the effect on sales volumes as a result thereof; increases in health care, pension and other employee welfare costs; as well as other risks and uncertainties detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2010, under Item 1A, “Risk Factors,” and in the company's other SEC filings.         ACCO Brands CorporationConsolidated Statements of Operations andReconciliation of Adjusted Results (Unaudited)(In millions of dollars, except per share data)   Three Months Ended September 30,2011   2010%     Change Net sales $339.1$319.46% Cost of products sold   232.0     221.6   5% Gross profit 107.197.810%   Operating costs and expenses: Advertising, selling, general and administrative expenses 70.666.17% Amortization of intangibles 1.51.7(12)% Restructuring charges (income)   (0.4)   -   NM Total operating costs and expenses   71.7     67.8   6%   Operating income 35.430.018%   Non-operating expense (income): Interest expense, net 20.619.75% Equity in earnings of joint ventures (3.8)(2.3)65% Other expense, net   3.2     0.1   NM   Income from continuing operations before income tax 15.412.523% Income tax expense   3.5     8.1   (57)% Income from continuing operations 11.94.4170% Income (loss) from discontinued operations, net of income taxes   (0.2)   1.0   NM Net income $11.7   $5.4   117%   Per share: Basic earnings per share: Income from continuing operations $0.22$0.08175% Income (loss) from discontinued operations -0.02(100)% Basic earnings per share $0.21$0.10110%   Diluted earnings per share: Income from continuing operations $0.21$0.08163% Income (loss) from discontinued operations -0.02(100)% Diluted earnings per share $0.20$0.09122%   Weighted average number of shares outstanding: Basic 55.254.9 Diluted 57.557.1     Reconciliation of Reported Consolidated Results to Adjusted Results   Three Months Ended   Three Months EndedSeptember 30, 2011September 30, 2010   Bond   Tax     Tax   RepurchasesAdjustmentAdjustment (in millions, except per share data) Reported(C)(B)AdjustedReported(A)Adjusted Income from continuing operations before income tax $15.4 $ 4.2 $ - $ 19.6 $12.5 $ - $ 12.5 Income tax expense (benefit)   3.5   1.3   1.1     5.9   8.1   (4.3 )   3.8 Income from continuing operations $11.9 $ 2.9 $ (1.1 ) $ 13.7 $4.4 $ 4.3   $ 8.7   Diluted earnings per share: Income from continuing operations $0.21 $ 0.24 $0.08 $ 0.15   Weighted average number of diluted shares outstanding 57.5 57.5 57.1 57.1   Note – “Adjusted” results are non-GAAP measures. There could be limitations associated with the use of non-GAAP financial measures as compared to the most directly comparable GAAP financial measure. Management believes these measures provide investors with helpful supplemental information regarding the underlying performance of the Company from year to year. These measures may be inconsistent with measures presented by other companies. Statistics (as a % of Net sales, except Income tax rate)   Three Months Ended September 30,2011     2010Reported     AdjustedReported     Adjusted Gross profit (Net sales, less Cost of products sold) 31.6%     30.6%     Advertising, selling, general and administrative 20.8% 20.7% Operating income 10.4% 9.4% Income from continuing operations before income tax 4.5% 3.9% Net income 3.5% 4.0% 1.7% 3.0% Income tax rate   22.7%     30.0%     64.8%     30.0% (A)   The Company has incurred significant operating losses in several jurisdictions in prior