Avery Dennison Corp. Reports Operating Results (10-K)
Avery Dennison has a market cap of $3.27 billion; its shares were traded at around $30.8 with a P/E ratio of 14.26 and P/S ratio of 0.54. The dividend yield of Avery Dennison stocks is 3.25%.
Highlight of Business Operations:In 2011, approximately 73% of our sales were from international operations. Fluctuations in currencies can cause transaction, translation and other losses to us, which could negatively impact our sales and profitability. Margins on sales of our products in foreign countries could be materially and adversely affected by foreign currency exchange rate fluctuations.
We rely on the efficient and uninterrupted operation of a large and complex information technology infrastructure to link our worldwide divisions. Like other information technology systems, ours is susceptible to a number of factors including, but not limited to, damage or interruptions resulting from a variety of causes such as obsolescence, natural disasters, power failures, human error, viruses and data security breaches. We upgrade and install new systems, which, if installed or programmed incorrectly or on a delayed timeframe, could cause delays or cancellations of customer orders, impede the manufacture or shipment of products, or disrupt the processing of transactions. We have implemented certain measures to reduce our risk related to system and network disruptions, but if a disruption were to occur, we could incur significant losses and remediation costs.
Our overall level of indebtedness and credit ratings are significant factors in our ability to raise short-term and long-term financing. Higher debt levels could negatively impact our ability to meet other business needs or opportunities and could result in higher financing costs. The credit ratings assigned to us also impact the interest rates on our commercial paper and other borrowings. If our credit ratings are downgraded, our financial flexibility could decrease and the cost to borrow would increase. At December 31, 2011, our variable rate borrowings were $225.6 million. Fluctuations in interest rates can increase borrowing costs and have a material adverse impact on our business, results of operations and financial condition.
We own all of our principal properties identified above, except for certain facilities in Vinhedo, Brazil; Brea, California; Panyu and Shenzen, China; Oberlaindern and Sprockhovel, Germany; Greensboro, North Carolina; Mentor, Ohio; and Taichung, Taiwan, which are leased.
As of December 31, 2011, our estimated accrued liability associated with environmental remediation was $40.6 million. See also Note 8, Contingencies, in the Notes to Consolidated Financial Statements of our 2011 Annual Report, which is incorporated herein by reference.
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