Good morning, and welcome to our First Quarter 2012 Conference Call. Speaking on the call today are Bob Keller, Chairman and Chief Executive Officer of ACCO Brands Corporation; and Neal Fenwick, Executive Vice President and Chief Financial Officer.

Slides that accompany this call have been posted to the Investor Relations section of accobrands.com. These slides provide detailed information to supplement this call.

When speaking to the quarterly results, we are referring to adjusted results, which exclude restructuring costs and the costs associated with the acquisition of MeadWestvaco's Consumer and Office Products business, and for earnings per share use a normalized effective tax rate of 30%. A reconciliation of adjusted results to GAAP can be found in our press release.

During the call, we may make forward-looking statements, and based on certain risks and uncertainties, our actual results could differ materially. We assume no obligation to update our forward-looking statements.

Please refer to our press release and SEC filings for an explanation of those factors. Following our prepared remarks, we will hold a Q&A session.

Now it is my pleasure to turn the call over to Bob Keller.

Thank you, Jennifer, and good morning, everyone. Today, we reported our first quarter results for 2012 as standalone ACCO Brands.

As most of you are aware, we had previewed these results on April 17 in conjunction with our financing of the merger with Mead.

Net sales were down 3%, primarily because of 4% sales volume decline, which was offset by 1% of pricing. Our adjusted loss from continuing operations was $0.05 per share compared to a loss of $0.06 per share in last year's quarter.

Adjusted operating income was down $1.4 million on a year-to-year basis.

Our declines resulted from lower sales in Europe and Canada. Despite this, we improved our profitability in Europe significantly because of the operational changes we implemented there in 2011.

Sales increased in every other region and our business remains on track for the year.

The last few weeks have been an exciting time for us. We successfully refinanced our business in connection with the merger, and the new weighted average interest rate on our debt is down to 5.25%.

By this time next year, we expect our net leverage to be below 3x EBITDA, down from the 3.8 level when we announced the Mead transaction. More importantly, we strengthened our business with the acquisition of Mead's talented people and its leading brands.

The new ACCO Brands is better penetrated in the 5 channels most important to our industry, and we've improved our geographic footprint as well. We expect the cross-selling opportunities between the 2 legacy organizations to be substantial.

It's been less than 2 weeks, but the integration of the 2 businesses is well underway, and we're pleased with our initial progress. We look forward to leveraging the strengths of both organizations as we move forward, and we will continue to keep you updated on our progress.

With that, I'll ask Neal to address the financial highlights of the quarter. Neal?

Thank you, Bob. Our first quarter performance is recapped on Slide 4.

Sales declined 3%, foreign exchange translation was modestly negative, while pricing was favorable 1%. Underlying volumes declined 4% due to declines mainly in Europe, but also in Canada.

Our gross profit margin declined 90 basis points to 29%, as shown on Slide 5. The decline was due to higher commodity cost relative to selling prices, which had a 90-basis-point impact.

Sales mix, which had a 50-basis-point impact, and other items largely deleveraging the fixed cost, which was 40 basis points. These factors were partially offset by the favorable impact of cost reductions, such as improvements in freight and distribution costs, which accounted for 90 basis points.

SG&A expenses decreased 50 basis points, primarily due to other costs in Europe.

In all, operating income margin decreased 40 basis points to 4.1% from 4.5%. Foreign exchange was a slight negative to the bottom line, but not material.

Turning to an overview of our segments. During the quarter, reported sales for the Americas increased slightly, driven by higher selling prices.

Volume declined in the quarter due to lower sales in Canada, primarily at one customer that reduced inventory. Largely as a result of adverse product mix as well as high commodity costs in Canada, operating margins in the Americas decreased 180 basis points to 1.8%.

Keep in mind that Q1 is our seasonally low-margin quarter.

International segment sales declined 10%, driven by volume declines of 13%. Selling prices were higher by 3%.

The decline in volume was due entirely to Europe and was largely in line with our expectations. The economy there is softer than expected, and as we announced when we reported Q4 results, we've taken even further actions to reduce costs as a result of the environment there.

