Avery Dennison Corporation announced preliminary, unaudited results for its third quarter ended September 28, 2013.
Highlights:
- 3Q13 Reported EPS (including discontinued operations) of $0.37
- Adjusted EPS (non-GAAP, continuing operations) of $0.69
- 3Q13 Net sales grew approximately 4 percent to $1.50 billion
- Net sales up approximately 4 percent on organic basis
-Returned $308 million of cash to shareholders through end of 3Q, including the repurchase of 5.2 million shares for $224 million
-OCP and DES sale completed July 1; net proceeds of approximately $400 million
- Raised adjusted 2013 EPS guidance to $2.60 to $2.70, an increase of 33% to 38% compared to prior year
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.”
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)
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.
