5/5/2023

speaker
Operator

Ladies and gentlemen, welcome to the Acro Brands' first quarter 2023 earnings conference call. My name is Glenn, and I'll be the operator for today's call. If you'd like to ask a question during the presentation, you may do so by pressing star 1 on the telephone keypad. I will now hand you over to your host, Chris McGinnis, to begin. Chris, please go ahead.

speaker
Glenn

Good morning, and welcome to the Acro Brands' first quarter 2023 conference call. This is Chris McGinnis, Senior Director of Investor Relations. Speaking on the call today are Boris Ellisman, Chairman and Chief Executive Officer of Aquagrams Corporation, who will provide an overview of our first quarter results and an update on our 2023 priorities. Tom Tedford, President and Chief Operating Officer, who will discuss the upcoming back to school season, new product innovation, and provide an update on cost savings initiatives. And Deb O'Connor, Executive Vice President and Chief Financial Officer, who will provide greater detail on our first quarter results and the outlook for the second quarter and full year. Following this, we will open the line for questions. Slides that accompany this call have been posted to the investor relations section of accobrands.com. When speaking about our results, we may refer to adjusted results. Adjusted results exclude transaction, integration, amortization, and restructuring costs, a non-cash goodwill impairment charge, the change in fair value of the contingent consideration related to the power rate earn out, and other non-recurring items and reflect an adjusted tax rate. Schedules of adjusted results and other non-GAAP financial measures and a reconciliation of these measures to the most directly comparable GAAP measures are in the earnings release and the slides that accompany this call. Due to the inherent difficulty in forecasting and quantifying certain amounts, we do not reconcile our forward-looking non-GAAP measures. Forward-looking statements made during the call are based on the beliefs and assumptions of management based on information available to us at the time the statements are made. Our forward-looking statements are subject to risks and uncertainties, and our actual results could differ materially. Please refer to our earnings release and SEC filings for an explanation of certain risk factors and assumptions. Our forward-looking statements are made as of today, and we assume no obligation to update them going forward. Following our prepared remarks, we will hold a Q&A session. Now I'll turn the call over to Boris Ellison.

speaker
Chris McGinnis

Thank you, Chris, and good morning, everyone. Thank you for joining us. We're pleased with our results for the first quarter, which exceeded the high end of our guidance for sales and adjusted earnings per share. These results were led by the continued strength of our brands, the geographic balance of our portfolio, and the strong execution by our team, despite a challenging consumer and retail environment. We made significant progress against our margin improvement efforts in the first quarter, with gross margins growing by 250 basis points and adjusted operating margins improving 90 basis points year on year. Comparable sales were down 6% versus near-record Q1 sales last year. In North America, in addition to the weaker economy, we, in many in our industry, face a difficult year-over-year comparison due to last year's early shipments of back-to-school products due to supply chain constraints, which did not repeat in 2023. With normalization of supply chains, we're back to the typical cadence of back-to-school shipments, which normally occur in Q2 and Q3. This was a large component of comparable sales decline in North America. We also saw continued pressure in the gaming market and the industry-wide slowdown in IT spending impact our technology accessory sales. North America did benefit in the quarter from improved price, our restructuring actions, and strong SG&A cost controls. In EMEA, demand was impacted by the weak macroeconomic environment compared to a strong pre-war quarter last year. Despite that, we made significant progress in restoring our margins through pricing and cost actions, with adjusted operating margins improving by over 400 basis points and adjusted operating income growing by 50% in the first quarter. Our market shares remained strong. Our international segment benefited from price and volume increases led by the recovery of in-person education and returned to office in our Latin American markets. Sales grew 17% year on year. Price, cost savings, and benefits of scale led to adjusted operating margin expanding 490 basis points and adjusted operating income growing 90%. Before I update you on our 2023 key priorities, I want to provide color on our global technology accessory sales, which consists of our computer and gaming accessories products. Parts of the gaming market continue to be challenged due to the lack of availability of certain wireless chips for our controllers and supply chain constraints of a console. We expect great availability of chipsets in our supply chain beginning in the second quarter, which along with anticipated strong slate of new game releases and new product introductions should help improve our volumes going forward. We hold leading market share positions in third-party gaming accessories and expect this category to grow for the full year. Importantly, the expansion efforts in our EMEA and international segments are on track and we remain excited about the long-term global growth opportunities for gaming accessories. Within computer accessories, after five years of growth, we've seen demand slow as businesses are being more cautious about their IT spending in response to the current macroeconomic environment. Our sales pipeline continues to grow and we are winning new business, but timing of purchases is being deferred. We expect computer accessories will show sequential improvement throughout the remainder of 2023 given the strength of the pipeline and our new products rollouts. In February, I shared with you four key priorities for 2023. Restoration of our gross margins is our top priority, followed by profit management of our top line, continued investment in our brands and new products, and tight management of our expenses and inventory. We have made progress on all fronts in the first quarter, which gives us confidence heading into the remainder of the year. We successfully implemented global price increases in January and in combination with our cost savings actions, believe this year we will be able to recover much of the lost profitability from the high levels of inflation we have experienced over the last two years. In the quarter, We've made significant progress in our EMEA and international segments and expect greater benefits from these actions in our North American segment as we enter our high volume quarters. We'll continue to manage our top line well in what is a slow economic environment. Given the strength of our brands, which hold leading market share positions, and our service capabilities, we are the supplier of choice for many of our channel partners. We offer them and the consumer a complimentary assortment of brands that occupy value to premium price points. This breadth of offerings with strong brands allows our partners to win across multiple categories in peak seasons, like the upcoming North America Back to School or the Autumn European Back to Business Seasons. We also did a good job with our expenses in the quarter for management of headcount and closely watching discretionary spend. Both headcount and SG&A expenses were down year on year. Before I turn it over to Tom, I want to say I'm encouraged by the momentum we built in the first quarter and remain confident in our transformation to drive long-term, sustainable, organic, profitable revenue growth as global economies improve. We have the right team in place to weather difficult economic environments and well capitalized with no debt maturities until 2026 and low fixed interest rates for over half of our outstanding debt. We will continue to generate consistent strong cash flow and will prioritize dividend payments and debt reduction in 2023. Now, I will turn the call over to Tom Tetford to discuss back to school new product innovation, and update you on our restructuring initiatives.

