Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.43pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.28pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.58pp
Lean +
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
litigation+4
negatively+3
adversely+2
decline+2
challenges+2
Positive rising
successfully+5
success+3
able+1
achieve+1
successful+1
Risk Factors (Item 1A)
9,248 words
ITEM 1A. RISK FACTORS
The factors that are discussed below, as well as the matters that are generally set forth in this Annual Report on Form 10-K and the documents incorporated by reference herein, could materially and adversely affect the Company’s business, results of operations, and financial condition. Additional risks and uncertainties that are not presently known to us or that are not deemed material also may materially adversely affect the Company’s business, results of operations, and financial condition in the future.
Summary Risk Factors
Economic and Strategic Risks
Customer concentration;
General economic and business conditions globally and in our markets;
Impact of business decisions by large customers;
Foreign currency exposure;
Highly competitive industry;
Ability to develop and market innovative products at competitive prices;
Operating in emerging markets;
Continued declines in the use of certain of our products;
Seasonality of our business;
Pension plan investment volatility and liabilities;
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
disruptions+2
declined+1
cancelled+1
delayed+1
Positive rising
favorable+5
benefit+3
gain+3
best+1
greater+1
MD&A (Item 7)
7,387 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained in Part II, Item 8. and the relevant risks outlined in Part I, Item 1A. Risk Factors of this report. The following discussion and analysis are for the year ended December 31, 2025, compared with the same period in 2024 unless otherwise stated. For a discussion and analysis of the year ended December 31, 2024, compared with the same period in 2023, please refer to " Management’s Discussion and Analysis of Financial Condition and Results of Operations " included in Part II, Item 7. of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on February 21, 2025.
Overview of the Company
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 ® , Buro ® 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.
Ability to protect and maintain intellectual property and to license the right to use the trademarks and other intellectual property of third parties;
Timing, frequency and success of release of new gaming consoles by major gaming console makers;
Ability to properly identify, value, execute and integrate acquisition opportunities;
Operational Risks
Ability to implement restructuring and cost savings initiatives;
Disruptions in the global supply chain;
Inflation in the cost of raw materials, transportation, labor and other supplies and services;
Ability to effectively outsource product development and production, our information technology systems and other administrative functions;
Technology and Cybersecurity Risks
Extensively reliance on information technology systems to manage our business;
Impact of data and system security breaches;
Risks related to implementation of artificial intelligence solutions in our operations;
Liquidity, Capital Resources and Capital Allocation Risks
Limitations under our debt instruments;
Ability to pay dividends or engage in stock repurchases;
Legal and Regulatory Risks
Product liability risks;
Litigation risks;
Tax compliance and liabilities applicable to global business;
Complex and expensive legal and regulatory requirements;
Changes in trade policy and regulations, including changing tariff policies and trade agreements;
General Risk Factors
Ability to attract and retain qualified personnel;
Stock price volatility; and
Broad range of circumstances outside our control.
Economic and Strategic Risks
A limited number of large customers account for a significant percentage of our net sales, and the loss of, or a substantial reduction in sales to, or gross profit from, or significant decline in the financial condition of one or more of these customers has and is likely to continue to adversely impact our business and results of operations.
Our top ten customers accounted for a significant portion of our net sales. The loss of, or a significant reduction in sales to, or gross profit from, one or more of our top customers, or significant adverse changes to the terms on which we sell our products to one or more of our top customers, has and is likely to continue to have a material adverse effect on our business, results of operations, and financial condition.
The size, scale, and relative competitive market position of certain large customers gives them significant leverage in business negotiations. Additionally, the competitive environment in which our large customers operate has made and will continue to make our business with them challenging and unpredictable.
Our customer concentration increases our customer credit risk. If any of our larger customers were to face liquidity issues, become insolvent or file for bankruptcy, we have and could continue to be adversely impacted due to not only a reduction in future sales but also delays or defaults in the payment of existing accounts receivable balances. Such a result could adversely impact our cash flows, results of operations, and financial condition.
Sales of our products have been, and we expect they will continue to be, materially and adversely affected by general economic and business conditions globally and in the countries in which we operate.
Our business depends on discretionary spending, and, as a result, our sales and operating results are highly dependent on consumer and business confidence and the health of the economies in the countries in which we operate. During periods of economic uncertainty or weakness, we have and continue to experience lower demand from our reseller customers who often reduce inventories, both to reduce their own working capital investments and because demand for our products decreases as consumers switch to private label and other branded and/or generic products that compete on price and quality, or forgo purchases altogether. Overall, adverse economic conditions, including high inflation, varying interest rates, and sustained periods of economic uncertainty or weakness in one or more of the geographic markets in which we operate, whatever the cause, have negatively affected, and we expect will continue to negatively affect, our sales and profitability, results of operations, cash flow, and financial condition.
Large customers have taken, and may continue to take, actions that adversely affect our gross profit and operating results.
We are increasingly dependent upon key customers whose bargaining strength is substantial and growing. We may be negatively affected by changes in the policies of our customers, such as on-hand inventory reductions, limitations on access to shelf space, use of private label brands, price and term demands, actions to respond to public health crises, and other conditions, which could negatively impact our business, operating results, and financial condition.
Certain of our customers source and sell products under their own private label brands that compete with our products. Additionally, as large traditional retail and online customers grow even larger and become more sophisticated, they may continue to demand lower pricing, shorter lead times for the delivery of products, smaller more frequent shipments, or impose other requirements on product suppliers. These business demands may relate to inventory practices, logistics, or other aspects of the customer-supplier relationship. If we do not effectively respond to these demands, these customers could decrease their purchases from us. A reduction in the demand for our products by these customers and the costs of complying with their business demands could have a material adverse effect on our business, operating results, and financial condition.
The Company has foreign currency translation and transaction exposure that has, and is likely to continue to, materially affect the Company’s sales, results of operations, financial condition, and liquidity.
A majority of our net sales are transacted in a currency other than the U.S. dollar. Our primary exposure to currency movements relative to the U.S. dollar is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Currency exchange rates can be volatile, especially in times of global, political and economic tension or uncertainty. Additionally, government actions such as currency devaluations, foreign exchange controls, and imposition of tariffs or other trade restrictions, among other things, can further negatively impact, and increase the volatility of, foreign currency exchange rates.
The fluctuations in the foreign currency rates relative to the U.S. dollar cause translation, transaction, and other gains and losses in our non-U.S.-based businesses, which impact our sales, profitability, and cash flow. Our primary exposure is from translation of our foreign operations' results. Generally, the strengthening of the U.S. dollar against foreign currencies negatively impacts the Company’s reported sales and operating margins. Conversely, the weakening of the U.S. dollar against foreign currencies generally has a positive effect on the Company’s sales and operating margins.
We source a majority of our products from lower cost countries, primarily in Asia using U.S. dollars. This creates transactional exposure in our foreign markets. The strengthening of the U.S. dollar against local foreign currencies increases our cost of goods and reduces our margins on products sold in local currency. When this occurs, we seek to raise prices in our foreign markets to recover the lost margin. Due to competitive pressures and the timing of these price increases relative to the changes in the foreign currency exchange rates, it is often difficult to increase prices fast enough to fully offset the cumulative impact of the foreign-exchange-related inflation on our cost of goods sold in these markets.
We use hedging instruments to mitigate transactional exposure to changes in foreign currencies. The effectiveness of our hedges depends in part on our ability to accurately forecast future cash flows, which is particularly difficult during periods of uncertain demand for our products and highly volatile exchange rates. For additional information, see "Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk - Foreign Exchange Risk Management " of this report.
Challenges related to the highly competitive business environment in which we operate have, and are likely to continue to have, a material adverse effect on our business, results of operations, and financial condition.
We operate in a highly competitive environment characterized by large, sophisticated customers, low barriers to entry for certain of our products, and competition from a wide range of products and services (including private label products and electronic and digital products and services that can replace or render certain of our products obsolete). We have seen, and expect to continue to see, increased competition from private label brands as well as increased price competition from branded competitors, especially in periods of economic uncertainty and weakness when customers and consumers turn to alternative or lower cost products, including digital solutions, and overall demand for our products is lower.
ACCO Brands competes with numerous branded consumer products manufacturers, as well as numerous private label suppliers and importers, including many of our customers who import their own private label products directly from foreign sources. Many of our competitors have strong, sought-after brands. Their ability to manufacture products locally at a lower cost or source them from other countries with lower production costs can give them a competitive advantage in terms of price under certain circumstances.
Our business has been, and we expect it will continue to be, affected by actions taken by our customers and competitors to compete more effectively. Such actions have, and in the future may, result in lost sales and lower margins, and adversely affect our business, results of operations, and financial condition.
Our success depends on our ability to develop and market innovative products that meet consumer and other end-user demands, including price expectations, and to expand into new and adjacent product categories.
Our success depends on our ability to invest in innovation and product development and successfully anticipate, develop and market products that appeal to the changing needs and preferences of consumers and other end-users. Additionally, part of our strategy is to develop new, exciting, and differentiated products which we believe help us to sustain category leading positions and drive significant long-term growth. There can be no assurance that we will make the right investment choices or be successful in developing innovative products. If we are unable to successfully increase sales and margins by expanding our product assortment, our business, results of operations, and financial condition could be adversely affected.
Growth in emerging geographies may be difficult to achieve and exposes us to financial, operational, regulatory, compliance, and other risks not present, or not as prevalent, in more established markets.
