ACCO BRANDS Corp
For the period ended Mar 31, 2025. Filed May 2, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
ACCO$5.06-3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0000950170-24-119895
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0000950170-25-062490
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 70 current paragraphs.
23 unchanged; 27 reworded; 20 added; 20 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
During the first quarter, our net sales decreased $41.5 million, or 11.6 percent, compared to the prior year's first quarter. The decrease is due to lower global demand for certain office related products and gaming accessories. These declines were partially offset by growth in computer accessories. Gross margin increased 60 basis points reflecting a favorable sales mix and cost savings from our global footprint rationalization program.
Current report
For the three months ended March 31, 2025, net sales decreased $41.5 million, or 11.6 percent, including $11.7 million, or 3.3 percent from adverse foreign exchange. Comparable net sales decreased 8.3 percent. The reported sales decline was driven by lower volume, which was down $30.1 million, or 8.4 percent, primarily due to lower global demand for certain office related products and gaming accessories, partly offset by growth in computer accessories.
Current report
Operating (Loss) Income
Current report
Interest Expense, Net
Current report
For the three months ended March 31, 2025, interest expense, net decreased $2.5 million, or 21.9 percent, primarily due to lower variable interest rates on lower variable debt balances versus the prior year. The weighted average interest rate on $361.5 million of outstanding variable rate debt as of March 31, 2025 decreased to 4.73 percent from 6.26 percent in the prior year.
Current report
Income Tax (Benefit) Expense
Current report
For the three months ended March 31, 2025, net sales decreased $23.3 million, or 11.8 percent, including $7.0 million, or 3.5 percent, from adverse foreign exchange. Comparable net sales decreased 8.3 percent. The reported sales decline was driven by lower volume, which was down $13.5 million, or 6.8 percent, primarily due to lower demand for technology accessories and certain consumer and business products. Price decreases of $2.7 million, or 1.4 percent also contributed to the decline.
Current report
For the three months ended March 31, 2025, net sales decreased 11.3 percent, including $4.7 million, or 2.9 percent, from adverse foreign exchange. Comparable net sales decreased 8.4 percent. The reported sales decline was driven by lower volume, which was down $16.6 million, or 10.3 percent, primarily due to reduced business and consumer demand for office products, partly offset by growth in technology accessories and the benefit of price increases of $3.0 million, or 1.9 percent.
Current report
Impact and Potential Impact of Tariffs
Current report
During the first quarter of 2025, the impact of the new U.S. and reciprocal tariffs on our business was not material to our condensed consolidated financial statements. We expect the environment to remain uncertain throughout 2025 until there is greater clarity on the tariffs and business and consumer demand. In reaction to the evolving tariff landscape, we have initiated a number of actions:
Current report
Implementing price increases,
Current report
In the near term, investing in inventory arriving from countries with lower tariffs,
Current report
Moving sourcing of our U.S. products to countries where we believe tariffs will be lower over the long term,
Current report
Evaluating our own manufacturing facilities to utilize existing capacity where it makes economic sense, and
Current report
Expanding our SKU rationalization in the U.S. and offering our customers item substitutions for high-cost products.
Current report
For further information on our risks related to the impact of tariffs, see "Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q.
Current report
Because of the seasonality of our business, generally our operating cash flow is generated in the second half of the year, as the cash inflows in the first and second quarters are consumed building working capital and making our annual performance-based compensation payments when earned. Our third and fourth quarter cash flows come from completing the working capital cycle.
Current report
In January 2024, the Company announced a multi-year restructuring and cost savings program, with currently anticipated annualized pre-tax cost savings of approximately $100.0 million by the end of 2026. The program incorporates initiatives to simplify and delayer the Company's operating structure and reduce costs through headcount reductions, supply chain optimization, global footprint rationalization, and better leveraging the Company's sourcing capabilities.
Current report
Cash provided by operating activities during the three months ended March 31, 2025, was driven by cash inflows of $13.1 million (excluding the non-cash impacts primarily of amortization of intangibles, depreciation, and stock-based compensation expense that are included in our net loss). Cash provided by trade working capital was $72.9 million, which includes accounts receivable, inventory, and accounts payable. This was more than offset by a net cash outflow of $80.5 million for all other assets and liabilities.
Current report
Cash used by investing activities during the three months ended March 31, 2025, was due to $10.1 million of cash used for the acquisition of Buro Seating as well as capital expenditures.