speaker
Chris

Tom? Thank you, Boris, and good morning, everyone. Let me begin with a few comments about the upcoming back-to-school season. Back-to-school is an important seasonal business for Akko Brands and represents a significant portion of our annual sales, particularly in our North America and international segments. We are a BTS market leader in the US, Canada, Mexico, and Brazil. The back to school market historically is very resilient in both good and bad economies, which is important to understand with the current economic backdrop. The industry sales expectations for this year's North America back to school season is to be roughly flat. Retailers are being cautious with loading back to school inventory, and we believe our partners will rely on Q3 replenishment as product sales through. It is too early to give meaningful insights on the North America back to school season. However, orders are coming in as expected and weeks of supplies at our retailers is at historic norms. Additionally, we expect growth in our back to school business in the international segment. With Mexico in Q2 and Q3 and Brazil later this year and into Q1 of 2024. Now a few comments about our team's good work in developing meaningful product solutions for our consumers. We have upcoming product introductions across multiple categories and geographies that will help drive organic growth. The company's commitment to innovation is being recognized globally as we won numerous awards in 2022 and in 2023. For the last two years, ACCO Brands has been named one of Crane's Chicago Business' most innovative companies. A recognition we are very proud to have earned. Further recognition has been by the Good Design and the Red Dot Design Awards. Both are internationally recognized and are highly desired endorsements for high quality design. In the past year, Red Dot recognized five ACCO Brands products, including three supporting the Kensington product range. In the EMEA segment, our light ergonomics offering was awarded Business Product of the Year at the European Office Product Awards. In North America, the Kensington Universal 3-in-1 Pro Audio Headset Switch was awarded Best New Technology Product at the North American Office Product Awards. In gaming accessories, we recently introduced several products in conjunction with Universal Pictures' successful release of the Super Mario Bros. movies. and an animated adventure film based on Nintendo's Mario video game franchise. In our do-it-yourself tools category, the Rapide brand began a collaboration with Bosch in 2022. The partnership has expanded our product offering with the EMEA segment to include 18-volt rechargeable tools as a part of the Bosch Power for All battery initiative. Moving to restructuring. In the fourth quarter of 2022, we initiated restructuring plans in our North America and EMEA segments, intended to improve operating efficiency and reduce costs, with an expected annual cost savings of $13 million. In North America, we have actioned all plans, including the consolidation of supply chain operations and automating our sales support process. We saw $2.5 million of benefits from these actions in our Q1 P&L and remain on track to deliver the full $13 million during the year. In the first quarter, we took a $3.3 million restructuring charge, which was related to our footprint rationalization project in EMEA. We are closing one manufacturing facility in continental Europe and expect it to be completed by the end of the third quarter, with the savings to come in 2024. We continue to analyze our global footprint for opportunities for further cost optimization and consolidation. We also remain on track to deliver another $15 million of incremental savings from our ongoing productivity initiatives. I will now hand it over to Deb, and we'll come back to answer your questions. Deb?