Emerging markets, such as Brazil and Mexico, generally involve more financial, operational, regulatory and compliance risks than more mature markets. As we expand and grow in these markets, we increase our exposure to these risks. These risks include currency transfer restrictions, currency fluctuations, changes in international trade and tax policies and regulations (including import and export restrictions), and a lack of well-established or reliable legal systems. Additionally, in some cases, emerging markets also have greater political and economic volatility, greatervulnerability to infrastructure and labor disruptions, and are more susceptible to corruption, civil unrest, military disruptions, terrorism, public health emergencies, severe weather conditions, and natural disasters. Weak or corrupt legal systems may affect our ability to protect and enforce our intellectual property, contractual and other rights. Further, these emerging markets are generally more remote from our headquarters' location and have different cultures that may make it more difficult to impose corporate standards and procedures and the extraterritorial laws of the U.S. and other jurisdictions, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other similar laws.
If we are unable to profitably grow our existing emerging market businesses or expand into other emerging markets, achieve the return on capital we expect as a result of our investments, or effectively manage the risks inherent in operating in these markets, our business, results of operations, and financial condition could be adversely affected.
Continued declines in the use of certain of our products have and will continue to materially adversely affect our business.
As use of technology-based tools continues to rise worldwide and the nature of hybrid work and education evolves demand for many of our products, especially for our traditional paper-based and related products has declined. This trend was accelerated by the COVID-19 pandemic and we expect that demand for these products will continue to decline. Additionally, regulatory developments - such as the recent decision by the German government to replace paper-based processes with digital solutions - continue to accelerate this decline in demand. The decline in the overall demand for certain of the products we sell has materially adversely impacted our business and results of operations, and we expect it will continue to do so.
Our school and technology accessories businesses are seasonal, which has impacted, and may in the future impact, our ability to accurately forecast our operating results, and working capital requirements.
Historically, each of our segments has demand that varies based on certain seasonal drivers related to the product categories it sells as discussed in "Part I, Item 1. Business - Seasonality " of this report.
As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year. In addition, our customers often change their order patterns for peak seasons, making forecasting of production schedules and inventory purchases more challenging. These fluctuations have impacted our ability to accurately forecast our inventory and working capital needs as well as our operating results. When we are unable to accurately forecast and prepare for customer orders or our working capital needs, or if there is a downturn in business or economic conditions during these periods, our business,
results of operations, liquidity and financial condition have been, and in the future could be, adversely affected. Additionally, because of these quarterly fluctuations, comparisons of our operating results across different fiscal quarters may not be meaningful.
The level of investment returns on pension plan assets and the assumptions used for valuation purposes have affected the Company's earnings and could affect the Company’s earnings and cash flows in future periods. Changes in government regulations, as well as the significant unfunded liabilities, including the unfunded liabilities of the U.S. multi-employer pension plan in which we are a participant, could also affect the Company’s pension plan expenses and funding requirements.
As of December 31, 2025, the Company had $122.8 million recorded as pension liabilities in its Consolidated Balance Sheet. Funding obligations are determined by government regulations and are measured each year based on the value of assets and liabilities on a specific date. When the financial markets do not provide the long-term returns that are expected, or discount rates increase the present value of liabilities, the Company has been, and in the future could be, required to make larger contributions and/or record higher non-cash expenses related to its pension liabilities. The markets can be very volatile, and therefore the Company’s estimate of future contribution requirements and/or non-cash expenses can change dramatically in relatively short periods of time. Similarly, changes in interest rates and legislation enacted by governmental authorities can impact the timing and amounts of contribution requirements and/or non-cash expenses. An adverse change in the funded status of our pension plans could significantly increase our required future contributions and/or non-cash expenses and adversely impact our liquidity.
We also participate in a multi-employer pension plan for our union employees at our Ogdensburg, New York facility. The plan has reported significant underfunded liabilities and declared itself in critical and declining status. As a result, the trustees of the plan adopted a rehabilitation plan in an effort to forestallinsolvency. Our current contributions to this plan (which are not significant) could increase due to the shrinking contribution base resulting from the insolvency or withdrawal of other participating employers, the inability or the failure of withdrawing participating employers to pay their withdrawal liability, lower than expected returns on pension fund assets, and other funding deficiencies. Additionally, if we were to withdraw from the plan, the present value of our withdrawal liability payments could be significant and would be recorded as an expense in our Consolidated Statements of Income and as a liability on our Consolidated Balance Sheets in the first year of our withdrawal. See also "Note 6. Pension and Other Retiree Benefits" to the consolidated financial statements contained in Part II, Item 8. of this report.
Impairment of goodwill and indefinite-lived intangible assets have had, and could in the future have, a material adverse effect on our financial results.
We have approximately $1.2 billion of goodwill and other specifically identifiable intangible assets as of December 31, 2025. During the second quarter of 2024, we recorded a $165.2 million non-cash impairment charge related to goodwill and an indefinite-lived trade name within our Americas reporting unit. This follows a $89.5 million non-cash goodwill impairment charge related to our Americas reporting unit recorded during the fourth quarter of 2023. Future events may occur that could adversely affect the reported value, or fair value, of our goodwill or indefinite-lived intangible assets that would require future impairment charges which would negatively impact our financial results. Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on our sales and customer base, the unfavorable resolution of litigation, a material adverse change in our relationship with significant customers, or a sustained decline in our stock price. We continue to evaluate the impact of developments from our reporting units to assess whether impairment indicators are present. See also "Note 10. Goodwill and Identifiable Intangible Assets" to the consolidated financial statements contained in Part II, Item 8. of this report.
Our inability to secure, protect and maintain rights to intellectual property could have an adverse impact on our business. In particular, the success and future growth of our technology accessories business depends on its ability to license the right to use the trademarks and other intellectual property and/or receive certifications as to the compatibility of our technology products with third parties.
We consider our intellectual property rights, particularly and most notably our trademarks, trade names, and software product certifications, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be an important and valuable part of our business. Our failure to obtain or adequately protect our intellectual property rights, or any change in law, limitation or termination of our intellectual property rights by third parties, or other changes that serve to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness, dilute the value of our brands, cause confusion in the marketplace, and materially impact our sales and profitability.
Our gaming accessories business licenses technology, trademarks and other intellectual property from the three major gaming console manufacturers and numerous video game publishers. Our audio products are certified compatible with major communication platforms. Our ability to expand our technology accessories business into certain new geographies or product types requires that we obtain additional licensing rights and/or certifications from third parties including gaming console manufacturers, video game publishers and communication software companies and platforms. There can be no assurance that we will be able to obtain these additional licensing rights. The loss, inability to obtain, or non-renewal of one or more of these licenses would, in all likelihood, materially and adversely impact our sales, results of operations, and financial condition.
We depend upon the introduction and success of new gaming consoles to drive sales of our products. If newly introduced gaming consoles are not successful, if the rate at which those products are introduced declines, or if such products are not readily available, it may negatively impact our business.
Our gaming accessories business depends on the introduction and success of new gaming consoles and video games. As a result, our business results can be materially affected by the timing and frequency with which new gaming consoles are introduced by the three major gaming console manufacturers and video game publishers, whether these products achieve widespread acceptance among gamers, whether such products are readily available at affordable prices, and whether and how quickly we receive intellectual property licenses or certifications with respect to our gaming accessories.
The demand for our products would likely decline, perhaps substantially, if gaming companies and developers do not introduce and successfully market sophisticated new and improved games on an ongoing basis or if demand for video games among gaming enthusiasts or conditions in the gaming industry deteriorate for any reason. As a result, our sales and other operating results fluctuate due to conditions in the market for gaming consoles and games, and downturns in this market would, in all likelihood, materially and adversely impact our sales, results of operation, and financial condition.
Our strategy is partially based on growth through acquisitions. Failure to properly identify, value and manage acquisitions, and successfully integrate them may materially impact our business, results of operations, and financial condition.
Our strategy is partially based on growth through acquisitions. We may not be successful in identifying suitable acquisition opportunities, prevailing against competing potential acquirers, negotiating appropriate acquisition terms, obtaining financing, or completing proposed acquisitions. In addition, an acquisition may not perform as anticipated, be successfully integrated, be accretive to earnings, or prove to be beneficial to our operations and cash flow. If we fail to effectively identify, value, consummate, or manage any acquired company, we may not achieve the financial results, including cost savings and synergies, anticipated at the time of its acquisition. An acquisition could also adversely impact our operating performance or cash flow due to the issuance of acquisition-related debt, pre-acquisition assumed liabilities, undisclosed facts about the business, expenses incurred to consummate the acquisition, increases in amortization due to the acquisition, or possible future impairments of goodwill or intangible assets associated with the acquisition.
We may face challenges in integrating our acquisitions with our existing operations and expanding the acquired business geographically. These challenges might include our need to rely on third parties to assist with integration efforts - including former owners of these acquired businesses to provide transition services as we migrate these businesses and their employees over to our various information technology platforms, systems, and benefit plans, among others. The process of integrating and expanding operations also could cause an interruption of, or loss of momentum in, the activities of one or more of our businesses due to the considerable time and attention needed for the process. If we are not able to effectively manage the integration process, or if any significant business activities are interrupted as a result thereof, our business and financial results could suffer.
