Avery Dennison – AVY Announces Q2 2012 Results and $100 Million Restructuring Program

Avery Dennison Corporation (NYSE:AVY) announced preliminary, unaudited second quarter 2012 results. 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.

• Reported EPS (including discontinued operations) of $0.62
• Reported EPS from continuing operations of $0.49
  • Adjusted EPS from continuing operations of $0.56 (non-GAAP)
• Net sales declined approximately 1 percent to $1.53 billion
  • Sales grew approximately 4 percent on organic basis
• Repurchased 2.4 million shares
• Narrowing range of 2012 EPS and free cash flow guidance
• Restructuring program targeting annualized savings of more than $100 million by mid-2013

“Second-quarter results were in line with our expectations, and we are on track for full-year earnings growth and free cash flow within the ranges of our guidance,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “We continued to deliver on our commitment to return more cash to shareholders, repurchasing more than two million shares during the quarter.

“We are aggressively implementing the next phase of our restructuring initiative to help us deliver on our financial targets for double-digit earnings growth and higher returns,” Scarborough said. “Our near-term target is to achieve more than $100 million in annualized savings by mid-2013. The leaner cost structure that will result will enhance our overall competitive position and strengthen our ability to increase returns even in an uncertain economic environment.”

AVY – Share Repurchase

The company repurchased 2.4 million shares during the second quarter at an aggregate cost of $70 million. Year-to-date through the end of the second quarter, the company repurchased 4.8 million shares at an aggregate cost of $142 million.

AVY – Outlook

In the company’s supplemental presentation materials, “Second Quarter 2012 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2012 financial results. Based on the factors listed and other assumptions, the company is narrowing its previous guidance of 2012 earnings per share from continuing operations to $1.55 to $1.70 and free cash flow from continuing operations to $280 million to $310 million. Excluding an estimated $0.35 per share for restructuring costs and other items, the company expects adjusted (non-GAAP) earnings per share from continuing operations of $1.90 to $2.05.

About Avery Dennison – AVY

Avery Dennison (AVY) helps make brands more inspiring and the world more intelligent. The company is a global leader in pressure-sensitive labeling technology and materials and retail branding and information solutions. A FORTUNE 500 company with sales of $6 billion from continuing operations in 2011, Avery Dennison is based in Pasadena, California, and has employees in over 50 countries.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.