24 July 2007 — Pasadena (CA): Avery Dennison has reported a fall in Q2 OP sales.
The company’s Q2 office and consumer products sales fell by 1 percent to $263 million, while organic sales declined by approximately 3 percent.
Avery’s Q2 net income was $85.8 million, or EPS of $0.87, compared to $112 million, or EPS of $1.12, last year. Q2 net sales were $1.52 billion, up 8.1 percent from $1.41 billion from a year earlier.
Dean Scarborough, president and CEO, said: "Net income from continuing operations continued to grow during the second quarter, despite a relatively slow market for roll label materials in North America and a more competitive pricing environment. Most importantly, the North American roll label material business achieved its first positive volume comparisons in two years. The company’s earnings growth was below expectations, however, and we have lowered the earnings outlook for the year."
"During the second quarter, we completed one of the most important acquisitions in the history of the company. The combining of Paxar with retail information services segment (RIS) is a transformative event for Avery Dennison and will enable us to serve a worldwide market for retail information and brand identification of more than $15 billion."
Avery Dennison completed the acquisition of Paxar in June and is merging the company with its RIS segment, which serves the global retail information and brand identification market. Avery has raised the estimates of the cost synergies from the transaction to $115-$125 million, from $90-$100 million.
Scarborough added: "We are pleased with the progress of the integration. We have retained a significant number of senior level Paxar executives and the leadership team represents a good blend of managers from both companies. Our teams have done a great job of identifying more savings than we initially expected, developing plans to achieve those savings faster than we anticipated, and finding additional opportunities to grow our business."