Removed paragraphs (20)
Previous report
During the third quarter, our net sales decreased $27.1 million, or 6.0 percent, compared to the prior year's third quarter. The decrease is due to lower back-to-school purchases by our customers in Latin America and North America. Additionally, global demand was weaker for certain office related products. These declines were partially offset by growth in the technology accessories categories. Gross margin increased 20 basis points compared to the prior-year period primarily due to the impact of cost reduction actions, partly offset by the impact of volume declines.
Previous report
For the three months ended September 30, 2024, net sales decreased $27.1 million, or 6.0 percent, including $4.4 million, or 1.0 percent, from adverse foreign exchange. Comparable net sales decreased 5.0 percent. The sales decline was driven by lower volume, which was down 4.7 percent, due to lower back-to-school sales in Latin America and North America. Additionally, global demand was weaker for certain office related products. These declines were partially offset by growth in the technology accessories categories. The exit of lower margin business in North America accounted for approximately 2.0 percent of the decline.
Previous report
For the nine months ended September 30, 2024, net sales decreased $126.1 million, or 9.4 percent, including $7.4 million, or 0.6 percent, from adverse foreign exchange. Comparable net sales decreased 8.8 percent. The sales decline was driven by lower volume, which was down 8.5 percent, primarily due to softer global business and consumer demand for certain product categories, and from the exit of lower margin business in North America which accounted for approximately 3.0 percent of the decline.
Previous report
Selling, General and Administrative Expenses
Previous report
For the nine months ended September 30, 2024, SG&A decreased $17.4 million, or 6.0 percent, primarily due to the impact of global cost reduction actions and lower incentive compensation expense, partly offset by people cost inflation. Favorable foreign exchange reduced SG&A by $1.0 million, or 0.3 percent.
Previous report
Operating Income (Loss)
Previous report
For the nine months ended September 30, 2024, we reported an operating loss of $79.0 million, a decrease of $176.5 million, primarily due to non-cash impairment charges of $165.2 million related to goodwill and an indefinite-lived trade name within our Americas reporting unit. In addition, the impact of lower sales volume more than offset moderating product costs and lower SG&A expense.
Previous report
Income Tax Expense
Previous report
For the three months ended September 30, 2024, we recorded income tax expense of $4.5 million on income before taxes of $13.8 million. This compared with an income tax expense of $6.7 million on income before taxes of $21.6 million for the three months ended September 30, 2023.
Previous report
Net Income (Loss)/Diluted Income (Loss) per Share
Previous report
For the three months ended September 30, 2024, net income was $9.3 million compared to net income of $14.9 million in the prior year. The decrease was due to lower operating income as noted above.
Previous report
For the nine months ended September 30, 2024, net loss was $122.2 million compared to a net income of $37.6 million in the prior year. The net loss was primarily due to the non-cash impairment charges related to goodwill and an indefinite-lived trade name.
Previous report
For the three months ended September 30, 2024, net sales decreased $25.3 million, or 8.9 percent, as a result of lower volume of $15.3 million, or 5.4 percent, and price decreases which reduced sales by $3.6 million, or 1.3 percent. The volume decline was primarily due to moderating demand trends in Latin America and lower replenishment for back-to-school products in North America. The exit of lower margin business in North America accounted for approximately 3.0 percent of the decline. These declines were partially offset by growth in technology accessories. Adverse foreign exchange reduced net sales $6.4 million, or 2.3 percent.
Previous report
For the nine months ended September 30, 2024, net sales decreased $102.2 million, or 12.0 percent, as a result of lower volume of $84.0 million, or 9.9 percent, and price decreases which reduced sales by $12.7 million, or 1.5 percent. The volume decline was primarily due to softer business and consumer demand for our office products, and from the exit of lower margin business in North America, which accounted for approximately 4.0 percent. Adverse foreign exchange reduced net sales $5.5 million, or 0.6 percent.
Previous report
For the nine months ended September 30, 2024, we reported an operating loss of $76.7 million, a decrease of $183.2 million, primarily due to the non-cash impairment charges totaling $165.2 million related to goodwill and an indefinite-lived trade name. The remaining change in operating results was from the impact of lower sales volume and $3.2 million of higher net restructuring expense, partly offset by moderating product costs and lower SG&A expense as a result of our cost reduction initiatives and reduced incentive compensation. Adverse foreign exchange increased operating loss $0.2 million, or 0.2 percent.