The integration of any acquisition will involve changes to or implementation of critical information technology systems, modifications to our internal control systems, processes and accounting and financial systems, and the establishment of disclosure controls and procedures and internal control over financial reporting necessary to meet our obligations as a public company. If we are unable to successfully complete these tasks and accurately report our financial results in a timely manner and establish internal control over financial reporting and disclosure controls and procedures that are effective, our business, results of operations and financial condition, investor, supplier and customer confidence in our reported financial information, market perception of our Company and/or the trading price of our common stock could be materially adversely affected.
Operational Risks
Failure to successfully implement our restructuring and cost savings initiatives could adversely affect our future results of operations and cash flow.
In January 2024, the Company announced a multi-year restructuring and cost savings program, with anticipated annualized pre-tax cost savings of at least $60 million when fully realized. In 2025, the Company increased its savings target by $40 million, and now anticipates the multi-year program to yield approximately $100 million in annualized pre-tax cost savings 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 of the Company's sourcing capabilities. We may not be able to successfully execute these initiatives in a timely manner or realize the anticipated cost savings and operational efficiencies. Failure to implement these initiatives and realize the anticipated cost savings and operational efficiencies as planned could adversely affect our future results of operations and cash flow. Further, the changes to our operating structure, including the leadership changes, have resulted in a significant amount of organization change which, could divert management's attention from other priorities, disrupt the Company's day-to-day operations, and have a negative impact on employee morale and retention. If we are not able to effectively manage the restructuring process our business and financial results could suffer.
Our business, results of operations and cash flow have been, and may continue to be, adversely impacted by disruptions in the global supply chain.
We purchase a majority of the products we sell from suppliers in lower cost countries, primarily in Asia, while manufacturing some products in our own facilities. We also purchase component parts and raw materials for our manufactured products from third parties many of which are also imported from Asia. Additionally, we rely on international freight carriers and domestic trucking and rail lanes to import and distribute products to our customers throughout the world. We have experienced, and could experience, disruptions in our global supply chain due to insufficient freight carrier capacity, port delays and closures, the cost and availability of international and domestic freight carriers, labor shortages, rapidly changing labor policies, and geopolitical unrest. These events as well as further supply chain disruptions could adversely affect our operations, sales, profitability, and cash flow.
Our operating results have been, and continue to be, adversely affected by inflation and changes in the cost or availability of raw materials, transportation, labor and other necessary supplies and services, including the cost of finished goods.
The price and availability of raw materials, transportation, labor, and other necessary supplies and services used in our business, as well as the cost of finished goods, can be volatile due to numerous factors beyond our control, including general economic and competitive conditions, inflation, tariffs and changes in foreign trade policies, supply chain disruptions, supplier business strategies, and political instability, war, and other geopolitical tensions.
During periods of inflation and rising costs, we manage this volatility through a variety of actions, including targeted advance or periodic purchases, future delivery purchases, long-term contracts, sales price increases, and the use of certain derivative instruments. We have implemented, and may implement in the future, additional price increases if necessary to offset future inflationary and supply-chain related cost increases. Historically, we have not been able to raise prices fast enough to effectively mitigate the adverse impact of these cost increases on our margins and there can be no assurance that we will be able to do so in the future. Additionally, we have lost, and may continue to lose, sales due to increasing our selling prices to our customers. We have also seen customers and consumers purchase lower priced products which generate lower margins due to our price increases and we expect this trend to continue.
Outsourcing the development and production of certain of our products, our information technology systems and other administrative and finance functions could materially adversely affect our business, results of operations, and financial condition.
We outsource certain product development and manufacturing functions, such as product design and production, to third-party suppliers. This creates a number of risks, including decreased control over the engineering and manufacturing processes which can result in cost overruns, delayed deliveries or shortages, inferior product quality, and loss or misappropriation of trade secrets and intellectual property. Additionally, we rely on our suppliers to ensure that our products meet our design and product content specifications, and all applicable laws, including product safety, product compliance, security, labor, sustainability, and environmental laws. We also expect our suppliers to conform to our and our customers’ and licensors' codes of conduct and expectations with respect to product safety, product quality, social responsibility and environmental sustainability, and be responsive to our audits and requests for information needed to comply with laws and our customers' expectations. Failure to meet any of these requirements may result in our having to cease doing business with a supplier or cease production at a particular facility, stop selling or recall non-conforming products, or having imported products detained at the port or subject to exclusion or seizure. Substitute suppliers might not be available, or if available, might be unwilling or unable to offer products on acceptable terms or in a timely manner. Moreover, if one or more of our suppliers is unable or unwilling to continue to provide products of acceptable quality, at acceptable cost or in a timely manner due to financial difficulties, insolvency or otherwise, including as a result of disruptions associated with circumstances outside their control, or if customer demand for our products increases, we may be unable to secure sufficient additional capacity from our current suppliers, or others, in a timely manner or on acceptable terms. Any of these events could result in unforeseen production delays and increased costs and negatively affect our ability to deliver our products to our customers, all of which could adversely affect our business, sales, results of operations, and financial condition.
We also outsource important portions of our information technology infrastructure and systems support to third-party service providers. Outsourcing of information technology services creates risks to our business, which are similar to those created by our product production outsourcing.
In addition, we outsource certain administrative and financial functions, such as payroll processing, benefit plan administration, and accounts payable and accounts receivable management, to third-party service providers and may outsource other functions in the future to achieve cost savings and efficiencies. If the service providers to whom we outsource these functions do not perform effectively or experience deficiencies or material weaknesses in their internal controls, we may not be able to achieve the expected cost savings and may incur additional costs to correct errors they make. Depending on the function
involved, such issues may also lead to business disruption, processing inefficiencies, internal control deficiencies, loss of or damage to intellectual property, legal and regulatory exposure, or harm to employee morale.
Technology and Cybersecurity Risks
We rely extensively on information technology systems to operate, transact and otherwise manage our business. Any material failure, inadequacy, or interruption of that technology or its supporting infrastructure could materially adversely affect our business, results of operations, and financial condition.
We rely extensively on our information technology systems, many of which are outsourced to third-party service providers. We depend on these systems and our third-party service providers to effectively manage our business and execute the production, distribution and sale of our products, as well as to manage and report our financial results and run other support functions. Although we have implemented service level agreements and require our third-party providers to validate their internal controls, if applicable, and have established monitoring controls, if our third-party service providers fail to perform their obligations in a timely manner or at satisfactory levels, our business could suffer. Additionally, if one or more of our information technology suppliers is unable or unwilling to continue to provide services at acceptable cost due to financial difficulties, insolvency, or otherwise, our business could be adversely affected.
Further, our failure to properly maintain and successfully upgrade or replace any of these systems, especially our enterprise resource planning systems, could disrupt our business and our ability to service our customers or negatively impact our ability to report our financial results in a timely and accurate manner.
If our day-to-day business operations or our ability to service our customers is negatively impacted by the failure or disruption of our information technology systems, if we are unable to accurately and timely report our financial results, or if we conclude that we do not have effective internal control over financial reporting and effective disclosure controls and procedures, it could damage our reputation and adversely affect our business, results of operations, and financial condition.
Security breaches could compromise our confidential and proprietary information, as well as any personally identifiable information for which we are responsible, and expose us to operational and legal risks that could cause our business and reputation to suffer and materially adversely affect our results of operations and financial condition.
We maintain information and applications necessary to conduct our business in data centers, on our networks and with third-party cloud services, including confidential and proprietary information, as well as personally identifiable information regarding our customers and employees. Our information technology infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions which creates the risk that our digital information could be stolen or tampered with or that our business operations could be materially and adversely impacted. This risk is heightened now that most of our office-based employees work remotely several days a week.
We maintain systems designed to prevent and monitor for such intrusion, tampering, and theft, and we continue to enhance and update these technologies as security threats evolve and become more sophisticated. We also obtain assurances from outsourced service providers regarding the sufficiency of their security procedures and, where appropriate, assess the protections employed by these third parties. Despite these efforts, there can be no assurance that we will successfully identify an incident of intrusion, tampering or theft in a timely manner or at all, and in advance of it impacting the Company, and any such impact could be material. Further, our costs to maintain and upgrade our security systems could increase significantly as cybersecurity threats increase.
Despite our efforts to secure and monitor our information technology systems, the possibility of intrusion, tampering, and theft cannot be eliminated entirely. We have from time to time experienced cybersecurity breaches, such as "phishing" attacks, business email compromises, employee or insider error, brute force attacks, unauthorized parties gaining access to our information technology systems, and similar incidents. To date, these incidents have not had a material impact on our business, but there can
be no assurance that future incidents will not cause material impacts. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target. Additionally, there can be no assurance that the actions we and our outsourced providers take will prevent a breach of, or attack on the information technology systems that support the day-to-day operation of our business or house our confidential, proprietary, and personally identifiable information.
Any such intrusion, tampering, or theft (and any resulting disclosure or use of confidential, proprietary or personally identifiable information) could compromise our network, the network or data center of a third-party hosting key operating systems or data, or to whom we have disclosed confidential, proprietary or personally identifiable information or a third-party cloud service provider. Any of these impacts could result in a disruption to our information technology infrastructure, interruption of our business operations, violation of applicable privacy and other laws or standards, a deficiency in our internal control over financial reporting, significant legal and financial exposure beyond the scope or limits of any insurance coverage (including legal claims and proceedings and regulatory enforcement actions and penalties), increased operating costs associated with remediation activities and a loss of confidence in our security measures, all of which could harm our reputation with our customers, end-users, employees and other stakeholders and materially adversely affect our business and results of operations. Contractual provisions with third parties, including cloud service providers, may limit our ability to recover these losses.