We did see profits improve in our International segment. Margins improved to 8.5% from 3.9%, but last year, we did have $3.9 million of costs related to our operational changes in Europe.

Computer Product sales increased 1%. Volume increased 5%, but was offset by pricing and currency.

The volume increase was the result of strong sales of new products for iPads and iPhones. Computer Products operating profit decreased in the quarter due to product mix, with lower laptop security product sales.

The margin decreased to 18% from 22.5% in the prior year quarter. We expect this adverse margin mix to continue.

In terms of the balance sheet and cash flow, as you know, we did complete our refinancing at the end of April. So our balance sheet in Q1 is not reflective of our ongoing profile.

Some important points to note are that ACCO Brands has its normal seasonal cash outflow in Q1 and we typically generate all of our cash in Q4. Mead Consumer & Office Products generates the majority of its cash in Q1, so that stayed at Mead's former parent this year.

But by this time next year, we will benefit from having the combined companies' cash flow and therefore, expect our net leverage to be under 3x.

Q2 should be a cash outflow quarter for the combined business, and Q3 should be a cash-neutral quarter for us. The transaction with Mead doubles our EBITDA, but it triples our annual free cash flow.

This is as a result of more favorable interest rates and low cash taxes. Therefore, next year we expect to generate combined free cash flow of at least $150 million.

We had already provided combined guidance when we pre-released in April, and that remains intact. Both ACCO and Mead generate the majority of profits in Q3 and Q4, and that seasonal pattern will continue but will be more pronounced with the combined company.

We will provide historical pro forma combined financial results by quarter and by segment before our next quarter end.

At this point, we will conclude our prepared remarks and Bob and I will be happy take your questions. Operator?

On the European volume decline, how much of that was voluntary concession of volumes because of your restructuring? And how much of it was sort of organic?

About 70% of it is stuff that we gave up as part of the actions we took to rationalize the business and improve the profitability, and about 30% of it is due to the continued decline in the general macroeconomic environment.

And would you anticipate that trend to continue at least into the next quarter, 70%?

Yes. I think Europe is going to be a very tough market, frankly, for the next couple of years and have planned it that way.

We took pretty significant actions in the first half of last year to rationalize our cost basis on the assumption that, that would continue. We took some more actions earlier this year because it, frankly, was even worse than we had anticipated at the beginning of last year.

And we'll take actions as required to ensure that we deliver the profitability from that marketplace. I think we've been pretty consistent for 15 months that we think, in that environment, we need to manage the business for profitability and that we don't have aggressive plans to try to grow the top line.

Right. So given your cost savings from last year, but the volume declines, organic and otherwise, would you anticipate European EBIT to continue to be higher year-over-year?

Absolutely. It's going to be a significant component of our year-to-year improvement in profitability.

Got it. And then for your EPS guidance for the year, how does that translate into EBITDA?

We haven't given specific EBITDA guidance for the year. But what we did do is include a slide with all the pro forma modeling assumptions in the deck that's posted on the website.

And I think you should be able to work through that whole scenario. I mean, if you start with last year's pro forma EBITDA of $320.6 million, and then you can work down the rest of the P&L from the modeling assumptions that are on there.

We've included what we anticipate the stepped-up D&A to be on the business.

Got it. And then as far as tone of business for the U.S., can you elaborate on that?

I'm sorry, I missed the question.

As far as the tone of business in the U.S. channel for both businesses, Mead and ACCO, how would you characterize your outlook for the U.S.

business, especially in the top line?

No, I think we were comfortable with where U.S. Office Products business came in, in Q1.

And our expectation is we will grow that business, take market share in 2012. We are seeing what we expected to see on the Kensington side of the business, which is reasonably rapid shift from laptops to tablets.

And I think if you look at what we're doing in that market in response, we've got 60 products that we'll introduce this year to support the tablet and smartphone marketplace. And that part of our business has gone from about 5% of our business 2 years ago to, it will represent something, probably a little bit north of 30% this year.

But the margins on that aren't as strong as the security part of that business. And so we'll see -- we like our position from a growth perspective, given the product set that we're introducing.

But our margins will leak a little bit on that, and we've [indiscernible] for that.

