ACCO Brands Corp. (ACCO: Quote), a branded office and consumer products company, announced a cost savings plan, which will further improve the efficiency and effectiveness of its European business.
The company disclosed in a regulatory filing that the cost savings activities will principally take place in European sales, marketing, customer service and manufacturing operations beginning after the Company negotiates with its various works councils in Europe to develop and finalize implementation plans in accordance with local labor laws and practices.
The financial impact of this plan was incorporated into the previously provided 2013 guidance, the company said. While announcing the fourth-quarter results, the company expected adjusted earnings per share growth of 16% to 28%, resulting in a range of $0.95 to $1.05 for 2013. Analysts polled by Thomson Reuters expect the company to report earnings of $1.00 per share for fiscal 2013. Analysts' estimates typically exclude special items.
The company believes the cost savings activities will result in improved future profitability and add future shareholder value. The cost savings activities are expected to be completed by the second quarter of 2014.
This cost savings plan is expected to result in approximately $9 million in annualized cost savings when fully realized in 2014, with approximately $3.5 million expected to be realized in 2013.
In connection with the plan, the company expects to incur pretax restructuring costs of approximately $12 million in 2013. These costs will predominately be recorded in the first, second and third quarters of 2013.
The company anticipates that $9 million of the costs to be incurred in 2013 will result in cash expenditures, principally related to $8 million for employee termination and severance costs and $1 million for facility closures. An additional $1 million of cash expenditure will be incurred in 2014, principally related to employee termination and facility closures.
by RTT Staff Writer
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