In the event a significant cybersecurity event is detected, we maintain disclosure controls and procedures that are designed to enable us to promptly analyze the impact on our business, respond expediently, appropriately and effectively and repair any damage caused by such incident, as well as consider whether such incident should be disclosed publicly. The Company also employs technology designed to detect potential incidents of intrusion, tampering and theft before they impact the Company, and we continue to enhance and update these technologies. However, there can be no assurance that we will successfully identify such an incident in a timely manner or at all, and in advance of it impacting the Company, and any such impact could be material.
Failure to successfully implement artificial intelligence in our operations and mitigate the attendant risks could materially adversely affect our business, results of operations, and financial condition.
We use artificial intelligence (“AI”), including generative AI and agentic AI, in various parts of our business. These technologies are complex and rapidly evolving; building them requires significant investment in infrastructure and personnel with no assurance that we will realize the desired or anticipated benefits. If we fail to successfully implement AI in our business operations, it could adversely affect our ability to realize anticipated cost savings and operational efficiencies as planned. Further, our competitors may more successfully incorporate AI into their businesses and products, which could impair our ability to compete effectively and adversely affect our results of operations.
Although we have recently established AI governance practices, including an AI policy, governance body, and review process, there remain risks related to AI accuracy, intellectual property infringement or misappropriation, data privacy, employment practices and cybersecurity, among others. Our ability to manage those risks and respond to new laws and regulations governing the use of AI, new or enhanced governmental or regulatory scrutiny, litigation, data breaches, ethical concerns, negative consumer perceptions of AI, or other complications could also adversely affect our business, brand perception, or financial results. As with many innovations, the use of AI may lead to challenges, concerns and risks we may not be able to predict, especially if our use of AI in our products and operations becomes more important over time.
Liquidity, Capital Resources and Capital Allocation Risks
Our existing borrowing arrangements limit our ability to engage in certain activities. If we are contractually restricted from pursuing activities or transactions that we believe are in our long-term best interests or are unable to meet our obligations under our loan agreements, our business, results of operations, and financial condition could be materially adversely affected.
The terms of our debt agreements limit our ability to engage in certain activities and transactions that may be in our and our stockholders' long-term interests. Among other things, the covenants and financial ratios and tests contained in our debt agreements restrict or limit our ability to incur additional indebtedness, grant certain liens on our assets, issue preferred stock or certain disqualified stock, make restricted payments (including dividends and share repurchases), make investments, sell our assets or merge with other companies, and enter into certain transactions with affiliates. We are also required to maintain specified financial ratios under certain circumstances and satisfy financial condition tests. Our ability to comply with these covenants and financial ratios and tests may be affected by events beyond our control, and we may not be able to continue to meet those covenants, ratios, and tests.
Our debt service obligations require us to dedicate a portion of our cash flow from operating activities to make interest and principal payments on our indebtedness, which reduces the availability of our cash flow to fund working capital, capital expenditures, research and product development efforts, potential acquisitions, and other general corporate purposes. A portion of our outstanding indebtedness bears interest at a floating rate which fluctuates with changes in interest rates.
Our ability to meet our debt obligations, including our financial covenants, and to refinance our existing indebtedness upon maturity, will depend upon our future operating performance, which will be affected by general economic, financial, competitive, regulatory, business, and other factors. Breach of any of the covenants, ratios, and tests contained in the agreements governing our indebtedness, or our inability to pay interest on, or principal of, our outstanding debt as it becomes due, could result in an event of default, in which case our lenders could declare all amounts outstanding to be immediately due and payable. If our lenders accelerate our indebtedness, or we are not able to refinance our debts at maturity, our assets may not be sufficient to repay in full such indebtedness and any other indebtedness that would become due as a result of such acceleration. If we then are unable to obtain replacement financing or any such replacement financing is on terms that are less favorable than the indebtedness being replaced, our liquidity, results of operations, and financial condition would be adversely affected.
We may not continue to pay dividends at historic rates, or at all, or engage in stock repurchases.
We have a history of paying quarterly dividends and engaging in stock repurchase programs; however, any determination to continue to pay cash dividends at recent rates or at all, or repurchase our shares in the market, is contingent on a variety of factors, including our financial condition, results of operations, business requirements, and whether our board of directors' determines that such dividends or share repurchases are in the best interests of our stockholders and in compliance with all applicable laws and agreements. Under certain circumstances, the terms of our debt agreements limit our ability to return capital to stockholders through stock repurchases, dividends, or otherwise. Pursuant to an amendment to our Credit Agreement in July 2025, the aggregate amount of dividend payments or share repurchases we can make in 2026 is limited to the greater of $40.0 million or 1 percent of our Consolidated Total Assets, see "Note 4. Long-term Debt and Short-term Borrowings" to the consolidated financial statements contained in Part II, Item 8. of this report. There is no assurance that we will continue to make dividend payments or repurchase stock in amounts consistent with prior dividends and stock repurchases, or at all.
Legal and Regulatory Risks
Product liability claims, recalls or regulatory actions could materially adversely affect our financial results or harm our reputation or brands.
Claims for losses or injuriespurportedly caused by one of our products arise in the ordinary course of our business. Litigation or regulatory enforcement actions related to our products, and the associated costs and potential for monetary judgments and penalties could have an adverse effect on our results of operations and financial condition. Additionally, product liability claims or regulatory actions, regardless of merit, could result in negative publicity that could harm our reputation in the marketplace or the value of our brands. We also may be, and in the past have been, required to recall and discontinue the sale of allegedlydefective or unsafe products, which has resulted in lost sales and unplanned expenses. Any future recall or quality issue could result in lost sales, adverse publicity, and significant expenses, and adversely impact our results of operations or financial condition.
Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.
We are party to various lawsuits and regulatory proceedings, as well as other claims incidental to our business. In addition, we may be unaware of third-party claims of intellectual property infringement relating to our technology, brands, or products, and we may face other claims related to business operations. Any litigation regarding patents or other intellectual property could be costly and time-consuming and might require us to pay monetary damages or enter into costly license agreements. As an example, for the past nine years we have been involved in patent litigation regarding computer security locks. While we expect to prevail in the proceeding, we have incurred millions of dollars in litigation costs and might be obligated to pay millions more in damages should we not prevail. We also may be subject to injunctionsagainst development and sale of certain of our products.
It is the opinion of management that the ultimate resolution of currently outstanding litigation and claims will not have a material adverse effect on our financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition, or cash flow. Further, future claims, lawsuits and legal proceedings could materially adversely affect our business, reputation, results of operations, and financial condition.
Additional tax liabilities stemming from our global operations and changes in tax legislation, regulation and tax rates have, and may continue to, adversely affect our financial results.
We face a variety of risks of increased future taxation on our earnings as a corporate taxpayer in the countries in which we have operations. Moving funds between countries can also produce adverse tax consequences. In addition, since our operations are global, we can face challenges in effectively gaining a tax benefit for costs incurred in one country that benefit our operations in other countries. Changes in tax legislation or tax rates may occur in one or more jurisdictions in which we operate that may materially impact the cost of operating our business.
In addition, the potential exists for significant legislative policy change in the taxation of multinational corporations, as has recently been the subject of the “Pillar One” and “Pillar Two” initiatives of the Organization for Economic Co-operation and Development, the European Union Anti-Tax Avoidance Directives, and legislation inspired or required by those initiatives. It is also possible that some governments will make significant changes to their tax policies in response to factors such as budgetary needs, feedback from the business community and the public view on applicable tax planning activities. Further, interpretations of existing tax law in various countries may change due to the regulatory and examination policies of the tax authorities and the decisions of courts.
Adverse or unanticipated tax consequences can negatively impact our performance. We are uncertain as to the ultimate results of these potential changes or what their effects will be on our business.
For additional information on the impact of recent changes in tax legislation, see "Note 12. Income Taxes" to the consolidated financial statements contained in Part II, Item 8. of this report.
Laws, rules and regulations and self-regulatory requirements that affect our business, including the costs of compliance, as well as the impact of changes in such laws, could materially adversely affect our business, reputation, and results of operations.
