-
3Q16 Reported EPS of $0.98
-
Adjusted EPS (non-GAAP) of $1.01
-
3Q16 Net sales increased approx. 3 percent to $1.51 billion
-
Organic sales growth (non-GAAP) of approx. 3 percent
-
Repurchased 2.7 million shares (1 mil. net of dilution) and paid $106
million in dividends in the first nine months of 2016
-
Raised FY16 guidance midpoint for Reported and Adjusted (non-GAAP) EPS
by $0.10, due in part to lower tax rate vs. previous expectation
GLENDALE, Calif. -- (Business Wire)
Avery Dennison Corporation (NYSE:AVY) today announced preliminary,
unaudited results for its third quarter ended October 1, 2016. All
non-GAAP financial measures referenced in this document are reconciled
to GAAP in the attached tables. Unless otherwise indicated, comparisons
are to the same period in the prior year.
“We delivered another solid quarter, with EPS above our expectations,”
said Mitch Butier, Avery Dennison president and CEO. “PSM continues to
deliver, with strong emerging market growth and ongoing operational
excellence worldwide. RBIS is making progress with its business model
transformation; however, revenue growth and margin are short of our
expectations amidst a challenging retail apparel environment.
“Overall, our outlook has improved for full year earnings per share by
ten cents,” Butier added. “The effective execution of our strategies
continues to enhance our competitive advantage, while driving profitable
growth and improving returns."
For more details on the company’s results, see the summary table
accompanying this news release, as well as the supplemental presentation
materials, “Third Quarter 2016 Financial Review and Analysis,” posted on
the company’s website at www.investors.averydennison.com,
and furnished to the SEC on Form 8-K.
Third Quarter 2016 Results by Segment
Organic sales change refers to the increase or decrease in sales
excluding the estimated impact of currency translation, product line
exits, and acquisitions and divestitures. Adjusted operating margin
refers to income before interest expense and taxes, excluding
restructuring charges and other items, as a percentage of sales.
Pressure-sensitive Materials (PSM)
-
PSM reported sales increased approximately 4 percent; on an organic
basis, sales grew approximately 3 percent. Within the segment, sales
for the Label and Packaging Materials business grew at a mid-single
digit rate on an organic basis. Sales for the combined Graphics and
Performance Tapes businesses declined at a low-single digit rate on an
organic basis, reflecting an expected program loss in Performance
Tapes.
-
Operating margin improved 30 basis points to 12.3 percent as the
benefit of productivity initiatives and increased volume more than
offset the net impact of price and raw material input costs and
unfavorable mix. Adjusted operating margin improved 50 basis points.
Retail Branding and Information Solutions (RBIS)
-
RBIS reported sales increased 1 percent; on an organic basis, sales
grew approximately 2 percent.
-
Operating margin improved 90 basis points to 7.7 percent primarily due
to the benefit of lower restructuring charges. Adjusted operating
margin improved 20 basis points as the net savings associated with the
business model transformation and higher volume were largely offset by
higher employee-related costs.
Vancive Medical Technologies
-
Sales decline and modest operating loss for the quarter were in line
with expectations.
Other
Share Repurchases / Equity Dilution from Long-Term Incentives
During the first nine months of 2016, the company repurchased 2.7
million shares at an aggregate cost of $182 million. Net of dilution,
the company reduced its share count by 1.0 million. The cost of
repurchases, net of proceeds from stock option exercises, was $118
million.
Income Taxes
The third quarter effective tax rate was approximately 30 percent,
comparable to prior year. The adjusted tax rate for the third quarter
was approximately 31 percent, as the company now anticipates a full year
effective tax rate of approximately 33 percent, comparable to prior year
and consistent with the assumption reflected in our guidance of a rate
in the low to mid-thirty percent range.
Cost Reduction Actions
In the third quarter, the company realized approximately $21 million in
pre-tax savings from restructuring, net of transition costs, and
incurred pre-tax restructuring charges of approximately $3 million.
Outlook
In its supplemental presentation materials, “Third Quarter 2016
Financial Review and Analysis,” the company provides a list of factors
that it believes will contribute to its 2016 financial results. Based on
the factors listed and other assumptions, the company now expects 2016
earnings per share of $3.50 to $3.55. Excluding an estimated $0.15 per
share for restructuring charges and other items, and $0.30 per share for
a non-cash charge to settle certain U.S. pension obligations in the
second quarter, the company now expects adjusted earnings per share
(non-GAAP) of $3.95 to $4.00.
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 of
$6.0 billion in 2015. 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 2015 Form 10-K, filed on
February 24, 2016 with the Securities and Exchange Commission, and
subsequent quarterly reports on Form 10-Q. 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.
