Avery Dennison Reports Record Third-Quarter Results; Increased Sales in Both Sectors Contribute to 8 Percent Growth in Earnings Per Share.PASADENA, Calif.--(BUSINESS WIRE)--Oct. 20, 1998--Avery Dennison Dennison is the name of several places in the United States of America:
See: New York Stock Exchange :AVY AVY may refer to:
1. pale soft exudative pork. 2. portosystemic encephalopathy. :AVY) Tuesday Tuesday: see week. reported record third-quarter sales, profits and returns for the quarter ended Sept. 26, 1998. Highlights of the third quarter of 1998:
-- Earnings per share, on a diluted basis, increased 8 percent to
54 cents per share, from 50 cents per share a year ago.
-- Unit volume grew approximately 7 percent over the same quarter
last year.
-- Sales increased 4 percent, excluding the impact of currency.
Reported sales grew 3 percent to $860.2 million from
$835.6 million a year ago.
-- Annualized return on shareholders' equity increased to
26.7 percent from 24.3 percent in last year's third quarter.
-- Annualized return on total capital increased to 19.0 percent from
17.8 percent a year ago.
Earnings per share, on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, for the first nine months of 1998 increased 13 percent to $1.60 per share from $1.41 per share for the same period in 1997. Unit volume growth was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 7 percent for the first nine months of 1998. Excluding the impact of currency, sales increased 5 percent to $2.6 billion for the first nine months of 1998. Cash generated from Avery A·ver·y , Oswald 1877-1955. American bacteriologist noted for establishing (1944) that DNA is responsible for the transmission of heritable characteristics. Dennison's operating activities during the first nine months was a strong $231 million, up from $210 million during the same period last year. As part of the company's ongoing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program, 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. purchased $117 million of its stock, or approximately 2.3 million shares, during the first nine months of 1998. "We are pleased with our results for the third quarter," said Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. M. Neal, president and chief executive officer. "In the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of increasingly challenging economic conditions, we delivered record third-quarter sales and profits. We are capitalizing on Avery Dennison's strong brands and leading market positions, generating high returns in both sectors while investing for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth." In the third quarter of 1998, sales and unit volume increased in both the Pressure-sensitive Materials sector and the Consumer and Converted Products sector due to continued strong demand for Avery and Fasson brand products. Both sectors reported growth in sales and unit volume domestically and internationally. The Pressure-sensitive Materials sector achieved strong growth internationally, reflecting the company's ongoing geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. expansion program and strong growth in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .
Looking forward to the fourth quarter, Neal said: "While we expect 1998 to be another successful year for the company, we see an uncertain economic environment impacting many of our customers. As a result, we are intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: our efforts to reduce manufacturing and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and improve productivity throughout all of our businesses. "We remain committed to our growth strategies, including expansion in key geographic markets, new product development and value-enhancing acquisitions. For example, we recently acquired Spartan International, a privately held specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. converting operation that supplies pressure-sensitive products to the commercial graphics, sign making, vehicle marking and automotive markets. These markets are being revolutionized by new digital imaging technologies which we see as an exceptional growth opportunity." Avery Dennison is a global leader in pressure-sensitive technology and innovative self-adhesive self-ad·he·sive adj. Having a surface coated with an adhesive and not needing any substance, such as glue or paste, applied to form a bond: self-adhesive wallpaper; self-adhesive labels. solutions for consumer products and label systems. Based in Pasadena, the company develops, manufactures and markets a wide range of products for consumer and industrial markets, including Avery-brand office products, Fasson-brand self-adhesive materials, peel-and-stick postage stamps This is a list of postage stamps that are especially notable in some way. The best-known stamps:
v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. retail tag and labeling systems, and specialty tapes and chemicals. Approximately 16,100 employees in 200 manufacturing and sales facilities produce and sell Avery Dennison products in 89 countries. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain information presented in this news release may constitute "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " 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, availability of raw materials, foreign exchange rates, worldwide economic conditions, fluctuations in consumer demand affecting production and inventory levels at customer companies and other matters referred to in the company's SEC filings. Investors will find additional financial information in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Avery Dennison's Web site: www.averydennison.com.