We are subject to national, state, provincial and/or local laws, rules and regulations, as well as self-regulatory requirements, in numerous countries due to the nature of our operations and the products we sell, including:
Laws and regulations applicable to U.S. public companies with securities listed on the New York Stock Exchange;
Delaware corporate law and laws relating to corporate governance;
International trade laws, including tariffs, trade sanctions, and embargoes;
Tax laws;
Privacy and data security laws and self-regulatory requirements regarding the acceptance, processing, storage and transmission of credit card data;
Anti-bribery, anti-corruption, and anti-money laundering laws;
Laws governing fair competition and marketing and advertising, including laws and regulations regarding "green" claims;
Environmental laws, including laws relating to the use, discharge and emission of certain materials (including hazardous substances), waste disposal, GHG emissions and other discharges to air, soil, and water;
Extended producer responsibility laws, that impose taxes on producers of various affected products and packaging, including those made of paper, plastic and rubber; to fund recycling programs, resulting in increases in our product costs;
Laws governing the toxic chemicals and materials in the products we sell, including PFAS;
Product safety laws; and
Laws relating to the environmental sustainability of our operations and our products and packaging, the health and safety of our employees and the protection of human rights in our supply chain, including:
laws mandating reporting obligations, including deforestation disclosures, and
laws establishing minimum recycled content requirements, governing labeling related to recyclability, and restricting or banning the use of certain materials in products or packaging, including single-use plastics (collectively “Sustainability Laws”);
All of these legal frameworks are complex and change frequently. Moreover, the requirements of these and other laws can vary significantly from jurisdiction to jurisdiction. Additionally, these laws and regulations are evolving rapidly, especially environmental laws, extended producer responsibility laws, Sustainability Laws, and laws governing "green" marketing claims, and may become more stringent over time, which could result in significant additional operating and compliance costs as well as increased risks of non-compliance. Further, the lack of harmonized regulatory requirements and reporting frameworks requires us to navigate myriad different requirements further increasing the cost and complexity of compliance and the risks of non-compliance. Failure by us to promptly and accurately meet these expectations and requirements may expose us to reputational and brand damage, regulatory penalties, and litigation among other things.
In addition, when we expand our business into new markets and into new product categories, we increase the number of legal and self-regulatory requirements with which we are required to comply, which increases the complexity and costs of compliance, as well as the risks of non-compliance. Any significant increase in our costs to comply with applicable legal and self-regulatory requirements, or any liability arising from non-compliance, could have a material adverse effect on our business, results of operations, and financial condition.
We are tracking and taking actions to comply with all of these laws and regulations; however, we cannot currently assess the impact that future requirements as well as regulation changes and enforcement practices will have on our business results of operations and financial condition.
Changes in trade policy and regulations in the United States and other countries, including the imposition of tariffs and changes in trade agreements, and the resulting consequences, as well as the ongoing uncertainties related to future tariffs and trade policy, have, and are likely to continue to, adversely impact our business, results of operations, and financial condition.
The U.S. government has implemented tariffs (including reciprocal tariffs) on a wide range of products and other goods from many countries, including China, and is considering additional tariffs and further changes to international trade policy. Other countries, including Canada, have implemented retaliatory tariffs in response to the new U.S. tariffs. A significant number of the products we sell and certain raw materials we use in our U.S. production facilities are sourced from China, Vietnam, and other impacted countries, and we optimize our North American supply chain by, in some cases, consolidating inventories in the U.S. The existing tariffs have had, and are likely to continue to have an adverse impact on our business and operating results which may be material. In addition, the current uncertainty surrounding international trade policy and regulations as well as trade disputes and tensions between the U.S. and its trading partners has had, and is likely to have, an adverse effect on business and consumer confidence and spending which is affecting, and we expect will continue to affect, the demand for our products. We are constantly monitoring the tariffs and other changes and adjusting our manufacturing and distribution footprint globally to manage and mitigate these risks. In addition, we are implementing price increases as appropriate.
We cannot predict future trade policy and regulations in the U.S. and other countries or their impact on our business. There remains significant uncertainty regarding these policies and regulations, including whether and when further tariffs will be implemented or the tensions between the U.S. and its trading partners will worsen. Our ongoing efforts to address these risks may not be sufficient or effective, may take time to implement, and may have long-term adverse effects on our business and operating results. As a result, new or increased U.S. tariffs and other changes in global trade policies and regulations, and the continued uncertainty, are likely to have an adverse impact on our business, results of operations and financial condition which may be material.
General Risk Factors
Our success depends on our ability to attract and retain qualified personnel.
Our success depends on our ability to attract and retain qualified personnel at all levels and maintain a diverse, global workforce. Our ability to provide competitive total rewards packages and an attractive culture remain key indicators for success in attracting and retaining talent. Talent development and succession planning have emerged as key activities to guard against the risk of key management personnel retirements and new capability requirements to successfully implement our business strategy.
Our stock price is volatile.
The market price for our common stock has been volatile historically. Our stock price may be significantly affected by factors, including those described elsewhere in this "Part I, Item 1A. Risk Factors," as well as the following:
quarterly fluctuations in our operating results compared with market expectations;
investors' perceptions; and
changes in financial estimates by us or securities analysts and recommendations by securities analysts.
Volatility in our stock price could adversely affect our business and financing opportunities, which could hurt our operating results and negatively impact our cash flow and financial condition.
Circumstances outside our control, including telecommunication failures, labor strikes, power and/or water shortages, acts of God, public health emergencies, including the occurrence of a pandemic, severe weather conditions, natural disasters, war, terrorism, and other geopolitical incidents have, and in the future could, materially and adversely impact our business, sales, results of operations, and financial condition.
A disruption at one of our suppliers' manufacturing facilities, one of our offices, manufacturing or distribution locations, or elsewhere in our global supply chain due to circumstances outside our control, have, and in the future could, materially and adversely impact our business operations. Such a disruption could occur as a result of any number of events, including but not limited to, a major equipment failure, labor stoppages, transportation failures affecting the supply and shipment of materials and finished goods, unavailability of raw materials, severe weather conditions, natural disasters, civil and geopolitical unrest, fire, explosions, public health emergencies, pandemics, war or terrorism, and disruptions in utility and other services. Any such future disruptions could materially and adversely impact our business, sales, results of operations, and financial condition.
Political instability, civil unrest, war or terrorism, public health crises, pandemics, or other public health emergencies, and severe weather or natural disasters may also affect consumer and business confidence and the health of the economies in the countries in which we operate. Overall, adverse changes in economic conditions or sustained periods of economic uncertainty or weakness in one or more of the geographic markets in which we operate, whatever the cause, have negatively affected our historical sales and profitability, and in the future could have an adverse effect on our sales, business, results of operations, cash flow, and financial condition.
The Company has 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. 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.
Our product categories include gaming and computer accessories; storage and organization; notebooks; shredding; laminating and binding machines; stapling; punching; planners; dry erase boards; and do-it-yourself tools, among others. We distribute our products through a wide variety of channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop. These channels include mass retailers, e-tailers, discount, drug/grocery and variety chains, warehouse clubs, hardware and specialty stores, independent office product dealers, office superstores, wholesalers, contract stationers, and specialist technology businesses. We also sell directly through e-commerce sites and our direct sales organization.
Overview of 2025 Financial Performance
During 2025, the Company was impacted by soft global demand, reflecting weak consumer and business spending due to a weak macroeconomic environment and geopolitical uncertainties. We expect these collective global trends to continue to impact our financial results.
In 2025, our net sales decreased $141.5 million, or 8.5 percent, compared to the prior year. Globally, demand was softer for certain office related products. In addition, sales were impacted by tariff disruptions in the Americas operating segment, primarily in the United States. Gross margin decreased 50 basis points compared to the prior-year period, primarily due to the impact of volume declines and tariff related impacts.
We reported operating income of $92.3 million in 2025 compared to an operating loss of $37.0 million in 2024. The increase was primarily due to the prior year non-cash goodwill and intangible asset impairment charge.
We reported net income of $41.3 million, or $0.44 per share, compared to a net loss of $101.6 million, or $(1.06) per share in the prior year. The prior year reported net loss reflects non-cash goodwill and intangible asset impairment charges and lower benefits from discrete tax items.
Operating cash flows for the year provided cash of $68.7 million and $148.2 million in 2025 and 2024, respectively. Our seasonal operating cash flow followed our historic pattern of outflow in the first half followed by strong inflows in both quarters of the second half.
Response to Tariffs
In reaction to the evolving tariff landscape, we have taken, and will continue to take, a number of actions:
Communicated and implemented price increases in the U.S.,
Moved sourcing of our U.S. products to countries where we believe tariffs will be lower over the long term,
Negotiated with suppliers on best terms, and
Expanded our SKU rationalization in the U.S. and offered our customers item substitutions for high-cost products.
For further information on our risks related to the impact of tariffs and changes in trade policies, see "Part I, Item 1A. Risk Factors" of this report.
Consolidated Results of Operations for the Years Ended December 31, 2025 and 2024
Year Ended December 31,
Amount of Change
(in millions, except per share data)
%/pts
Net sales
Comparable sales (Non-GAAP) (1)
Gross profit
Gross profit margin
Selling, general and administrative expenses
Impairment of goodwill and intangible assets
Intangible amortization and other operating expense
Operating income (loss)
Operating income (loss) margin
Interest expense, net
Non-operating pension and other expense, net
Income (loss) before income tax
Income tax expense
Effective tax rate
Net income (loss)
Diluted income (loss) per share
See reconciliation to GAAP contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures."
Net Sales
For the year ended December 31, 2025, net sales decreased $141.5 million, or 8.5 percent. Favorable foreign exchange increased sales by $13.2 million, or 0.8 percent. Comparable net sales decreased 9.3 percent. The reported sales decline was driven by lower volume, which was down $161.0 million or 9.7 percent, primarily due to lower global demand for consumer and business products and tariff-related impacts, partially offset by the acquisition of Buro (for more information see "Note 3. Acquisitions" to the Consolidated Financial Statements contained in Part II, Item 8. of this report).
Gross Profit
For the year ended December 31, 2025, gross profit decreased $55.4 million, or 10.0 percent, primarily due to volume declines, reduced fixed-cost absorption, and impacts from tariffs, partly offset by savings resulting from our global cost reduction actions. Gross profit margin declined 50 basis points. Favorable foreign exchange increased gross profit by $5.4 million, or 1.0 percent.