Can you talk a little bit about the Computer Products business? I mean, I think you'd said there something had to do with -- around iPad shipment?

And how you see that playing out for the rest of the year? I mean, should we get back to mid-single digit high or single-digit growth?

Yes. I think that's probably reasonable expectation for growth.

The margins on that business we've said we think ultimately are going to settle in mid to high teens, and we think that's kind of the right number for that business going forward. But we are seeing kind of product shifts.

We saw people hold off on purchases in Q1 related to both laptops and notebook products in anticipation of the new iPad introduction. And we saw some hesitancy from some of our suppliers to take product until they saw the new product to ensure that the form factor for iPad 2 and iPad 3 were consistent.

But we're going to -- we are seeing and expect to continue to see, as we bring new product to the market, strong demand for the iPhone and tablet accessories -- or smartphone and tablet accessories. And we're driving our business that way.

We planned our business to be that way, and you'll see most of the impact of that in the second half of the year.

Okay. And then I think the one thing I'm having tough time getting my arms around is the revenue-synergy potential between the 2 companies.

And I think in the past maybe you've said or I have heard that if Mead and ACCO were equal size in every country, it would equate to $500 million type in revenue synergies and I know that's not happening next year. But I mean, is that -- is there any way or guidepost that we can look for or any metrics you're trying to look for to help quantify that.

We do think that they're significant. I think if you just look, we're -- not counting any cross synergy opportunities in the U.S.

or Canada if you just said what the normal ratios are for the relative revenue of our businesses in -- where we do compete side-by-side, and then apply that to where one of us competes and the other doesn't, it's hundreds of millions of dollars. So we do think that the sale synergies are very, very significant.

We haven't quantified those yet. Our expectation is we'll talk about that in August.

When we do our next quarter call, I will tell you it has clearly been a focus of the integration planning to get new product into new markets as fast as we can. So as soon as we feel like we've got our arms around it a little bit, we'll be happy to talk about that.

Okay. And then it looked, at least from what I could tell, that as you're going through refinancing, you probably took on a little more debt than you had to take, and I understand that's favorable markets.

But is there a plan to use that additional capital anytime soon?

Well, I think we've been pretty outspoken about the fact that our strategy is to be the #1 branded player in the categories that we serve. And clearly, part of that strategy is that we're going to acquire branded competitors in par [ph] categories.

We don't see anything substantial, and substantial being anything of this kind of magnitude, for at least a couple of years because the opportunities for us to go after organizations of comparable size to this, frankly, either the economic opportunities don't exist in the near term or that we just don't expect that they would be available in the near term. So we'd be open to being opportunistic about tuck-in opportunities, frankly, going forward at any point in time that they presented themselves.

And I think our financing allows us the flexibility to go do that. But it would truly be opportunistic in the near term.

It's worth noting, Bill, that Mead will actually be a cash use for the rest of the year of about $30 million. So a little bit of, as you know, our cash comes in Q4.

So we also have that outflow that will occur.

Okay. And Neal, one last thing.

I know you're going to put out the historicals, but just as we're modeling for the back half, is it safe to say that the September quarter is bigger than the December quarter for the combined businesses and sort of back-to-school?

No, actually. I think you'll find Q4 is still the biggest one.

And part of the reason for that is, if you think about their business in Brazil, not only does it have the same characteristics as the other Mead business, but they both occur in Q4 because you have back-to-school in the southern hemisphere in December and you also have the calendaring business, which occurs in December. So -- but then Brazil is a dramatic Q4 event and really it make -- it should still make Brazil a bigger business.

The U.S. business, you'd be correct, Q3 is slightly larger.

I wanted to follow up on the topic of synergies. Bob, we've had a chance to talk at length about the International opportunities.

But I presume that you had a greater degree of learning over the last week or so now about the U.S. opportunities as the 2 companies have come together.

How do the 2 revenue opportunities shape up as you look at that opportunity to capitalize on the relationship here in the U.S. versus the International opportunity as you look over the next 12 or 18 months or so?

Yes, I think the opportunity is that we'll just have much more consistent coverage across all of the relevant channels. I think we worked very hard over the last several months to ensure that our investors had an understanding of the business.

