ACCO BRANDS Corp

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2026 and 2025 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 and nine months ended September 30, 2026 and 2025 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.

Previous wording

On January 30, 2026, we completed the acquisition of EPOS from Demant A/S ("EPOS"), a leading Danish hearing healthcare company. Based in Copenhagen, Denmark, EPOS provides a comprehensive range of premium enterprise wired and wireless headsets, and other audio solutions, that build on over a century of research in psychoacoustics. The EPOS product line is designed to reduce listening fatigue, improve voice clarity and support cognitive performance. EPOS complements our global computer accessories portfolio and expands on our strategy into growing technology peripherals.

Current wording

On January 30, 2026, we completed the acquisition of EPOS from Demant. Based in Ballerup, Denmark, EPOS provides a comprehensive range of premium enterprise wired and wireless headsets, and other audio solutions, that build on over a century of research in psychoacoustics. The EPOS product line is designed to reduce listening fatigue, improve voice clarity and support cognitive performance. EPOS complements our global computer accessories portfolio and expands on our strategy into growing technology peripherals.

Previous wording

The second quarter benefited from the acquisition of EPOS and favorable foreign exchange. The Company continues to be impacted by softer global demand primarily due to lower consumer and office spending and geopolitical instability. We expect these collective global trends and the impact of evolving trade policy to continue to impact our results of operations.

Current wording

The third quarter benefited from the acquisition of EPOS, tariff refunds, and favorable foreign exchange. The Company continues to be impacted by softer global demand primarily due to lower consumer and business spending in our product categories and geopolitical instability. We expect these collective global trends and the impact of evolving trade policy to continue to impact our results of operations.

Previous wording

During the second quarter, our net sales increased $20.3 million, or 5.1 percent, compared to the prior year's second quarter. The net sales increase reflects the acquisition of EPOS and favorable foreign exchange. Growth in the Americas segment's learning and creative category was partially offset by organic declines within the International segment.

Current wording

During the third quarter, our net sales decreased $3.4 million, or 0.9 percent, compared to the prior year's third quarter. The net sales decrease reflects lower demand for technology peripherals globally, partially offset by sales from the EPOS acquisition and favorable foreign exchange.

Previous wording

Our operating cash flow for the first six months was cash used of $31.8 million compared to cash used of $33.4 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 nine months was cash provided of $99.6 million compared to cash provided of $38.1 million in the prior year primarily reflecting increased investments 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

In March 2026, the CIT directed the CBP to begin refunding all tariffs imposed under IEEPA. In April 2026, the CBP launched the CAPE process, which allows entities to submit refund claims for IEEPA tariffs paid. We submitted claims seeking approximately $20.6 million of previously paid IEEPA tariffs through CAPE, which we expect to receive during the second half of 2026. In addition, we intend to submit additional claims of approximately $5.0 million which we expect to receive during 2027.

Current wording

In March 2026, the CIT directed the CBP to begin refunding all tariffs imposed under IEEPA. In April 2026, the CBP launched the CAPE process, which allows entities to submit refund claims for IEEPA tariffs paid. During the third quarter of 2026, we have received $21.3 million of previously paid IEEPA tariffs through CAPE. We recorded $20.1 million as a reduction of our cost of goods sold and $1.2 million as a reduction to inventory. During the month of October 2026, we submitted and received additional refund claims of approximately $5.0 million.

Previous wording

The Company elected to account for the recoveries for previously paid IEEPA tariffs in accordance with ASC 450. ASC 450 states that a gain contingency is not recognized in the financial statements until the gain is realized or realizable. The Company will record tariff refunds received as a reduction of inventory to the extent the inventory remains on hand, or a reduction of cost of goods sold for inventory that has already been sold. There can be no assurance of the timing or likelihood of receipt of these refund claims.

Current wording

The Company elected to account for the recoveries for previously paid IEEPA tariffs in accordance with ASC 450. ASC 450 states that a gain contingency is not recognized in the financial statements until the gain is realized or realizable. The Company has recorded and will record tariff refunds received as a reduction of inventory to the extent the inventory remains on hand, or a reduction of cost of goods sold for inventory that has already been sold.

Previous wording

Consolidated Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Consolidated Results of Operations for the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

For the six months ended June 30, 2026, net sales increased $46.6 million, or 6.5 percent, including $37.6 million of sales from the acquisition of EPOS and $26.0 million, or 3.7 percent from favorable foreign exchange. Comparable net sales decreased 2.5 percent which includes lower volume, of $25.4 million, or 3.6 percent, as stronger demand for learning and creative categories in the Americas segment and growth in Mexico were more than offset by declines in technology peripherals and lower demand for workspace solutions globally.