periods. In accordance with GAAP, tax valuation allowances have been recorded on certain of the Company's deferred tax assets. As a result, the operating results in these locations have recorded no tax benefit or expense, which results in a high effective tax rate for the prior-year period. Assuming all the locations become profitable in the future and valuation allowances were reversed, the Company's ongoing effective tax rate would approximate 30%. This estimated long-term rate will be subject to variations from the mix of earnings in the Company's operating jurisdictions. (B) During the third quarter of 2011 the U.K. reversed a valuation allowance of $2.8 million which had the effect of reducing the effective tax rate to less than 30%. (C) During the third quarter of 2011, the Company recorded a loss associated with bond repurchases of $4.2 million, or $0.05 per diluted share.   Reconciliation of Net Income to Adjusted Supplemental EBITDA from Continuing Operations(Unaudited)(In millions of dollars)               Three Months EndedSeptember 30,2011       2010 % Change Net income $ 11.7 $ 5.4 117 % Discontinued operations 0.2 (1.0 ) 120 % Loss on bond repurchases (D) 4.2 - NM Income taxes, impact of adjustments   (2.4 )   4.3   NM Adjusted income from continuing operations 13.7 8.7 57 % Adjusted interest expense, net (D) 19.4 19.7 (2 )% Adjusted income tax expense 5.9 3.8 55 % Depreciation (E) 6.4 7.5 (15 )% Amortization of intangibles 1.5 1.7 (12 )% Adjusted other expense, net (D) 0.2 0.1 100 % Stock-based compensation expense   1.0     0.1   900 % Adjusted supplemental EBITDA from continuing operations $ 48.1   $ 41.6   16 %   Adjusted supplemental EBITDA from continuing operations as a % of Net Sales 14.2 % 13.0 %   (D) During the third quarter of 2011, the company recorded a $4.2 million loss associated with bond repurchases. $3.0 million of the premium paid was recorded in Other expense, net and $1.2 million of accelerated debt origination costs were recorded in Interest expense, net. (E) Depreciation expense for the three months ended September 30, 2010, excludes $0.1 million that has been included in discontinued operations, which is excluded from adjusted income from continuing operations.         ACCO Brands CorporationConsolidated Statements of Operations andReconciliation of Adjusted Results (Unaudited)(In millions of dollars, except per share data)   Nine Months Ended September 30,2011   2010%     Change Net sales $967.7$925.15% Cost of products sold   665.9     641.8   4% Gross profit 301.8283.37%   Operating costs and expenses: Advertising, selling, general and administrative expenses 218.5203.57% Amortization of intangibles 4.85.1(6)% Restructuring income   (0.8)   (0.8)0% Total operating costs and expenses   222.5     207.8   7%   Operating income 79.375.55%   Non-operating expense (income): Interest expense, net 59.358.91% Equity in earnings of joint ventures (6.2)(4.6)35% Other expense, net   3.0     1.2   150%   Income from continuing operations before income tax 23.220.016% Income tax expense   14.0     16.5   (15)% Income from continuing operations 9.23.5163% Income from discontinued operations, net of income taxes   38.1     2.1   NM Net income $47.3   $5.6   745%   Per share: Basic earnings per share: Income from continuing operations $0.17$0.06183% Income from discontinued operations 0.690.04NM Basic earnings per share $0.86$0.10760%   Diluted earnings