Avery Dennison Reports 4th Quarter and Year-End 2007 Earnings.PASADENA, Calif. -- 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): [TABLE OMITTED] Avery Dennison Corporation (NYSE:AVY) today reported net income of $79.4 million or $0.81 per share, compared with $104.7 million or $1.04 per share in the prior year. Results included restructuring and asset impairment charges, transition costs associated with the integration of Paxar, and other items, totaling $0.27 and $0.05 in the fourth quarters of 2007 and 2006, respectively. (See Attachment A-3: "Preliminary Reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to Non-GAAP Measures".) Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the fourth quarter were $1.71 billion, up approximately 21 percent from $1.41 billion for the same quarter last year. Sales before the impact of the Paxar acquisition and foreign currency translation were down approximately 1 percent from the prior year. The Company reported net income of $303.5 million or $3.07 per share for the full year 2007, compared with $373.2 million or $3.72 per share in the prior year. Results included restructuring and asset impairment charges, transition costs associated with the integration of Paxar, and other items, totaling $0.84 per share in 2007 and $0.12 per share in the prior year. Net sales were $6.31 billion in 2007, compared to $5.58 billion in the previous year. (See Attachment A-3: "Preliminary Reconciliation of GAAP to Non-GAAP Measures".) In the fourth quarter of 2007, Avery Dennison changed from the last-in, first- out (LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack ) inventory accounting method to the first-in, first-out first-in, first-out n. A method of inventory accounting in which the oldest remaining items are assumed to have been the first sold. In a period of rising prices, this method yields a higher ending inventory, a lower cost of goods sold, a higher gross (FIFO (First In First Out) A storage method that retrieves the item stored for the longest time. Contrast with LIFO. See traffic engineering methods. FIFO - first-in first-out ) method for certain businesses operating in the U.S. All the Company's businesses now utilize the FIFO method of accounting for inventory. All results have been presented on a FIFO basis as if the accounting change occurred as of January 1, 2006. "2007 was a challenging year as U.S. retail markets slowed and market conditions for our pressure-sensitive materials business weakened, causing us to miss our revenue growth and profit objectives for the year," said Dean A. Scarborough, president and chief executive officer of Avery Dennison. "We took a number of actions to mitigate the effects of weaker market conditions, including accelerating productivity programs and reducing expenses." "I am pleased with the Paxar acquisition, which positions us as the clear leader in the global retail information services See Information Systems. market," he added. "The integration of Paxar with our Retail Information Services Group has been virtually seamless to our customers and is on track to realize annual cost synergies of nearly $125 million by the end of 2009." "We continue to achieve solid results in the emerging markets, particularly in China and India where we have expanded our capacity with several new manufacturing facilities," Scarborough said. "Our radio frequency identification See RFID. business is gaining traction with the number of inlays sold in 2007 nearly tripling from the previous year. Buoyed by Paxar's 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. business, we expect sales of RFID products to reach $50 million in 2008." Additional Fourth Quarter Financial Highlights (For a more detailed presentation of the Company's results for the quarter, see Fourth Quarter 2007 Financial Review and Analysis, posted at the Company's Web site at www.investors.averydennison.com.) * Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (GAAP basis) was 5.7 percent, compared to 8.1 percent for the same period last year. Excluding interest expense, the effect of transition costs associated with the Paxar integration, restructuring and asset impairment charges, and other items, operating margin was 9.6 percent, compared to 9.4 percent for the previous year. (See Attachment A-3: "Preliminary Reconciliation of GAAP to Non-GAAP Measures".) * The effective tax rate for the quarter and full year 2007 was approximately 19 percent, in line with the Company's guidance. Segment Highlights (See Attachment A-4: "Preliminary Supplementary Information, Reconciliation of GAAP to Non-GAAP Supplementary Information" for adjusted operating margins included below.) [TABLE OMITTED] Outlook for the Year Avery Dennison announced that it expects reported (GAAP) earnings for 2008 to be in the range of $3.80 to $4.20 per share, including an estimated $0.35 per share in restructuring and asset impairment charges and Paxar integration costs. These charges and costs are subject to revision, as plans have not been finalized. Excluding these items, the Company expects full year earnings per share for 2008 to be in the range of $4.15 to $4.55 per share. (See Attachment A-6: "Preliminary Reconciliation of GAAP to Non-GAAP Measures (Full Year 2008 Estimates)".) The Company's earnings expectations reflect an assumption of reported revenue growth in the range of 9.5 to 12.5 percent, including a 6.5 percent contribution from the Paxar acquisition and an estimated 2 to 3 percent benefit from currency translation. (For a more detailed presentation of the Company's assumptions underlying its 2008 earnings expectations, see Fourth Quarter and Full Year 2007 Financial Review and Analysis, posted at the Company's Web site at www.investors.averydennison.com.) Note: Throughout this release, all calculations of amounts on a per share basis reflect fully diluted shares outstanding. Avery Dennison is a global leader in pressure-sensitive labeling materials, retail tag, ticketing and branding systems, and office products. