ACCO Brands Corp. (ABD, Financial) filed Quarterly Report for the period ended 2012-09-30.
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Computer Products net sales decreased $5.8 million, or 13%, to $40.4 million compared to $46.2 million in the prior-year quarter. The loss of $1.4 million of royalty income accounted for 3% of the sales decrease. Volume declined 5% due to lower sales of PC accessories, particularly security products due to lower sales of laptops and desktops in the U.S. and Europe. Gains from sales of new products for smartphones and tablets were not able to offset the lower sales of PC accessories in the quarter. Also contributing to the decline was unfavorable foreign currency translation, which decreased sales by $1.5 million, or 3%, and lower net pricing due to promotions.
Advertising, 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, etc.). SG&A increased $41.7 million, or 20%, to $248.2 million, and as a percentage of sales, SG&A decreased compared to the prior-year period, 20.2% versus 21.3%. The acquisition of the Mead C&OP Business contributed $46.7 million of the increase. The underlying decrease of $5.0 million was driven by savings in the North America and International business segments, and the absence of $4.5 million of business rationalization charges within our European operations incurred during 2011, $3.7 million in reduced management incentives and favorable currency translation of $2.8 million, partially offset by $18.4 million in transaction and integration costs associated with the acquisition the Mead C&OP Business.
ACCO Brands North America net sales increased $274.9 million, or 59%, to $737.9 million, compared to $463.0 million in the prior-year nine-month period. The acquisition of the Mead C&OP Business accounted for $299.4 million of the increase. The underlying decline of $24.5 million includes an unfavorable currency translation of $1.7 million. The comparable sales decline of 5% occurred in the legacy ACCO Brands U.S. and Canadian businesses due to weaker demand and inventory reductions by certain customers.
Computer Products net sales decreased $9.2 million, or 7% to $127.0 million compared to $136.2 million in the prior-year period. The decrease primarily reflects unfavorable foreign currency translation, which decreased sales by $4.1 million, or 3%, the loss of $2.4 million, or 2% in royalty income and lower net pricing due to promotions and a shift in sales mix in Europe to lower priced products sold in the retail channel. Volume decreased slightly as gains from the sales of new products for smartphones and tablets, could not offset lower sales of PC accessories, particularly high-margin security products in the U.S.
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Highlight of Business Operations:
ACCO Brands North America net sales increased $154.8 million, or 93%, to $321.4 million compared to $166.6 million in the prior-year quarter. The acquisition of the Mead C&OP Business accounted for $165.3 million of the increase. The underlying decline of $10.5 million, includes an unfavorable currency translation of $0.4 million. The comparable sales decline of 6% was largely in the legacy ACCO Brands business and was due to a soft U.S. and Canadian back-to-school season with an adverse sales mix towards commodity back-to-school products and reductions in U.S. wholesaler inventories, particularly for our durable products.Computer Products net sales decreased $5.8 million, or 13%, to $40.4 million compared to $46.2 million in the prior-year quarter. The loss of $1.4 million of royalty income accounted for 3% of the sales decrease. Volume declined 5% due to lower sales of PC accessories, particularly security products due to lower sales of laptops and desktops in the U.S. and Europe. Gains from sales of new products for smartphones and tablets were not able to offset the lower sales of PC accessories in the quarter. Also contributing to the decline was unfavorable foreign currency translation, which decreased sales by $1.5 million, or 3%, and lower net pricing due to promotions.
Advertising, 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, etc.). SG&A increased $41.7 million, or 20%, to $248.2 million, and as a percentage of sales, SG&A decreased compared to the prior-year period, 20.2% versus 21.3%. The acquisition of the Mead C&OP Business contributed $46.7 million of the increase. The underlying decrease of $5.0 million was driven by savings in the North America and International business segments, and the absence of $4.5 million of business rationalization charges within our European operations incurred during 2011, $3.7 million in reduced management incentives and favorable currency translation of $2.8 million, partially offset by $18.4 million in transaction and integration costs associated with the acquisition the Mead C&OP Business.
ACCO Brands North America net sales increased $274.9 million, or 59%, to $737.9 million, compared to $463.0 million in the prior-year nine-month period. The acquisition of the Mead C&OP Business accounted for $299.4 million of the increase. The underlying decline of $24.5 million includes an unfavorable currency translation of $1.7 million. The comparable sales decline of 5% occurred in the legacy ACCO Brands U.S. and Canadian businesses due to weaker demand and inventory reductions by certain customers.
Computer Products net sales decreased $9.2 million, or 7% to $127.0 million compared to $136.2 million in the prior-year period. The decrease primarily reflects unfavorable foreign currency translation, which decreased sales by $4.1 million, or 3%, the loss of $2.4 million, or 2% in royalty income and lower net pricing due to promotions and a shift in sales mix in Europe to lower priced products sold in the retail channel. Volume decreased slightly as gains from the sales of new products for smartphones and tablets, could not offset lower sales of PC accessories, particularly high-margin security products in the U.S.
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