Previous report
For the three months ended September 30, 2024, net sales decreased $1.8 million, or 1.1 percent, primarily due to lower volume of $5.6 million, or 3.4 percent, partly offset by price increases which added $1.8 million, or 1.1 percent. The lower volume reflects reduced business and consumer demand for our office products, partially offset by growth in technology accessories. Favorable foreign exchange increased net sales $2.0 million, or 1.2 percent.
Previous report
For the nine months ended September 30, 2024, net sales decreased $23.9 million, or 4.8 percent, primarily due to lower volume of $30.7 million, or 6.2 percent, partly offset by price increases which added $8.7 million, or 1.8 percent. The lower volume reflects reduced business and consumer demand for our office products, partially offset by growth in technology accessories. Adverse foreign exchange reduced net sales $1.9 million, or 0.4 percent.
Previous report
For the three months ended September 30, 2024, operating income increased $0.1 million primarily due to the cumulative benefit of cost reduction actions offsetting the impact of lower volume. Favorable foreign exchange increased operating income $0.2 million, or 2.1 percent.
Previous report
On October 30, 2024, the Company entered into a seventh amendment to the Credit Agreement to extend the maturity of the credit facility to October 30, 2029. The Company repaid in full the outstanding USD Senior Secured Term Loan A, the Australian Dollar Senior Secured Term Loan A and part of the outstanding Euro Senior Secured Term Loan A by borrowing under the Revolving Facility. After giving effect to the seventh amendment, the current Revolving Facility provides for outstanding borrowings not to exceed $467.5 million. See "Note 3. Long-term Debt and Short-term Borrowings" for more information.
Previous report
Cash provided by operating activities during the nine months ended September 30, 2023, was driven by net income adjusted for non-cash add backs primarily consisting of amortization of intangibles, depreciation, and stock-based compensation expense. This was partially offset by cash payments for incentive compensation, interest and taxes.
Reworded paragraphs (27)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2024 and 2023 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2025 and 2024 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.
Previous wording
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. We have expanded into higher growth product categories, while increasing our sales mix to higher growth 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.
Current wording
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. These brands include At-A-Glance®, Barrilito®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Swingline®, Tilibra® and others. Our products are sold primarily in the U.S., Europe, Australia, Canada, Brazil and Mexico.
Previous wording
Effective January 1, 2024, the Company reorganized its previously reported North America, EMEA and International operating segments into two operating segments, Americas and International. Americas includes the U.S., Canada, Brazil, Mexico and Chile and International includes EMEA, Australia, New Zealand and Asia. This change will simplify and delayer the Company's operating structure and reduce costs through headcount reductions, supply change optimization, global footprint rationalization, and better leverage of our sourcing capabilities. Prior period results have been reclassified to reflect this change in our operating segments. Each business segment designs, markets, sources, manufactures, and sells recognized consumer, technology and business branded products used in schools, homes and at work. Product designs are tailored to end-user preferences in each geographic region, and where possible, leverage common engineering, design, and sourcing.
Current wording
The Company has two operating segments Americas and International. Each operating segment designs, markets, sources, manufactures, and sells recognized consumer, technology and business branded products used in schools, homes and at work. Product designs are tailored to end-user preferences in each geographic region, and where possible, leverage common engineering, design, and sourcing.
Previous wording
The Company continues to be impacted by softer global demand, reflecting lower consumer and office spending due to the macroeconomic conditions and geopolitical uncertainties. We expect these collective global trends to continue to impact our financial results.
Current wording
The Company continues to be impacted by softer global demand, reflecting lower consumer and office spending due to the weak macroeconomic conditions and geopolitical instability. We expect these collective global trends to continue to impact our financial results.
Previous wording
We reported operating income of $26.3 million in the third quarter, compared to $32.2 million in the prior year's third quarter. The decline in operating results was primarily due to lower sales volume and higher restructuring expense.
Current wording
We reported an operating loss of $6.7 million in the first quarter, compared to operating income of $5.9 million in the prior year's first quarter. The decline in operating results was primarily due to lower sales volume and higher restructuring expense.
Previous wording
Our operating cash flow for the first nine months was cash provided of $95.5 million compared to cash provided of $70.7 million in the prior year primarily reflecting reductions in working capital. Our operating cash flow continues to be seasonal with a historic pattern of strong inflows during the second half of the year.
Current wording
Our operating cash flow for the first three months was cash provided of $5.5 million compared to cash provided of $28.2 million in the prior year primarily reflecting reductions in working capital. Our operating cash flow continues to be seasonal with a historic pattern of strong inflows during the second half of the year.
