Avery Dennison announces 53% earnings per share increase for fourth quarter.

PASADENA, Calif.--(BUSINESS WIRE)--Jan. 31, 1995--Avery Dennison Corp. (NYSE/PSE:AVY) Tuesday reported a 53% earnings per share increase for the fourth quarter and record sales and earnings per share for the full year.

For the fourth quarter:

o Earnings per share increased 53 percent

o Net income increased 48 percent to $28.5 million.

o Sales increased 15 percent to $736.7 million. Excluding the

impact of foreign currency translation, sales increased

12 percent.

For the year:

o Earnings per share increased 35 percent to $1.97 per share

o Net income increased 30 percent to $109.4 million.

o Sales increased 10 percent to $2.86 billion. Foreign

currency translation had no impact for the year.

Charles D. Miller, chairman and chief executive officer, was extremely pleased with the company's record year. "Sales and profitability were up significantly at both U.S. and international operations, led by the pressure-sensitive adhesives and materials sector. All three business sectors reported increased sales and profits," Miller stated.

Miller added: "In addition to having excellent financial results, we invested in our future growth and profitability. Capital expenditures increased 62 percent to $163 million for the year. We spent heavily to reduce costs, realign businesses and bring on new capacity, and we invested in new products and expansion in developing countries.

"Asset management continues to be a major focus," Miller stated. "Cash flow from operations was excellent." The company repurchased an additional 3.2 million shares of stock during the year. In addition, in October, 1994, the quarterly dividend was increased 13 percent to $.27 per share.

"Looking ahead, we expect good earnings growth in 1995, depending on the continued strength of the economies in the United States and Europe," Miller stated.

Avery Dennison, based in Pasadena, makes self-adhesive materials, tapes and labels, office products, tags, retail systems and specialty chemicals. Consumer brands include AVERY office labels, indexes, binders and software, MARKS-A-LOT and HI-LITER markers, and FASSON self-adhesive materials for industrial markets. The company has 15,400 employees in 200 manufacturing facilities and sales offices in 25 countries. -0-

                            AVERY DENNISON
                   CONSOLIDATED STATEMENT OF INCOME
                (in millions, except per share amounts)

                          Three Months Ended           Year Ended
                         Dec 31,      Jan 1,       Dec 31,     Jan 1,
                          1994         1994         1994        1994

Net sales             $   736.7   $   641.9   $   2,856.7   $  2,608.7
Cost of products sold     501.7       439.9       1,948.9      1,790.6

Gross profit              235.0       202.0         907.8        818.1

Marketing, general &
 administrative expense   180.1       160.1         691.9        642.7

Operating profit           54.9        41.9         215.9        175.4

Interest expense            9.9        11.3          43.0         43.2

Income before taxes on
 income                    45.0        30.6         172.9        132.2

Taxes on income            16.5        11.3          63.5         48.9

Income before cumulative
 effect of changes in
  accounting principles    28.5        19.3         109.4         83.3

Cumulative effect of
 changes in accounting
  principles                 --          --            --          1.1

Net Income             $   28.5    $   19.3     $   109.4     $   84.4

Per common share amounts:
Income before cumulative effect
 of changes in accounting
  principles           $   0.52    $   0.34      $   1.97       $ 1.44

Cumulative effect of
 changes in accounting
  principles                 --          --            --         0.02

Net income              $   0.52   $   0.34      $   1.97     $   1.46

Average shares
 outstanding                54.7       56.9          55.6         58.0

Shares outstanding at
 period end                 53.5       56.2          53.5         56.2

                            AVERY DENNISON
                 CONDENSED CONSOLIDATED BALANCE SHEET
                             (In millions)

                                                      Year Ended
ASSETS                                            1994           1993
Current assets:
 Cash and cash equivalents                     $   3.1         $   5.8
 Trade accounts receivable                       391.8           356.7
 Inventories                                     206.4           184.1
 Other current assets                             75.6            68.0

Total current assets                             676.9           614.6

Property, plant and equipment, net               831.6           758.5

Intangibles resulting from business
 acquisitions, net                               127.6           129.2
Other assets                                     127.0           136.7
                                           $   1,763.1     $   1,639.0

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Short-term and current portion
  of long-term debt                          $   73.4         $   86.5
 Accounts payable                               181.5            140.8
 Accrued liabilities                            299.2            245.7

Total current liabilities                       554.1            473.0

Long-term debt                                  347.3            311.0
Other long-term liabilities                     132.7            135.9
Shareholders' equity:
 Common stock                                    62.1             62.1
 Capital in excess of par value                 193.0            194.4
 Retained earnings                              753.2            698.9
 Cumulative translation adjustment               16.7            (10.1)
 Cost of unallocated ESOP shares                (37.6)           (53.2)
 Minimum pension liability                       (5.0)            (8.9)
 Treasury stock at cost                        (253.4)          (164.1)

Total shareholders' equity                      729.0            719.1

                                          $   1,763.1      $   1,639.0

                            AVERY DENNISON
            CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
                             (In millions)

                                                      Year Ended
                                                  1994           1993

Operating Activities:
Net income                                    $   109.4       $   84.4
Adjustments to reconcile net income
 to net cash provided by operating
  activities:
  Depreciation                                     87.9           84.1
  Amortization                                     14.6           11.3
  Non-current deferred taxes and
   other long-term liabilities                     13.8          (15.0)
  Cumulative effect of changes in accounting
   principles                                        --           (1.1)
  Net increase in assets and decrease in
   liabilities net of the effect of foreign
    currency translation and divested operations   39.3           83.3
Net cash provided by operating activities         265.0          247.0

Investing Activities:
Purchase of property, plant and equipment        (163.3)        (100.6)
Proceeds from sale of assets and divested
 operations                                        16.2            4.9
Other                                             (10.2)          (6.2)
Net cash used in investing activities            (157.3)        (101.9)

Financing Activities:
Net increase (decrease) in long-term debt          51.2          (10.9)
Net decrease in short-term debt                   (16.0)          (1.0)
Dividends paid                                    (55.1)         (52.1)
Purchase of treasury stock                       (105.7)         (82.9)
Other                                              15.0            4.0
Net cash used in financing activities            (110.6)        (142.9)
Effect of foreign currency
 translation on cash balances                       0.2           (0.3)
(Decrease) increase in cash and cash equivalents   (2.7)           1.9
Cash and cash equivalents, beginning of period      5.8            3.9
Cash and cash equivalents, end of period        $   3.1        $   5.8

CONTACT: Avery Dennison Corp., Pasadena

Diane B. Dixon, 818/304-2118 (media relations)

Wayne H. Smith, 818/304-2001 (investor relations)