Selling, General and Administrative Expenses ("SG&A")
For the year ended December 31, 2025, SG&A decreased $19.0 million, or 5.2 percent. The decrease was due to the positive impact of global cost reduction actions and lower incentive compensation expense. Adverse foreign exchange increased SG&A by $2.2 million, or 0.6 percent.
Operating Income (Loss)
For the year ended December 31, 2025, we reported operating income of $92.3 million compared to a loss of $37.0 million in the prior year. The prior year operating loss was due to non-cash impairment charges totaling $165.2 million related to goodwill and an indefinite-lived trade name within our Americas reporting unit. The current year period was impacted by lower sales volume, reduced fixed-cost absorption and $4.8 million of higher restructuring expense, partly offset by a net gain of $6.8 million primarily related to the sale of facilities in Sidney, New York and Barcelona, Spain and the benefit of cost reduction actions and lower incentive compensation expense. Favorable foreign exchange increased operating income $1.8 million, or 4.9 percent.
Interest Expense, Net
For the year ended December 31, 2025, interest expense, net decreased $8.7 million or 19.3 percent, primarily due to lower variable interest rates on lower variable debt balances versus the prior year. The weighted average interest rate on $265.9 million of outstanding variable rate debt as of December 31, 2025, decreased to 4.66 percent from 5.15 percent in the prior year.
Income Tax Expense
For the year ended December 31, 2025, we recorded income tax expense of $7.8 million on income before taxes of $49.1 million. This compared with income tax expense of $14.3 million on a loss before taxes of $87.3 million for the year ended December 31, 2024. After removing the impacts of the 2024 non-cash impairment charges, the decrease in income tax expense versus 2024 was primarily due to a reduction of income before income tax, the tax benefit recorded in 2025 from the settlement of the Brazil Tax Assessments, partially offset by the tax expense for a foreign statutory tax rate change.
See "Note 12. Income Taxes" to the Consolidated Financial Statements contained in Part II, Item 8. of this report for more information.
Segment Net Sales and Operating Income (Loss) for the Years Ended December 31, 2025 and 2024
ACCO Brands Americas
Year Ended December 31,
Amount of Change
(in millions)
%/pts
Net sales
Comparable sales (Non-GAAP)⁽¹⁾
Segment operating income (loss)⁽²⁾
Segment operating income (loss) margin
pts
See reconciliation to GAAP contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measure."
Segment operating income (loss) excludes corporate costs. See "Part II, Item 8. Note 18. Information on Operating Segments" for a reconciliation of total "Segment operating income (loss)" to "Income (Loss) before income tax."
For the year ended December 31, 2025, net sales decreased $105.5 million, or 10.6 percent. Adverse foreign exchange reduced net sales $4.6 million, or 0.5 percent. Comparable net sales decreased 10.1 percent. The reported sales decline was driven by lower volume which was down $98.5 million, or 9.9 percent, primarily due to lower demand for consumer and business products, as well as disruptions in customer purchasing, including cancelled or delayed orders, due to uncertainty related to the tariffs.
For the year ended December 31, 2025, we reported operating income of $97.7 million compared to a loss of $45.5 million. The prior year operating loss was due to non-cash impairment charges totaling $165.2 million related to goodwill and an indefinite-lived trade name. The current year was impacted by lower sales volume, reduced fixed-cost absorption and impacts from tariffs, partly offset by cost savings, lower incentive compensation and the gain on the sale of our Sidney, New York facility of $5.7 million. Favorable foreign exchange increased operating income $0.3 million or 0.7 percent.
ACCO Brands International
Year Ended December 31,
Amount of Change
(in millions)
%/pts
Net sales
Comparable sales (Non-GAAP)⁽¹⁾
Segment operating income⁽²⁾
Segment operating income margin
pts
See reconciliation to GAAP contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measure."
Segment operating income excludes corporate costs. See "Part II, Item 8. Note 18. Information on Operating Segments" for a reconciliation of total "Segment operating income (loss)" to "Income (Loss) before income tax."
For the year ended December 31, 2025, net sales decreased $36.0 million, or 5.4 percent. Favorable foreign exchange increased sales $17.8 million, or 2.7 percent. Comparable net sales decreased 8.1 percent. The reported sales decline was driven by lower volume, which was down $62.5 million, or 9.4 percent, primarily due to reduced demand for business products, partly offset by the benefit of price increases of $8.7 million, or 1.3 percent.
For the year ended December 31, 2025, operating income decreased $19.9 million, or 36.8 percent, primarily due to lower sales volume and higher restructuring costs of $7.2 million in the current year, partly offset by cost savings, price increases, lower incentive compensation and the net gain of $1.1 million primarily related to the sale of a facility in Barcelona, Spain. Favorable foreign exchange increased operating income by $1.5 million, or 2.8 percent.
Liquidity and Capital Resources
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 December 31, 2025, there was $164.6 million in borrowings outstanding under the
Revolving Facility ($23.6 million reported in "Current portion of long-term debt" and $141.0 million reported in "Long-term debt, net"), and the amount available for borrowings was $292.3 million (allowing for $10.6 million of letters of credit outstanding on that date). We had $64.4 million in cash on hand as of December 31, 2025, and our total available liquidity (cash and availability under our credit facilities) was $356.7 million.
We have no debt maturities before March 2029. Debt currently outstanding under our senior secured credit facility is due on October 30, 2029, with the requirement that we refinance our senior unsecured notes by September 2028.
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.
Debt
The $265.9 million of debt currently outstanding under our senior secured credit facilities has a weighted average interest rate of 4.66 percent as of December 31, 2025 and the $575.0 million outstanding principal amount of our senior unsecured notes due March 2029 ("Senior Unsecured Notes") has a fixed interest rate of 4.25 percent.
Effective July 29, 2025, we entered into an amendment to the Credit Agreement, which, among other things, increased our maximum Consolidated Leverage Ratio financial covenant to 4.50x for the third and fourth quarters of 2025, to 4.75x for the first and second quarters of 2026 and to 4.25x for the third and fourth quarters of 2026. Thereafter, the maximum Consolidated Leverage Ratio will return to 4.50x for all first and second fiscal quarters and 4.00x for all third and fourth quarters. In addition, it modified certain covenant baskets related to liens, indebtedness and restricted payments through December 31, 2026. The amendment also required that $35.0 million in outstanding principal amount under the term loan facility be repaid on or before September 30, 2025, for which the payment was made as required. Further, the amendment restricts the aggregate amount of dividend payments or share repurchases we can make in 2026 to the greater of $40.0 million or 1 percent of our Consolidated Total Assets.
Prior to July 29, 2025, the maximum Consolidated Leverage Ratio under the Credit Agreement for all first and second fiscal quarters was 4.50x and 4.00x for all third and fourth fiscal quarters.
The current pricing for borrowings under the Credit Agreement is as follows:
Consolidated Leverage Ratio
Applicable Rate on Euro/AUD/CDN Loans
Applicable Rate on Base Rate Loans
Undrawn Fee
As of December 31, 2025, the applicable rate on Euro, Australian and Canadian dollar loans was 2.25 percent and the applicable rate on Base Rate loans was 1.25 percent. Undrawn amounts under the Revolving Facility are subject to a commitment fee rate of 0.25 percent to 0.375 percent per annum, depending on the Company's Consolidated Leverage Ratio. As of December 31, 2025, the commitment fee rate was 0.375 percent. Pursuant to the July 29, 2025 amendment to the Credit Agreement, pricing is fixed at Tier 1 (>4.25x) until December 31, 2026.
Financial Covenants
The Company is required to comply with the maximum Consolidated Leverage Ratio covenant described above and a minimum Interest Coverage Ratio covenant. As of December 31, 2025, our Consolidated Leverage Ratio was approximately 4.13 to 1.00 versus our maximum covenant of 4.50 to 1.00. Our Interest Coverage Ratio was approximately 5.51 to 1.00 versus the minimum covenant of 3.00 to 1.00.
Other Covenants and Restrictions
The Credit Agreement contains customary affirmative and negative covenants as well as events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults, certain bankruptcy or insolvency events, certain ERISA-related events, changes in control or ownership, and invalidity of any loan document. The Credit Agreement also establishes limitations on the aggregate amount of Permitted Acquisitions and Investments (each as defined in the Credit Agreement) that the Company and its subsidiaries may make during the term of the Credit Agreement.
As of and for the period ended December 31, 2025, the Company was in compliance with all applicable loan covenants under the Credit Agreement and the Senior Unsecured Notes.
Guarantees and Security
Generally, obligations under the Credit Agreement are guaranteed by certain of the Company's existing and future subsidiaries and are secured by substantially all of the Company's and certain guarantor subsidiaries' assets, subject to certain exclusions and limitations.
For further information, see "Note 4. Long-term Debt and Short-term Borrowings" to the consolidated financial statements contained in Part II, Item 8. of this report.
Restructuring
The Company may implement restructuring, realignment, or cost-reduction plans and activities, including those related to integrating acquired businesses.
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. Since inception, the Company has realized over $60.0 million in pre-tariff savings.
During the year ended December 31, 2025, the Company recorded $21.6 million in restructuring expenses: $7.7 million of restructuring expense for our Americas segment; $14.1 million for our International segment; and $0.2 million credit from the release of reserves within Corporate. Restructuring charges in 2025 were primarily for severance costs related to cost reduction initiatives.
