Avery Dennison Revises Outlook for First Quarter 2005.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) today announced that, based on preliminary results for the first quarter of 2005, diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of are expected to be approximately $0.10 below the low end of its previous guidance, before costs associated with a previously announced plant closure. The Company had previously said it expected diluted earnings per share for the first quarter would be in the range of $0.71 to $0.78, before costs associated with the plant closure. Severance and transition costs associated with the plant closure are expected to total approximately $0.04 per share for the quarter. The Company attributed the reduction in its first quarter earnings expectation to an increase in inventory reserves related to a new product in its office and consumer products business and other factors that are not expected to repeat during the balance of the year, as well as higher-than-anticipated spending associated with the Company's growth initiatives in its Retail Information Services See Information Systems. business. Reported revenue in the first quarter is expected to be approximately $1.3 billion, 8 percent higher than the first quarter of 2004, and at the low end of the Company's previously announced guidance. The positive impact of price increases and favorable currency exchange rates was partially offset by slower-than-expected unit volume growth in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe that affected several businesses late in the quarter. Avery Dennison plans to provide revised expectations for the balance of the year when the Company announces its actual financial results for the first quarter on April 26, 2005. "Following a strong January, demand weakened as the quarter progressed," said Philip M. Neal, chairman and chief executive officer of Avery Dennison. "While our gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was in line with our expectations, reflecting the successful execution of planned price increases, the timing of the demand slowdown, combined with a number of unusual expenses, significantly reduced our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the quarter." "Generally speaking, raw material costs have been increasing in line with our expectations. We expect to continue raising prices as needed as needed prn. See prn order. throughout the balance of the year. At the same time, we will continue to aggressively reduce our 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. to reflect current demand trends," said Neal. Avery Dennison will host its first quarter 2005 earnings conference call in a live Webcast for investors, equity analysts, portfolio managers and media representatives at 2:00 PM (Eastern time)/11:00 AM (Pacific time) on Tuesday, April 26, 2005. The Webcast will follow the Company's first quarter 2005 earnings news release which will be issued earlier that morning at 8:30 AM (Eastern time)/5:30 AM (Pacific time). The Webcast can be accessed at www.investors.averydennison.com. In addition, an audio replay of the conference call will be available approximately one hour following its conclusion at the same Web address. 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 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, 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 European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community and Canadian Department of Justice investigations, into competitive practices in the label stock industry and any related proceedings or lawsuits pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. 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 Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). ; 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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