Avery Dennison announces record quarterly results; second quarter earnings per share up 18...

PASADENA, Calif.--(BUSINESS WIRE)--July 23, 1996--Avery Dennison Corp. (NYSE/PSE:AVY) Tuesday reported record earnings per share, net income and sales for the quarter ended June 29, 1996.

- Earnings per share increased 18 percent to 79 cents per share

from 67 cents per share for the

- Net income increased 17 percent to $41.6 million from $35.7

million in the same period last year.

- Excluding divested units and currency, sales increased 6.2

percent to $797.7 million. Reported sales increased 2.2 percent

from $780.5 million.

- Annualized return on shareholders' equity increased to 20.0

percent and return on total capital increased to 15.4 percent,

the highest returns in more than 20 years.

Earnings per share for the first six months increased 17 percent to $1.55 per share from $1.32 per share in 1995. Net income increased 16 percent to $81.6 million from $70.2 million. Excluding the impact of business divestitures and currency, sales increased 5.5 percent to $1.59 billion.

Charles D. Miller, chairman and chief executive officer, said, "I'm very pleased with the consistent sales increase in our core businesses and our significant operating profit improvement over last year. The second quarter was excellent in every measure.

"Avery-brand office products reported continued excellent results in all major worldwide markets driven by new products and market expansion. In addition, Fasson-brand pressure-sensitive materials reported solid growth in sales and profits. We continue to invest in new geographic markets and new products, while consistently improving our operating effectiveness.

"Looking ahead," Miller said, "the outlook for the third quarter is positive, and we expect sales and profit momentum to continue into the second half of the year based on current economic indicators."

Avery Dennison, based in Pasadena, makes self-adhesive materials, tapes and labels, office products, tags, retail systems and specialty chemicals. Consumer brands include AVERY brand office labels and card products, indexes, binders and software, and FASSON brand self-adhesive materials for industrial markets. The Company has 15,850 employees in more than 200 manufacturing facilities and sales offices in 33 countries. -0-

                           Avery Dennison
                   Consolidated Statement of Income
                (In millions, except per share amounts)
                            (Unaudited)

                               Three Months Ended     Six Months Ended
                               June 29,   July 1,    June 29,     July 1,
                                 1996     1995        1996        1995

Net sales                      $ 797.7   $ 780.5   $ 1,594.3   $ 1,553.7
Cost of products sold            549.3     541.5     1,099.2     1,069.9

      Gross profit               248.4     239.0       495.1       483.8

Marketing, general &
 administrative expense          174.9     172.3       350.2       352.3

Interest expense                   9.4      11.7        18.3        21.7

      Income before taxes         64.1      55.0       126.6       109.8

Taxes on income                   22.5      19.3        45.0        39.6

      Net income               $  41.6   $  35.7     $  81.6     $  70.2

      Net income per share
       of common stock         $  0.79   $  0.67     $  1.55     $  1.32

Average shares outstanding        52.7      53.2        52.8        53.3

Shares outstanding at period end  52.6      53.1        52.6        53.1
-0-

                            Avery Dennison
                 Condensed Consolidated Balance Sheet
                            (In millions)
                             (Unaudited)

ASSETS                              June 29, 1996    July 1, 1995
Current assets:
   Cash and cash equivalents           $   5.1         $   2.7
   Trade accounts receivable, net        451.7           437.1
   Inventories, net                      230.4           263.0
   Other current assets                   97.2            78.3

         Total current assets            784.4           781.1

Property, plant and equipment, net       916.1           882.8
Intangibles resulting from
 business acquisitions, net              121.3           128.4
Other assets                             138.4           128.7

                                     $ 1,960.2       $ 1,921.0

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Short-term and current portion
    of long-term debt                $   111.6       $    54.9
   Accounts payable                      147.8           176.1
   Accrued liabilities                   329.2           318.5

         Total current liabilities       588.6           549.5

Long-term debt                           404.6           451.2
Other long-term liabilities              151.6           137.7
Shareholders' equity:
   Common stock                           62.1            62.1
   Capital in excess of par value        189.5           191.0
   Retained earnings                     887.8           794.6
   Cumulative translation adjustment      29.3            49.2
   Cost of unallocated ESOP shares       (27.0)          (37.6)
   Minimum pension liability              (2.6)           (5.0)
   Treasury stock at cost               (323.7)         (271.7)

         Total shareholders' equity      815.4           782.6

                                     $ 1,960.2       $ 1,921.0
-0-

                           Avery Dennison
             Condensed Consolidated Statement of Cash Flow
                           (In millions)
                            (Unaudited)

                                         Six Months Ended
                                  June 29, 1996   July 1, 1995
Operating Activities:
Net income                           $   81.6       $   70.2

Adjustments to reconcile net
 income to net cash provided
 by operating activities:

   Depreciation                          49.8           45.5

   Amortization                           5.6            6.5

   Deferred taxes                        10.5            5.7

   Changes in assets and liabilities,
    net of the effect of foreign
    currency translation and
    business divestitures               (88.1)         (75.7)

Net cash provided by
 operating activities                    59.4           52.2

Investing Activities:
Purchase of property,
 plant and equipment                    (73.9)         (75.1)
Proceeds from sale of assets
 and business divestitures                3.8            0.2

Other                                    (1.0)          (9.6)

Net cash used in investing activities   (71.1)         (84.5)

Financing Activities:
Net increase in long-term debt           70.6          103.4

Net decrease in short-term debt          (3.3)         (20.9)

Dividends paid                          (31.7)         (28.8)

Purchase of treasury stock              (50.1)         (23.0)

Other                                     4.3            1.1

Net cash (used in) provided
 by financing activities                (10.2)          31.8

Effect of foreign currency
   translation on cash balances           ---            0.1

Decrease in cash and cash equivalents   (21.9)          (0.4)
Cash and cash equivalents,
 beginning of period                     27.0            3.1

Cash and cash equivalents,
 end of period                        $   5.1        $   2.7

CONTACT: Avery Dennison

Media Relations:

Diane B. Dixon, 818/304-2118

dixondiane@averydennison.com

or

Investor Relations:

Wayne H. Smith, 818/304-2001

investorcom@averydennison.com