Previous wording
Consolidated Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Consolidated Results of Operations for the Three Months Ended March 31, 2025 and 2024
Previous wording
For the nine months ended September 30, 2024, gross profit decreased $28.4 million, or 6.6 percent, primarily due to volume declines partly offset by the impact of global cost reduction actions and improved product mix. Adverse foreign exchange reduced gross profit by $2.0 million, or 0.5 percent.
Current wording
For the three months ended March 31, 2025, gross profit decreased $10.8 million, or 9.8 percent, primarily due to volume declines partly offset by improved product mix and savings from the impact of our global cost reduction actions. Adverse foreign exchange reduced gross profit by $3.6 million, or 3.3 percent.
Previous wording
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).
Current wording
Selling, General and Administrative Expenses("SG&A")
Previous wording
For the three months ended September 30, 2024, SG&A decreased $6.6 million, or 6.7 percent, primarily due to the impact of global cost reduction actions and lower incentive compensation expense, partly offset by people cost inflation. Favorable foreign exchange reduced SG&A by $0.7 million, or 0.7 percent.
Current wording
For the three months ended March 31, 2025, SG&A decreased $1.5 million, or 1.6 percent. The decrease was due to favorable foreign exchange which reduced SG&A by $2.3 million, or 2.4 percent, as well as the positive impact of global cost reductions, offset by people costs.
Previous wording
For the three months ended September 30, 2024, we reported operating income of $26.3 million, a decrease of $5.9 million, primarily due to the impact of lower sales volume and higher restructuring expense, partly offset by lower SG&A expense.
Current wording
For the three months ended March 31, 2025, we reported an operating loss of $6.7 million, compared to operating income of $5.9 million in the prior year, primarily due to the impact of lower sales volume and higher restructuring costs partly offset by lower SG&A expense and positive sales mix. Adverse foreign exchange increased operating loss by $1.0 million, or 16.9 percent.
Previous wording
For the nine months ended September 30, 2024, we recorded income tax expense of $3.3 million on a loss before taxes of $118.9 million. This compared with an income tax expense of $22.7 million on income before taxes of $60.3 million for the nine months ended September 30, 2023.
Current wording
For the three months ended March 31, 2025, we recorded an income tax benefit of $3.3 million on a loss before taxes of $16.5 million. For the three months ended March 31, 2024, we recorded income tax expense of $1.0 million on a loss before taxes of $5.3 million.
Previous wording
Segment Net Sales and Operating Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Segment Net Sales and Operating Income for the Three Months Ended March 31, 2025 and 2024
Previous wording
Segment operating income excludes corporate costs. See "Part I, Item 1. Note 16. Information on Business Segments" for a reconciliation of total "Segment operating income (loss)" to "Income (loss) before income tax."
Current wording
Segment operating income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Operating Segments" for a reconciliation of total "Segment operating income" to "Loss before income tax."
Previous wording
For the three months ended September 30, 2024, we reported operating income of $25.9 million, a decrease of $7.9 million, primarily due to the impact of lower sales volume and $3.4 million of higher restructuring expense, partly offset by lower SG&A expense as a result of our cost reduction initiatives and reduced incentive compensation. Adverse foreign exchange reduced operating income $0.6 million, or 1.8 percent.
Current wording
For the three months ended March 31, 2025, we reported operating income of $0.9 million, a decrease of $5.2 million, primarily due to the impact of lower sales volume and $1.8 million of restructuring expense in the current year period. Adverse foreign exchange reduced operating income $0.6 million, or 9.8 percent.
Previous wording
Segment operating income (loss) excludes corporate costs. See "Part I, Item 1. Note 16. Information on Business Segments" for a reconciliation of total "Segment operating income (loss)" to "Income (loss) before income tax."
Current wording
Segment operating income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Operating Segments" for a reconciliation of total "Segment operating income" to "Loss before income tax."
Previous wording
For the nine months ended September 30, 2024, operating income increased $3.9 million primarily due to lower restructuring expense and the cumulative benefit of cost reduction actions offsetting the impact of lower volume. Adverse foreign exchange reduced operating income $0.5 million, or 1.9 percent.
Current wording
For the three months ended March 31, 2025, operating income decreased $7.7 million primarily due to lower sales volume, partly offset by cost savings and pricing actions. Adverse foreign exchange reduced operating income $0.4 million, or 3.1 percent.