per share: Income from continuing operations $0.16$0.06167% Income from discontinued operations 0.660.04NM Diluted earnings per share $0.82$0.10720%   Weighted average number of shares outstanding: Basic 55.154.8 Diluted 57.657.2   Reconciliation of Reported Consolidated Results to Adjusted Results   Nine Months Ended   Nine Months EndedSeptember 30, 2011September 30, 2010   Bond   Tax     Tax   RepurchasesAdjustmentAdjustment (in millions, except per share data) Reported(B)(A)AdjustedReported(A)Adjusted Income from continuing operations before income tax $23.2 $ 4.2 $ - $ 27.4 $20.0 $ - $ 20.0 Income tax expense (benefit)   14.0   1.3   (7.0 )   8.3   16.5   (10.4 )   6.1 Income (loss) from continuing operations $9.2 $ 2.9 $ 7.0   $ 19.1 $3.5 $ 10.4   $ 13.9   Diluted earnings per share: Income (loss) from continuing operations $0.16 $ 0.33 $0.06 $ 0.24   Weighted average number of diluted shares outstanding 57.6 57.6 57.2 57.2   Note – “Adjusted” results are non-GAAP measures. There could be limitations associated with the use of non-GAAP financial measures as compared to the most directly comparable GAAP financial measure. Management believes these measures provide investors with helpful supplemental information regarding the underlying performance of the Company from year to year. These measures may be inconsistent with measures presented by other companies. Statistics (as a % of Net sales, except Income tax rate)   Nine Months Ended September 30,2011     2010Reported     AdjustedReported     Adjusted Gross profit (Net sales, less Cost of products sold) 31.2%     30.6%     Advertising, selling, general and administrative 22.6% 22.0% Operating income 8.2% 8.2% Income from continuing operations before income tax 2.4% 2.2% Net income 4.9% 5.9% 0.6% 1.7% Income tax rate   60.3%     30.0%     82.5%     30.0% (A)   The Company has incurred significant operating losses in several jurisdictions in prior periods. In accordance with GAAP, tax valuation allowances have been recorded on certain of the Company's deferred tax assets. As a result, the operating results in these locations have recorded no tax benefit or expense, which results in a high effective tax rate for the current and prior periods. Assuming all the locations become profitable in the future and valuation allowances were reversed, the Company's ongoing effective tax rate would approximate 30%. This estimated long-term rate will be subject to variations from the mix of earnings in the Company's operating jurisdictions. (B) During the third quarter of 2011, the Company recorded a loss associated with bond repurchases of $4.2 million, or $0.05 per diluted share.   Reconciliation of Net Income to Adjusted Supplemental EBITDA from Continuing Operations(Unaudited)(In millions of dollars)               Nine Months EndedSeptember 30,2011       2010 % Change Net income $ 47.3 $ 5.6 745 % Discontinued operations (38.1 ) (2.1 ) NM Loss on bond repurchases (C) 4.2 - NM Income taxes, impact of adjustments   5.7     10.4   (45 )% Adjusted income from continuing operations 19.1 13.9 37 % Adjusted interest expense, net (C) 58.1 58.9 (1 )% Adjusted income tax expense 8.3 6.1 36 % Depreciation (D) 20.3 22.4 (9 )% Amortization of intangibles (E) 4.8 5.1 (6 )% Adjusted other expense, net (C) - 1.2 (100 )% Stock-based compensation expense   3.8     2.5   52 % Adjusted supplemental EBITDA from continuing operations $ 114.4   $ 110.1   