Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its third quarter ended September 28, 2013. 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. Results reflect classification of Office and Consumer Products (OCP) and Designed and Engineered Solutions (DES) businesses as discontinued operations.
“I’m happy to once again report strong double-digit adjusted earnings growth for the quarter,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Both of our core businesses are delivering solid sales growth, as well as outstanding operating margin expansion.”
“With another strong quarter behind us, we increased our earnings guidance for the year, and we remain committed to our disciplined capital allocation strategy,” Scarborough added. “We will return the vast majority of the net proceeds from our recent divestitures to shareholders, along with the solid free cash flow generated by our ongoing business. During the first nine months, we distributed over $300 million through dividends and the repurchase of 5.2 million shares.”
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 2013 Financial Review and Analysis,” posted on the company’s website at
, and furnished to the SEC on Form 8-K.
Third Quarter 2013 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. Adjusted operating margin refers to earnings before interest expense and taxes, excluding restructuring costs and other items, as a percentage of sales.
Pressure-sensitive Materials (PSM)
Retail Branding and Information Solutions (RBIS)
- PSM segment sales increased approximately 4 percent. Within the segment, Label and Packaging Materials sales increased low single digits. Combined sales for Graphics, Reflective, and Performance Tapes increased mid-single digits.
- Operating margin improved 220 basis points to 10.2 percent as the benefit of productivity initiatives, lower restructuring costs, and higher volume more than offset the impact of changes in product mix. Adjusted operating margin improved 120 basis points.
- RBIS segment sales increased approximately 4 percent driven by increased demand from European retailers and brands.
- Operating margin declined 20 basis points to 3.2 percent due to higher restructuring costs. Adjusted operating margin improved 100 basis points as the benefit of productivity initiatives and higher volume more than offset higher employee-related expenses.
The company repurchased 5.2 million shares through the end of the third quarter at an aggregate cost of $224 million.