And I think one of the things that was kind of a common topic in all of the discussions was how dramatically the channels have changed in this industry over the last 3 or 4 years, where 3 or 4 years ago the conversation was dominated by the office product superstores. And now the mass channel is a significant part of that discussion, and the wholesalers are a significant part of that discussion, and the independent billers are a significant part of that discussion, and e-commerce is a significant part of that discussion.

And we think Mead complements ACCO extraordinarily well by bringing a strength in the consumer and academic and mass channels. And so as volume has shifted from one channel to the other, unless it shifted to a commercial channel in the last 3 or 4 years, we likely lost share in that.

We think the opportunity to go in and present our combined entity to a channel is significantly better. And so our expectation is we're going to leverage that.

We've announced the first couple of levels of organization changes in this past week. And in the next week or so, we'll get down, frankly, to the customer level in terms of representation.

And then I think we'll start to see some things change.

Great. And then in terms of a few financial housekeeping items, I appreciate the pro forma capital structure that's in the PowerPoint presentation.

What does the cash balance look like today on a pro forma basis?

So net debt at close was about $1.14 billion, allowing for the remaining expenses to get paid out but it's all [ph] ought to be paid. As I mentioned earlier, Mead will be a cash use between now and the end of the year.

We did receive cash from MeadWestvaco as part of the working capital adjustment, which was part of the negotiation. So they contributed $53 million to the business.

And that was to achieve an average level of working capital within the Mead business. As I mentioned earlier, Mead then absorbs cash as it moves its working capital to its peak at year end, and that peak point is obviously why it generates all that cash in Q1.

Great. And as we think about the second quarter, with it being the first quarter, you'll get combined results.

What factors should we pay attention to as we're modeling out the quarter?

The -- I mean, 2 things. Number one, obviously, we will actually only have 2 months of Mead, not 3 months.

But importantly, we will get the most important Mead month, which is June. And in fact, June is the most important month in Q2 for both businesses, which is always one of the interesting things with back-to-school because we don't have much control about when our customers take back-to-school.

And so there's always a volatility around where the Q2 or Q3 shows certain demands. The second thing that you will see that kicks in, in Q2 is we will have to take on all of the additional costs we anticipate immediately for having the larger board, being a bigger public company, et cetera.

So this will negatively drag a little bit in Q2, although we expect them to kind of be offset for the year as a whole. And then as Bob had mentioned earlier, what you saw in Q1 with the compression of Computer Products margins, we would anticipate that also flowing into Q2 as a trend that you'll see all year.

And that will actually accelerate slightly in Q2 because the royalty that we used to get on the security products drops off Q2, 3 and 4, and that's a $5 million impact over the last 3 quarters.

Bob, when you were on the roadshow, I think you mentioned that Brazil could be similar in size for ACCO Brands in 2013. And I think we're all sort of asking you the same question, perhaps, in a different way.

You've put in no revenue synergies, I believe, in your 2013. If you, in fact, could get Brazil to be similar in size to ACCO as an example, how much incremental could that add to 2013?

Again, there's nothing in our 2013 number for sales synergies. We absolutely anticipate and believe that Brazil should be a couple of hundred million dollar market for ACCO over time.

But it's not a "Snap your fingers, make it happen" kind of thing. It literally -- because of the distribution operations down there, it's going to be 9,000 independent discussions with popularity [ph] owners.

It's going to take some time. But it is front-and-center on our to-do list.

Okay. And then I think on the roadshow, you also mentioned that there is greater seasonality as a combined entity.

I think you said 65% of your EBITDA typically would be in the back half of the year. So again, we're all trying to form models that make some sense.

You've spoken a lot about Q2, but you also indicated Q4 would be even larger than Q3. If I think about the 65% you spoke about on the road being in the back half, how would you try to split that piece up between the 2 quarters?

Clearly, from -- I can't issue pro formas until I can finish going through all the audit work that I have to do to do all the finalization of reevaluations of the opening assets. And so we will get those pro formas issued prior to the end of June, and we'll do it as soon as we can and that will help people.

