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CorporationCorporation
Second Quarter 2013 Earnings Conference Call
July 31, 2013
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Q2 Highlights and Outlook
Pleased with integration progress, on track to deliver $20 mill
ion of net costsynergies in 2013 and now $25 million of product
ivity improvements
Gaining momentum in school and office products; early traction
on revenuesynergy opportunities
Strong cash flow generation
Marketplace remains challenging, particularly for Computer
Products
Expect pro forma sales to decline 3-6%
Lower than previous range due to volume softness
Expect adjusted EPS of $0.90-$0.95
Earnings improvement driven by cost synergies and productivity
improvements
Lower than previous range due to softness in Computer
Products
Free cash f low generation of $150 mil lion
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Q2 2013 Pro Forma Margin Reconcil iation
Changevs.
Q2 2012ems o gn can mpac ps
Gross Profit $137.1 $(3.1) Cost savings / Synergies 220
One-off Items (20)
Gross Margin 31.1%110 bpsfavorable
Mix / Deleveraging / Reserves (100)
FX 10
Adjusted SG&A $85.2 $(2.8) Cost savings / Synergies
(150)
One-off Items (40)
Adjusted SG&A Margin 19.4%
60 bps
adverse Sales deleveraging / Incentive Comp 260
Adjusted Operating IncomeMargin(includes Amortization, 1.4% of
Sales
in 2013, 10 bps favorable vs. 2012 )
10.4%70 bpsfavorable
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Six Month 2013 Pro Forma Margin Reconcil iation
$MM 6 mo 2013Change vs.6mo 2012
Items of Significant Impact bps
Gross Profit $233.8 $(18.9) Cost savings / Synergies 210
Product costs, net of price 20
Gross Margin 29.5%30 bpsfavorable
Mix / Deleveraging / Reserves (140)
One-off Items (70)
FX 10
Adjusted SG&A $173.6 $(7.9) Cost savings / Synergies
(160)
Sales Deleveraging / Incentive Comp 260
Adjusted SG&A Margin 21.9%
90 bps
adverse FX (10)
Adjusted Operating IncomeMargin(includes Amortization, 1.6% of
Sales
in 2013, 10 bps adverse vs. 2012 )
6.0%70 bpsadverse
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Pro Forma Modeling Assumptions
($ in MM, adjusted pro forma basis) 2012 Actual 2013 Estimate
(1)
Capital Expenditures $34 $36 (3)
Cash Restructuring $10 $30
Cash Interest, net $64 $50
Book Interest (2) $69 $54
Net Working Capital Source Source
Depreciation $40 $39
Amortization $27 $25
Amortization of Stock Comp Expense $10 $16
Cash Taxes $34 $38
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Effective Tax Rate 30% 35%
Diluted Shares 115 116
1. Directional information for modeling purposes only.2.
Excludes accelerated amortization expense.3. Cash basis; excludes
$9MM of leasehold improvements provided by landlord.
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