PASADENA, Calif.--(BUSINESS WIRE)--Avery Dennison Corporation (NYSE:AVY - News) today reported second quarter 2008 results. All non-GAAP terms are reconciled to GAAP in the following tables. Second Quarter Financial Summary ($ millions, except per share amounts) Q2 Q2 % Change vs. P/Y 2008 2007 As Rept Org(a) Net sales, by segment: Pressure-sensitive Materials $ 979.9 $ 879.3 11 % 3 % Retail Information Systems 438.2 219.4 100 % -3 % Office and Consumer Products 255.4 262.7 -3 % -6 % Other specialty converting businesses 155.4 162.1 -4 % -9 % Total net sales $ 1,828.9 $ 1,523.5 20 % -1 % As Reported (GAAP) Adjusted Non-GAAP(b) % of Sales % of Sales 2008 2007 % Change 2008 2007 2008 2007 % Change 2008 2007 Operating income before interest and taxes, by segment: Pressure-sensitive Materials $ 80.0 $ 89.5 -11 % 8.2 % 10.2 % $ 80.4 $ 86.8 -7 % 8.2 % 9.9 % Retail Information Systems 19.3 1.2 1508 % 4.4 % 0.5 % 30.5 21.3 43 % 7.0 % 9.7 % Office and Consumer Products 40.1 42.2 -5 % 15.7 % 16.1 % 44.3 42.5 4 % 17.3 % 16.2 % Other specialty converting businesses 5.5 7.2 -24 % 3.5 % 4.4 % 5.5 7.2 -24 % 3.5 % 4.4 % Corporate expense (1.4 ) (8.0 ) 83 % (5.7 ) (8.0 ) 29 % Total operating income before interest and taxes $ 143.5 $ 132.1 9 % 7.8 % 8.7 % $ 155.0 $ 149.8 3 % 8.5 % 9.8 % Interest expense 29.3 20.1 46 % 29.3 20.1 46 % Income from operations before taxes $ 114.2 $ 112.0 2 % 6.2 % 7.4 % $ 125.7 $ 129.7 -3 % 6.9 % 8.5 % Taxes on income $ 21.8 $ 25.8 -16 % $ 23.6 $ 29.9 -21 % Net income $ 92.4 $ 86.2 7 % 5.1 % 5.7 % $ 102.1 $ 99.8 2 % 5.6 % 6.6 % Net income per common share, assuming dilution $ 0.93 $ 0.87 7 % $ 1.03 $ 1.01 2 % 2008 2007 Free cash flow(c) $ 99.6 $ 7.2 Note: This table has been added to the Company's quarterly earnings disclosure to provide greater ease of reference and facilitate trend analysis. a) Percent change in sales before the impact of acquisitions, divestitures, and foreign currency translation. b) Excludes restructuring and asset impairment charges, transition costs associated with the integration of Paxar, and other items (see accompanying schedules A-3 and A-4 for reconciliation to GAAP measures). c) Free Cash Flow (a non-GAAP measure) as used herein is defined as net cash provided by operating activities (as reported), less purchase of property, plant, equipment, software, and other deferred charges, plus proceeds from sale of investments, net (see accompanying schedule A-3 for reconciliation to GAAP measure)."A strong product line, distinct competitive advantages, and the strength of our global footprint continue to help offset the current environment of spiking raw material costs and economic slowdown in the U.S. and Europe," said Dean A. Scarborough, president and chief executive officer of Avery Dennison. "Inflation and economic conditions were worse than expected in the quarter, and are now expected to be worse than previously anticipated during the second half of the year, diminishing our 2008 outlook. In the face of major headwinds, we are delivering strong cash flow and dividends, as we have in the past.
"Despite weak economic environments in the U.S. and Europe, demand in the Company's Pressure-sensitive Materials Segment continues to grow, particularly in emerging markets. With rapid cost inflation compressing margins, we're continuing to drive productivity improvement and implementing additional price increases.
"The integration of Paxar into our Retail Information Services Group remains on track, and is targeted to drive annual cost synergies of approximately $120 million by the end of 2009, with 85 percent of the savings realized by the end of 2008. We fully expect this business to be an outstanding performer when the slumping apparel market recovers. Our Office Products business continues to generate significant cash flow, despite market conditions.
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