“I’m happy to once again report strong double-digit adjusted earnings growth for the quarter,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Both of our core businesses are delivering solid sales growth, as well as outstanding operating margin expansion.”
“With another strong quarter behind us, we increased our earnings guidance for the year, and we remain committed to our disciplined capital allocation strategy,” Scarborough added. “We will return the vast majority of the net proceeds from our recent divestitures to shareholders, along with the solid free cash flow generated by our ongoing business. During the first nine months, we distributed over $300 million through dividends and the repurchase of 5.2 million shares.”
Third Quarter 2013 Results by Segment
Pressure-sensitive Materials (PSM) segment sales increased approximately 4%. Within the segment, Label and Packaging Materials sales increased low single digits. Combined sales for Graphics, Reflective, and Performance Tapes increased mid-single digits. Operating margin improved 220 basis points to 10.2% as the benefit of productivity initiatives, lower restructuring costs, and higher volume more than offset the impact of changes in product mix.
Retail Branding and Information Solutions (RBIS) segment sales increased approximately 4%, driven by increased demand from European retailers and brands.
On July 1, 2013, the company completed the sale of its OCP and DES businesses to CCL Industries Inc. Net proceeds from the sale are expected to be approximately $400 million, which the company intends to use primarily to repurchase shares. Net loss per share from discontinued operations was $(0.25), which includes loss on sale.