speaker
Tom

Thank you, Tom, and good morning, everyone. When we last spoke to you in February, we highlighted the impact of last year's inventory destocking by retailers with their cautious approach to replenishment and slowing demand due to the macroeconomic environment. In the first quarter, while the macroeconomic environment remained challenging, we did see a sequential improvement in retailers' inventory replenishment. This improvement helped us beat our sales guidance for the first quarter. The stronger sales and the improvement in our margin profile due to our pricing and cost actions helped us deliver adjusted EPS above our outlook. In the first quarter of 2023, reported sales decreased 9% versus Q1 of 2022. Comparable sales, excluding foreign exchange, were down 6%. The decline was due to lower volumes in our North America and EMEA segments more than offsetting global price increases and solid growth in our international segment. Growth profit for the first quarter was essentially flat at $119 million, despite the sales decline, as growth margin improved 250 basis points to 29.6% from the cumulative effect of our pricing and cost actions. Adjusted SG&A expense of $95 million was down from $97 million in 2022. Adjusted SG&A as a percent of sales increased 160 basis points to 23.6% due to the lower level of sales. Adjusted operating income was $24 million, up 8% compared with the approximate $23 million last year. Adjusted EPS was 9 cents versus 11 cents in 2022 as interest and non-operating pension expenses increased, which we expect to be a headwind for the rest of the year. Now let's turn to our segment results. North America reported and comparable sales were down 15% as volume declines more than offset accumulative pricing actions. This was slightly better than expected. As anticipated, we faced a difficult year-over-year comparison in the first quarter due to the early purchase of back-to-school product by retailers in 2022. Given normalization of supply chains, these purchases did not recur in the first quarter of 2023 to the same level as in the prior year period. Sales in the first quarter were also impacted by lower retailer demand due to the macroeconomic environment, as well as declines in technology accessories due to softening IT spending and a lack of wireless chips for our gaming accessories. We expect this to be the last quarter of difficult comparisons for gaming accessories as we expect sequential improvement in both availability and consumer demand. North America adjusted operating income margin in the first quarter decreased due to negative fixed cost leverage from the volume decline. We expect larger benefits from our pricing and cost actions as we progress throughout the year and move into higher volume periods. Now let's turn to EMEA. Net sales for the quarter were down 13% to $136 million. 6% of this decline was due to FX. Comparable sales were down 7% to $145 million, mainly due to volume declines offsetting our price increases. Demand continues to be impacted by the overall macroeconomic environment in the region. especially as compared to the first quarter of last year before the impact of the Russian-Ukraine war. Sales of technology accessories declined, reflecting industry-wide trends. In the first quarter, EMEA posted adjusted operating income of $14 million, almost a 50% increase over the $9 million a year ago. The margin rate improved 420 basis points from the prior year to 10%. The improvement in adjusted operating income was due to our pricing and cost actions taking hold. Moving to the international segment, reported and comparable sales in the first quarter increased 17%. Growth was driven by price increases and strong demand in Latin America as resellers gained momentum from in-person education and return to office. The international segment posted adjusted operating income of $12 million, up almost 90% versus the prior year's $6 million. The adjusted margin rate improved 490 basis points to 13% in the quarter due to the higher pricing and improved sales leverage. Switching to cash flow and balance sheet items, due to seasonality, we generally use cash in the first half of the year and generate significant cash flow in the second half of the year. free cash flow improved by $83 million in the first quarter. We had a use of free cash flow of $5 million versus a cash outflow of $108 million a year ago. The improvement was driven by better working capital management as we lowered inventory levels and returned to a more typical product payment cycle, as well as reduced incentive compensation payments. In 2021, we ended the year with higher levels of inventory, with much of it paid for in the first quarter of 2022. Reversing that trend, we ended 2022 with inventory that was significantly paid for. The change in timing of payments improved first quarter cash flow significantly. We ended the quarter with a consolidated leverage ratio of 4.3 times, well below our five-time covenant ratio. and expect to end the year within a range of 3.5 to 3.7 times. Longer term, we are still targeting 2 to 2.5 times. At quarter end, we had $420 million of remaining availability on our $600 million revolving credit facility. As shown on our earnings slide, more than half of our debt is fixed and not impacted by interest rate increases, and we have no maturities until 2026. We ended the quarter with $127 million in cash. Much of this cash, about $106 million, was held in Brazil. And in April, we took action to repatriate $46 million of this cash back to the US, which we then used to reduce borrowings on our revolvers. The remaining cash balance in Brazil will be used to fund their inventory for back to school. Turning to our outlook, we are providing a second quarter outlook. and reiterating our full year guidance for 2023. For the second quarter of 2023, we expect comparable sales to be down 4 to down 7%, with adjusted EPS of 29 to 32 cents. For the full year, we continue to expect comparable sales to be within a range of flat to down 3%. We expect our growth margins to increase over the prior year and be similar to our 2021 margin rate. Longer term, we continue to target a range of 32 to 33%. While we have reduced our overall cost structure from our restructuring actions, as we mentioned in February, the restoration of our annual incentive compensation, as well as increases of merit and go-to-market spending, will lead to higher FG&A levels in 2023. For the full year, we expect adjusted EPS to increase 4% to 8%, to $1.08 to $1.12, as double-digit growth in adjusted operating income is partially offset by higher net interest costs of about $10 million and higher non-cash, non-operating pension expenses of $5 million. The adjusted tax rate is expected to be approximately 29%. Intangibles amortization for the year is estimated to be $43 million, which equates to approximately 32 cents of adjusted EPS. We are reiterating that we expect our free cash flow to be at least $100 million after capex of $20 million, and to end the year with a consolidated leverage ratio within a range of 3.5 to 3.7 times. Looking at cash uses in 2023, we expect to continue to prioritize dividends and debt reduction. Now let's move on to Q&A, where Boris, Tom, and I will be happy to take your questions. Operator?