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | Third Quarter Financial Summary - Preliminary, unaudited |
| |
(in millions, except % and per share amounts)
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | 3Q | | 3Q | | % Change vs. P/Y | | | | | | | | | | |
| | | | | | 2016 | | 2015 | | Reported | | Organic (a) | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Net sales, by segment:
| | | | | | | | | | | | | | | | | | | | |
| | | |
Pressure-sensitive Materials
| | $ | 1,123.8 | | | $ | 1,083.7 | | | 4 | % | |
3
|
%
| | | | | | | | | | | | |
| | | |
Retail Branding and Information Solutions
| | | 370.9 | | | | 366.8 | | | 1 | % | |
2
|
%
| | | | | | | | | | | | |
| | | |
Vancive Medical Technologies
| |
| 14.0 |
| |
| 17.6 |
| | (20 | %) | |
(20
|
%)
| | | | | | | | | | | | |
| |
Total net sales
| | $ | 1,508.7 | | | $ | 1,468.1 | | | 3 | % | |
3
|
%
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | As Reported (GAAP) | | Adjusted Non-GAAP (b) |
| | | | | | 3Q | | 3Q | | % | | % of Sales | | 3Q | | 3Q | | % | | % of Sales |
| | | | | | 2016 | | 2015 | | Change | | 2016 | | 2015 | | 2016 | | 2015 | | Change | | 2016 | | 2015 |
| |
Operating income (loss) / operating margins before interest and
taxes, by segment:
| | | | | | | | | | | | | | | | | | | | |
| | | |
Pressure-sensitive Materials
| | $ | 138.7 | | | $ | 130.5 | | | | | 12.3 | % | | 12.0 | % | |
$
|
141.4
| | |
$
|
131.6
| | | | |
12.6
|
%
| |
12.1
|
%
|
| | | |
Retail Branding and Information Solutions
| | | 28.4 | | | | 25.1 | | | | | 7.7 | % | | 6.8 | % | | |
29.9
| | | |
29.0
| | | | |
8.1
|
%
| |
7.9
|
%
|
| | | |
Vancive Medical Technologies
| | | (0.9 | ) | | | (1.2 | ) | | | | (6.4 | %) | | (6.8 | %) | | |
(0.5
|
)
| | |
0.5
| | | | |
(3.6
|
%)
| |
2.8
|
%
|
| | | |
Corporate expense
| |
| (23.5 | ) |
|
| (23.6 | ) | | | | | | | |
|
(23.5
|
)
|
|
|
(23.3
|
)
| | | | | | |
| |
Total operating income before interest and taxes / operating
margins
| | $ | 142.7 | | | $ | 130.8 | | | 9 | % | | 9.5 | % | | 8.9 | % | |
$
|
147.3
| | |
$
|
137.8
| | |
7
|
%
| |
9.8
|
%
| |
9.4
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Interest expense
| | $ | 14.7 | | | $ | 14.7 | | | | | | | | |
$
|
14.7
| | |
$
|
14.7
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Income from continuing operations before taxes
| | $ | 128.0 | | | $ | 116.1 | | | 10 | % | | 8.5 | % | | 7.9 | % | |
$
|
132.6
| | |
$
|
123.1
| | |
8
|
%
| |
8.8
|
%
| |
8.4
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Provision for income taxes
| | $ | 38.9 | | | $ | 34.8 | | | | | | | | |
$
|
41.0
| | |
$
|
41.8
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Income from continuing operations
| | $ | 89.1 | | | $ | 81.3 | | | 10 | % | | 5.9 | % | | 5.5 | % | |
$
|
91.6
| | |
$
|
81.3
| | |
13
|
%
| |
6.1
|
%
| |
5.5
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Income from discontinued operations (c)
| | | --- | | | $ | 0.4 | | | n/m | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Net income
| | $ | 89.1 | | | $ | 81.7 | | | 9 | % | | 5.9 | % | | 5.6 | % | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Net income per common share, assuming dilution:
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Continuing operations
| | $ | 0.98 | | | $ | 0.87 | | | 13 | % | | | | | |
$
|
1.01
| | |
$
|
0.87
| | |
16
|
%
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Discontinued operations
| | | --- | | | | 0.01 | | | n/m | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
Total Company
| | $ | 0.98 | | | $ | 0.88 | | | 11 | % | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | 2016 | | 2015 | | | | | | |
| |
3Q Free Cash Flow from Continuing Operations (d)
| | | | | | | |
$
|
95.9
| | |
$
|
77.6
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
YTD Free Cash Flow from Continuing Operations (d)
| | | | | | | |
$
|
247.7
| | |
$
|
191.1
| | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| | | |
See accompanying schedules A-4 to A-8 for reconciliations from GAAP
to non-GAAP financial measures.
|
| |
(a)
| |
Percentage change in sales excluding the estimated impact of
currency translation, product line exits, acquisitions and
divestitures, and, where applicable, the extra week in our fiscal
year.
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
(b)
| |
Excludes restructuring charges and other items.
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
(c)
| |
"Income from discontinued operations" relates to the 2013 sale of
our former Office and Consumer Products and Designed and Engineered
Solutions businesses.
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
(d)
| |
Free cash flow refers to cash flow from operations, less payments
for property, plant and equipment, software and other deferred
charges, plus proceeds from sales of property, plant and equipment,
plus (minus) net proceeds from sales (purchases) of investments,
plus (minus) free cash outflow (inflow) from discontinued
operations. Prior year amounts have been reduced due to a
reclassification of certain liquid short-term bank drafts with
maturities greater than three months to other current assets.
|
|
| | |
| | |
| | |
| | |
| | | | | | | | | | | | A-1 |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(In millions, except per share amounts) |
|
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
| | | | | | (UNAUDITED) |
| | | | | | | | | | | | | | |
|
| | | | | | Three Months Ended | | | Nine Months Ended |
| | | | | | | | | | | | | | |
|
| | | | | | Oct. 01, 2016 | | | Oct. 03, 2015 | | | Oct. 01, 2016 | | | Oct. 03, 2015 |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
Net sales
| | |
$
|
1,508.7
| |
$
|
1,468.1
| |
$
|
4,535.7
| |
$
|
4,512.1
| |
| | | | | | | | | | | | | | |
|
Cost of products sold
| | |
1,091.1
| | |
1,062.2
| | |
3,261.4
| | |
3,258.6
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Gross profit
| | | |
417.6
| | |
405.9
| | |
1,274.3
| | |
1,253.5
| |
| | | | | | | | | | | | | | |
|
Marketing, general & administrative expense
| | |
270.3
| | |
268.1
| | |
817.7
| | |
841.8
| |
| | | | | | | | | | | | | | |
|
Interest expense
| | | |
14.7
| | |
14.7
| | |
45.4
| | |
45.3
| |
| | | | | | | | | | | | | | |
|
Other expense, net(1) | | |
4.6
| | |
7.0
| | |
60.4
| | |
49.0
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Income from continuing operations before taxes
| | |
128.0
| | |
116.1
| | |
350.8
| | |
317.4
| |
| | | | | | | | | | | | | | |
|
Provision for income taxes
| | |
38.9
| | |
34.8
| | |
92.1
| | |
99.5
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Income from continuing operations
| | |
89.1
| | |
81.3
| | |
258.7
| | |
217.9
| |
| | | | | | | | | | | | | | |
|
Income (loss) from discontinued operations
| | |
---
| | |
0.4
| | |
---
| | |
(0.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Net income | | |
$
|
89.1
| |
$
|
81.7
| |
$
|
258.7
| |
$
|
217.3
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Per share amounts: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Net income (loss) per common share, assuming dilution
| | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
| |
Continuing operations
| |
$
|
0.98
| |
$
|
0.87
| |
$
|
2.85
| |
$
|
2.35
| |
| | | | | | | | | | | | | | |
|
| |
Discontinued operations
| | |
---
| | |
0.01
| | |
---
| | |
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Net income per common share, assuming dilution
| |
$
|
0.98
| |
$
|
0.88
| |
$
|
2.85
| |
$
|
2.34
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | |
|
Weighted average number of common shares outstanding, assuming
dilution
|
|
|
90.6
|
|
|
93.2
|
|
|
90.9
|
|
|
92.9
|
|
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
(1) | |
"Other expense, net" for the third quarter of 2016 includes
severance and related costs of $1.9, asset impairment and lease
cancellation charges of $.7, and transaction costs of $2.
