- 1Q16 Reported EPS of $0.98
- Adjusted EPS (non-GAAP) of $0.94
- 1Q16 Net sales declined approx. 3
percent to $1.49 billion
- Sales increased approx. 4 percent on
organic basis
- Repurchased 1.5 million shares (0.8
mil. net of dilution) and paid $33 million in dividends
- Increased midpoint of guidance range
for FY16 Reported and Adjusted (non-GAAP) EPS by $0.08
Avery Dennison Corporation (NYSE:AVY) today announced
preliminary, unaudited results for its first quarter ended April 2,
2016. All non-GAAP financial measures referenced in this document
are reconciled to GAAP in the attached tables. Unless otherwise
indicated, comparisons are to the same period in the prior
year.
“We’re off to a very good start to the year,” said Dean
Scarborough, Avery Dennison chairman and CEO. “Both of our core
businesses delivered solid organic sales growth and significant
margin expansion, driving mid-teens growth in adjusted EPS, above
our expectations for the quarter.
“Our consistently strong performance is testament to the
strategic foundations we have laid, as well as the strength and
depth of our leadership team. I am happy to say that the leadership
transition we have had underway has been seamless, and I hand off
my CEO duties to Mitch with complete confidence,” Scarborough
added.
“I am really proud to have been a part of making Avery Dennison
the leading company that it is today, and am as excited about the
company’s future as I was when I joined more than thirty years
ago,” said Scarborough.
“I look forward to working with our board and leadership team to
continue building on our solid foundation," said Mitch Butier,
Avery Dennison president and chief operating officer. "We have
excellent prospects for profitable growth, exemplified by our
strong results in the first quarter.
"PSM's solid earnings growth reflected a return to high
single-digit organic growth in emerging markets, alongside
outstanding productivity gains globally,” Butier added. “RBIS grew
through continued momentum in radio-frequency identification
products. While we have not yet met our objective to accelerate
growth in core product sales, the team is executing well against
its aggressive margin improvement plans for the year.
“We have raised our outlook for full-year adjusted earnings per
share, reflecting some relief from currency translation headwinds,
combined with strong operating performance in the first quarter,”
said Butier. “We continue to remain confident that the consistent
execution of our strategies will enable us to meet our long-term
goals for superior value creation through a balance of profitable
growth and capital discipline."
For more details on the company’s results, see the summary table
accompanying this news release, as well as the supplemental
presentation materials, “First Quarter 2016 Financial Review and
Analysis,” posted on the company’s website at
www.investors.averydennison.com, and furnished to the SEC on Form
8-K.
First Quarter 2016 Results by
Segment
All references to sales reflect comparisons on an organic basis,
which exclude the estimated impact of currency translation, product
line exits, and acquisitions and divestitures. Adjusted operating
margin refers to income before interest expense and taxes,
excluding restructuring charges and other items, as a percentage of
sales.
Pressure-sensitive Materials (PSM)
- PSM sales increased approximately 4
percent. Within the segment, sales in both Label and Packaging
Materials and combined Graphics and Performance Tapes increased
mid-single digits.
- Operating margin improved 170 basis
points to 12.7 percent as the benefit of productivity initiatives
and increased volume more than offset higher employee-related
costs. Adjusted operating margin improved 140 basis points.
Retail Branding and Information Solutions (RBIS)
- RBIS sales increased approximately 4
percent.
- Operating margin increased 200 basis
points to 6.9 percent as the benefit of productivity initiatives
and increased volume more than offset higher employee-related
costs. Adjusted operating margin increased 140 basis points.
Other
Share Repurchases / Equity Dilution from Long-Term
Incentives
The company repurchased 1.5 million shares in the first quarter
of 2016 at an aggregate cost of $96 million. Net of dilution, the
company reduced its share count by 0.8 million in the first
quarter. The cost of repurchases, net of proceeds from stock option
exercises, was $80 million.
Income Taxes
The first quarter effective tax rate was 27 percent. The
adjusted tax rate for the first quarter was 34 percent, consistent
with the anticipated full year tax rate in the low to mid-thirty
percent range.