Current wording

For the three months ended September 30, 2026, net sales decreased $3.4 million, or 0.9 percent, which included $18.8 million of sales from the EPOS acquisition and $1.6 million, or 0.4 percent from favorable foreign exchange. Comparable net sales decreased 6.2 percent which includes lower volume of $24.9 million, or 6.5 percent, driven by lower demand globally, including global declines in technology peripherals.

Previous wording

For the three months ended June 30, 2026, gross profit increased $4.4 million, or 3.4 percent, primarily due to global cost reduction actions and the acquisition of EPOS, partially offset by $3.4 million of inventory step-up amortization. Favorable foreign exchange increased gross profit by $1.8 million, or 1.4 percent.

Current wording

For the three months ended September 30, 2026, gross profit increased $9.2 million, or 7.3 percent, primarily due to $20.1 million of tariff refunds, global cost reduction actions and the acquisition of EPOS, partially offset by lower volumes globally on comparable sales. Favorable foreign exchange increased gross profit by $0.4 million, or 0.3 percent.

Previous wording

For the six months ended June 30, 2026, gross profit increased $11.6 million, or 5.1 percent, primarily due to global cost reduction actions and the acquisition of EPOS, partially offset by $3.4 million of inventory step-up amortization. Favorable foreign exchange increased gross profit $8.0 million, or 3.5 percent.

Current wording

For the nine months ended September 30, 2026, gross profit increased $20.8 million, or 5.8 percent, primarily due to $20.1 million of tariff refunds, global cost reduction actions and the acquisition of EPOS, partially offset by lower volumes globally on comparable sales and a $4.0 million inventory step-up related to the EPOS acquisition. Favorable foreign exchange increased gross profit by $8.4 million, or 2.4 percent.

Previous wording

For the three months ended June 30, 2026, SG&A increased $8.6 million, or 10.4 percent. The increase was due to the acquisition of EPOS, a Brazil indirect tax, and adverse foreign exchange which more than offset the positive impact of global cost reductions.

Current wording

For the three months ended September 30, 2026, SG&A increased $6.3 million, or 7.2 percent. The increase was primarily due to the acquisition of EPOS, a reserve for a customer liquidation of $4.8 million, and increased incentive compensation related to tariff refunds, which more than offset the positive impact of global cost reductions.

Previous wording

For the six months ended June 30, 2026, SG&A increased $15.0 million, or 8.6 percent. The increase was due to the acquisition of EPOS, a litigation settlement, a Brazil indirect tax, and adverse foreign exchange which more than offset the positive impact of global cost reductions.

Current wording

For the nine months ended September 30, 2026, SG&A increased $21.3 million, or 8.1 percent. The increase was due to the acquisition of EPOS, a litigation settlement, a reserve for a customer liquidation of $4.8 million, a Brazil indirect tax reserve, increased incentive compensation due to tariff refunds, and adverse foreign exchange, which more than offset the positive impact of global cost reductions.

Previous wording

For the six months ended June 30, 2026, operating income decreased $6.4 million or 24.3 percent. The current year period was impacted by $4.0 million related to a litigation settlement, $3.4 million of inventory step-up amortization, $1.8 million Brazil indirect tax, partially offset by the benefit of cost reduction actions and lower restructuring expense. The prior year benefited from the gain on sale of property of $6.9 million. Favorable foreign exchange benefited operating income $1.3 million, or 4.9 percent.

Current wording

For the nine months ended September 30, 2026, operating income decreased $2.1 million or 4.0 percent. The current year period was impacted by a reserve for a customer liquidation, a litigation settlement, inventory step-up amortization related to the acquisition of EPOS, and a Brazil indirect tax reserve, partially offset by the benefit of $15.1 million in net tariff refunds and the benefit of cost reductions. The prior year benefited from the gain on sale of property of $6.9 million. Favorable foreign exchange benefited operating income $1.4 million, or 2.7 percent.

Previous wording

For the six months ended June 30, 2026, we recorded a $36.5 million preliminary bargain purchase gain related to our acquisition of EPOS.

Current wording

For the nine months ended September 30, 2026, we recorded $33.8 million in bargain purchase gain related to our acquisition of EPOS.

Previous wording

For further information, see "Note 3. Acquisitions" to the consolidated financial statements contained in "Part I, Item 1. Financial Information" of this Quarterly Report on Form 10-Q.