|
| | | | | | | | | | | | | | |
|
| |
"Other expense, net" for the third quarter of 2015 includes
severance and related costs of $4.7, asset impairment and lease
cancellation charges of $1.9, loss on sale of product line of $.2,
and legal settlement of $.2.
|
| | | | | | | | | | | | | | |
|
| |
"Other expense, net" for 2016 YTD includes severance and related
costs of $10.7, asset impairment and lease cancellation charges of
$3.9, loss from settlement of pension obligations of $41.4,
transaction costs of $4.1, and loss on sale of asset of $.3.
|
| | | | | | | | | | | | | | |
|
| |
"Other expense, net" for 2015 YTD includes severance and related
costs of $35, asset impairment and lease cancellation charges of
$5.5, and loss on sale of product line and related exit costs of
$10.5, partially offset by gain on sale of asset of $1.7 and legal
settlements of $.3.
|
| | | | | | | | | | | | | | |
|
| | |
| | |
|
| | |
| | | | | | | | | A-2 |
| | | | | | | | |
|
| | | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS |
(In millions) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| | | | | | | | (UNAUDITED) |
| | | | | | | | | | | | |
|
ASSETS | | | |
| | | Oct. 01, 2016 | |
| Oct. 03, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Current assets:
| | | | | | | | | | | |
|
Cash and cash equivalents
| | | | | |
$
|
189.4
| | | |
$
|
143.8
| |
|
Trade accounts receivable, net
| | | | | |
1,069.7
| | | | |
999.0
| |
|
Inventories, net
| | | | | | |
565.3
| | | | |
512.4
| |
|
Assets held for sale
| | | | | | |
5.9
| | | | |
---
| |
|
Other current assets
| | | | | | |
183.3
| | | | |
260.8
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
| | |
Total current assets
| | | | |
2,013.6
| | | | |
1,916.0
| |
| | | | | | | | | | | | |
|
Property, plant and equipment, net
| | | | | | |
905.4
| | | | |
840.6
| |
Goodwill
| | | | | | | |
821.6
| | | | |
690.7
| |
Other intangibles resulting from business acquisitions, net
| | | | |
70.9
| | | | |
50.7
| |
Non-current deferred income taxes
| | | | | |
390.7
| | | | |
304.5
| |
Other assets
| | | | | | |
398.2
| | | | |
433.9
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
| | | | | | | |
$
|
4,600.4
| | | |
$
|
4,236.4
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Current liabilities:
| | | | | | | | | | | |
|
Short-term borrowings and current portion of long-term debt and
capital leases
| |
$
|
587.6
| | | |
$
|
85.1
| |
|
Accounts payable
| | | | | | |
866.7
| | | | |
840.4
| |
|
Other current liabilities
| | | | | | |
601.8
| | | | |
539.2
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
| | |
Total current liabilities
| | | | |
2,056.1
| | | | |
1,464.7
| |
| | | | | | | | | | | | |
|
Long-term debt and capital leases
| | | | | | |
713.0
| | | | |
963.9
| |
Other long-term liabilities
| | | | | | |
788.9
| | | | |
755.6
| |
Shareholders' equity:
| | | | | | | | | | | |
|
Common stock
| | | | | | |
124.1
| | | | |
124.1
| |
|
Capital in excess of par value
| | | | | | |
843.1
| | | | |
825.5
| |
|
Retained earnings
| | | | | | |
2,444.1
| | | | |
2,244.3
| |
|
Treasury stock at cost
| | | | | | |
(1,699.9
|
)
| | | |
(1,483.5
|
)
|
|
Accumulated other comprehensive loss
| | | | | |
(669.0
|
)
| | | |
(658.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
| | |
Total shareholders' equity
| | | |
1,042.4
| | | | |
1,052.2
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
| | | | | | | |
$
|
4,600.4
| | | |
$
|
4,236.4
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Certain prior period amounts have been revised to reflect the impact
of certain adjustments.
|
|
In the fourth quarter of 2015, we elected to adopt the provisions of
Accounting Standards Update (ASU) 2015-03, Simplifying the
Presentation of Debt Issuance Costs, earlier than required. This
ASU requires that debt issuance costs related to a recognized debt
liability be classified as a direct deduction from the carrying
amount of that debt liability instead of being recorded separately
in other assets. The new guidance was applied on a retrospective
basis and prior period amounts have been reclassified to conform to
the current year presentation.
|
|
In the fourth quarter of 2015, we also elected to adopt the
provisions of ASU 2015-17, Balance Sheet Classification of
Deferred Taxes, earlier than required. This ASU requires that
all deferred tax assets and liabilities for each jurisdiction, along
with any related valuation allowances, be classified as noncurrent
on the balance sheet. As permitted by this ASU, prior periods have
not been retrospectively adjusted.