4 %   Adjusted supplemental EBITDA from continuing operations as a % of Net Sales 11.8 % 11.9 %   (C) During the third quarter of 2011, the company recorded a $4.2 million loss associated with bond repurchases. $3.0 million of the premium paid was recorded in Other expense, net and $1.2 million of accelerated debt origination costs were recorded in Interest expense, net. (D) Depreciation expense for the nine months ended September 30, 2011 and 2010, respectively, excludes $0.1 million and $0.2 million that has been included in discontinued operations, which is excluded from adjusted income from continuing operations. (E) Amortization of intangibles for the nine months ended September 30, 2011 and 2010, both exclude $0.1 million that has been included in discontinued operations, which is excluded from adjusted income from continuing operations.                             ACCO Brands CorporationSupplemental Business Segment Information(Unaudited)(In millions of dollars)   2011 2010 Changes Net Sales Net Sales Margin Net Sales   OI   OI Margin Net Sales   OI   OI Margin $   %   OI $   OI %   Points Q1: ACCO Brands Americas $ 152.2 $ 5.5 3.6 % $ 158.6 $ 8.3 5.2 % $ (6.4 ) (4 )% $ (2.8 ) (34 )% (160 ) ACCO Brands International 104.9 4.1 3.9 % 102.2 9.1 8.9 % 2.7 3 % (5.0 ) (55 )% (500 ) Computer Products 41.3 9.3 22.5 % 39.7 8.1 20.4 % 1.6 4 % 1.2 15 % 210 Corporate   -   (5.6 )   -   (5.0 )   -     (0.6 ) Total $ 298.4 $ 13.3   4.5 % $ 300.5 $ 20.5   6.8 % $ (2.1 ) (1 )% $ (7.2 ) (35 )% (230 )   Q2: ACCO Brands Americas $ 175.7 $ 14.5 8.3 % $ 169.9 $ 14.4 8.5 % $ 5.8 3 % $ 0.1 1 % (20 ) ACCO Brands International 105.8 9.0 8.5 % 93.2 4.9 5.3 % 12.6 14 % 4.1 84 % 320 Computer Products 48.7 13.1 26.9 % 42.1 10.7 25.4 % 6.6 16 % 2.4 22 % 150 Corporate   -   (6.0 )   -   (5.0 )     (1.0 ) Total $ 330.2 $ 30.6   9.3 % $ 305.2 $ 25.0   8.2 % $ 25.0   8 % $ 5.6   22 % 110   Q3: ACCO Brands Americas $ 182.6 $ 16.5 9.0 % $ 178.1 $ 16.5 9.3 % $ 4.5 3 % $ - 0 % (30 ) ACCO Brands International 110.3 14.6 13.2 % 97.0 5.3 5.5 % 13.3 14 % 9.3 175 % 770 Computer Products 46.2 11.1 24.0 % 44.3 12.6 28.4 % 1.9 4 % (1.5 ) (12 )% (440 ) Corporate   -   (6.8 )   -   (4.4 )     (2.4 ) Total $ 339.1 $ 35.4   10.4 % $ 319.4 $ 30.0   9.4 % $ 19.7   6 % $ 5.4   18 % 100   YTD: ACCO Brands Americas $ 510.5 $ 36.5 7.1 % $ 506.6 $ 39.2 7.7 % $ 3.9 1 % $ (2.7 ) (7 )% (60 ) ACCO Brands International 321.0 27.7 8.6 % 292.4 19.3 6.6 % 28.6 10 % 8.4 44 % 200 Computer Products 136.2 33.5 24.6 % 126.1 31.4 24.9 % 10.1 8 % 2.1 7 % (30 ) Corporate   -   (18.4 )   -   (14.4 )     (4.0 ) Total $ 967.7 $ 79.3   8.2 % $ 925.1 $ 75.5   8.2 % $ 42.6   5 % $ 3.8   5 % 0                       ACCO Brands CorporationSupplemental Net Sales Growth Analysis(Unaudited)   Percent Change - SalesNetComparableSalesCurrencySalesGrowth     Translation     Growth     Price     VolumeQ1 2011: ACCO Brands Americas (4.0%) 1.4% (5.4%) 1.1% (6.5%) ACCO Brands International 2.6% 4.7% (2.1%) 1.2% (3.3%) Computer Products 4.0% 1.3% 2.7% 1.8% 0.9% Total (0.7%) 2.5% (3.2%) 1.2% (4.4%)   Q2 2011: ACCO Brands Americas 3.4% 1.5% 1.9% 1.5% 0.4% ACCO Brands International 13.5% 14.6% (1.1%) 3.3% (4.4%) Computer Products 15.7% 5.8% 9.9% 1.7% 8.2% Total 8.2% 6.1% 2.1% 2.1% 0.0%   Q3 2011: ACCO Brands Americas 2.5% 1.2% 1.3% 1.7% (0.4%) ACCO Brands International 13.7% 10.9% 2.8% 4.5% (1.7%) Computer Products 4.3% 4.1% 0.2% (1.1%) 1.3% Total 6.2% 4.5% 1.7% 