Cost Reduction Actions
In the first quarter, the company realized approximately $27
million in pre-tax savings from restructuring, net of transition
costs, and incurred pre-tax restructuring charges of approximately
$6 million, nearly all of which represented cash charges.
Pension Liability Settlement Charges
As part of a previously announced long-term strategy to reduce
financial volatility associated with its frozen defined benefit
pension plan for U.S. employees, the company offered eligible
former employees the option to receive their benefits immediately
as either a lump sum payment or an annuity, rather than waiting
until they are retirement eligible under the terms of the plan.
Satisfaction of this offer will be made out of existing plan assets
during the second quarter of this year. No additional contributions
to the plan are required to complete the offering.
This action settles approximately $70 million of the company’s
existing pension liability. The company estimates that it will
incur a one-time, non-cash charge of approximately $40 million, or
approximately $0.30 per share, in the second quarter. This action
is not expected to change required contributions to the pension
plan over the next several years. The company does not anticipate
making any contributions to the U.S. pension plan in 2016, and the
amount of contributions to foreign plans is expected to be similar
to recent years.
Outlook
In its supplemental presentation materials, “First Quarter 2016
Financial Review and Analysis,” the company provides a list of
factors that it believes will contribute to its 2016 financial
results. Based on the factors listed and other assumptions, the
company now expects 2016 earnings per share of $3.25 to $3.40.
Excluding an estimated $0.20 per share for restructuring charges
and other items, and $0.30 per share for non-cash charges to settle
certain U.S. pension obligations, the company now expects adjusted
(non-GAAP) earnings per share of $3.75 to $3.90.
Note: Throughout this release and the supplemental presentation
materials, amounts on a per share basis reflect fully diluted
shares outstanding.
About Avery Dennison
Avery Dennison (NYSE:AVY) is a global leader in labeling and
packaging materials and solutions. The company’s applications and
technologies are an integral part of products used in every major
market and industry. With operations in more than 50 countries and
over 25,000 employees worldwide, Avery Dennison serves customers
with insights and innovations that help make brands more inspiring
and the world more intelligent. Headquartered in Glendale,
California, the company reported sales of $6.0 billion in 2015.
Learn more at www.averydennison.com.
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995
Certain statements contained in this document are
"forward-looking statements" intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements,
and financial or other business targets, are subject to certain
risks and uncertainties. Actual results and trends may differ
materially from historical or anticipated results depending on a
variety of factors, including but not limited to risks and
uncertainties relating to the following: fluctuations in demand
affecting sales to customers; worldwide and local economic
conditions; fluctuations in currency exchange rates and other risks
associated with foreign operations, including in emerging markets;
the financial condition and inventory strategies of customers;
changes in customer preferences; fluctuations in cost and
availability of raw materials; our ability to generate sustained
productivity improvement; our ability to achieve and sustain
targeted cost reductions; the impact of competitive products and
pricing; loss of significant contracts or customers; collection of
receivables from customers; selling prices; business mix shift;
timely development and market acceptance of new products, including
sustainable or sustainably-sourced products; investment in
development activities and new production facilities; integration
of acquisitions and completion of potential dispositions; amounts
of future dividends and share repurchases; customer and supplier
concentrations; successful implementation of new manufacturing
technologies and installation of manufacturing equipment;
disruptions in information technology systems, including
cyber-attacks or other intrusions to network security; successful
installation of new or upgraded information technology systems;
data security breaches; volatility of financial markets; impairment
of capitalized assets, including goodwill and other intangibles;
credit risks; our ability to obtain adequate financing arrangements
and maintain access to capital; fluctuations in interest and tax
rates; changes in tax laws and regulations, and uncertainties
associated with interpretations of such laws and regulations;
outcome of tax audits; fluctuations in pension, insurance, and
employee benefit costs; the impact of legal and regulatory
proceedings, including with respect to environmental, health and
safety; changes in governmental laws and regulations; protection
and infringement of intellectual property; changes in political
conditions; the impact of epidemiological events on the economy and
our customers and suppliers; acts of war, terrorism, and natural
disasters; and other factors.
