ACCO expecting to refinance revolver before August 2010

By Jennifer Lanning Drey

Portland, Ore., July 27 - ACCO Brands Corp. plans to begin discussions with its bank group regarding the August 2010 maturity of its revolving credit facility at a suitable time to ensure a refinancing, Neal Fenwick, chief financial officer of ACCO, said Monday during the company's second-quarter earnings conference call.

"We are confident that our banks will appreciate how we've been able to manage through the difficult economic times and anticipate their continued support of the business," Fenwick said.

ACCO's earnings and cash flow faced significant challenges in the first half of 2009, but the company expects both to be stronger in the second half of the year, based on typical seasonal patterns, he said.

Excluding the proceeds from the sale of its commercial print finishing business, ACCO expects to generate $30 million to $40 million of net cash flow for full-year 2009, Fenwick said.

Net cash flow for the first half of the year was $5 million.

ACCO had total gross debt of $724.5 million at June 30.

The company said declines in demand and adverse foreign exchange conversion contributed to a net sales decrease of 27% in the second quarter. Net sales for the period were $303.8 million, compared to $414.0 million in the same period of 2008.

The second-quarter loss from continuing operations was $116.7 million, versus a loss of $5.8 million in the prior-year quarter.

"The first six months of 2009 were very challenging with a number of headwinds impacting us in addition to lower overall demand," Fenwick said.

ACCO is a Lincolnshire, Ill.-based designer, developer, manufacturer and marketer of branded office products.

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