2.2% (0.5%)   2011 YTD: ACCO Brands Americas 0.8% 1.4% (0.6%) 1.5% (2.1%) ACCO Brands International 9.8% 9.9% (0.1%) 3.0% (3.1%) Computer Products 8.0% 3.8% 4.2% 0.7% 3.5% Total 4.6% 4.4% 0.2% 1.8% (1.6%)     ACCO Brands CorporationKey Stats and Ratios(Unaudited)(In millions of dollars)             Net Debt Calculation   September 30, 2011     December 31, 2010 Current debt obligations, including current portion of long-term debt   $ 0.2     $ 0.2 Long-term debt obligations   668.6     727.4   Total outstanding debt 668.8 727.6 Less: cash and cash equivalents   41.3     83.2   Net debt $ 627.5   $ 644.4               Twelve Months EndedTwelve Months EndedLeverage Ratio (Debt to EBITDA from Continuing Operations)   September 30, 2011     September 30, 2010 Trailing twelve months (TTM) adjusted supplemental EBITDA from Continuing Operations (A) $ 162.7 $ 155.3 Net debt $ 627.5 $ 711.8 Gross debt $ 668.8 $ 726.1   Total Leverage (net debt divided by TTM adjusted supplemental EBITDA from Continuing Operations) 3.9 4.6   Senior-Secured Leverage (senior-secured debt ($422.5 million as of September 30, 2011 and $454.8 million as of September 30, 2010) divided by TTM adjusted supplemental EBITDA from Continuing Operations) 2.6 2.9             As of and for theAs of and for theTwelve Months EndedTwelve Months EndedWorking Capital per Dollar Sales Ratio (Working Capital to Sales)   September 30, 2011     September 30, 2010 Current assets, excluding cash and cash equivalents (B) $ 512.5 $ 531.1 Current liabilities, excluding current debt obligations (C)   254.9     283.2   Net working capital $ 257.6 $ 247.9   Trailing twelve months (TTM) net sales (A) $ 1,327.2 $ 1,267.8   Working capital ratio (net working capital divided by TTM net sales) (A) 19.4 % 19.6 %             (A)   Management believes these measures provide investors with helpful supplemental information regarding the underlying performance of the Company from year to year. These measures may be inconsistent with similar measures presented by other companies. (B) Balance is comprised of receivables, inventories, current deferred income taxes and other current assets. (C) Balance is comprised of accounts payable, accrued compensation, accrued customer programs and other current liabilities.           ACCO Brands CorporationReconciliation of Net Income (Loss) to Adjusted Supplemental EBITDA from Continuing Operations(Unaudited)(In millions of dollars)                     Three Months Ended   December 31,March 31,June 30,September 30,Trailing2010   2011   2011   2011Twelve Months   Net sales   $ 359.5       $ 298.4       $ 330.2       $ 339.1   $ 1,327.2     Net income (loss) $ 6.8 $ (8.1 ) $ 43.7 $ 11.7 $ 54.1 Discontinued operations (2.5 ) (0.9 ) (37.4 ) 0.2 (40.6 ) Loss on bond repurchases - - - 4.2 4.2 Income taxes, impact of adjustments     8.7         5.8         2.3         (2.4 )   14.4     Adjusted income (loss) from continuing operations 13.0 (3.2 ) 8.6 13.7 32.1   Adjusted interest expense, net 19.4 19.2 19.5 19.4 77.5 Adjusted income tax expense (benefit) 5.5 (1.3 ) 3.7 5.9 13.8 Depreciation expense 7.1 7.1 6.8 6.4 27.4 Amortization of intangibles 1.6 1.7 1.6 1.5 6.4 Adjusted other (income) expense, net - (0.2 ) - 0.2 - Stock-based compensation expense     1.7         0.8         2.0         1.0     5.5     Adjusted supplemental EBITDA from continuing operations   $ 48.3       $ 24.1       $ 42.2       $ 48.1   $ 