We believe that the most significant risk factors that could
affect our financial performance in the near-term include: (1) the
impacts of economic conditions on underlying demand for our
products and foreign currency fluctuations; (2) competitors'
actions, including pricing, expansion in key markets, and product
offerings; and (3) the degree to which higher costs can be offset
with productivity measures and/or passed on to customers through
selling price increases, without a significant loss of volume.
For a more detailed discussion of these and other factors, see
“Risk Factors” and “Management’s Discussion and Analysis of Results
of Operations and Financial Condition” in our 2015 Form 10-K, filed
on February 24, 2016 with the Securities and Exchange Commission.
The forward-looking statements included in this document are made
only as of the date of this document, and we undertake no
obligation to update these statements to reflect subsequent events
or circumstances, other than as may be required by law.
For more information and to listen to a live broadcast or an
audio replay of the quarterly conference call with analysts, visit
the Avery Dennison website at
www.investors.averydennison.com
First Quarter Financial Summary -
Preliminary, unaudited
(in millions, except %
and per share amounts)
1Q 1Q
% Change vs. P/Y
2016 2015
Reported Organic (a)
Net sales, by segment: Pressure-sensitive Materials $
1,092.0 $ 1,120.6 (3 %) 4 % Retail Branding and Information
Solutions 378.1 388.1 (3 %) 4 %
Vancive Medical Technologies 15.4 19.3
(20 %) (18 %) Total net sales $ 1,485.5 $ 1,528.0 (3 %) 4 %
As Reported (GAAP) Adjusted Non-GAAP (b)
1Q 1Q % of Sales 1Q 1Q % of
Sales 2016
2015 (c)
% Change 2016
2015 (c)
2016
2015 (d)
% Change 2016
2015 (d)
Operating income (loss) before interest and taxes, by segment:
Pressure-sensitive Materials $ 138.5 $ 122.9 12.7 % 11.0 % $ 140.6
$ 128.5 12.9 % 11.5 % Retail Branding and Information Solutions
26.1 19.2 6.9 % 4.9 % 29.5 24.7 7.8 % 6.4 % Vancive Medical
Technologies (0.9 ) (2.1 ) (5.8 %) (10.9 %) (0.8 ) (1.0 ) (5.2 %)
(5.2 %) Corporate expense (24.9 ) (24.7 )
(24.9 ) (23.1 ) Total operating income before interest and
taxes / operating margins $ 138.8 $ 115.3 20 % 9.3 % 7.5 % $ 144.4
$ 129.1 12 % 9.7 % 8.4 % Interest expense $ 15.3 $ 15.3 $
15.3 $ 15.3 Income before taxes $ 123.5 $ 100.0 24 % 8.3 %
6.5 % $ 129.1 $ 113.8 13 % 8.7 % 7.4 % Provision for income
taxes $ 33.9 $ 28.1 $ 43.9 $ 38.7 Net income $ 89.6 $ 71.9
25 % 6.0 % 4.7 % $ 85.2 $ 75.1 13 % 5.7 % 4.9 % Net income
per common share, assuming dilution $ 0.98 $ 0.78 26 % $ 0.94 $
0.81 16 %
2016
2015 1Q Free Cash Flow (e) $
(37.2 ) $ (19.7 )
(a) Percentage
change in sales excluding the estimated impact of currency
translation, product line exits, acquisitions, and divestitures.
(b) Excludes restructuring charges and other items (see
accompanying schedules A-2 to A-4 for reconciliation to GAAP
financial measures). (c) Certain prior period amounts have been
revised to reflect the impact of adjustments made in the third
quarter of 2015 to certain of the Company's benefit plan balances.
(d) Non-GAAP amounts have not been revised for the adjustments
referenced in note (c) above since the impact was not material. (e)
Free cash flow refers to cash flow from operations, less payments
for property, plant and equipment, software and other deferred
charges, plus proceeds from sales of property, plant and equipment,
plus (minus) net proceeds from sales (purchases) of investments.