speaker
Operator

Thank you. Ladies and gentlemen, if you'd like to ask a question, please press the follow bar 1 on the iPhone keypad now. When preparing to ask your question, please ensure your phone is muted locally. We have our first question comes from Greg Burns from Zittoni Company. Greg, your line is now open.

speaker
Greg Burns

Good morning. Just dig into the decline you saw on the Kensington side of the business. How much was that down in the quarter? And your outlook for the rest of the year, are you looking for that business to still grow this year, or is it just going to show improvement off of kind of the lower level you saw this quarter?

speaker
Chris McGinnis

Hi, Greg. Thanks for the question. Kensington sales were down low double digits in the quarter. We are – important to point out that sales were down, but POS, sell-through in Kensington, was up. It was up a little bit in the U.S. and it was up significantly more in Europe. So obviously there's a lot of inventory being taken out of the channel given the overall macro environment and especially what's happening on the technology and IT side. And you see that from multiple companies' earnings reports. We still expect the Kensington business to grow for the year. Last year, that business grew about 13%. So growth will not be as high this year. We don't anticipate it to be as high this year, but we still expect the business to grow.

speaker
Greg Burns

Okay. And you mentioned new product introductions is, you know, I guess your outlook for growth there around maybe some new product introductions. And do you have a target for for like revenue contribution from new products in any given year, or how should we think about that layering in this year?

speaker
Chris McGinnis

I'll let Tom answer that question.

speaker
Chris

Yeah, so Greg, another great question. Thank you for it. Yeah, annually we do have a target within our Kensington business specifically. I don't know that we would want to publish that target, but we do have a target. We track to it. We have a business cadence in which we measure it. each quarter, and it gets set annually. So the shorter answer is yes, we have a growth target. And I think it's important to note, you know, over the last five years, as Boris said in his prepared remarks, the Kensington business has grown. The CAGR is roughly low double digits on that, and new product development and introductions is a big piece of that growth over the years. Thank you.

speaker
Chris McGinnis

Thanks, Greg.

speaker
Operator

Thank you. With our next question comes from Joe Gomez from Noble Capital. Joe, your line is now open.

speaker
Joe Gomez

Good morning, and thanks for taking my questions.

speaker
Chris McGinnis

Good morning, Joe.