AVERY DENNISON
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
1998 1997 1998 1997
Net sales $ 860.2 $ 835.6 $2,575.3 $2,509.3
Cost of
products sold 579.3 565.5 1,722.6 1,702.5
Gross profit 280.9 270.1 852.7 806.8
Marketing, general
& administrative
expense 188.9 183.9 575.0 552.9
Interest expense 8.7 8.0 25.3 25.3
Income before
taxes 83.3 78.2 252.4 228.6
Taxes on income 27.5 25.6 85.0 78.2
Net income $ 55.8 $ 52.6 $ 167.4 $ 150.4
Net income per
common share,
assuming
dilution $ 0.54 $ 0.50 $ 1.60 $ 1.41
Average shares
outstanding:
Assuming dilution 104.2 106.1 104.6 106.3
Common shares
outstanding at
period end 101.5 103.0 101.5 103.0
AVERY DENNISON
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
(Unaudited)
ASSETS Sept. 26, 1998 Sept. 27, 1997
Current assets:
Cash and cash equivalents $ 4.9 $ 6.3
Trade accounts receivable, net 515.3 499.4
Inventories, net 231.9 227.1
Other current assets 103.6 110.7
Total current assets 855.7 843.5
Property, plant and equipment, net 1,000.8 946.9
Intangibles resulting from business
acquisitions, net 134.2 134.5
Other assets 144.0 135.8
$ 2,134.7 $ 2,060.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term and current portion
of long-term debt $ 39.1 $ 58.2
Accounts payable 252.4 215.2
Other current liabilities 327.4 357.7
Total current liabilities 618.9 631.1
Long-term debt 471.1 430.5
Other long-term liabilities 183.7 173.0
Shareholders' equity:
Common stock 124.1 124.1
Capital in excess of par value 694.0 506.1
Retained earnings 1,157.0 1,034.3
Cumulative translation adjustment (17.2) (17.7)
Cost of unallocated ESOP shares (19.3) (29.4)
Minimum pension liability (1.1) (0.2)
Employee stock benefit trusts (793.0) (666.0)
Treasury stock at cost (283.5) (125.1)
Total shareholders' equity 861.0 826.1
$ 2,134.7 $ 2,060.7
AVERY DENNISON
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(In millions)
(Unaudited)
Nine Months Ended
Sept. 26, 1998 Sept. 27, 1997
Operating Activities:
Net income $ 167.4 $ 150.4
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 84.2 78.5
Amortization 9.1 8.4
Deferred taxes 1.5 1.3
Cash provided by operations 262.2 238.6
Changes in assets and liabilities,
net of the effect of foreign
currency translation, business
divestitures and acquisitions (30.9) (28.2)
Net cash provided by
operating activities 231.3 210.4
Investing Activities:
Purchase of property,
plant and equipment (102.1) (104.1)
Net payments from acquisitions
and sale of assets (3.1) (4.2)
Other (11.5) (16.6)
Net cash used in
investing activities (116.7) (124.9)
Financing Activities:
Net decrease in long-term debt (31.8) (30.6)
Net increase in short-term debt 92.8 57.7
Dividends paid (74.0) (61.7)
Purchase of treasury stock (116.7) (57.6)
Proceeds from exercise
of stock options 18.4 9.5
Other (1.8) 0.2
Net cash used in
financing activities (113.1) (82.5)
Effect of foreign currency
translation on cash balances 0.1 (0.5)
Increase in cash and
cash equivalents 1.6 2.5
Cash and cash equivalents,
beginning of period 3.3 3.8
Cash and cash equivalents,
end of period $ 4.9 $ 6.3
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