|
| |
| | |
|
| | |
| | | | | | | | A-3 |
| | | | | | | |
|
| | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
|
| | | | | | | | (UNAUDITED) |
| | | | | | | | | | | | |
|
| | | | | | | | Nine Months Ended |
| | | | | | | | | | | | |
|
|
|
|
|
|
|
|
| Oct. 01, 2016 |
|
| Oct. 03, 2015 |
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
Operating Activities: | | | | | | | | | | |
| | | | | | | | | | | | |
|
Net income
| | | | | |
$
|
258.7
| | | |
$
|
217.3
| |
| | | | | | | | | | | | |
|
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | | |
| | | | | | | | | | | | |
|
|
Depreciation
| | | | | | |
88.8
| | | | |
95.3
| |
| | | | | | | | | | | | |
|
|
Amortization
| | | | | | |
46.7
| | | | |
47.5
| |
| | | | | | | | | | | | |
|
|
Provision for doubtful accounts and sales returns
| | | |
33.8
| | | | |
36.6
| |
| | | | | | | | | | | | |
|
|
Net losses from asset impairments and sales/disposals of assets
| | |
3.8
| | | | |
10.9
| |
| | | | | | | | | | | | |
|
|
Stock-based compensation
| | | | |
20.1
| | | | |
18.4
| |
| | | | | | | | | | | | |
|
|
Loss from settlement of pension obligations
| | | |
41.4
| | | | |
---
| |
| | | | | | | | | | | | |
|
|
Other non-cash expense and loss
| | | | |
34.7
| | | | |
38.9
| |
| | | | | | | | | | | | |
|
Changes in assets and liabilities and other adjustments
| | |
(162.3
|
)
| | | |
(182.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Net cash provided by operating activities
| | | | |
365.7
| | | | |
282.2
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Investing Activities: | | | | | | | | | | |
| | | | | | | | | | | | |
|
Purchases of property, plant and equipment
| | | |
(104.9
|
)
| | | |
(89.6
|
)
|
| | | | | | | | | | | | |
|
Purchases of software and other deferred charges
| | | |
(16.6
|
)
| | | |
(9.0
|
)
|
| | | | | | | | | | | | |
|
Proceeds from sales of property, plant and equipment
| | | |
4.3
| | | | |
7.1
| |
| | | | | | | | | | | | |
|
Purchases of investments, net
| | | | |
(0.8
|
)
| | | |
(0.2
|
)
|
| | | | | | | | | | | | |
|
Payments for acquisitions, net of cash acquired
| | | |
(227.5
|
)
| | | |
---
| |
| | | | | | | | | | | | |
|
Other
| | | | | | | |
---
| | | | |
1.5
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Net cash used in investing activities
| | | | |
(345.5
|
)
| | | |
(90.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Financing Activities: | | | | | | | | | | |
| | | | | | | | | | | | |
|
Net increase (decrease) in borrowings (maturities of 3 months or
less)
| | |
242.0
| | | | |
(109.8
|
)
|
| | | | | | | | | | | | |
|
Payments of debt (maturities greater than 3 months)
| | | |
(1.9
|
)
| | | |
(6.2
|
)
|
| | | | | | | | | | | | |
|
Dividends paid
| | | | | | |
(106.2
|
)
| | | |
(99.6
|
)
|
| | | | | | | | | | | | |
|
Share repurchases
| | | | | | |
(181.5
|
)
| | | |
(108.5
|
)
|
| | | | | | | | | | | | |
|
Proceeds from exercises of stock options, net
| | | |
63.4
| | | | |
78.4
| |
| | | | | | | | | | | | |
|
Other
| | | | | | | |
(4.4
|
)
| | | |
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Net cash provided by (used in) financing activities
| | | |
11.4
| | | | |
(246.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Effect of foreign currency translation on cash balances
| | |
(1.0
|
)
| | | |
(8.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Increase (decrease) in cash and cash equivalents
| | | |
30.6
| | | | |
(63.4
|
)
|
| | | | | | | | | | | | |
|
Cash and cash equivalents, beginning of year
| | | |
158.8
| | | | |
207.2
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Cash and cash equivalents, end of period
| | | |
$
|
189.4
| | | |
$
|
143.8
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | |
|
Certain prior period amounts have been revised to reflect the impact
of certain adjustments.
|
|
A-4 |
|
|
Reconciliation of Non-GAAP Financial Measures in Accordance with
SEC Regulations G and S-K |
|
We report financial results in conformity with accounting principles
generally accepted in the United States of America, or GAAP, and
also communicate with investors using certain non-GAAP financial
measures. These non-GAAP financial measures are not in accordance
with, nor are they a substitute for or superior to, the comparable
GAAP financial measures. These non-GAAP financial measures are
intended to supplement presentation of our financial results that
are prepared in accordance with GAAP. Based upon feedback from
investors and financial analysts, we believe that the supplemental
non-GAAP financial measures we provide are useful to their
assessment of our performance and operating trends, as well as
liquidity.
|
|
Our non-GAAP financial measures exclude the impact of certain
events, activities, or strategic decisions. The accounting effects
of these events, activities or decisions, which are included in the
GAAP financial measures, may make it difficult to assess our
underlying performance in a single period. By excluding the
accounting effects, both positive and negative, of certain items
(e.g., restructuring charges, asset impairments, legal settlements,
certain effects of strategic transactions and related costs, losses
from debt extinguishments, losses from curtailment and settlement of
pension obligations, gains or losses on sales of certain assets, and
other items), we believe that we are providing meaningful
supplemental information to facilitate an understanding of our core
operating results and liquidity measures. These non-GAAP financial
measures are used internally to evaluate trends in our underlying
performance, as well as to facilitate comparison to the results of
competitors for a single period. While some of the items we exclude
from GAAP financial measures recur, they tend to be disparate in
amount, frequency, or timing.
|
|
We use the following non-GAAP financial measures in the accompanying
news release and presentation:
|
|
Organic sales change refers to the increase or decrease in
sales excluding the estimated impact of currency translation,
product line exits, acquisitions and divestitures, and, where
applicable, the extra week in our fiscal year. The estimated impact
of currency translation is calculated on a constant currency basis,
with prior period results translated at current period average
exchange rates to exclude the effect of currency fluctuations. We
believe that organic sales change assists investors in evaluating
the sales growth from the ongoing activities of our businesses and
provides improved comparability of our results from period to period.