Free cash flow excludes uses of cash that do not directly or
immediately support the underlying business, such as discretionary
debt reductions, dividends, share repurchases, and certain effects
of acquisitions and divestitures (e.g., cash flow from discontinued
operations, taxes, and transaction costs). Prior year amount has
been reduced due to a reclassification of certain liquid short-term
bank drafts with maturities greater than 90 days to other current
assets.
AVERY DENNISON CORPORATION
A-1
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(UNAUDITED) `
Three Months Ended
Apr. 02, 2016 Apr. 04, 2015
(1)
Net sales $ 1,485.5 $ 1,528.0 Cost of products
sold 1,062.9 1,098.0
Gross profit 422.6 430.0
Marketing, general & administrative expense 278.2 300.4
Interest expense 15.3 15.3 Other expense, net(2) 5.6 14.3
Income before taxes 123.5 100.0 Provision for income
taxes 33.9 28.1
Net income $ 89.6 $ 71.9
Per
share amounts: Net income per common share, assuming
dilution $ 0.98 $ 0.78
Weighted average number of common
shares outstanding, assuming dilution
91.1 92.4
(1)
Certain prior period amounts have been revised to reflect the
impact of adjustments made in the third quarter of 2015 to certain
of the Company's benefit plan balances.
(2)
"Other expense, net" for the first quarter of 2016 includes
severance and related costs of $5.2 and asset impairment and lease
cancellation charges of $.4. "Other expense, net" for the
first quarter of 2015 includes severance and related costs of
$13.5, asset impairment charges of $.4, impairment charges on
assets held for sale of $2, and transaction costs related to a
product line divestiture of $.6, partially offset by gain on sale
of asset of $1.7 and legal settlement of $.5.
A-2
Reconciliation of Non-GAAP Financial Measures in
Accordance with SEC Regulations G and S-K We report
financial results in conformity with accounting principles
generally accepted in the United States of America, or GAAP, and
also communicate with investors using certain non-GAAP financial
measures. These non-GAAP financial measures are not in accordance
with, nor are they a substitute for or superior to, the comparable
GAAP financial measures. These non-GAAP financial measures are
intended to supplement presentation of our financial results that
are prepared in accordance with GAAP. Based upon feedback from
investors and financial analysts, we believe that supplemental
non-GAAP financial measures provide information that is useful to
the assessment of our performance and operating trends, as well as
liquidity. Our non-GAAP financial measures exclude the
impact of certain events, activities, or strategic decisions. The
accounting effects of these events, activities or decisions, which
are included in the GAAP financial measures, may make it difficult
to assess our underlying performance in a single period. By
excluding the accounting effects, both positive and negative, of
certain items (e.g., restructuring charges, asset impairments,
legal settlements, certain effects of strategic transactions and
related costs, losses from debt extinguishments, losses from
curtailment and settlement of pension obligations, gains or losses
on sales of certain assets, and other items), we believe that we
are providing meaningful supplemental information to facilitate an
understanding of our core operating results and liquidity measures.
These non-GAAP financial measures are used internally to evaluate
trends in our underlying performance, as well as to facilitate
comparison to the results of competitors for a single period. While
some of the items we exclude from GAAP financial measures recur,
they tend to be disparate in amount, frequency, or timing.
We use the following non-GAAP financial measures in the
accompanying news release and presentation: Organic sales
change refers to the increase or decrease in sales excluding the
estimated impact of currency translation, product line exits,
acquisitions and divestitures, and, where applicable, the extra
week in the prior fiscal year. Adjusted operating margin
refers to income before interest expense and taxes, excluding
restructuring charges and other items, as a percentage of sales.
Adjusted tax rate refers to the anticipated full-year GAAP
tax rate adjusted for certain events. Adjusted net income
refers to reported net income adjusted for tax-effected
restructuring charges and other items. Adjusted EPS refers
to reported net income per common share, assuming dilution,
adjusted for tax-effected restructuring charges and other items.