speaker
Joe Gomez

So I wanted to start out with last quarter you talked some about your SKU reduction efforts and just trying to get a little update on how they are performing.

speaker
Chris

Yeah. Hey, Joe, this is Tom Tedford. I'll take that question. Thank you for it. We are aggressively looking across our entire portfolio, but particularly in our mature markets, at our SKU offering. As many companies have felt the impact of the changes in consumer behavior over the last few years with the pandemic and then the inflationary pressures the consumer is feeling, demand has changed in our portfolio. And so our collective teams, our marketers and our supply chain teams are working closely together to retire products that no longer meet our minimum thresholds and introduce margin accretive products across all of our product categories. So that work is ongoing and we're making nice progress.

speaker
Joe Gomez

Okay, thank you for that. And on the Latin American business, I know it's been a quarter or two here where you've had some good performance driven by the return to in-person education and in-person office. How much more of that trend do you think is available Are we kind of past that? Are they all back to a more normal environment, at least on the school side and maybe on office, getting to where we are, where there seems to be that blend of in-office versus telecommuting?

speaker
Chris McGinnis

We still believe that there's a bunch left in Latin America. Latin America obviously has been recovering from the pandemic. schools are open, offices are open. But if I compare volumes, not revenue, but volumes, volumes are still below pre-pandemic levels. So there's still market expectation and our expectations that those volumes will continue to recover. There obviously been a lot of price inflation in the market, just given the cost inflation that all of us have experienced over the last couple of years. So with that, we expect revenue growth to continue this year. And both our Mexican business and our Brazilian business are expecting good back to schools in their markets with significant growth over the prior year.

speaker
Joe Gomez

Okay. And just if I could sneak in one more. I know the capital allocation, you've talked about the focus on dividends and debt repayment. But if we're looking at the stock here, it was down about 24% year to date just off a 52-week low. You have the buyback authorization. At what point, Boris, I guess, do you sit there and say, hey, it makes sense to start repurchasing shares here?

speaker
Chris McGinnis

Yeah, I would just reiterate, Joe, that the priority is to fund the dividend and to pay down debt. You know, we believe that in this environment, a lot of the pressure on our stock is coming from our leverage. And I think it will suit our shareholders very, very well if we pay down debt and transfer that debt to equity by doing that. So that's the priority.

speaker
Joe Gomez

Okay, great. Thank you.

speaker
Chris McGinnis

Thanks very much.

speaker
Operator

Thank you, Joe. As a reminder, ladies and gentlemen, if you would like to ask any further questions, please press star followed by 1 on the telephone keypad now. When preparing to ask your question, please ensure your phone is unmuted locally. With our next question comes from Kevin Stein from Barrington Research. Kevin, your line is now open.

speaker
Chris McGinnis

Good morning, everyone. Hi, Kevin. Hey, Boris.

speaker
Kevin

I wanted to start out by asking about gaming accessories. You mentioned there how you expect growth in gaming accessories this year and sequential improvement as the year progresses. Is that... a positive update relative to what you expected before um you know just trying to get a sense as to the the improvement there and and if it's uh you know kind of coming out of that that uh slow down that we we had seen last year and um if it's just trending maybe a little bit better than your thought

speaker
Chris McGinnis

It's a similar outlook that we had before. We expected to have a difficult Q1 due to the compares. We're still selling a lot of product in Q1 of last year. And then we mentioned we had some product availability issues due to lack of some wireless chips in the last three quarters of this year, sorry, of last year, and it continued through Q1 of this year. So we knew we were going to have difficult compares. now behind us, and we expect growth in Q2 and in the second half of the year and overall growth for the full year, but that's consistent with our expectations that we had going into the year.

speaker
Kevin

Okay, thank you. And similarly, on the discussion around slower IT spending and lower computer accessories sales, Yeah, you did say you expect sequential improvement as we move throughout the year and grow through the full year. I was just wondering if that was kind of a newer development, the slowdown, or if that had kind of been baked into what you had already thought for the year. Obviously, you didn't change your guidance or anything, but just kind of trying to get a sense as to how much of a change that is relative to prior expectations.

speaker
Chris McGinnis

You know, I think versus A couple of months ago, the IT environment is a little bit slower than we expected. So again, you're seeing it from the public announcements from other companies in our space and also from large technology companies announced layoffs specifically due to the IT environment. What we've seen, though, is we've seen better performance in other parts of the business. offsetting a little bit of a slowness that we've seen on the technology side. So more specifically, our business products have performed better than we expected. So overall, as a company, we've delivered better results. Even now on the computer accessory side, it's a little bit slower than expectations.