|
|
Adjusted operating margin refers to income from continuing
operations before interest expense and taxes, excluding
restructuring charges and other items, as a percentage of sales.
|
|
Adjusted tax rate refers to our anticipated full-year GAAP
tax rate using the most likely scenario in a range of estimated tax
rates for the year. This range includes various items such as the
impact of the discrete rates applicable to the adjustments we make
in calculating our adjusted non-GAAP earnings, changes in uncertain
tax positions and our repatriation assertions on unremitted
earnings, and other items that may impact our full-year GAAP tax
rate.
|
|
Adjusted income from continuing operations refers to reported
income from continuing operations tax-effected at the adjusted tax
rate, and adjusted for tax-effected restructuring charges and other
items.
|
|
Adjusted EPS refers to reported income from continuing
operations per common share, assuming dilution, tax-effected at the
adjusted tax rate, and adjusted for tax-effected restructuring
charges and other items.
|
|
We believe that adjusted operating margin, adjusted income from
continuing operations, and adjusted EPS assist investors in
understanding our core operating trends and comparing our results
with those of our competitors.
|
|
Free cash flow refers to cash flow from operations, less
payments for property, plant and equipment, software and other
deferred charges, plus proceeds from sales of property, plant and
equipment, plus (minus) net proceeds from sales (purchases) of
investments, plus (minus) free cash outflow (inflow) from
discontinued operations. We believe that free cash flow assists
investors by showing the amount of cash we have available for debt
reductions, dividends, share repurchases, and acquisitions.
|
|
The following reconciliations are provided in accordance with
Regulations G and S-K and reconcile our non-GAAP financial measures
with the most directly comparable GAAP financial measures.
|
|
| | |
| | |
| | |
| | |
| | | | | | | | | | | | A-5 |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL
MEASURES |
(In millions, except % and per share amounts) |
|
|
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| | | | | | | (UNAUDITED) |
| | | | | | | | | | | | | | | |
|
| | | | | | | Three Months Ended | | | Nine Months Ended |
| | | | | | | | | | | | | | | |
|
| | | | | | | Oct. 01, 2016 | | | Oct. 03, 2015 | | | Oct. 01, 2016 | | | Oct. 03, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
Reconciliation from GAAP to non-GAAP Operating Margins: | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
Net sales
| |
$
|
1,508.7
| | |
$
|
1,468.1
| | |
$
|
4,535.7
| | |
$
|
4,512.1
| |
| | | | | | |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Income from continuing operations before taxes
| |
$
|
128.0
| | |
$
|
116.1
| | |
$
|
350.8
| | |
$
|
317.4
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Income from continuing operations before taxes as a percentage of
sales
| | | 8.5 | % | | | 7.9 | % | | | 7.7 | % | | | 7.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
|
Adjustment:
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
|
Interest expense
| |
$
|
14.7
| | |
$
|
14.7
| | |
$
|
45.4
| | |
$
|
45.3
| |
| | | | | | |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Operating income from continuing operations before interest expense
and taxes
| |
$
|
142.7
| | |
$
|
130.8
| | |
$
|
396.2
| | |
$
|
362.7
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Operating Margins | | | 9.5 | % | | | 8.9 | % | | | 8.7 | % | | | 8.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
As reported income from continuing operations before taxes
| |
$
|
128.0
| | |
$
|
116.1
| | |
$
|
350.8
| | |
$
|
317.4
| |
Adjustments(1) | | |
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
(1.0
|
)
|
| | | | | | | | | | | | | | | |
|
Previously reported income from continuing operations before taxes
| | |
N/A
| | | |
N/A
| | | |
N/A
| | | |
316.4
| |
| | | | | | | | | | | | | | | |
|
|
Adjustments:
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
|
Restructuring charges:
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
| | |
Severance and related costs
| | |
1.9
| | | |
4.7
| | | |
10.7
| | | |
35.0
| |
| | | | | | | | | | | | | | | |
|
| | |
Asset impairment and lease cancellation charges
| | |
0.7
| | | |
1.9
| | | |
3.9
| | | |
5.5
| |
| | | | | | | | | | | | | | | |
|
|
Loss from settlement of pension obligations
| | |
---
| | | |
---
| | | |
41.4
| | | |
---
| |
| | | | | | | | | | | | | | | |
|
|
Other items(2) | | |
2.0
| | | |
0.4
| | | |
4.4
| | | |
8.5
| |
| | | | | | | | | | | | | | | |
|
|
Interest expense
| | |
14.7
| | | |
14.7
| | | |
45.4
| | | |
45.3
| |
| | | | | | |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Adjusted operating income from continuing operations before interest
expense and taxes (non-GAAP)
| |
$
|
147.3
| | |
$
|
137.8
| | |
$
|
456.6
| | |
$
|
410.7
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Adjusted Operating Margins (non-GAAP)
| | |
9.8
|
%
| | |
9.4
|
%
| | |
10.1
|
%
| | |
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
Reconciliation from GAAP to Non-GAAP Income from Continuing
Operations: | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
As reported income from continuing operations
| |
$
|
89.1
| | |
$
|
81.3
| | |
$
|
258.7
| | |
$
|
217.9
| |
Adjustments(1) | | |
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
(0.6
|
)
|
| | | | | | | | | | | | | | | |
|
Previously reported income from continuing operations
| | |
N/A
| | | |
N/A
| | | |
N/A
| | | |
217.3
| |
| | | | | | | | | | | | | | | |
|
|
Adjustments:
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
| |
Restructuring charges
| | |
2.6
| | | |
6.6
| | | |
14.6
| | | |
40.5
| |
| |
Loss from settlement of pension obligations
| | |
---
| | | |
---
| | | |
41.4
| | | |
---
| |
| |
Other items(2) | | |
2.0
| | | |
0.4
| | | |
4.4
| | | |
8.5
| |
| |
Tax effect of pre-tax adjustments and impact of adjusted tax rate(3) | | |
(2.1
|
)
| | |
(7.0
|
)
| | |