Free cash flow refers to cash flow from operations, less
payments for property, plant and equipment, software and other
deferred charges, plus proceeds from sales of property, plant and
equipment, plus (minus) net proceeds from sales (purchases) of
investments. Free cash flow excludes uses of cash that do not
directly or immediately support the underlying business, such as
discretionary debt reductions, dividends, share repurchases, and
certain effects of acquisitions and divestitures (e.g., cash flow
from discontinued operations, taxes, and transaction costs).
The reconciliations set forth below and in the accompanying
presentation are provided in accordance with Regulations G and S-K
and reconcile our non-GAAP financial measures with the most
directly comparable GAAP financial measures.
A-3
AVERY DENNISON CORPORATION PRELIMINARY
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In
millions, except % and per share amounts)
(UNAUDITED) Three Months Ended
Apr. 02, 2016 Apr. 04, 2015
(1)
Reconciliation of Operating Margins:
Net sales $ 1,485.5 $ 1,528.0
Income before taxes $ 123.5 $ 100.0
Income before taxes as a
percentage of sales
8.3 % 6.5 %
Adjustment: Interest expense $ 15.3 $ 15.3
Operating income before interest expense and taxes $
138.8 $ 115.3
Operating Margins 9.3 %
7.5 %
As reported income before taxes
$ 123.5 $ 100.0 Adjustments(1) N/A (0.5 )
Previously reported income before taxes N/A 99.5
Adjustments: Restructuring charges: Severance and
related costs 5.2 13.5 Asset impairment and lease
cancellation charges 0.4 0.4 Other items(2) --- 0.4
Interest expense 15.3 15.3 Adjusted
operating income before interest expense and taxes (non-GAAP) $
144.4 $ 129.1
Adjusted Operating Margins (non-GAAP)
9.7 % 8.4 %
Reconciliation of GAAP to Non-GAAP Net Income: As
reported net income $ 89.6 $ 71.9 Adjustments(1) N/A
(0.3 ) Previously reported net income N/A 71.6
Non-GAAP adjustments, net of tax: Restructuring charges and
other items(3) (4.4 ) 3.5
Adjusted Non-GAAP Net Income $
85.2 $ 75.1
A-3
(continued)
AVERY DENNISON CORPORATION PRELIMINARY
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In
millions, except % and per share amounts)
(UNAUDITED) Three Months Ended Apr.
02, 2016 Apr. 04, 2015
(1)
Reconciliation of GAAP to Non-GAAP Net Income per Common
Share: As reported net income per common share, assuming
dilution $ 0.98 $ 0.78 Adjustments(1) N/A (0.01 )
Previously reported net income per common share,
assuming dilution N/A 0.77 Non-GAAP adjustments per common
share, net of tax: Restructuring charges and other items(3)
(0.04 ) 0.04
Adjusted Non-GAAP Net Income per Common Share,
assuming dilution $ 0.94 $ 0.81
Weighted average number of
common shares outstanding, assuming dilution 91.1 92.4
(1)
Certain prior period amounts have been revised to reflect the
impact of adjustments made in the third quarter of 2015 to certain
of the Company's benefit plan balances.
(2)
Includes impairment charges on assets held for sale, transaction
costs related to a product line divestiture, gain on sale of
assets, and legal settlement.
(3)
Reflects restructuring charges and other items, tax-effected at the
adjusted tax rate.
(UNAUDITED) Three
Months Ended Apr. 02, 2016 Apr. 04, 2015
(1)
Reconciliation of GAAP to Non-GAAP Free Cash Flow:
Net cash (used in) provided by operating activities(1) $ (6.3 ) $
4.6 Purchases of property, plant and equipment (25.2 ) (25.3
) Purchases of software and other deferred charges (2.0 )
(1.4 ) Proceeds from sales of property, plant and equipment
0.1 2.8 Purchases of investments, net (3.8 ) (0.4 )
Free
Cash Flow $ (37.2 ) $ (19.7 )
(1) Prior year amounts have been reduced
due to a reclassification of certain liquid short-term bank drafts
with maturities greater than 90 days to other current assets.