But fundamentally, in rough numbers, the business approximates to an EPS that is a couple of cents lost in Q1, something around $0.20 EPS pro forma Q2 and then $0.40-ish in Q3 and slightly higher than that in Q4. And that's how you get back to the $1 that we gave as an approximation for how to model it.

And that's very rough, and it will -- it's something that we will give more guidance on. But I just wanted to give you approximate views as to where to think.

That's enormously helpful. My final question, just as a clarification.

I think you've mentioned in your prepared remarks greater than $150 million of free cash flow this year. But then, I also think you mentioned Mead would be a use of cash of about $30 million.

If I think about 2013, is it easy to conclude that we could be north of $180 million of free cash flow?

What we said is on a full year run rate, the right way to think about our cash is somewhere between $150 million and $180 million, and the variation depends on how much we're going to spend on capital and restructuring. We will have some restructuring cash that will go out in 2013 and we will have some of the extra IT CapEx that goes out, which is why we kind of have a slightly larger CapEx in the 2 businesses we've been running at.

So we'll model then to the lower end of that range in 2013, would be my view. But remember ACCO will generate a great deal of cash still in Q4, and that will still occur.

And as you will have seen, we had our traditional cash outflow in Q1. And our guidance for the year for ACCO of generating $50 million to $60 million is still true.

And so just from a pretty close modeling point-of-view, if you take our cash outflow in Q1, approximately $5 million of that was Mead expenses. So if you back that out, you'll get the net cash outflow from ACCO in Q1 and then effectively add that to the $50 million to $60 million we gave you for ACCO in total, and you've got a good view of where my cash should be at the end of the year because you know it'll be just slightly south of $1.1 billion in terms of net debt on the business.

It's Gary and Simeon. I'll start.

Simeon will have a follow-up question. You [indiscernible] to - obviously, without synergies, you mentioned that you expect flat revenues for the rest of the year.

What are the assumptions built in from a macro perspective in terms of either business improvements, et cetera, into that assumption first of all?

One of the assumptions that we got in terms of our reported numbers is an assumption that we're going to see negative translation effects from foreign exchange. And that's a couple of points of adverse impacts.

And so when we talk about the top line being flat for ACCO, our guidance was to get some underlying growth in ACCO offset by foreign exchange. And the guidance for Mead is they've traditionally been a flat business, but they will have adverse foreign exchange.

So year-over-year, they will get slightly smaller in terms of reported.

And macro being essentially not a mover one way or the other, like essentially same scenario that we're seeing now in terms of macro finance?

We think the scenario you see today is kind of what we expect going forward. We think the U.S.

business environment is steady to slightly positive. We think Europe is extraordinarily challenging and will continue to be so.

And it's kind of a -- it kind of the 3-headed monster out there right now. You've got a very, very challenging macro environment.

You've got austerity measures that are being imposed, but largely being imposed across the government sector who happens to be a very large user of traditional office products. And then you just got an awful lot of change going on in our distribution partners.

There have been leadership changes at Depot and at Staples and at Lyreco, and organizational changes at Spicers and at VOW. So it's challenging and it will remain so, and that's kind of our expectation.

We think the interest rate control in Brazil would suggest that, that market is going to be slightly stronger this year than it was last year. We think Australia, from a macro environment, looks healthy, but it's largely -- almost entirely driven by the mining sector.

And consumer confidence there, we think, is lower than we've seen it, frankly, in a while. So we think that will be a little more challenging market than it's traditionally been, so it's usually our strongest market.

And we think Asia Pacific is growing and is a reasonably healthy market. So that's kind of our world view.

Okay, that's helpful. And then just a follow-up, then I'll turn it to Simeon.

The gross margin, down 90, and you explained in the slides it's kind of mix and et cetera . How should we think about gross margin?

And not that that's crucial because we're focused more on EBITDA basically, but how should we think about where gross margin trends over the next few years?

Q1 is always an interesting quarter for us. I mean, the -- remember for us, foreign exchange not only hits translation.

It also hits cost of goods in many of our overseas countries. And so what we saw in Q1 is a combination of factors, the big swings in foreign exchange that occurred in the second half of 2011 really hit into our cost of goods in the first -- in the beginning of 2012.

