Avery Dennison Q4 Profit Down, Sales Beat Expectations

Avery Dennison Corporation recently announced preliminary, unaudited results for its fourth quarter and full year ended Dec. 28, 2013. Unless otherwise indicated, the discussion of the company's results is focused on its continuing operations, and comparisons are to the same period in the prior year. Results reflect classification of Office and Consumer Products (OCP) and Designed and Engineered Solutions (DES) businesses as discontinued operations.

"I'm happy to report another year of excellent progress toward our long-term goals," said Dean Scarborough, Avery Dennison chairman, president and CEO. "We delivered a solid finish to a strong year, with higher-than-expected top-line growth, a significant increase in earnings, and solid free cash flow.

"Both of our core businesses beat their sales targets through innovation and share gain," Scarborough added. "At the same time, they delivered outstanding margin expansion, further strengthening their competitive positions. I thank all the members of our global team for their contributions to these results.

"We will continue to deliver on our long-term financial commitments through top-line growth, margin expansion, and disciplined capital management, while returning significant cash to shareholders through dividends and share repurchase," Scarborough said.

Fourth Quarter 2013 Results by Segment

All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, product line exits, acquisitions and divestitures. Adjusted operating margin refers to earnings before interest expense and taxes, excluding restructuring costs and other items, as a percentage of sales.

Pressure-sensitive Materials (PSM)

• PSM segment sales increased approximately 8 percent. Within the segment, Label and Packaging Materials sales increased mid-single digits. Combined sales for Graphics, Reflective, and Performance Tapes increased low double digits.

• Operating margin improved 180 basis points to 9.5 percent as the benefit of higher volume, lower restructuring costs, and productivity initiatives more than offset the impact of changes in product mix. Adjusted operating margin improved 100 basis points.

Retail Branding and Information Solutions (RBIS)