A-4
AVERY DENNISON CORPORATION PRELIMINARY
SUPPLEMENTARY INFORMATION (In millions, except %)
(UNAUDITED) First Quarter Ended
NET SALES OPERATING INCOME OPERATING MARGINS 2016
2015
2016 (1)
2015 (2)
2016 2015 Pressure-sensitive Materials $
1,092.0 $ 1,120.6 $ 138.5 $ 122.9 12.7 % 11.0 % Retail Branding and
Information Solutions 378.1 388.1 26.1 19.2 6.9 % 4.9 % Vancive
Medical Technologies 15.4 19.3 (0.9 ) (2.1 ) (5.8 %) (10.9 %)
Corporate Expense N/A N/A (24.9 ) (24.7
)
(3)
N/A N/A TOTAL FROM OPERATIONS $ 1,485.5 $
1,528.0 $ 138.8 $ 115.3
(3)
9.3 % 7.5 %
(3)
(1) Operating income for the first quarter of 2016 includes
severance and related costs of $5.2 and asset impairment and lease
cancellation charges of $.4. Of the total $5.6, the
Pressure-sensitive Materials segment recorded $2.1, the Retail
Branding and Information Solutions segment recorded $3.4, and the
Vancive Medical Technologies segment recorded $.1. (2)
Operating income for the first quarter of 2015 includes severance
and related costs of $13.5, asset impairment charges of $.4,
impairment charges on assets held for sale of $2, and transaction
costs related to a product line divestiture of $.6, partially
offset by gain on sale of asset of $1.7 and legal settlement of
$.5. Of the total $14.3, the Pressure-sensitive Materials segment
recorded $5.6, the Retail Branding and Information Solutions
segment recorded $5.5, the Vancive Medical Technologies segment
recorded $1.1, and Corporate recorded $2.1. (3) Certain
prior period amounts have been revised to reflect the impact of
adjustments made in the third quarter of 2015 to certain of the
Company's benefit plan balances.
RECONCILIATION OF GAAP
TO NON-GAAP SUPPLEMENTARY INFORMATION First Quarter
Ended OPERATING INCOME OPERATING MARGINS 2016
2015 2016 2015
Pressure-sensitive Materials Operating
income and margins, as reported $ 138.5 $
122.9 12.7 % 11.0 % Adjustments:
Restructuring charges: Severance and related costs 2.1 6.9 0.2 %
0.6 % Asset impairment charges --- 0.4 --- --- Gain on sale of
asset --- (1.7 ) --- (0.1 %)
Adjusted operating income and margins (non-GAAP) $
140.6 $ 128.5 12.9
% 11.5 % Retail Branding and
Information Solutions Operating income and margins,
as reported $ 26.1 $ 19.2
6.9 % 4.9 % Adjustments: Restructuring
charges: Severance and related costs 3.0 3.4 0.8 % 0.9 % Asset
impairment and lease cancellation charges 0.4 --- 0.1 % ---
Impairment charges on assets held for sale --- 2.0 --- 0.5 %
Transaction costs related to a product line divestiture --- 0.6 ---
0.2 % Legal settlement --- (0.5 ) ---
(0.1 %)
Adjusted operating income and margins (non-GAAP)
$ 29.5 $ 24.7 7.8
% 6.4 % Vancive Medical
Technologies Operating loss and margins, as
reported $ (0.9 ) $ (2.1
) (5.8 %) (10.9 %) Adjustments:
Restructuring charges: Severance and related costs 0.1
1.1 0.6 % 5.7 %
Adjusted operating loss and
margins (non-GAAP) $ (0.8 ) $
(1.0 ) (5.2 %) (5.2 %)
A-5
AVERY DENNISON CORPORATION PRELIMINARY CONDENSED
CONSOLIDATED BALANCE SHEETS (In millions)
(UNAUDITED)
ASSETS
Apr. 02, 2016
Apr. 04, 2015
Current assets: Cash and cash
equivalents $ 169.6 $ 189.0 Trade accounts receivable, net 1,019.1
988.0 Inventories, net 519.5 508.9 Assets held for sale 2.5 17.7
Other current assets 176.7 260.5
Total current assets 1,887.4 1,964.1 Property, plant and
equipment, net 847.9 831.2 Goodwill 695.1 697.0 Other intangibles
resulting from business acquisitions, net 41.3 60.9 Non-current
deferred income taxes 381.8 306.6 Other assets 395.9 448.6
$ 4,249.4 $ 4,308.4
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt and
capital leases $ 264.9 $ 265.7 Accounts payable 836.9 825.1
