Avery Dennison Corporation announced Monday that the company expects to report unaudited second quarter 2011 net sales of approximately $1.7 billion, a decline versus the same period last year of 2 percent excluding the impact of currency. Unit volume was down an estimated 5 percent, driven primarily by declines in the Company's largest segments--Pressure-sensitive Materials and Retail Branding and Information Solutions. Second quarter results for the Company's Office and Consumer Products segment were in line with internal expectations.
The Company expects second quarter earnings per share to be between $0.64 and $0.69, and adjusted (non-GAAP) earnings per share to be between $0.74 and $0.79. These estimates reflect lower-than-expected volume, partially offset by lower employee-related expenses. Actual results are subject to finalizing several items, including a projected tax rate for the year in the high 20 percent range. Year-to-date free cash flow through the second quarter is expected to be approximately negative $165 million, reflecting lower operating results.
For the full-year 2011, the Company now expects earnings per share between $2.25 and $2.55, and adjusted (non-GAAP) earnings per share between $2.45 and $2.75, assuming net sales of between $6.8 and $6.9 billion. These estimates reflect a reduction from the Company's previous earnings per share guidance, primarily due to lower volumes in the Company's largest segments.
"In the second quarter, volume in our two largest segments was negatively impacted as consumer packaged goods companies and apparel retailers and brands became more cautious about consumer sentiment and the impact of rising retail prices to offset inflation," said Dean A. Scarborough, Avery Dennison chairman, president and CEO. "We are taking actions to offset the declines, and we expect to continue the momentum shown in 2010 and earlier this year when conditions improve."
Adjusted (non-GAAP) EPS refers to as reported net income per common share, assuming dilution, adjusted forthe full year estimated tax effect of charges for restructuring and other non-operating costs, asset impairment and lease cancellation charges, and legal settlements.Free cash flow refers to cash flow from operations, less net payments for property, plant, and equipment, software and other deferred charges, plus net proceeds from sale (purchase) of investments. Free cash flow excludes mandatory debt service requirements and other uses of cash that do not directly or immediately support the underlying business (such as discretionary debt reductions, dividends, share repurchases, acquisitions, etc.).
About Avery Dennison
Avery Dennison helps make brands more inspiring and the world more intelligent. For more than 75 years the company has been a global leader in pressure-sensitive technology and materials, retail branding and information solutions, and organization and identification products for offices and consumers. A FORTUNE 500 company with sales of $6.5 billion in 2010, Avery Dennison is based in Pasadena, California and has employees in over 60 countries. For more information, visit www.averydennison.com.
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