For further information, see "Note 11. Restructuring" to the consolidated financial statements contained in Part II, Item 8. of this report.
Cash Flow for the Years Ended December 31, 2025 and 2024
During the year ended December 31, 2025, our cash and cash equivalents decreased $9.7 million compared to an increase of $7.7 million during the prior year. The following table summarizes our cash flows for the periods presented:
Year Ended December 31,
(in millions)
Amount of Change
Net cash flow provided (used) by:
Operating activities
Investing activities
Net borrowings
Dividends paid
All other financing
Financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash Flow from Operating Activities
Cash provided by operating activities during the twelve months ended December 31, 2025, was driven by cash inflows of $117.6 million (excluding non-cash impacts primarily of amortization of intangibles, depreciation, stock-based compensation expense, and the gain on the sale of facilities in Sidney, New York and Barcelona, Spain from our net income). Cash was also provided by trade working capital of $16.3 million, which includes accounts receivable, inventory, and accounts payable. This was partially offset by a net cash outflow of $65.2 million from other assets and liabilities including cash payments for restructuring, taxes, interest, pensions, and incentives.
Cash provided by operating activities during the twelve months ended December 31, 2024, was driven by cash inflows of $143.8 million (excluding the non-cash impacts primarily of amortization of intangibles, depreciation, stock-based compensation expense, and non-cash goodwill and intangible asset impairment charges that are included in our net loss). Cash provided by trade working capital was $75.3 million, which includes accounts receivable, inventory and accounts payable. This was partially offset by a net cash outflow of $70.9 million for all other assets and liabilities.
Cash Flow from Investing Activities
Cash used by investing activities during the twelve months ended December 31, 2025, was due to $10.1 million of cash used for the Buro Acquisition as well as capital expenditures, partly offset by $18.7 million in proceeds from the sale of facilities in Sidney, New York, Barcelona, Spain, and Arcos, Portugal.
Cash used by investing activities during the twelve months ended December 31, 2024, was primarily due to capital expenditures partly offset by proceeds of $2.0 million from the sale of our facility in the Czech Republic and $1.4 million from the sale of machinery and equipment at our Sidney, NY facility which closed during 2024.
Cash Flow from Financing Activities
Cash used by financing activities during the twelve months ended December 31, 2025, was primarily due to debt repayments exceeding borrowings, dividend payments, and cash used to repurchase common stock.
Cash used by financing activities during the twelve months ended December 31, 2024, was primarily due to debt repayments exceeding borrowings, dividend payments, and cash used to repurchase common stock.
Capitalization
The Company had 90.1 million and 92.9 million shares of common stock outstanding as of December 31, 2025, and 2024, respectively.
Adequacy of Liquidity Sources
Based on our 2026 business plan and current forecasts, we believe that cash flow from operations, our current cash balance and borrowings available under our Revolving Facility will be adequate to support our requirements for working capital, capital expenditures, dividend payments, share repurchases, and debt service in both the short and long-term. Our future operating performance is dependent on many factors, some of which are beyond our control, including prevailing economic, financial, and industry conditions. For further information on these risks, see "Part I, Item1A. Risk Factors" of this report.
Off-Balance-Sheet Arrangements and Contractual Financial Obligations
The Company does not have any material off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Our contractual obligations and related payments by period as of December 31, 2025, were as follows:
(in millions)
Thereafter
Total
Debt
Interest on debt (1)
Operating lease obligations (2)
Purchase obligations (3)
Brazil tax assessment (4)
Other long-term liabilities (5)
Total
Interest calculated at December 31, 2025, rates for variable rate debt.
For further information on leases, see "Note 5. Leases" to the consolidated financial statements contained in Part II, Item 8. of this report.
For further information on purchase obligations see "Note 19. Commitments and Contingencies - Unconditional Purchase Commitments " to the consolidated financial statements contained in Part II. Item 8. of this report.
In June 2025, we agreed with the Brazilian Treasury to settle the Brazil Tax Assessments pursuant to an amnesty program. For further information regarding the Brazil Tax Assessments, see "Note 12. Income Taxes – Brazil Tax Assessments " to the consolidated financial statements contained in Part II, Item 8. of this report.
Other long-term liabilities consist of estimated expected employer contributions to pension and post-retirement plans for 2026, along with estimated future payments to these plans that are not paid from assets held in a plan trust.
Critical Accounting Estimates
Our financial statements are prepared in conformity with generally accepted accounting principles in the U.S. ("GAAP"). Preparation of our financial statements requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses presented for each reporting period in the financial statements and the related accompanying notes. Actual results could differ significantly from those estimates. We regularly review our assumptions and estimates, which are based on historical experience and, where appropriate, current business trends. We believe that the following discussion addresses our critical accounting policies, which require significant, subjective, and complex judgments to be made by our management.
Revenue Recognition
Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount reflective of the consideration we expect to receive in exchange for those goods or services. Taxes we collect concurrent with revenue producing activities are excluded from revenue. Incidental items incurred that are immaterial in the context of the contract are expensed.
At the inception of each contract, the Company assesses the products and services promised and identifies each distinct performance obligation. To identify the performance obligations, the Company considers all products and services promised regardless of whether they are explicitly stated or implied within the contract or by standard business practices.
For our products, we transfer control and recognize a sale primarily when we either ship the product from our manufacturing facility or distribution center, or upon delivery to a customer-specified location depending upon the terms in the customer agreement. In addition, we recognize revenue for private label products as the product is manufactured (or over time) when a contract has an enforceable right to payment. For consignment arrangements, revenue is not recognized until the products are sold to the end customer.
Customer programs and incentives ("Customer Program Costs") are a common practice in our industry. We incur Customer Program Costs to obtain favorable product placement, to promote sell-through of products and to maintain competitive pricing. The amount of consideration we receive and revenue we recognize is impacted by Customer Program Costs, including sales rebates; in-store promotional allowances; shared media and customer catalog allowances; other cooperative advertising arrangements; freight allowance programs offered to our customers; allowances for discounts and reserves for returns. We recognize Customer Program Costs, primarily as a deduction to gross sales, at the time that the associated revenue is recognized. Customer Program Costs are based on management's best estimates using the most likely amount method and are an amount that is probable of not being reversed. In the absence of a signed contract, estimates are based on historical or projected experience for each program type or customer. We adjust our estimate of revenue when the most likely amount of consideration we expect to receive changes.
Inventories
Inventories are priced at the lower of cost (principally first-in, first-out) or net realizable value. When necessary, the write-down of inventory to its net realizable value is recorded for obsolete or slow-moving inventory based on assumptions about future demand and marketability of products, the impact of new product introductions, and specific identification of items, such as product discontinuance or engineering/material changes. These estimates could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer inventory levels, or competitive conditions differ from our expectations.
Identifiable Intangible Assets
Identifiable intangible assets are comprised primarily of indefinite-lived and amortizable intangible assets acquired and arising from the application of purchase accounting. Indefinite-lived intangible assets are not amortized but are evaluated at least annually to determine whether the indefinite useful life is appropriate. Our ACCO ® trade name has been assigned an indefinite life as we currently anticipate that this trade name will contribute cash flows to ACCO Brands indefinitely. Amortizable intangible assets are amortized over their useful lives which range from 5 years to 30 years.
We test indefinite-lived intangibles for impairment annually, during the second quarter, and during any interim period when market or business events indicate there may be a potential adverse impact on a particular intangible. The test may be on a qualitative or quantitative basis as allowed by GAAP. We consider the implications of both external factors (e.g., market growth, pricing, competition, and technology) and internal factors (e.g., product costs, margins, support expenses, and capital investment) and their potential impact on cash flows in both the near and long term, as well as their impact on any identifiable intangible asset
associated with the business. Based on recent business results, consideration of significant external and internal factors, and the resulting business projections, indefinite-lived intangible assets are reviewed to determine whether they are likely to remain indefinite-lived, or whether a finite life is more appropriate. In addition, based on events in the period and future expectations, management considers whether the potential for impairment exists.
We believe the assumptions used in our impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each our indefinite-lived trade names. However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our indefinite-lived intangible impairment testing, will prove to be an accurate prediction of the future.
Goodwill
Goodwill has been recorded on our balance sheet and represents the excess of the cost of an acquisition when compared with the fair value of the net assets acquired. The authoritative guidance on goodwill and other intangible assets requires that goodwill be tested for impairment at a reporting unit level. We have determined that our reporting units are ACCO Brands Americas and ACCO Brands International.
We test goodwill for impairment at least annually, during the second quarter, or any interim period when market or business events indicate there may be a potential adverse impact on goodwill. As permitted by GAAP, we may perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test as required by GAAP.
During the fourth quarter of 2025, we identified triggering events that converged within our Americas and International reporting units indicating that it was more likely than not that an impairmentloss had been incurred. These triggering events include a sustained shift in product mix toward lower-priced and lower-margin products in Brazil that began earlier in the year, reduced year-end customer purchasing activity in Europe, and fourth quarter gaming accessories performing below expectations globally, driven in part by higher consoles prices reducing consumer demand for related accessories. Accordingly, as of November 30, 2025, we completed an impairment assessment, on a quantitative basis, of goodwill for both the Americas and International reporting units. The result of our assessment was that the fair value of both the Americas and International reporting unit exceeded their respective carrying values and we concluded that no impairment existed for either reporting unit.