Current wording

For further information, see "Note 3. Acquisitions" to the condensed consolidated financial statements contained in "Part I, Item 1. Financial Statements" of this Quarterly Report on Form 10-Q.

Previous wording

For the three months ended June 30, 2026, we recorded income tax expense of $5.6 million on income before taxes of $19.7 million. For the three months ended June 30, 2025, we recorded an income tax benefit of $6.5 million on income before taxes of $22.7 million. In June 2025, the Company entered into a settlement related to the Brazil Tax Assessments resulting in a net tax benefit of $13.4 million.

Current wording

For the three months ended September 30, 2026, we recorded income tax expense of $5.1 million on income before taxes of $16.6 million. For the three months ended September 30, 2025, we recorded an income tax expense of $10.7 million on income before taxes of $14.7 million.

Previous wording

For the six months ended June 30, 2026, we recorded income tax expense of $1.1 million on income before taxes of $34.6 million. For the six months ended June 30, 2025, we recorded an income tax benefit of $9.8 million on income before taxes of $6.2 million. In June 2025, the Company entered into a settlement related to the Brazil Tax Assessments resulting in a net tax benefit of $13.4 million.

Current wording

For the nine months ended September 30, 2026, we recorded income tax expense of $6.2 million on income before taxes of $51.2 million. For the nine months ended September 30, 2025, we recorded an income tax expense of $0.9 million on income before taxes of $20.9 million. In June 2025, the Company entered into a settlement related to the Brazil Tax Assessments resulting in a net tax benefit of $13.4 million.

Previous wording

For further information, see "Note 11. Income Taxes" to the consolidated financial statements contained in "Part I, Item 1. Financial Information" of this Quarterly Report on Form 10-Q.

Current wording

For further information, see "Note 11. Income Taxes" to the condensed consolidated financial statements contained in "Part I, Item 1. Financial Statements" of this Quarterly Report on Form 10-Q.

Previous wording

Segment Net Sales and Operating Income for the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Segment Net Sales and Operating Income for the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

For the six months ended June 30, 2026, net sales increased $19.0 million, or 4.5 percent, including $10.1 million of sales from the acquisition of EPOS and $8.4 million, or 2.0 percent, from favorable foreign exchange. Comparable net sales increased 0.1 percent driven by price and program of $6.9 million, or 1.6 percent, partly offset by lower volume, which was down $6.4 million, or 1.5 percent. Volume declines in workspace solutions and technology peripherals were partly offset by growth in the learning and creative category in North America as well as growth in Latin America.

Current wording

For the nine months ended September 30, 2026, net sales increased $11.2 million, or 1.7 percent, including $14.6 million of sales from the EPOS acquisition and $10.6 million, or 1.6 percent, from favorable foreign exchange. Comparable net sales decreased 2.1 percent driven by lower volume of $19.5 million, or 3.0 percent, partly offset by the benefit of price increases, net of programs of $5.5 million, or 0.8 percent. Volume declines in workspace solutions and technology peripherals were partly offset by growth in the learning and creative category in both North America and Latin America.

Previous wording

For the six months ended June 30, 2026, operating income increased $8.2 million primarily driven by cost savings and the acquisition of EPOS, partly offset the prior year gain on the sale of our Sidney, New York facility.

Current wording

For the nine months ended September 30, 2026, operating income increased $8.9 million, or 13.4 percent, primarily driven by the net impact of the tariff refunds of $18.3 million, cost savings, partly offset by lower volumes, a reserve for a customer liquidation and the prior year gain on the sale of our Sidney, New York facility.

Previous wording

Segment operating (loss) income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Operating Segments" for a reconciliation of total "Segment operating (loss) income" to "Income 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 "Income before income tax."

Previous wording

For the three months ended June 30, 2026, net sales increased $5.9 million, or 4.0 percent, including $15.8 million of sales from the acquisition of EPOS and $3.6 million, or 2.5 percent of favorable foreign exchange. Comparable net sales decreased 9.3 percent driven by lower volume, which was down $14.0 million, or 9.6 percent, primarily due to reduced demand for office product categories, partly offset by the benefit of price increases, net of programs of $0.5 million, or 0.3 percent.

Current wording

For the three months ended September 30, 2026, net sales increased $4.4 million, or 2.8 percent, including $14.3 million of sales from the EPOS acquisition and $0.6 million, or 0.4 percent, from unfavorable foreign exchange. Comparable net sales decreased 6.0 percent driven by lower volume, which was down $11.8 million, or 7.6 percent, primarily due to reduced demand for office product categories, partly offset by the benefit of price increases, net of programs of $2.5 million, or 1.6 percent.