We also, in a number of countries, lowered our prices because of what they had seen in terms of foreign exchange gains prior to that. And so in a number of our International markets, margins were squeezed significantly in Q1.

There also is a delay that we always see when we do raise prices in the impact that you get in the first quarter where that occurs. So with a number of customers, there are staggered timings and there are also orders in hand that don't get the price increase.

The other big driver of cost increase we saw in Q1 was fuel cost. And so you see fuel cost go up and you see also significant changes in International freight rates, particularly Asia to Europe.

Just a follow-up from Simeon...

Can I -- because you asked about kind of where we see it over 3 years, and our expectation is that we're still probably 150 basis points lighter than we think we can get to from a traditional ACCO product set. And that's mostly cost takeouts and efficiency improvements.

And we've got programs in place to try to get that. So we think there are still gross margin expansion opportunities in the core ACCO business.

The follow-up on, I think, MeadWest had some tough compares Q1 due to some year ago sell-ins. And I'm not sure if maybe ACCO had a little bit of spillover from sell-ins also into the first quarter.

Can you talk about just how to think about that going forward. Do those tough compares subside?

And should we see at least a moderation in some of the sales rates? Is there an immediate bounce back that we should see going forward?

I suspect that one of the big impact they saw was on foreign exchange, as the Brazilian real has been -- is a big FX factor. The other issue that they had was they had a Brazilian issue the year before, which was associated with merging the formal [indiscernible] business that shifted business between Q4 and Q1.

So generally, their business is in line with our expectations, which is it's a business that gets growth in the Brazilian market and a little bit of decline in the U.S. market.

And that's pretty much how Q1 was without that exception.

But I think we have kind of one more specific tough compare, and that's on Kensington in Q2 on the top line. They had a big quarter on security.

Last year, they introduced a new product and had a big hit. But it -- this is just a tough business to forecast on a quarterly basis.

The Q2 is driven or not driven by the timing of back-to-school shipments, either being June or July. And that's, frankly, our customers change their mind during the course of the quarter about whether they're going to go early or whether they're going to respond.

And so we just have a very hard time. We think we're very comfortable about how we're positioned for the year, and we're no better than we've ever been about predicting it on a quarterly basis.

Okay. And then last question.

Just thinking about the core business for a second, just the ACCO standalone, if it were still standalone. There's been nice improvement in that business from an EBIT and an earnings standpoint for the past several quarters.

And I think you telegraphed pretty nicely last year of when some of the changes that you made would kick in, and that sort of worked out nicely. And then first quarter, there was a little slippage, which there were some unusual events that happened.

Can you just help bridge Q1 to the rest of the year in which you're predicting or expecting that same -- that similar 30% of earnings growth from the core? And how -- what were some of the items to think about and then the timing of some of the savings that are supposed to kick in, in this year?

So obviously, we took restructuring charges in Q1, and they will have an increasing benefit as the year goes on again, mainly in the second half we see most of that benefit kick through. We do still have a year-over-year benefit from what we did last year, which runs through Q1 and Q2.

So you'll see favorable benefit again in Europe for Q2. We mentioned earlier from a timing perspective that a lot of Kensington's new products will really benefit them in the second half, and Q2 is going to be a particularly tough compare for them both in terms of certain sell-ins that occurred last year.

And while we feel good about Kensington, it certainly has more of an issue in the first half. We also have cost savings coming out of our Lean Six Sigma program.

And again, those build as the year goes on. And also the back-to-school, while we can never predict the timing of it, we feel good about it.

We've actually got some additional placement for back-to-school in the ACCO business. So we're -- while we are always nervous about when that goes, we are feeling good about the total size of back-to-school.

I wanted to ask you about cost synergies. Your 2012 adjusted combined EPS guidance does not include cost synergies, but 2013 does.

Does that assume you reached the full $20 million run rate in 2013?

Pretty much.

Run rate by the end of the year, we won't see all of it at the beginning. You will see that go in -- at the back half of 2013.

Okay. So our synergies perhaps trekking a little bit ahead of your initial expectations when you announced the merger, I believe before you said you wouldn't reach the full run rate until 2014.