(43.6
|
)
| | |
(25.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | |
|
Adjusted Income from Continuing Operations (non-GAAP)
|
|
$
|
91.6
|
|
|
$
|
81.3
|
|
|
$
|
275.5
|
|
|
$
|
241.2
|
|
|
| | |
| | |
| | | |
| | |
| | | | | | | | | | | | | A-5 |
| | | | | | | | | | | | | (continued) |
| | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL
MEASURES |
(In millions, except % and per share amounts) |
|
|
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | (UNAUDITED) | | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | Three Months Ended | | | | Nine Months Ended | | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | Oct. 01, 2016 | | | Oct. 03, 2015 | | | | Oct. 01, 2016 | | | Oct. 03, 2015 | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
Reconciliation from GAAP to Non-GAAP Income per Common Share from
Continuing Operations: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
As reported income per common share from continuing operations,
assuming dilution
| |
$
|
0.98
| | |
$
|
0.87
| | | |
$
| |
2.85
| | |
$
|
2.35
| | | |
| | | | | | | | | | | | | | | | | | |
|
Adjustments(1) | | | |
N/A
| | | |
N/A
| | | | |
N/A
| | | |
(0.01
|
)
| | |
| | | | | | |
| | |
| | | |
| | |
| | |
| | | | | | | | | | | | | | | | | | |
|
Previously reported income per common share from continuing
operations, assuming dilution
| | |
N/A
| | | |
N/A
| | | | |
N/A
| | | |
2.34
| | | |
| | | | | | | | | | | | | | | | | | |
|
| |
Adjustments per common share, net of tax:
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
| | |
Restructuring charges, loss from settlement of pension obligations,
and other items(3) | | |
0.03
| | | |
---
| | | | |
0.18
| | | |
0.26
| | | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| | |
| | | | | | | | | | | | | | | | | | |
|
Adjusted Income per Common Share from Continuing Operations,
assuming dilution (non-GAAP)
| |
$
|
1.01
| | |
$
|
0.87
| | | |
$
| |
3.03
| | |
$
|
2.60
| | | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| | |
| | | | | | | | | | | | | | | | | | |
|
Weighted average number of common shares outstanding, assuming
dilution
| | |
90.6
| | | |
93.2
| | | | |
90.9
| | | |
92.9
| | | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| | |
| | | | | | | | | | | | | | | | | | |
|
(1) | |
GAAP adjustment for 2015 reflects the previously disclosed impact
of the third quarter 2015 revision to certain of the Company's
benefit plan balances, which had an immaterial impact to the
non-GAAP amounts.
|
| | | | | | | | | | | | | | | | | | |
|
(2) | |
Includes loss on sale of product line and related exit costs,
transaction costs, gain/loss on sale of assets, and legal
settlements.
|
| | | | | | | | | | | | | | | | | | |
|
(3) | |
The adjusted tax rate was 31% and 33% for the three and nine months
ended Oct. 1, 2016, respectively, and 34% for the three and nine
months ended Oct. 3, 2015.
|
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | (UNAUDITED) | | |
| | | | | | | | | | | | | | | | | | |
|
| | | |
| | | Three Months Ended | | | | Nine Months Ended | | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | Oct. 01, 2016 | | | Oct. 03, 2015 | | (1) |
| Oct. 01, 2016 | | | Oct. 03, 2015 | | (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
Reconciliation of Free Cash Flow: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Net cash provided by operating activities(1) | |
$
|
149.7
| | |
$
|
111.8
| | | |
$
|
365.7
| | |
$
|
282.2
| | | |
| | | | | | | | | | | | | | | | | | |
|
Purchases of property, plant and equipment
| | |
(43.6
|
)
| | |
(33.2
|
)
| | | |
(104.9
|
)
| | |
(89.6
|
)
| | |
| | | | | | | | | | | | | | | | | | |
|
Purchases of software and other deferred charges
| | |
(10.5
|
)
| | |
(5.0
|
)
| | | |
(16.6
|
)
| | |
(9.0
|
)
| | |
| | | | | | | | | | | | | | | | | | |
|
Proceeds from sales of property, plant and equipment
| | |
1.1
| | | |
4.3
| | | | |
4.3
| | | |
7.1
| | | |
| | | | | | | | | | | | | | | | | | |
|
(Purchases) sales of investments, net
| | |
(0.8
|
)
| | |
0.1
| | | | |
(0.8
|
)
| | |
(0.2
|
)
| | |
| | | | | | | | | | | | | | | | | | |
|
Plus: free cash (inflow) outflow from discontinued operations
| | |
---
| | | |
(0.4
|
)
| | | |
---
| | | |
0.6
| | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
| | | | | | | | | | | | | | | | | | |
|
Free Cash Flow - Continuing Operations (non-GAAP)
|
|
$
|
95.9
|
|
|
$
|
77.6
|
|
|
|
$
|
247.7
|
|
|
$
|
191.1
|
| | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
(1)Prior year amounts have been reduced due to a
reclassification of certain liquid short-term bank drafts with
maturities greater than three months to other current assets.
|
|
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | | A-6 |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY SUPPLEMENTARY INFORMATION |
(In millions, except %) |
(UNAUDITED) |
| | | | | | | | | | | |
|
| | Third Quarter Ended |
| | | | | | | | | | | |
|
| |
NET SALES
| |
OPERATING INCOME
| |
OPERATING MARGINS
|
| |
2016
|
|
2015
| |
2016 (1) |
|
2015 (2) | |
2016
|
|
2015
|
| | | | | | | | | | | |
|
Pressure-sensitive Materials
| |
$
|
1,123.8
| |
$
|
1,083.7
| |
$
|
138.7
| | |
$
|
130.5
| | |
12.3
|
%
| |
12.0
|
%
|
Retail Branding and Information Solutions
| | |
370.9
| | |
366.8
| | |
28.4
| | | |
25.1
| | |
7.7
|
%
| |
6.8
|
%
|
Vancive Medical Technologies
| | |
14.0
| | |
17.6
| | |
(0.9
|
)
| | |
(1.2
|
)
| |
(6.4
|
%)
| |
(6.8
|
%)
|
Corporate Expense
| |
|
N/A
|
|
|
N/A
| |
|
(23.5
|
)
|
|
|
(23.6
|
)
| |
N/A
|
|
|
N/A
|
|
| | | | | | | | | | | |
|
TOTAL FROM CONTINUING OPERATIONS
| |
$
|
1,508.7
|
|
$
|
1,468.1
| |
$
|
142.7
|
|
|
$
|
130.8
|
| |
9.5
|
%
|
|
8.9
|
%
|
| | | | | | | | | | | |
|
(1) Operating income for the third quarter of 2016
includes severance and related costs of $1.9, asset impairment and
lease cancellation charges of $.7, and transaction costs of $2. Of
the total $4.6, the Pressure-sensitive Materials segment recorded
$2.7, the Retail Branding and Information Solutions segment
recorded $1.5, and the Vancive Medical Technologies segment
recorded $.4.