162.7             ACCO Brands Corporation and SubsidiariesCondensed Consolidated Balance Sheets   September 30,December 31,20112010(in millions of dollars)(unaudited)Assets Current assets: Cash and cash equivalents $ 41.3 $ 83.2 Accounts receivable, net 254.5 274.8 Inventories 217.7 205.9 Deferred income taxes 7.5 9.1 Other current assets 32.6 24.0 Assets of discontinued operations   0.2     23.7   Total current assets 553.8 620.7   Total property, plant and equipment 477.6 474.1 Less accumulated depreciation   (325.8 )   (310.9 ) Property, plant and equipment, net 151.8 163.2 Deferred income taxes 12.4 10.6 Goodwill 136.2 136.9 Identifiable intangibles, net 132.4 137.0 Other assets 63.7 71.8 Assets of discontinued operations   -     9.4   Total assets $ 1,050.3   $ 1,149.6     Liabilities and Stockholders' Deficit Current liabilities: Current portion of long-term debt $ 0.2 $ 0.2 Accounts payable 105.7 110.3 Accrued compensation 19.5 23.9 Accrued customer program liabilities 57.4 72.8 Accrued interest 4.2 22.0 Other current liabilities 65.9 84.1 Liabilities of discontinued operations   2.2     14.6   Total current liabilities 255.1 327.9   Long-term debt 668.6 727.4 Deferred income taxes 83.1 81.2 Pension and post retirement benefit obligations 63.2 74.9 Other non-current liabilities 12.9 12.7 Liabilities of discontinued operations   -     5.3   Total liabilities   1,082.9     1,229.4     Stockholders' deficit: Common stock 0.6 0.6 Treasury stock (1.7 ) (1.5 ) Paid-in capital 1,405.0 1,401.1 Accumulated other comprehensive loss (89.9 ) (86.1 ) Accumulated deficit   (1,346.6 )   (1,393.9 ) Total stockholders' deficit   (32.6 )   (79.8 ) Total liabilities and stockholders' deficit $ 1,050.3   $ 1,149.6           ACCO Brands Corporation and SubsidiariesCondensed Consolidated Statements of Cash Flows(Unaudited)   Nine Months EndedSeptember 30,(in millions of dollars)2011     2010Operating activities Net income $ 47.3 $ 5.6 Other non-cash charges - 0.4 Gain on sale of assets (40.8 ) (0.1 ) Depreciation 20.4 22.6 Amortization of debt issuance costs and bond discount 6.7 4.7 Amortization of intangibles 4.9 5.2 Stock-based compensation 3.8 2.5 Loss on debt redemption 2.9 - Changes in balance sheet items: Accounts receivable 17.7 0.8 Inventories (13.5 ) (28.4 ) Other assets (4.5 ) (7.2 ) Accounts payable (4.5 ) 9.0 Accrued expenses and other liabilities (58.5 ) (38.0 ) Accrued income taxes (2.6 ) 8.2 Equity in earnings of joint ventures, net of dividends received   (1.2 )   (0.2 ) Net cash used by operating activities (21.9 ) (14.9 ) Investing activities Additions to property, plant and equipment (10.6 ) (8.7 ) Assets acquired (1.4 ) (1.1 ) Proceeds (payments) from the sale of discontinued operations 54.6 (3.8 ) Proceeds from the disposition of assets 0.3 0.7 Other   0.6     -   Net cash provided (used) by investing activities 43.5 (12.9 ) Financing activities (Repayments) proceeds of long-term debt (62.8 ) 0.4 Repayments of short term debt, net - (0.8 ) Cost of debt issuance - (0.8 ) Other   (0.2 )   (0.1 ) Net cash used by financing activities (63.0 ) (1.3 ) Effect of foreign exchange rate changes on cash   (0.5 )   (0.2 ) Net decrease in cash and cash equivalents (41.9 ) (29.3 ) Cash and cash equivalents Beginning of period   83.2     43.6   End of period $ 41.3   $ 14.3   ACCO Brands CorporationMedia RelationsRich Nelson, (847) 484-3030orInvestor RelationsJennifer Rice, (847) 484-3020