Avery Dennison Corp. (AVY, Financial) filed Quarterly Report for the period ended 2009-04-04.
Avery Dennision Corporation produces pressure-sensitive adhesives and materials and the production of consumer and converted products. Some pressure-sensitive adhesives and materials are ``converted`` into labels and other products through embossing printing stamping and die-cutting and some are sold in unconverted form as base materials tapes and reflective sheeting. The company also manufactures and sells a variety of consumer and converted products and other items not involving pressure-sensitive components such as notebooks three-ring binders among others. Avery Dennison Corp. has a market cap of $2.88 billion; its shares were traded at around $27.14 with a P/E ratio of 11.5 and P/S ratio of 0.4. The dividend yield of Avery Dennison Corp. stocks is 6%. Avery Dennison Corp. had an annual average earning growth of 4.4% over the past 10 years. GuruFocus rated Avery Dennison Corp. the business predictability rank of 4.5-star.
In connection with the acquisition of Paxar Corporation (Paxar), we acquired approximately $30 million of intangible assets, consisting of certain trade names and trademarks, which are not subject to amortization because they have an indefinite useful life. As part of the interim goodwill impairment test discussed above, we additionally recorded a non-cash impairment charge of $12 million in the first three months of 2009.
In the fourth quarter of 2008, we initiated new restructuring actions that are expected to impact approximately 10% of our global workforce. These new actions target over $150 million in annualized savings by the middle of 2010, of which an estimated $75 million, net of transition costs, is expected to benefit 2009. We expect to incur approximately $160 million (of which $130 million will be settled in cash) of restructuring charges associated with these actions, with the majority to be incurred in 2009. At the end of the first quarter, we achieved run-rate savings representing approximately 30% of our target, and we anticipate reaching 50% by the end of the second quarter.
We anticipate our capital and software expenditures to be in the range of $120 million to $150 million in 2009, including increased investment in new business opportunities to transform the Retail Information Services business and drive future growth and profitability improvement.
Sales in our Retail Information Services segment decreased 15% in the first three months of 2009 compared to the same period last year, reflecting lower sales on an organic basis and the unfavorable impact of foreign currency translation (approximately $20 million), partially offset by the impact of the extra week in the first three months of 2009 and incremental sales from the DM Label acquisition (approximately $9 million). On an organic basis, sales declined 20% due primarily to continued weakness of the retail apparel market in the U.S. and Europe.
Read the The complete ReportAVY is in the portfolios of Arnold Van Den Berg of Century Management, Brian Rogers of T Rowe Price Equity Income Fund, John Hussman of Hussman Economtrics Advisors, Inc., PRIMECAP Management, PRIMECAP Management, Richard Aster Jr of Meridian Fund, Dodge & Cox.
Avery Dennision Corporation produces pressure-sensitive adhesives and materials and the production of consumer and converted products. Some pressure-sensitive adhesives and materials are ``converted`` into labels and other products through embossing printing stamping and die-cutting and some are sold in unconverted form as base materials tapes and reflective sheeting. The company also manufactures and sells a variety of consumer and converted products and other items not involving pressure-sensitive components such as notebooks three-ring binders among others. Avery Dennison Corp. has a market cap of $2.88 billion; its shares were traded at around $27.14 with a P/E ratio of 11.5 and P/S ratio of 0.4. The dividend yield of Avery Dennison Corp. stocks is 6%. Avery Dennison Corp. had an annual average earning growth of 4.4% over the past 10 years. GuruFocus rated Avery Dennison Corp. the business predictability rank of 4.5-star.
Highlight of Business Operations:
In the first three months of 2009, we recorded non-cash impairment charges of $832 million for the retail information services reporting unit, of which $820 million is related to goodwill and $12 million is related to indefinite-lived intangible assets. These charges are based on our preliminary estimates, which are expected to be finalized in the second quarter of 2009.In connection with the acquisition of Paxar Corporation (Paxar), we acquired approximately $30 million of intangible assets, consisting of certain trade names and trademarks, which are not subject to amortization because they have an indefinite useful life. As part of the interim goodwill impairment test discussed above, we additionally recorded a non-cash impairment charge of $12 million in the first three months of 2009.
In the fourth quarter of 2008, we initiated new restructuring actions that are expected to impact approximately 10% of our global workforce. These new actions target over $150 million in annualized savings by the middle of 2010, of which an estimated $75 million, net of transition costs, is expected to benefit 2009. We expect to incur approximately $160 million (of which $130 million will be settled in cash) of restructuring charges associated with these actions, with the majority to be incurred in 2009. At the end of the first quarter, we achieved run-rate savings representing approximately 30% of our target, and we anticipate reaching 50% by the end of the second quarter.
We anticipate our capital and software expenditures to be in the range of $120 million to $150 million in 2009, including increased investment in new business opportunities to transform the Retail Information Services business and drive future growth and profitability improvement.
Sales in our Retail Information Services segment decreased 15% in the first three months of 2009 compared to the same period last year, reflecting lower sales on an organic basis and the unfavorable impact of foreign currency translation (approximately $20 million), partially offset by the impact of the extra week in the first three months of 2009 and incremental sales from the DM Label acquisition (approximately $9 million). On an organic basis, sales declined 20% due primarily to continued weakness of the retail apparel market in the U.S. and Europe.
Read the The complete ReportAVY is in the portfolios of Arnold Van Den Berg of Century Management, Brian Rogers of T Rowe Price Equity Income Fund, John Hussman of Hussman Economtrics Advisors, Inc., PRIMECAP Management, PRIMECAP Management, Richard Aster Jr of Meridian Fund, Dodge & Cox.
