October 23, 2007 - PASADENA, Calif. - Avery Dennison Corporation today reported net income of $58 million or $0.59 per share, compared with $85 million or $0.85 per share in the prior year. Results included restructuring and asset impairment charges, transition costs associated with the integration of Paxar, and other items totaling $0.41 and $0.13 in the third quarters of 2007 and 2006, respectively. (See Attachment A-3: Preliminary Reconciliation of GAAP to Non-GAAP Measures .)
Net sales from continuing operations for the third quarter were $1.68 billion, up approximately 19 percent from $1.42 billion for the same quarter last year. Sales before the impact of acquisitions, divestitures and foreign currency translation were essentially unchanged from prior year.
"Weaker retail demand in the U.S. affected sales growth in our office products and retail information services businesses," said Dean A. Scarborough, president and chief executive officer of Avery Dennison. "While core volumes continue to grow overall, heightened competitive pressure in pressure sensitive-materials negatively impacted price and mix during the quarter."
"In the face of these more challenging market conditions, we are taking a number of steps to drive productivity improvement and increase the top line," he added. "We are intensifying our efforts to find operational efficiencies and reduce costs. We are also partnering with customers to develop creative solutions to help them grow, tripling the number of Horizon 1 growth projects that could generate substantial revenue gains."
"We remain on track to achieve targeted cost synergies through the integration of Paxar with Retail Information Services," Scarborough said. "We have completed the planning phase and are executing the integration of the two companies. These actions include the elimination of Paxar headquarter costs and the closure of two facilities in Mexico by the end of this year. With the execution of synergy plans well underway, we are now shifting the focus to accelerating top line growth."
"While we are experiencing some current headwinds from weak retail markets in the U.S. and a softening of demand in Europe, Avery Dennison remains well positioned for the future with strong brands, leading market share and relative economies of scale," he said. "Emerging markets and radio frequency identification are two of our most significant growth opportunities. The Paxar acquisition significantly increases our presence in the RFID market. We estimate about $50 million in sales from RFID related products next year."