|
| | | | | | | | | | | |
|
(2) Operating income for the third quarter of 2015
includes severance and related costs of $4.7, asset impairment and
lease cancellation charges of $1.9, loss on sale of product line of
$.2, and legal settlement of $.2. Of the total $7, the
Pressure-sensitive Materials segment recorded $1.1, the Retail
Branding and Information Solutions segment recorded $3.9, the
Vancive Medical Technologies segment recorded $1.7, and Corporate
recorded $.3.
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
RECONCILIATION FROM GAAP TO NON-GAAP SUPPLEMENTARY INFORMATION |
| | | | | | | | | | | |
|
| | | | | | Third Quarter Ended |
| | | | | |
OPERATING INCOME
| |
OPERATING MARGINS
|
| | | | | | | | | | | |
|
| | | | | |
2016
|
|
2015
| |
2016
|
|
2015
|
Pressure-sensitive Materials | | | | | | | | | | | | |
Operating income and margins, as reported
| | | | | |
$
|
138.7
| | |
$
|
130.5
| | |
12.3
|
%
| |
12.0
|
%
|
Adjustments:
| | | | | | | | | | | | |
Restructuring charges:
| | | | | | | | | | | | |
Severance and related costs
| | | | | | |
0.6
| | | |
1.1
| | |
0.1
|
%
| |
0.1
|
%
|
Asset impairment charges
| | | | | | |
0.1
| | | |
---
| | |
---
| | |
---
| |
Transaction costs
| | | | | |
|
2.0
|
|
|
|
---
|
| |
0.2
|
%
|
|
---
|
|
Adjusted operating income and margins (non-GAAP)
| | | | | |
$
|
141.4
|
|
|
$
|
131.6
|
| |
12.6
|
%
|
|
12.1
|
%
|
| | | | | | | | | | | |
|
Retail Branding and Information Solutions | | | | | | | | | | | | |
Operating income and margins, as reported
| | | | | |
$
|
28.4
| | |
$
|
25.1
| | |
7.7
|
%
| |
6.8
|
%
|
Adjustments:
| | | | | | | | | | | | |
Restructuring charges:
| | | | | | | | | | | | |
Severance and related costs
| | | | | | |
1.3
| | | |
3.5
| | |
0.3
|
%
| |
0.9
|
%
|
Lease cancellation charges
| | | | | | |
0.2
| | | |
0.2
| | |
0.1
|
%
| |
0.1
|
%
|
Loss on sale of product line
| | | | | |
|
---
|
|
|
|
0.2
|
| |
---
|
|
|
0.1
|
%
|
Adjusted operating income and margins (non-GAAP)
| | | | | |
$
|
29.9
|
|
|
$
|
29.0
|
| |
8.1
|
%
|
|
7.9
|
%
|
| | | | | | | | | | | |
|
Vancive Medical Technologies | | | | | | | | | | | | |
Operating loss and margins, as reported
| | | | | |
$
|
(0.9
|
)
| |
$
|
(1.2
|
)
| |
(6.4
|
%)
| |
(6.8
|
%)
|
Adjustment:
| | | | | | | | | | | | |
Restructuring charges:
| | | | | | | | | | | | |
Asset impairment and lease cancellation charges
| | | | | |
|
0.4
|
|
|
|
1.7
|
| |
2.8
|
%
|
|
9.6
|
%
|
Adjusted operating (loss) income and margins (non-GAAP)
| | | | | |
$
|
(0.5
|
)
|
|
$
|
0.5
|
| |
(3.6
|
%)
|
|
2.8
|
%
|
|
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | | A-7 |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
AVERY DENNISON CORPORATION |
PRELIMINARY SUPPLEMENTARY INFORMATION |
(In millions, except %) |
(UNAUDITED) |
| | | | | | | | | | | |
|
| | Nine Months Year-to-Date |
| | | | | | | | | | | |
|
| |
NET SALES
| |
OPERATING INCOME
| |
OPERATING MARGINS
|
| |
2016
|
|
2015
| |
2016 (1) |
|
2015 (2) | |
2016
|
|
2015
|
| | | | | | | | | | | |
|
Pressure-sensitive Materials
| |
$
|
3,360.9
| |
$
|
3,318.4
| |
$
|
425.6
| | |
$
|
383.2
| | |
12.7
|
%
| |
11.5
|
%
|
Retail Branding and Information Solutions
| | |
1,127.0
| | |
1,138.7
| | |
82.8
| | | |
54.3
| | |
7.3
|
%
| |
4.8
|
%
|
Vancive Medical Technologies
| | |
47.8
| | |
55.0
| | |
(0.2
|
)
| | |
(4.7
|
)
| |
(0.4
|
%)
| |
(8.5
|
%)
|
Corporate Expense
| |
|
N/A
| |
|
N/A
| |
|
(112.0
|
)
|
|
|
(70.1
|
)
| |
N/A
|
|
|
N/A
|
|
| | | | | | | | | | | |
|
TOTAL FROM CONTINUING OPERATIONS
| |
$
|
4,535.7
|
|
$
|
4,512.1
| |
$
|
396.2
|
|
|
$
|
362.7
|
| |
8.7
|
%
|
|
8.0
|
%
|
| | | | | | | | | | | |
|
(1) Operating income for 2016 includes severance and
related costs of $10.7, asset impairment and lease cancellation
charges of $3.9, loss from settlement of pension obligations of
$41.4, transaction costs of $4.1, and loss on sale of asset of
$.3. Of the total $60.4, the Pressure-sensitive Materials segment
recorded $11.2, the Retail Branding and Information Solutions
segment recorded $7.3, the Vancive Medical Technologies segment
recorded $.5, and Corporate recorded $41.4.
