2Q20 Results. Revenue of $366.9 million declined 29.3% y-o-y with comp sales off 28.3%. GAAP net income totaled $5.4 million, or $0.06 per share, compared to $35.9 million, or $0.35, last year. Adjusted net income was $11.6 million, or $0.12 per share, versus $36.3 million, or $0.36 per share, in 2Q19. Quarterly results were negatively impacted by the COVID crisis and $6.5 million of restructuring costs.. Results came in at the lower end of management's guidance of a 25%-40% sales decline and above the guided adjusted EPS of a loss of $0.05 to a positive $0.07. We had forecast revenue at $363 million, net income of $0.02, and adjusted net income of $0.04.Cost Reductions. Savings from cost reductions reduced 2Q expenses by some $33 million, which drove the positive earnings in the face of the revenue decline. Further actions to focus the business on faster growing categories and channels will result in an expected additional $11 million of annual savings.Some Positives. Although limited, ACCO did see some positives in the quarter. Sales improved sequentially from the April bottom with the improvement continuing into July. The key North American back-to-school sell-in was solid. Starting in the third quarter, the Company resumed regular pay for full time work, which should be an indication of improving business fundamentals. Management continues to expect at least $100 million of free cash flow for the year, which will be used to fund dividends and reduce debt.Conference Call. ACCO management will host a call to discuss second quarter earnings this morning at 8:30am est. Dial in is 866-438-0750, ID 8346908. We will update our models and provide additional commentary following the call.Compelling Risk/Reward. ACCO shares present investors a compelling risk/reward opportunity, in our view. We are maintaining our Outperform rating and $14.00 12-month price target. We believe ACCO is well positioned to weather the COVID storm with solid growth opportunities post the crisis.Read More >>