ACCO Brands Corp., a provider of branded office products, reported its fourth quarter results for the period ended December 31, 2013.
"As we reported in January, our quarterly and full-year results were in line with our overall expectations," said Boris Elisman, president and chief executive officer, ACCO Brands. "Despite a challenging environment, we generated over $150 million in free cash flow, which was used to reduce our debt. Looking into 2014, we again expect strong free cash flow, underpinned by cost reduction actions and productivity improvements."
In a release on February 12, the Company reported that net sales decreased 5 percent to $503.7 million, compared to $529.7 million in the prior-year quarter. On a constant currency basis, sales declined 2 percent driven primarily by lower volume and mix. Income from continuing operations was $50.3 million, or $0.43 per share, including pre-tax net charges of $11.0 million, primarily for restructuring costs. This compared to a loss of $15.1 million, or $0.13 per share, in the prior-year quarter, which included a significant tax adjustment. Adjusted income from continuing operations in the current quarter increased 6 percent to $44.9 million, or $0.39 per share, compared to $42.3 million, or $0.37 per share, in the prior-year quarter. The improvement was the result of cost synergies and productivity improvements, which were partially offset by lower sales and unfavorable foreign exchange.
Net sales increased 0.4 percent to $1.77 billion, compared to $1.76 billion in the prior-year twelve-month period, due to the full- year impact of the merger with MeadWestvaco's Consumer & Office Products business (Mead C&OP). Income from continuing operations was $77.3 million, or $0.67 per share, including pre-tax charges of $43.5 million primarily for restructuring costs, debt refinancing and IT integration costs. This compared to income from continuing operations of $117.0 million, or $1.22 per share, in the prior-year period, including a $145.1 million tax benefit, which was only partially offset by refinancing costs, merger-related costs and restructuring charges.
On a pro forma basis, including the results of Mead C&OP for all of 2012, sales decreased 7 percent, or 5 percent on a constant currency basis. The underlying decline was driven primarily by lower volume and mix in North America and Computer Products. Adjusted income from continuing operations was $87.9 million, or $0.76 per share, compared to adjusted pro forma income from continuing operations in the prior-year period of $93.7 million, or $0.82 per share. The decline in income was primarily driven by lower sales and unfavorable foreign exchange, partially offset by cost synergies and productivity improvements.
In 2013, the company reduced its debt by $151 million.
The company expects 2014 sales to decline in the mid-single digits and adjusted earnings per share of $0.70-$0.76, both of which assume negative effects of foreign currency. The company expects free cash flow of approximately $140 million.
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