Liabilities held for sale --- 17.8 Other current liabilities 492.4
493.4
Total current liabilities
1,594.2 1,602.0 Long-term debt and capital leases 963.3
940.3 Other long-term liabilities 723.6 759.5 Shareholders' equity:
Common stock 124.1 124.1 Capital in excess of par value 828.7 810.4
Retained earnings 2,329.7 2,155.1 Treasury stock at cost (1,653.0 )
(1,470.2 ) Accumulated other comprehensive loss (661.2 ) (612.8 )
Total shareholders' equity 968.3
1,006.6
$ 4,249.4 $ 4,308.4
Certain prior period amounts
have been revised to reflect the impact of certain adjustments and
to correct the timing of previously recorded out-of-period
adjustments. In the fourth quarter of 2015, we elected to
adopt the provisions of Accounting Standards Update (ASU) 2015-03,
Simplifying the Presentation of Debt Issuance Costs, earlier than
required. This ASU requires that debt issuance costs related to a
recognized debt liability be classified as a direct deduction from
the carrying amount of that debt liability instead of being
recorded separately in other assets. The new guidance was applied
on a retrospective basis and prior period amounts have been
reclassified to conform to the current year presentation. In
the fourth quarter of 2015, we also elected to adopt the provisions
of ASU 2015-17, Balance Sheet Classification of Deferred Taxes,
earlier than required. This ASU requires that all deferred tax
assets and liabilities for each jurisdiction, along with any
related valuation allowances, be classified as noncurrent on the
balance sheet. As permitted by this ASU, prior periods have not
been retrospectively adjusted.
A-6
AVERY DENNISON CORPORATION PRELIMINARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions)
(UNAUDITED) Three Months
Ended
Apr. 02, 2016
Apr. 04, 2015
Operating Activities: Net income $ 89.6 $ 71.9
Adjustments to reconcile net income to net cash (used in) provided
by operating activities: Depreciation 29.0 33.2
Amortization 15.3 16.1 Provision for doubtful accounts and
sales returns 11.2 14.8 Net losses from asset impairments
and sales/disposals of assets 0.6 1.1 Stock-based
compensation 7.5 7.4 Other non-cash expense and loss 12.8
13.6 Changes in assets and liabilities and other adjustments
(172.3 ) (153.5 )
Net cash (used in)
provided by operating activities (6.3 ) 4.6
Investing Activities: Purchases of
property, plant and equipment (25.2 ) (25.3 ) Purchases of
software and other deferred charges (2.0 ) (1.4 ) Proceeds
from sales of property, plant and equipment 0.1 2.8
Purchases of investments, net (3.8 ) (0.4 )
Net cash used in investing activities (30.9 ) (24.3 )
Financing Activities:
Net increase in borrowings (maturities of 90 days or less)
169.4 64.2 Payments of debt (maturities longer than 90 days)
(0.5 ) (0.2 ) Dividends paid (33.0 ) (31.8 ) Share
repurchases (95.6 ) (33.8 ) Proceeds from exercises of stock
options, net 16.0 16.0 Other (9.2 ) (8.4 )
Net cash provided by financing activities 47.1
6.0
Effect of foreign currency
translation on cash balances 0.9 (4.5 )
Increase (decrease) in cash and cash equivalents 10.8 (18.2
) Cash and cash equivalents, beginning of year 158.8 207.2
Cash and cash equivalents, end
of period $ 169.6 $ 189.0
Certain
prior period amounts have been revised to reflect the impact of
certain adjustments and to correct the timing of previously
recorded out-of-period adjustments.
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Avery Dennison CorporationMedia Relations:Rob Six, (626)
304-2361rob.six@averydennison.comorInvestor Relations:Cynthia S.
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