• 1Q15 Reported EPS of $0.77
  • Adjusted EPS (non-GAAP) of $0.81
• 1Q15 Net sales declined approximately 1 percent to $1.53 billion
  • Net sales up approximately 3 percent on organic basis
• Returned $66 million to shareholders via share repurchases and dividends
• Updated FY15 Reported EPS guidance to $2.85 to $3.05, reflecting higher anticipated restructuring charges and 1Q outperformance vs. Company expectations
  • Increased Adjusted EPS (non-GAAP) guidance by $0.05 to $3.25 to $3.45

GLENDALE, Calif. -- (Business Wire)

Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its first quarter ended April 4, 2015. All non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached tables. Unless otherwise indicated, the discussion of the company’s results is focused on its continuing operations, and comparisons are to the same period in the prior year.

“We’re off to a good start, with earnings above our expectations,” said Dean Scarborough, Avery Dennison chairman and CEO. "Sales were up 3 percent on an organic basis, reflecting another quarter of solid growth for Pressure-sensitive Materials, and strong sequential improvement for Retail Branding and Information Solutions. Despite the headwind from currency translation, we delivered significant growth in adjusted earnings, and expanded our operating margins through ongoing productivity initiatives and improved product mix.

“We have raised our outlook for full-year adjusted earnings per share, as we expect additional productivity improvement will offset the incremental pressure we’ve seen from a stronger dollar,” Scarborough added. “I am confident that the consistent execution of our strategies for profitable growth, combined with our continued focus on productivity and capital discipline, will enable us to meet our long-term goals."

For more details on the company’s results, see the summary table accompanying this news release, as well as the supplemental presentation materials, “First Quarter 2015 Financial Review and Analysis,” posted on the company’s website at www.investors.averydennison.com, and furnished to the SEC on Form 8-K.

First Quarter 2015 Results by Segment

All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, product line exits, acquisitions and divestitures, and, where applicable, the extra week in the prior fiscal year. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring costs and other items, as a percentage of sales.

Pressure-sensitive Materials (PSM)

• PSM sales increased approximately 4 percent. Within the segment, Label and Packaging Materials increased low-single digits. Combined sales of Graphics and Performance Tapes increased mid-single digits.
• Operating margin improved 120 basis points to 11 percent as the benefit of favorable product mix and higher volume, combined with productivity, more than offset higher employee-related costs and increased restructuring charges. Adjusted operating margin improved 160 basis points.

Retail Branding and Information Solutions (RBIS)

• RBIS sales were up approximately 2 percent.
• Operating margin improved 60 basis points to 4.9 percent as the benefit of productivity initiatives and higher volume more than offset higher employee-related costs. Adjusted operating margin also improved 60 basis points.

Other

Share Repurchases

The company repurchased 0.6 million shares in the first quarter of 2015 at an aggregate cost of $34 million.

Income Taxes

The first quarter effective tax rate was 28 percent. The adjusted tax rate for the first quarter was 34 percent, consistent with the anticipated full year tax rate in the low to mid-thirty percent range.

Cost Reduction Actions

In the first quarter, the company realized approximately $10 million in savings from restructuring, net of transition costs, and incurred restructuring charges of approximately $14 million, nearly all of which represent cash costs.

Outlook

In its supplemental presentation materials, “First Quarter 2015 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2015 financial results. Based on the factors listed and other assumptions, the company now expects 2015 earnings per share of $2.85 to $3.05. Excluding an estimated $0.40 per share for restructuring costs and other items, the company now expects adjusted (non-GAAP) earnings per share of $3.25 to $3.45.

Note: Throughout this release and the supplemental presentation materials, amounts on a per share basis reflect fully diluted shares outstanding.

About Avery Dennison

Avery Dennison (NYSE:AVY) is a global leader in labeling and packaging materials and solutions. The company’s applications and technologies are an integral part of products used in every major market and industry. With operations in more than 50 countries and over 25,000 employees worldwide, Avery Dennison serves customers with insights and innovations that help make brands more inspiring and the world more intelligent. Headquartered in Glendale, California, the company reported sales from continuing operations of $6.3 billion in 2014. Learn more at www.averydennison.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act 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. These 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 anticipated results depending on a variety of factors, including but not limited to risks and uncertainties relating to the following: fluctuations in demand affecting sales to customers; worldwide and local economic conditions; fluctuations in currency exchange rates and other risks associated with foreign operations, including in emerging markets; the financial condition and inventory strategies of customers; changes in customer preferences; fluctuations in cost and availability of raw materials; our ability to generate sustained productivity improvement; our ability to achieve and sustain targeted cost reductions; the impact of competitive products and pricing; loss of significant contracts or customers; collection of receivables from customers; selling prices; business mix shift; timely development and market acceptance of new products, including sustainable or sustainably-sourced products; investment in development activities and new production facilities; integration of acquisitions and completion of potential dispositions; amounts of future dividends and share repurchases; customer and supplier concentrations; successful implementation of new manufacturing technologies and installation of manufacturing equipment; disruptions in information technology systems, including cyber-attacks or other intrusions to network security; successful installation of new or upgraded information technology systems; data security breaches; volatility of financial markets; impairment of capitalized assets, including goodwill and other intangibles; credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; fluctuations in interest and tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; fluctuations in pension, insurance, and employee benefit costs; the impact of legal and regulatory proceedings, including with respect to environmental, health and safety; changes in governmental laws and regulations; protection and infringement of intellectual property; changes in political conditions; the impact of epidemiological events on the economy and our customers and suppliers; acts of war, terrorism, and natural disasters; and other factors.

We believe that the most significant risk factors that could affect our financial performance in the near-term include: (1) the impacts of economic conditions on underlying demand for our products and foreign currency fluctuations; (2) competitors' actions, including pricing, expansion in key markets, and product offerings; and (3) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through selling price increases, without a significant loss of volume.

For a more detailed discussion of these and other factors, see “Risk Factors” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition” in our 2014 Form 10-K, filed on February 25, 2015 with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law.

For more information and to listen to a live broadcast or an audio replay of the quarterly conference call with analysts, visit the Avery Dennison website at www.investors.averydennison.com.

Contacts:

Avery Dennison Corporation
Media Relations:
Heather Rim, 626-304-2067
heather.rim@averydennison.com
or
Investor Relations:
Cynthia S. Guenther, 626-304-2204
investorcom@averydennison.com

Source: Avery Dennison Corporation