Previous wording

For the six months ended June 30, 2026, net sales increased $27.6 million, or 9.5 percent, including $27.5 million of sales from the acquisition of EPOS and $17.6 million, or 6.1 percent, of favorable foreign exchange. Comparable net sales decreased 6.1 percent driven by lower volume, which was down $19.0 million, or 6.6 percent, primarily due to reduced demand for business and consumer products, partly offset by the benefit of price increases, net of programs of $1.5 million, or 0.5 percent.

Current wording

For the nine months ended September 30, 2026, net sales increased $32.0 million, or 7.2 percent, including $41.8 million of sales from the EPOS acquisition and $17.0 million, or 3.8 percent, of favorable foreign exchange. Comparable net sales decreased 6.0 percent driven by lower volume, which was down $30.8 million, or 6.9 percent, primarily due to reduced demand for business and consumer products, partly offset by the benefit of price increases, net of programs of $4.0 million, or 0.9 percent.

Previous wording

For the six months ended June 30, 2026, we reported an operating loss of $2.4 million compared to operating income of $5.9 million primarily due to lower organic sales volume, fixed cost deleveraging and amortization of inventory step up, partly offset by favorable foreign exchange and cost savings. The prior year benefited from the gain on sale of our Barcelona, Spain facility for $1.2 million.

Current wording

For the nine months ended September 30, 2026, operating income decreased $6.4 million, or 39.0 percent, primarily due to lower organic sales volume, fixed cost deleveraging and amortization of inventory step-up from the EPOS acquisition, partly offset by favorable foreign exchange and cost savings. The prior year benefited from the gain on sale of our Barcelona, Spain facility of $1.2 million.

Previous wording

Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures, dividends, acquisitions, and stock repurchases. 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 June 30, 2026, there was $251.6 million in borrowings outstanding under the Revolving Facility ($12.8 million reported in "Current portion of long-term debt" and $238.8 million reported in "Long-term debt, net"), and the amount available for borrowings was $204.8 million (allowing for $11.1 million of letters of credit outstanding on that date). We had $106.4 million in cash on hand as of June 30, 2026, and our total available liquidity (cash and availability under our credit facilities) was $311.2 million.

Current wording

Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures, dividends, acquisitions, and stock repurchases. 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 September 30, 2026, there was $206.3 million in borrowings outstanding under the Revolving Facility ($24.5 million reported in "Current portion of long-term debt" and $181.8 million reported in "Long-term debt, net"), and the amount available for borrowings was $253.7 million (allowing for $7.5 million of letters of credit outstanding on that date). We had $174.7 million in cash on hand as of September 30, 2026, and our total available liquidity (cash and availability under our credit facilities) was $428.4 million.

Previous wording

As of June 30, 2026, our Consolidated Leverage Ratio was approximately 4.30 to 1.00 versus our maximum covenant of 4.75 to 1.00. We have no debt maturities before March 2029. Debt currently outstanding under our Credit Agreement is due on October 30, 2029, with the requirement that we refinance our senior unsecured notes by September 2028.

Current wording

As of September 30, 2026, our Consolidated Leverage Ratio was approximately 3.60 to 1.00 versus our maximum covenant of 4.25 to 1.00. We have no debt maturities before March 2029. Debt currently outstanding under our Credit Agreement is due on October 30, 2029, with the requirement that we refinance our senior unsecured notes by September 2028.

Previous wording

The $358.8 million of debt currently outstanding under our senior secured credit facilities had a weighted average interest rate of 5.21 percent as of June 30, 2026, and the $575.0 million outstanding principal amount of our senior unsecured notes due March 2029 have a fixed interest rate of 4.25 percent.

Current wording

The $306.2 million of debt currently outstanding under our senior secured credit facilities had a weighted average interest rate of 5.49 percent as of September 30, 2026, and the $575.0 million outstanding principal amount of our senior unsecured notes due March 2029 have a fixed interest rate of 4.25 percent.

Previous wording

For further information, see "Note 4. Long-term Debt and Short-term Borrowings" to the consolidated financial statements contained in "Part I, Item 1. Financial Information" of this Quarterly Report on Form 10-Q.

Current wording

For further information, see "Note 4. Long-term Debt and Short-term Borrowings" to the condensed consolidated financial statements contained in "Part I, Item 1. Financial Statements" of this Quarterly Report on Form 10-Q.

Previous wording

During 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. In the first half of the current year the Company realized approximately $20.0 million in pre-tariff savings and approximately $80.0 million since inception of the program.

