Avery Dennison Announces Second Quarter 2017 Results
Tuesday, July 25, 2017
Press release from the issuing company
GLENDALE, Calif. - Avery Dennison Corporation today announced preliminary, unaudited results for its second quarter ended July 1, 2017. 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 continued to make good progress against our strategic and financial objectives in the second quarter," said Mitch Butier, Avery Dennison President and CEO. "LGM generated strong profitability despite a short-term moderation in organic growth; RBIS had a great quarter, with accelerated sales growth and margin expansion as our multi-year transformation delivers; and IHM continues to make progress against its strategic priorities, including the completion of two acquisitions.
“We have raised our outlook for full-year earnings per share, reflecting continued strong operating performance and a reduction in the tax rate," said Butier. "We continue to remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline.”
For more details on the company’s results, see the summary table accompanying this news release, as well as the supplemental presentation materials, “Second Quarter 2017 Financial Review and Analysis,” posted on the company’s website at www.investors.averydennison.com, and furnished to the SECon Form 8-K.
Second Quarter 2017 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.
Label and Graphic Materials
Retail Branding and Information Solutions
Industrial and Healthcare Materials
Share Repurchases / Equity Dilution from Long-Term Incentives
The company repurchased 0.4 million shares in the second quarter at an aggregate cost of $36 million. Net of dilution, the company’s share count decreased 0.5 million in the quarter. The cost of repurchases, net of proceeds from stock option exercises, was $35 million.
The second quarter effective tax rate was 19.1 percent, comparable to prior year. The adjusted tax rate for the quarter was approximately 26 percent, as the company now anticipates a full year effective tax rate of approximately 28 percent.
Cost Reduction Actions
In the second quarter, the company realized approximately $15 million in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately $8 million, nearly all of which represents cash charges.
In its supplemental presentation materials, “Second Quarter 2017 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2017 financial results. Based on the factors listed and other assumptions, the company now expects 2017 reported earnings per share of $4.45 to $4.60. Excluding an estimated $0.30 per share for restructuring charges and other items, the company now expects adjusted earnings per share (non-GAAP) of $4.75 to $4.90.
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