PASADENA, Calif. - April 24, 2001 - Avery Dennison Corporation (NYSE/PCX:AVY) today announced first quarter results, achieving sales and earnings consistent with the Company's previous projections for the quarter. The Company reported that the ongoing slowdown in the North American economy, as well as some weakness in certain specialty markets in Europe, negatively impacted growth for the short term.
Key results for the first quarter of 2001 include:
* Earnings per share, on a diluted basis, were $.65 per share, down from $.70 per share in the same quarter a year ago. Currency exchange rates reduced earnings per share by $.02 in the first quarter of 2001.
* Net income was $63.6 million, compared with $70.2 million for the first quarter of 2000.
* Reported sales were essentially unchanged from prior-year levels, totaling $963.2 million for the first quarter of 2001 compared with $965.3 million in the first quarter of 2000. Sales grew 3 percent excluding the impact of currency exchange rates. Acquisitions contributed 3.5 percent to sales in the first quarter.
"We continued to deliver solid returns on investment and benefited from continued growth in international businesses. We are taking aggressive steps to adjust operations to the ongoing slowdown in the North American economy and in specific European markets served by our graphics and specialty tapes businesses," said Philip M. Neal, chairman and chief executive officer of Avery Dennison. "During the quarter, we responded to these economic conditions by reducing costs and lowering breakevens. We continued to focus on our longer term objectives of pursuing new product initiatives and integrating operations of recent acquisitions that position us to enhance market share and resume strong growth when the economy improves."
The Pressure-sensitive Adhesives and Materials sector reported increased unit volume, driven primarily by the strength of the Company's international operations in Asia, Latin America and Europe. Excluding the impact of currency exchange rates, sector sales grew 5.8 percent to $548 million. Solid international sales growth offset mid single-digit declines in domestic sales. During the quarter, Avery Dennison completed the acquisition of Dunsirn Industries, a leading supplier of non-pressure-sensitive materials, opening an important new market segment for the Company while providing customers with a single source for roll materials.
The Consumer and Converted Products sector reported unit volume that was essentially unchanged from prior-year levels. Excluding the impact of currency exchange rates, sector sales increased 1 percent to $452 million. Consolidation among office products superstores and the placement of several large orders by major customers late in the fourth quarter of 2000 held back sales growth during the first quarter of 2001. The Company said that it does not anticipate further impact from retail store closures among office products superstores, which now appear to be completed.
Sales in the office products business were especially strong for Avery-brand consumer and office labels, printer papers and writing instruments. With the acquisition of the CD Stomper brand of CD and DVD labels during the quarter, Avery Dennison is now the largest manufacturer of customizable CD and DVD labels. This newly acquired brand has joined the family of label product lines offered by the company's worldwide office products business. In addition, Avery Dennison's Worldwide Ticketing Services business continued to deliver double-digit sales growth by providing industry-leading products and services to retailers and apparel manufacturers.
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