Yes. I think we're very comfortable that we'll deliver the $20 million next year.

And part of what we tried to say is you won't see the full P&L benefit in 2013 because of the fact you won't see it, particularly in Q1.

Right, okay. And how are market share gains progressing overall, as well as in some of the various product categories that you've been targeting?

We're very pleased. We have an annual target of kind of $50 million.

And we believe we're well on track to deliver that this year, mostly in the U.S. And we think that's a very strong.

When you look at it on a net basis, because of the products that we walked away from, Europe will be down obviously year-to-year.

When we look at Europe and kind of the turmoil that we've had there, do you feel that there are additional areas where you could cut if you needed to? Or are we kind of at a point where we're just going to have grin and bear it?

No. We think we are capable and willing to take actions if, in fact, the market softens beyond where it is today.

And so we also believe that at the end of the day, we're subscaling that marketplace, and that marketplace ultimately should represent a significant opportunity for us. And so it's not a market that we have any intention of ever abandoning.

And so we'd like to grow into our infrastructure a little bit. We don't think that's going to happen in the next couple of years.

But yes, we have more things that we could do if we had to do them.

It's also worth remembering, Karru, that most of our business is in Northern Europe, so it's in the U.K., France, Germany, Holland, Scandinavia, Ireland as opposed to Southern Europe.

Okay. And when we look at the free cash flow going forward, you got $150 million, $180 million.

And looking at your cash or if there was a new cash [ph], there's not a lot that you guys can do with that. What are your planned usage for free cash flow?

We're going to deleverage the business or use it for acquisitions.

Okay. When you look at the portfolio now, combined, I think you guys said that 80% is coming from #1 or# 2 market share products.

And are there -- are the plans here to call some of the underperforming divestitures on the horizon?

[Indiscernible] and people often have about what that 20% is. Quite often, that 20% is products that, in other markets, are in the #1 or #2 position, but they're in growth mode in certain markets.

And so I think that's an important piece to understand about that metric.

Okay. And you guys talked about Kensington coming out with 60 new products in the second half here.

I mean, how is the rest of the new product pipeline looking for both you guys and for Mead?

We feel good about it. The -- just to be definitive about your last question, we have no plans to divest any part of our business.

I know people look at paper-based calendars and believe that they're in secular decline. Now we appreciate that they are -- that the decline is low to mid-single digits, which is offset to some degree by pricing.

But it's a very, very profitable product set. It's on where we've got synergy opportunities as we combine the manufacturing operations of the 2 businesses, and so it will be more profitable.

And so we're not looking -- we're going to manage it as a cash cow. We're not looking to get rid of that.

Okay, understood. And then in terms of the new product pipelines?

It's strong. Kensington is clearly leading the way.

I think -- the way we think about product development is kind of there's 3 groups of product development. When you look at the high end of our durable product line, it's one that we kind of want to refresh every 3 to 4 years.

We did that with shredders over the past year. You'll see our laminating products have the entire category refreshed this year.

And then you look at Kensington on the other end of the spectrum and that's one where we look and say we need to innovate most of the product line annually, and we're doing a very good job of doing that. And then kind of in between, you've got kind of our core products that have to be kind of updated on a regular basis with style and design and licensing and things like that.

And frankly, that's one of the things where we think Mead is going to bring substantial benefit to our business because we think that they just do a better job on that kind of stuff than we've ever done before. And frankly, they've been -- historically been better marketing partners with our customers than we have, and they'll help us do that better.

I appreciate everyone's attention this morning. In closing, we expect that the external environment, the demand environment is going to remain very, very challenging.

But we're confident that we can continue to win in that environment. I think we've demonstrated that we'll manage this business closely.

We intend to continue to do that. We feel very good about how we are positioned and we feel great about the merger with Mead.

We think it significantly strengthens the company across a variety of perspectives, from a marketing perspective, from a geographic coverage perspective, from a channel perspective. And I think Neal and his team did an incredible job on the refinancing of the business.

And so I think we're just a much, much stronger company financially. And we look forward to talking to you about our progress next quarter.