Previous wording
Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures and 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, 2024, there was $22.5 million in borrowings outstanding under the Revolving Facility ($17.0 million reported in "Current portion of long-term debt" and $5.5 million reported in "Long-term debt, net"), and the amount available for borrowings was $569.0 million (allowing for $8.5 million of letters of credit outstanding on that date). We had $102.0 million in cash on hand. We maintain adequate financing arrangements at market rates.
Current wording
Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures, dividends, stock repurchases and acquisitions. Our principal sources of liquidity are cash flows from operating activities, cash and cash equivalents held, and seasonal borrowings under our $467.5 million multi-currency revolving credit facility (the "Revolving Facility"). As of March 31, 2025, there was $221.4 million in borrowings outstanding under the Revolving Facility ($18.5 million reported in "Current portion of long-term debt" and $202.9 million reported in "Long-term debt, net"), and the amount available for borrowings was $235.9 million (allowing for $10.2 million of letters of credit outstanding on that date). We had $134.6 million in cash on hand as of March 31, 2025.
Previous wording
As of September 30, 2024, our Consolidated Leverage Ratio was approximately 3.50 to 1.00 versus our maximum covenant of 4.00 to 1.00. We had no debt maturities before March 2026.
Current wording
As of March 31, 2025, our Consolidated Leverage Ratio was approximately 3.65 to 1.00 versus our maximum covenant of 4.50 to 1.00. We had no debt maturities before March 2029.
Previous wording
The $339.4 million of debt outstanding as of September 30, 2024 under our senior secured credit facilities had a weighted average interest rate of 6.72 percent, and the $575.0 million outstanding principal amount of our senior unsecured notes due 2029 had a fixed interest rate of 4.25 percent.
Current wording
The $361.5 million of debt currently outstanding under our senior secured credit facilities had a weighted average interest rate of 4.73 percent as of March 31, 2025, and the $575.0 million outstanding principal amount of our senior unsecured notes due March 2029 had a fixed interest rate of 4.25 percent.
Previous wording
From time to time the Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.
Current wording
The Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.
Previous wording
Cash Flow for the Nine Months Ended September 30, 2024 and 2023
Current wording
Cash Flow for the Three Months Ended March 31, 2025 and 2024
Previous wording
During the nine months ended September 30, 2024, our cash and cash equivalents increased $35.6 million, as compared to an increase of $11.5 million in the first nine months of the prior year. The following table summarizes our cash flows for the periods presented:
Current wording
During the three months ended March 31, 2025, our cash and cash equivalents increased $60.5 million, as compared to an increase of $58.2 million in the first three months of the prior year. The following table summarizes our cash flows for the periods presented:
Previous wording
Cash provided by operating activities during the nine months ended September 30, 2024, was driven by cash provided by trade working capital of $86.7 million, which includes accounts receivable, inventory and accounts payable. This was partially offset by cash payments for incentive compensation, interest and taxes.
Current wording
Cash provided by operating activities during the three months ended March 31, 2024, was driven by cash inflows of $17.5 million (excluding the non-cash impacts primarily of amortization of intangibles, depreciation, and stock-based compensation expense that are included in our net loss). Cash provided by trade working capital was $114.6 million, which includes accounts receivable, inventory, and accounts payable. This was partially offset by a net cash outflow of $103.9 million for all other assets and liabilities.
Previous wording
Cash used by investing activities during the nine months ended September 30, 2024 and 2023 was primarily due to capital expenditures. The prior year also included proceeds of $2.2 million from the sale of our facility in Japan.
Current wording
Cash used by investing activities during the three months ended March 31, 2024, was due to capital expenditures.
Previous wording
Cash used by financing activities during the nine months ended September 30, 2024, was primarily due to cash outflows from a net decrease in debt, dividend payments, and cash used to repurchase common stock.
Current wording
Cash provided by financing activities during the three months ended March 31, 2025, was primarily due to borrowings exceeding debt repayments, partially offset by dividend payments and $15.0 million in repurchases of common stock.
Previous wording
Cash used by financing activities during the nine months ended September 30, 2023, was primarily due to cash outflows from a net decrease in debt and dividend payments.
Current wording
Cash provided by financing activities during the three months ended March 31, 2024, was primarily due to borrowings exceeding debt repayments, partially offset by dividend payments.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, gross profit decreased $7.9 million, or 5.5 percent, primarily due to volume declines partly offset by the impact of global cost reduction actions. Adverse foreign exchange reduced gross profit by $1.4 million, or 1.0 percent.