|
| | | | | | | | | | | |
|
(2) Operating income for 2015 includes severance and
related costs of $35, asset impairment and lease cancellation
charges of $5.5, and loss on sale of product line and related exit
costs of $10.5, partially offset by gain on sale of asset of $1.7
and legal settlements of $.3. Of the total $49, the
Pressure-sensitive Materials segment recorded $13.8, the Retail
Branding and Information Solutions segment recorded $29.4, the
Vancive Medical Technologies segment recorded $3.4, and Corporate
recorded $2.4.
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
RECONCILIATION FROM GAAP TO NON-GAAP SUPPLEMENTARY INFORMATION |
| | | | | | | | | | | |
|
| | | | | | Nine Months Year-to-Date |
| | | | | |
OPERATING INCOME
| |
OPERATING MARGINS
|
| | | | | | | | | | | |
|
| | | | | |
2016
|
|
2015
| |
2016
|
|
2015
|
Pressure-sensitive Materials | | | | | | | | | | | | |
Operating income and margins, as reported
| | | | | |
$
|
425.6
| | |
$
|
383.2
| | |
12.7
|
%
| |
11.5
|
%
|
Adjustments:
| | | | | | | | | | | | |
Restructuring charges:
| | | | | | | | | | | | |
Severance and related costs
| | | | | | |
5.0
| | | |
12.4
| | |
0.1
|
%
| |
0.4
|
%
|
Asset impairment charges
| | | | | | |
2.5
| | | |
3.1
| | |
0.1
|
%
| |
0.1
|
%
|
Transaction costs
| | | | | | |
3.7
| | | |
---
| | |
0.1
|
%
| |
---
| |
Gain on sale of asset
| | | | | |
|
---
|
|
|
|
(1.7
|
)
| |
---
|
|
|
---
|
|
Adjusted operating income and margins (non-GAAP)
| | | | | |
$
|
436.8
|
|
|
$
|
397.0
|
| |
13.0
|
%
|
|
12.0
|
%
|
| | | | | | | | | | | |
|
Retail Branding and Information Solutions | | | | | | | | | | | | |
Operating income and margins, as reported
| | | | | |
$
|
82.8
| | |
$
|
54.3
| | |
7.3
|
%
| |
4.8
|
%
|
Adjustments:
| | | | | | | | | | | | |
Restructuring charges:
| | | | | | | | | | | | |
Severance and related costs
| | | | | | |
5.6
| | | |
18.7
| | |
0.6
|
%
| |
1.6
|
%
|
Asset impairment and lease cancellation charges
| | | | | | |
1.0
| | | |
0.7
| | |
0.1
|
%
| |
0.1
|
%
|
Loss on sale of asset
| | | | | | |
0.3
| | | |
---
| | |
---
| | |
---
| |
Loss on sale of product line and related transaction and exit costs
| | | | | | |
0.4
| | | |
10.5
| | |
---
| | |
0.9
|
%
|
Legal settlement
| | | | | |
|
---
|
|
|
|
(0.5
|
)
| |
---
|
|
|
---
|
|
Adjusted operating income and margins (non-GAAP)
| | | | | |
$
|
90.1
|
|
|
$
|
83.7
|
| |
8.0
|
%
|
|
7.4
|
%
|
| | | | | | | | | | | |
|
Vancive Medical Technologies | | | | | | | | | | | | |
Operating loss and margins, as reported
| | | | | |
$
|
(0.2
|
)
| |
$
|
(4.7
|
)
| |
(0.4
|
%)
| |
(8.5
|
%)
|
Adjustment:
| | | | | | | | | | | | |
Restructuring charges:
| | | | | | | | | | | | |
Severance and related costs
| | | | | | |
0.1
| | | |
1.7
| | |
0.2
|
%
| |
3.1
|
%
|
Asset impairment and lease cancellation charges
| | | | | |
|
0.4
|
|
|
|
1.7
|
| |
0.8
|
%
|
|
3.0
|
%
|
Adjusted operating income (loss) and margins (non-GAAP)
| | | | | |
$
|
0.3
|
|
|
$
|
(1.3
|
)
| |
0.6
|
%
|
|
(2.4
|
%)
|
| | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
A-8 |
|
|
AVERY DENNISON CORPORATION |
PRELIMINARY SUPPLEMENTARY INFORMATION |
(UNAUDITED) |
|
| |
| |
| |
| |
| | | | | | | |
|
| | | | | | | |
|
| | Third Quarter 2016 |
|
|
Total
Company
|
|
Pressure-sensitive Materials
|
|
Retail Branding and Information Solutions
|
|
Vancive Medical Technologies
|
Reconciliation of GAAP to non-GAAP sales change | | | | | | | | |
Reported sales change
| |
3
|
%
| |
4
|
%
| |
1
|
%
| |
(20
|
%)
|
Foreign currency translation
| |
2
|
%
| |
2
|
%
| |
1
|
%
| |
---
| |
Acquisitions
|
|
(2
|
%)
|
|
(2
|
%)
|
|
---
|
|
|
---
|
|
| | | | | | | |
|
Organic sales change (non-GAAP)(1) |
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
|
(20
|
%)
|
(1)Totals may not sum due to rounding.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20161026005435/en/
Contacts:
Avery Dennison Corporation
Media Relations:
Rob Six,
626-304-2361
rob.six@averydennison.com
or
Investor
Relations:
Cynthia S. Guenther, 626-304-2204
investorcom@averydennison.com
Source: Avery Dennison Corporation
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