PASADENA, Calif. 4/24/07 -- Avery Dennison Corporation today reported first quarter net income of $79.2 million or $0.80 per share, up from $68.7 million or $0.69 per share for the first quarter of 2006. Charges associated with restructuring and asset impairment totaled $0.02 per share for the first quarter of 2007, compared to $0.06 per share for the first quarter of 2006. (See Attachment A-3: "Preliminary Reconciliation of GAAP to Non-GAAP Measures".)
Net sales from continuing operations for the first quarter of 2007 were $1.39 billion, up approximately 3.9 percent from $1.34 billion for the same quarter last year. Organic sales growth, which excludes the impact of acquisitions, divestitures and foreign currency translation, was 1.3 percent. Sales growth was reduced by one percentage point due to an increase in fourth quarter 2006 orders related to a January 2007 price increase by office products, which shifted volume into the prior year.
During the quarter, the Company realized approximately $10 million in additional savings from 2006 restructuring actions and the Company expects to realize over $40 million of incremental savings from these actions during the year. First quarter earnings included approximately $5 million in transition costs largely related to new productivity actions in 2007. Savings from these actions are expected to be realized in the second half of 2007.
"We met our profit improvement target for the first quarter," said Dean A. Scarborough, president and chief executive officer of Avery Dennison. "We achieved strong sales increases in Europe, as well as emerging markets, where we continue to achieve double-digit growth. These results more than offset soft business conditions in North America."
"We are pleased that the U.S. government's pre-merger anti-trust review of our pending acquisition of Paxar was concluded positively on April 20," Scarborough added. "We are still waiting for clearance from regulatory agencies outside the U.S., which we believe will happen by the end of the second quarter, as well as for approval of the transaction by Paxar's shareholders. Paxar is planning to hold its shareholder meeting early this summer.
"Combining Paxar with Retail Information Services will enable us to compete more effectively in a rapidly evolving and highly fragmented global marketplace. The merger of the two companies will allow us to realize significant cost synergies, as well as grow faster by investing more in product innovation and providing even better service to our customers," Scarborough said.
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