speaker
Kevin

Okay, one last question for me. You mentioned there some areas of the business performing better than expected. And, Deb, I think you mentioned that you saw some improvement in an inventory replenishment in the first quarter that helped to beat your sales guidance. Is there anything more to call out about that or elaborate on in terms of that being a trend or – Just just kind of wondering about that comment you made.

speaker
Tom

Yeah, I think as Tom said in his remarks just done. Back to school and and kind of replenishment. You know we're at the same kind of weeks of supply as historical levels and as the prior year, so you feel pretty good set up for the back to school season. I don't really think there's much more to add. I mean, I think we are expecting. the sequential improvement as we go forward.

speaker
Kevin

Okay. Thank you for taking the questions. I'll turn it over.

speaker
Chris McGinnis

Thanks, Kevin.

speaker
Operator

Thank you. We have our next question. It comes from Helmut Korshand from BWS Financial. Helmut, your line is now open.

speaker
Helmut Korshand

Good morning. So the first question was just a follow-up on your expectations on back to school. Are you expecting that it'll be the same kind of replenishment you've seen in prior years, it's just more coordinated in one or two quarters? And then as far as your answer goes, are you getting any kind of feedback from your retailers right now as to what their ordering pattern would be?

speaker
Chris McGinnis

Tom, go ahead.

speaker
Chris

Yeah, so I'll start with the last part of your question. You know, we do a pretty good job with our retail partners in collaboration of planning out the season and when orders would flow into the stores and kind of work backwards from there all the way to our Asian factories on product that we import. You know, our domestic shipments tend to go later out of our domestic factories. So all of that is very well coordinated with our partners for BTS. And I would say, for the most part, that is similar to what we have seen historically. Last year was very much an anomaly as retailers were trying to ensure supply with the global supply chain crisis, really apexing, if you will, at the time that their decisions were being made regarding back-to-school inventory. So last year was more of an anomaly versus this year being different than historic norms. I think we've kind of reverted back to more kind of historic ways of the BTS cadence in North America playing out.

speaker
Tom

I do think, too, Tom, we probably are anticipating more retailers kind of chasing their POS, and so some shifting into the third quarter could also happen this year.

speaker
Chris McGinnis

Yeah, and that's the normal behavior, Hamid. They typically buy in Q2 for the first wave, and then they replenish in Q3 as products sell through. As Tom mentioned, last year they didn't do that. There was an anomaly. And this year we expect to revert back to normal, typical performance. And overall, to your first question, we expect a flat back to school. And that's what the industry expects as well, roughly flat back to school.

speaker
Helmut Korshand

Okay. My last question was just as far as the PowerA distribution goes in Europe. Has that started and what are your expectations for that product in the region?

speaker
Chris

Yeah, you know, it has started. We started really in earnest in the first quarter of this year with our expansion efforts. Europe is a large addressable market for gaming accessories and specifically console gaming accessories. And we have relatively small shares. Our business is primarily concentrated in two markets, the U.K. and Germany. So we have, in the first quarter, trained all of our salespeople. We've consolidated our operations from a 3PL into ACCO-owned facilities. And so all the back-end work has largely been completed. Now we're just kind of working against some of the trends that Boris mentioned earlier. I think we're probably off to a bit of a slower start than we would have hoped. but we still have great optimism for the balance of the year. Okay, great.

speaker
Operator

Thank you.

speaker
Chris McGinnis

Thanks, Alan.

speaker
Operator

Thank you. As a reminder, ladies and gentlemen, if you'd like to ask any further questions, please press star, followed by 1 on the headphone keypad now. We have no further questions on the line.

speaker
Chris McGinnis

Thanks, Glenn. I'll just do the closing remarks. Thanks, everybody, for your interest in ACCO Brands. We had a stronger than expected start of the year and are encouraged about the remainder of 2023 as we stay focused on executing against our key priorities and keeping margin improvement at the forefront. We have managed well in difficult environments and are confident in our ability to navigate current economic challenges. We're confident we have the right strategy and believe we're well positioned to continue to deliver organic sales growth, compelling market performance, and improve financial results as global economies recover. We look forward to talking to you in a couple of months to report on our second quarter results. Thanks, everybody.

speaker
Operator

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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