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 Company with 2007 sales of $6.3 billion. Avery Dennison employs more than 30,000 individuals in 51 countries worldwide, who develop, manufacture and market a wide range of products for both consumer and industrial markets. Products offered by Avery Dennison include: Fasson brand self-adhesive materials; Avery Dennison brand products for the retail and apparel industries; Avery brand office products and graphics imaging media; specialty tapes, peel-and-stick postage stamps This is a list of postage stamps that are especially notable in some way. The best-known stamps:
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. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and financial or other business targets 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 risks and uncertainties relating to investment in development activities and new production facilities; fluctuations in cost and availability of raw materials; ability of the Company to achieve and sustain targeted cost reductions, including synergies expected from the integration of the Paxar business in the time and at the cost anticipated; ability of the Company to generate sustained productivity improvement; successful integration of acquisitions; successful implementation of new manufacturing technologies and installation of manufacturing equipment; the financial condition and inventory strategies of customers; customer and supplier concentrations; changes in customer order patterns; loss of significant contract(s) or customer(s); timely development and market acceptance of new products; fluctuations in demand affecting sales to customers; impact of competitive products and pricing; selling prices; business mix shift; credit risks; ability of the Company to obtain adequate financing arrangements; fluctuations in interest rates; fluctuations in pension, insurance and employee benefit costs; 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 Australian Competition and Consumer Commission For the other Australian organisation with the same acronym, see . The Australian Competition and Consumer Commission (ACCC) is an independent authority of the government of Australia. investigation into industry competitive practices, and any related proceedings or lawsuits pertaining to this investigation or to the subject matter thereof or of the concluded investigations by the U.S. Department of Justice ("DOJ (Department Of Justice) The legal arm of the U.S. government that represents the public interest of the United States. It is headed by the Attorney General. "), the European Commission, and the Canadian Department of Justice (including purported class actions seeking treble damages A recovery of three times the amount of actual financial losses suffered which is provided by statute for certain kinds of cases. The statute authorizing treble damages directs the judge to multiply by three the amount of monetary damages awarded by the jury in those cases for alleged unlawful competitive practices, which were filed after the announcement of the DOJ investigation), as well as the impact of potential violations of the U.S. Foreign Corrupt Practices Act Foreign Corrupt Practices Act An amendment to the Securities Exchange Act created to sanction bribery of foreign officials by publicly held US companies. Foreign Corrupt Practices Act based on issues in China; changes in governmental regulations; changes in political conditions; fluctuations in foreign currency exchange rates and other risks associated with foreign operations; worldwide and local economic conditions; impact of epidemiological events on the economy and the Company's customers and suppliers; acts of war Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. , terrorism, natural disasters; and other factors. 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) the impact of economic conditions on underlying demand for the Company's products; (2) the degree to which higher raw material and energy-related costs can be passed on to customers through selling price increases, without a significant loss of volume; (3) the impact of competitors' actions, including pricing, expansion in key markets, and product offerings; (4) potential adverse developments in legal proceedings and/or investigations regarding competitive activities, including possible fines, penalties, judgments or settlements; and (5) the ability of the Company to achieve and sustain targeted cost reductions, including expected synergies associated with the Paxar acquisition. For a more detailed discussion of these and other factors, see "Risk Factors" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Results of Operations and Financial Condition" in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , filed on February 28, 2007, with the Securities and Exchange Commission. The forward-looking statements included in this news release are made only as of the date of this news release, and the Company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances. For more information and to listen to a live broadcast or an audio replay of the 4th Quarter conference call with analysts, visit the Avery Dennison Web site at www.investors.averydennison.com [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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