Current wording

During 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. During the first nine months of the current year, the Company realized approximately $30.0 million in pre-tariff savings and approximately $90.0 million since inception of the program.

Previous wording

During the first half of the current year, we recorded restructuring costs of $8.0 million primarily related to the integration of EPOS.

Current wording

During the first nine months of the current year, we recorded restructuring costs of $8.3 million primarily related to the integration of EPOS.

Previous wording

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

Current wording

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

Previous wording

Cash Flow for the Six Months Ended June 30, 2026 and 2025

Current wording

Cash Flow for the Nine Months Ended September 30, 2026 and 2025

Previous wording

During the six months ended June 30, 2026, our cash and cash equivalents increased $42.0 million, as compared to an increase of $59.2 million in the first six months of the prior year. The following table summarizes our cash flows for the periods presented:

Current wording

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

Previous wording

Cash used by operating activities during the six months ended June 30, 2026, was driven by cash used for trade working capital of $25.7 million, which includes accounts receivable, inventory, and accounts payable as well as by a net cash outflow from other assets and liabilities of $47.0 million including cash payments for restructuring, taxes, interest, pensions, and incentive compensation. These were partially offset by cash inflows of $40.9 million after excluding non-cash impacts primarily from amortization of intangibles, depreciation, stock-based compensation expense, and the preliminary bargain purchase gain related to the acquisition of EPOS from our net income.

Current wording

Cash provided by operating activities during the nine months ended September 30, 2026, was driven by cash inflows of $75.2 million after excluding non-cash impacts primarily from amortization of intangibles, depreciation, stock-based compensation expense, and the bargain purchase gain related to the acquisition of EPOS from our net income. Our net income for the first nine months of 2026 includes $20.3 million of tariff refunds received. Cash was also provided by trade working capital of $57.3 million, which includes accounts receivable, inventory, and accounts payable. These were partially offset by a net cash outflow of $32.9 million from other assets and liabilities including cash payments for restructuring, taxes, interest, pensions, and incentive compensation.

Previous wording

Cash used by operating activities during the six months ended June 30, 2025, was driven by cash used for trade working capital of $11.2 million, which includes accounts receivable, inventory, and accounts payable as well as by a net cash outflow from other assets and liabilities of $76.7 million including cash payments for restructuring, taxes, interest, pensions, and incentive compensation. These were partially offset by cash inflows of $54.5 million after excluding non-cash impacts primarily from amortization of intangibles, depreciation, stock-based compensation expense, and the gain on the sale of our facilities in Sidney, New York and Barcelona, Spain from our net income.

Current wording

Cash provided by operating activities during the nine months ended September 30, 2025, was driven by cash inflows of $78.4 million after excluding non-cash impacts primarily from amortization of intangibles, depreciation, stock-based compensation expense, and the gain on the sale of our facilities in Sidney, New York and Barcelona, Spain from our net income. Cash was also provided by trade working capital of $48.4 million, which includes accounts receivable, inventory, and accounts payable. These were partially offset by a net cash outflow of $88.7 million from other assets and liabilities including cash payments for restructuring, taxes, interest, pensions, and incentive compensation.

Previous wording

Cash used by investing activities during the six months ended June 30, 2026, was primarily due to capital expenditures and $1.1 million of cash used for the acquisition of EPOS, net of cash acquired.

Current wording

Cash used by investing activities during the nine months ended September 30, 2026, was primarily due to capital expenditures and $1.1 million of cash used for the acquisition of EPOS, net of cash acquired.

Previous wording

Cash used by investing activities during the six months ended June 30, 2025, was primarily due to $10.1 million of cash used for the acquisition of Buro Seating as well as capital expenditures, largely offset by $16.5 million in proceeds from the sale of our facilities in Sidney, New York and Barcelona, Spain.

Current wording

Cash used by investing activities during the nine months ended September 30, 2025, was primarily due to $10.1 million of cash used for the acquisition of Buro Seating Limited Partnership, as well as capital expenditures, partly offset by $16.5 million in proceeds from the sale of our facilities in Sidney, New York and Barcelona, Spain.

Previous wording

Cash provided by financing activities during the six months ended June 30, 2026, was primarily due to borrowings exceeding debt repayments, partially offset by dividend payments and payments related to tax withholding for stock-based compensation.

Current wording

Cash provided by financing activities during the nine months ended September 30, 2026, was primarily due to borrowings exceeding debt repayments, partially offset by dividend payments and payments related to tax withholding for stock-based compensation.