Avery Dennison Ends ‘06 with a Strong Fourth Quarter

PASADENA, Calif.—Avery Dennison Corporation reported a net income of $101.5 million or $1.01 per share for the fourth quarter, compared with a $6.9 million or $0.07 per share loss last year. Reported results included restructuring and divestiture related charges and other items totaling $0.05 per share in 2006 and $0.99 per share in the prior year.

Net of transition costs, the company’s savings in 2006 from restructuring efforts were approximately $50 million, and it expects to realize approximately $45 million in additional savings from 2006 restructuring actions in the current year. Avery Dennison recognized restructuring charges in the fourth quarter related to 2007 actions which are expected to yield further savings.

Net sales from continuing operations for the fourth quarter were $1.41 billion, up approximately 3.5 percent from $1.36 billion for the same quarter last year. Organic sales growth, which excludes the impact of acquisitions, divestitures and foreign currency translation, was approximately 2 percent. This increase was attributable to unit volume growth and positive changes in pricing and product mix.

The company reported net income of $367.2 million or $3.66 per share for the full year 2006, compared with $226.4 million or $2.25 per share in the prior year. Results included restructuring and divestiture related charges and other items totaling $0.12 per share in 2006 and $1.21 per share in the prior year. Net sales were $5.58 billion in 2006, compared to $5.47 billion in the previous year.

“During both the fourth quarter and the full year, we increased sales and produced solid improvement in earnings, despite sluggish demand in North America. We are well positioned for 2007,” said Dean A. Scarborough, president and chief executive officer of Avery Dennison. “We were particularly pleased with our expansion in emerging markets in the past year, with double-digit growth in sales and improved profitability.

“We expect to continue to make progress in reaching our sales and operating margin objectives in 2007,” Scarborough added. “Our restructuring efforts are saving the company approximately $95 million, almost half of which will benefit 2007. We are reinvesting a portion of these savings into initiatives to drive long-term growth and productivity improvement, including development of global IT platforms to drive back office standardization and efficiency. In addition, we are expanding capacity in emerging markets, including both China and India, where we see strong demand for our products and high potential for sustained, rapid growth. We are also encouraged by high demand for our new and improved products and technologies, like the heat transfer products that are contributing to growth in the Retail Information Services business,” he said.