Avery Dennison Provides Update on Growth and Profit Improvement Strategies.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , N.Y. -- Avery Dennison Avery Dennison Corporation (NYSE: AVY) produces pressure-sensitive materials (such as self-adhesive labels), office products, and various paper products. R. Stanton Avery founded Avery in 1935. Avery Dennison Corporation was created in 1990 by merger of Avery and Dennison. Corporation (NYSE NYSE See: New York Stock Exchange :AVY) today provided an overview of its worldwide operations and long-term growth opportunities at an annual meeting of security analysts and investors which was broadcast live over the Internet. "We are optimistic about our prospects for 2005, as we look forward to continued sales growth and improved profitability," said Dean A. Scarborough, who is currently president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Avery Dennison and will become chief executive officer on May 1, 2005. "Although sales growth has modestly slowed since January when we provided earnings guidance for the first quarter, we remain comfortable with the earnings-per-share range we provided." Scarborough noted that the pressure-sensitive materials business and the retail information services See Information Systems. business are expected to contribute strong sales growth and margin expansion over the next three to five years, while the consumer and office products business is expected to achieve modest growth through new products and applications in the printable media Refers to CDs and DVDs in which their label side can be printed with an inkjet printer. Although all CD and DVD media can be marked with a soft ink pen, they cannot be printed across their entire surface. category. Scarborough outlined the Company's four global priorities, citing improvement in operating margins and return on total capital, expansion of Avery Dennison's market leadership position in emerging markets, top-line growth through superior service and product innovation, and establishment of a leadership position in the developing radio frequency identification See RFID. (RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. ) market. Scarborough emphasized the breadth of the Company's geographic presence, highlighted by strong sales growth in the emerging markets of Asia, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. . These emerging markets now generate approximately 20 percent of Avery Dennison's total revenue. Demonstrating continued plans for growth in emerging markets, Scarborough said that more than 30 percent of the Company's capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in 2005 will be in Asia. The Company provided an update on Avery Dennison's RFID business, announcing that it was recently selected as a vendor by the U.S. Department of Defense to supply a portion of a total of 50 million RFID tags that will be required for its upcoming program launch. Scarborough said that the Company's new high-speed manufacturing line for RFID inlays is expected to be operational by the end of March. Scarborough detailed the Company's strategies across its businesses to achieve its high-priority goal of improving operating margins. Included in the actions designed to expand operating margins are recently implemented price increases and ongoing productivity improvement efforts including Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. and Lean Manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. . The Company outlined its long-term financial goals, including annual organic sales growth in the range of 5 percent to 9 percent and annual earnings-per-share growth exceeding 10 percent. "We are positioned to benefit from our significant investments in growth over the past several years," said Scarborough. "We have proven programs in place to grow sales, increase productivity and expand operating margins. Our fundamentals remain solid and the growth drivers for our businesses are strong." Avery Dennison is a global leader in pressure-sensitive labeling materials, office products and retail tag, ticketing and branding systems. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 company with 2004 sales of $5.3 billion. Avery Dennison employs approximately 21,400 individuals in 47 countries worldwide who apply the Company's technologies to develop, manufacture and market a wide range of products for both consumer and industrial markets. Products offered by Avery Dennison include Avery-brand office products and graphics imaging media, Fasson-brand self-adhesive materials, peel-and-stick postage stamps, reflective highway safety products, labels for a wide variety of automotive, industrial and durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. applications, brand identification and supply chain management products for the retail and apparel industries, and specialty tapes and polymers. Forward-Looking Statements Certain information presented in this news release may constitute "forward-looking" statements. These statements are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or expected results depending on a variety of factors, including but not limited to fluctuations in cost and availability of raw materials; foreign exchange rates; worldwide and local economic conditions; selling prices; impact of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , including the U.S. Department of Justice criminal investigation, as well as the European Commission and Canadian Department of Justice investigations, into competitive practices in the label stock industry and any related proceedings or lawsuits pertaining to these investigations or to the subject matter thereof; impact of epidemiological events on the economy and the Company's customers and suppliers; successful integration of acquired companies; financial condition and inventory strategies of customers; development, introduction and acceptance of new products; fluctuations in demand affecting sales to customers; and other matters referred to in the Company's SEC filings. The Company believes that the most significant risk factors that could affect its ability to achieve its stated financial expectations in the near-term include (1) potential adverse developments in legal proceedings and/or investigations regarding competitive conditions in the label stock industry; (2) the degree to which higher raw material costs can be passed on to customers through price increases, without a significant loss of volume; (3) the impact of economic conditions on underlying demand for the Company's products, particularly in the U.S. and Western Europe; and (4) availability and cost of certain components used to manufacture adhesives used in some products sold by the Company, an extended shortage of which could disrupt production, resulting in a potentially significant loss of revenue and earnings. |
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