Estimating the fair value of each reporting unit requires us to make assumptions and estimates regarding our future. We utilized a combination of discounted cash flows and market approach. The financial projections used in the valuation models reflected management's assumptions regarding revenue growth rates, economic and market trends, cost structure, discount rate, and other expectations about the anticipated short-term and long-term operating results for each of our reporting units.
We believe the assumptions used in our goodwill impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each reporting unit. However, given the economic environment and other uncertainties that can negatively impact our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future. If our assumptions regarding future performance are not achieved, or if future events occur that adversely affect our enterprise value, we may be required to record additional goodwill impairment charges in future periods.
Employee Benefit Plans
We provide a range of benefits to our employees and retired employees, including pension, post-retirement, post-employment, and health care benefits. We record annual amounts relating to these plans based on calculations specified by GAAP, which include various actuarial assumptions, including discount rates, assumed rates of return, mortality rate tables, compensation increases, turnover rates, and health care cost trends. Actuarial assumptions are reviewed on an annual basis and modifications to these assumptions are made based on current rates and trends when it is deemed appropriate. As required by GAAP, the effect
of our modifications and unrecognized actuarial gains and losses are generally recorded to a separate component of accumulated other comprehensive income (loss) ("AOCI") in stockholders’ equity and amortized over future periods. We believe that the assumptions utilized in recording our obligations under the plans are reasonable based on our experience. The actuarial assumptions used to record our plan obligations could differ materially from actual results due to changing economic and market conditions, higher or lower withdrawal rates, or other factors which may impact the amount of retirement-related benefit expense recorded by us in future periods.
The discount rate assumptions used to determine the pension and post-retirement obligations of the benefit plans are based on a spot-rate yield curve that matches projected future benefit payments with the appropriate interest rate applicable to the timing of the projected future benefit payments. For the majority of the obligations, the assumed discount rates reflect market rates for high-quality corporate bonds currently available and were determined by constructing a yield curve based on a large population of high-quality corporate bonds. Where the corporate bond market is not sufficiently deep, government bond yields are used instead. The resulting discount rates reflect the matching of plan liability cash flows to the yield curves.
For the ACCO Europe Pension Plan, the Company’s discount rate assumption methodology was based on the yield curve that uses a dataset of bonds rated AA by at least one of the main rating agencies.
The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested based on our investment profile to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation, fixed income returns and equity returns, while also considering historical returns over the last 10 years, asset allocation and investment strategy.
We estimate the service and interest components of net periodic benefit cost (income) for pension and post-retirement benefits utilizing a full yield curve approach by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
At the end of each calendar year an actuarial evaluation is performed to determine the funded status of our pension and post-retirement obligations and any actuarial gain or loss is recognized in AOCI and then amortized into the income statement in future periods, based on the average remaining lifetime or average remaining service expected.
We recognized pension expense of $3.5 million, $7.1 million, and $2.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. Post-retirement income was $0.2 million, $0.4 million, and $0.3 million for the years ended December 31, 2025, 2024, and 2023, respectively. The decrease in pension expense was primarily due to settlement costs in the prior year and changes in discount rates.
The weighted average assumptions used to determine benefit obligations for the years ended December 31, 2025, 2024, and 2023 were as follows:
Pension
Post-retirement
International
Discount rate
Rate of compensation increase
The weighted average assumptions used to determine net periodic benefit (income) cost for the years ended December 31, 2025, 2024 and 2023 were as follows:
Pension
Post-retirement
International
Discount rate - benefit obligation
Discount rate - service cost
Discount rate - interest cost
Expected long-term rate of return
Rate of compensation increase
In 2026, we expect pension expense of approximately $0.2 million and post-retirement income of approximately $0.4 million.
A 25-basis point decrease (0.25 percent) in our discount rate assumption would lead to a decrease in our pension and post-retirement expense of approximately $0.6 million for 2026. A 25-basis point change in our long-term rate of return assumption would lead to an increase or decrease in pension and post-retirement expense of approximately $1.1 million for 2026.
Pension and post-retirement liabilities of $117.5 million as of December 31, 2025, increased from $117.2 million at December 31, 2024.
Income Taxes
Deferred tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred tax assets to an amount that is more likely than not to be realized. Facts and circumstances may change and cause us to revise our conclusions regarding our ability to realize certain net operating losses and other deferred tax attributes.
The amount of income taxes that we pay is subject to ongoing audits by federal, state and foreign tax authorities. Our estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts, and circumstances existing at that time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period any assessments are received, revised, or resolved.
Recently Adopted Accounting Standards
For information on recently adopted accounting pronouncements, see "Note 2. Significant Accounting Policies, Recent Accounting Pronouncements and Adopted Accounting Standards" to the consolidated financial statements contained in Part II, Item 8. of this report.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements presented in accordance with GAAP, we provide investors with certain non-GAAP financial measures, including comparable sales. Comparable sales represent net sales excluding the impact of material acquisitions, if any, and with current-period foreign operation sales translated at prior-year currency rates. We sometimes refer to comparable sales as comparable net sales.
We use comparable sales both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business. We believe comparable sales provide management and investors with a more complete understanding of our underlying operational results and trends, facilitate meaningful period-to-period comparisons, and enhance an overall understanding of our past and future financial performance. Comparable sales should not be considered in
isolation or as a substitute for, or superior to, GAAP net sales and should be read in connection with the Company's consolidated financial statements presented in accordance with GAAP and contained in Part II, Item 8 of this report.
The following tables provide a reconciliation of GAAP net sales as reported to non-GAAP comparable sales by segment:
Comparable Sales - Year Ended December 31, 2025
Non-GAAP
(in millions)
GAAP Net Sales
Currency Translation
Comparable Sales
ACCO Brands Americas
ACCO Brands International
Total
Amount of Change - Year Ended December 31, 2025 compared to the Year Ended December 31, 2024
$ Change - Net Sales
Non-GAAP
(in millions)
GAAP Net Sales Change
Currency Translation
Comparable Sales
ACCO Brands Americas
ACCO Brands International
Total
% Change - Net Sales
Non-GAAP
GAAP Net Sales Change
Currency Translation
Comparable Sales
ACCO Brands Americas
ACCO Brands International
Total
ITEM 7A. QUANTITATIVE AND QUALI TATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions.
See also "Part I, Item 1A. Risk Factors" of this report.
Foreign Exchange Risk Management
We enter into forward foreign currency contracts to reduce the effect of fluctuating foreign currencies, primarily on foreign inventory purchases and intercompany loans, which create foreign exchange exposure relative to the trading currency of the foreign operating unit. Our primary exposure to currency movements is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, and British pound. Increases and decreases in the fair market values of our forward contracts are expected to be offset by gains/losses in recognized net underlying foreign currency transactions or loans. Notional amounts of outstanding foreign currency forward exchange contracts were $140.2 million and $150.5 million at December 31, 2025, and 2024, respectively. The net fair value of these foreign currency contracts was $(0.6) million and $4.0 million at December 31, 2025, and 2024, respectively. At December 31, 2025, a 10-percent unfavorable exchange rate movement in our portfolio of foreign currency forward contracts would have reduced our unrealized gains $12.3 million. Consistent with the use of these contracts to neutralize the effect of exchange rate fluctuations, such unrealized losses or gains would be offset by corresponding gains or losses, respectively, in the remeasurement of the underlying transactions being hedged. When taken together, we believe these forward contracts and the offsetting underlying commitments do not create material market risk.
For further information related to outstanding foreign currency forward exchange contracts, see "Note 14. Derivative Financial Instruments" and "Note 15. Fair Value of Financial Instruments" to the consolidated financial statements contained in Part II, Item 8. of this report.
Interest Rate Risk Management
Amounts outstanding under our senior credit facility bear interest at a rate per annum equal to the Euro Rate (with a zero percent floor for Euro borrowings), the Australian BBSR Rate, the Canadian BA Rate or the Base Rate, as applicable and as each such rate is defined in the Credit Agreement, plus an "applicable rate." The applicable rate applied to outstanding Euro, Australian, and Canadian dollar denominated loans and Base Rate loans is based on the Company’s Consolidated Leverage Ratio as follows:
Consolidated Leverage Ratio
Applicable Rate on Euro/AUD/CDN Loans
Applicable Rate on Base Rate Loans
Undrawn Fee
As of December 31, 2025, the applicable rate on Euro, Australian and Canadian dollar loans was 2.25 percent and the applicable rate on Base Rate loans was 1.25 percent. Undrawn amounts under the Revolving Facility are subject to a commitment fee rate of 0.25 percent to 0.375 percent per annum, depending on the Company’s Consolidated Leverage Ratio. As of December 31, 2025, the commitment fee rate was 0.375 percent. Pursuant to the July 29, 2025 amendment to the senior credit facility, pricing is fixed at Tier 1 (>4.25x) until December 31, 2026.
The Senior Unsecured Notes have a fixed interest rate and, accordingly, are not exposed to market risk resulting from changes in interest rates. However, the fair market value of our long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. In addition, fair market values will also reflect the credit markets' view of credit risk spreads and our risk profile. These interest rate changes may affect the fair market value of our fixed interest rate debt and any decisions we may make to repurchase the Senior Unsecured Notes, but do not impact our earnings or cash flow.
