Cover Page
Cover Page - shares | 3 Months Ended | |
Apr. 03, 2021 | May 01, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Apr. 3, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-7685 | |
Entity Registrant Name | AVERY DENNISON CORPORATION | |
Entity Central Index Key | 0000008818 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-1492269 | |
Entity Address, City or Town | Glendale | |
Entity Address, State or Province | CA | |
Entity Address, Address Line One | 207 Goode Avenue | |
City Area Code | 626 | |
Local Phone Number | 304-2000 | |
Entity Address, Postal Zip Code | 91203 | |
Current Fiscal Year End Date | --01-01 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 83,007,729 | |
Document Quarterly Report | true | |
Common stock, $1 par value | ||
Document Information [Line Items] | ||
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common stock, $1 par value | |
Trading Symbol | AVY | |
Senior notes due 2025 at 1.25% | ||
Document Information [Line Items] | ||
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | 1.25% Senior Notes due 2025 | |
Trading Symbol | AVY25 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 328 | $ 252.3 |
Trade accounts receivable, less allowances of $40.7 and $44.6 at April 3, 2021 and January 2, 2021, respectively | 1,301.4 | 1,235.2 |
Inventories, net | 786.7 | 717.2 |
Other current assets | 216.3 | 211.5 |
Total current assets | 2,632.4 | 2,416.2 |
Property, plant and equipment, net | 1,329 | 1,343.7 |
Goodwill | 1,141.6 | 1,136.4 |
Other intangibles resulting from business acquisitions, net | 221.9 | 224.9 |
Deferred tax assets | 201.4 | 197.7 |
Other assets | 746.9 | 765 |
Total assets | 6,273.2 | 6,083.9 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt and finance leases | 116.9 | 64.7 |
Accounts payable | 1,178 | 1,050.9 |
Accrued payroll and employee benefits | 214 | 239 |
Other current liabilities | 549.6 | 571.4 |
Total current liabilities | 2,058.5 | 1,926 |
Long-term debt and finance leases | 2,025.9 | 2,052.1 |
Long-term retirement benefits and other liabilities | 493.1 | 503.6 |
Deferred tax liabilities and income taxes payable | 113.8 | 117.3 |
Commitments and contingencies (see Note 12) | ||
Shareholders' equity: | ||
Common stock, $1 par value per share, authorized - 400,000,000 shares at April 3, 2021 and January 2, 2021; issued - 124,126,624 shares at April 3, 2021 and January 2, 2021; outstanding - 83,056,656 shares and 83,151,174 shares at April 3, 2021 and January 2, 2021, respectively | 124.1 | 124.1 |
Capital in excess of par value | 845.8 | 862.1 |
Retained earnings | 3,504.4 | 3,349.3 |
Treasury stock at cost, 41,069,968 shares and 40,975,450 shares at April 3, 2021 and January 2, 2021, respectively | (2,546.3) | (2,501) |
Accumulated other comprehensive loss | (346.1) | (349.6) |
Total shareholders' equity | 1,581.9 | 1,484.9 |
Total liabilities and shareholders' equity | $ 6,273.2 | $ 6,083.9 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Condensed Consolidated Balance Sheets | ||
Trade accounts receivable, allowances (in dollars) | $ 40.7 | $ 44.6 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized shares | 400,000,000 | 400,000,000 |
Common stock, issued shares | 124,126,624 | 124,126,624 |
Common stock, outstanding shares | 83,056,656 | 83,151,174 |
Treasury stock, shares | 41,069,968 | 40,975,450 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 2,051.3 | $ 1,723 |
Cost of products sold | 1,454.3 | 1,237.9 |
Gross profit | 597 | 485.1 |
Marketing, general and administrative expense | 312.3 | 281 |
Other expense (income), net | 0.9 | 4.9 |
Interest expense | 16.2 | 18.8 |
Other non-operating expense (income), net | (1.3) | (0.5) |
Income before taxes | 268.9 | 180.9 |
Provision for (benefit from) income taxes | 58.1 | 46.3 |
Equity method investment (losses) gains | (1.3) | (0.4) |
Net income | $ 209.5 | $ 134.2 |
Per share amounts: | ||
Net income per common share (in dollars per share) | $ 2.52 | $ 1.61 |
Net income per common share, assuming dilution (in dollars per share) | $ 2.50 | $ 1.60 |
Weighted average number of shares outstanding: | ||
Common shares (in shares) | 83.1 | 83.3 |
Common shares, assuming dilution (in shares) | 83.9 | 84.1 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income | $ 209.5 | $ 134.2 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | 7.6 | (68.6) |
Pension and other postretirement benefits | 1.2 | 0.6 |
Cash flow hedges | (5.3) | 4.1 |
Other comprehensive income (loss), net of tax | 3.5 | (63.9) |
Total comprehensive income, net of tax | $ 213 | $ 70.3 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Operating Activities | ||
Net income | $ 209.5 | $ 134.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 40 | 36.8 |
Amortization | 14.4 | 10.7 |
Provision for credit losses and sales returns | 8.9 | 31.2 |
Stock-based compensation | 9.9 | 6.3 |
Pension plan settlement loss | 0.4 | |
Deferred taxes and other non-cash taxes | 1.5 | 6.4 |
Other non-cash expense and loss (income and gain), net | 2.7 | 4.4 |
Changes in assets and liabilities and other adjustments | (78) | (225.6) |
Net cash provided by operating activities | 209.3 | 4.4 |
Investing Activities | ||
Purchases of property, plant and equipment | (25.2) | (33.2) |
Purchases of software and other deferred charges | (2.3) | (6.2) |
Proceeds from sales of property, plant and equipment | 0.7 | |
Proceeds from insurance and sales (purchases) of investments, net | (0.5) | (0.3) |
Proceeds from sale of product line | 6.7 | |
Payments for acquisitions, net of cash acquired, and investments in businesses | (30.6) | (245.9) |
Net cash used in investing activities | (51.2) | (285.6) |
Financing Activities | ||
Net increase (decrease) in borrowings (maturities of three months or less) | 53.8 | (106) |
Additional borrowings under revolving credit facility | 500 | |
Additional long-term borrowings | 494.4 | |
Repayments of long-term debt and finance leases | (1.5) | (1.1) |
Dividends paid | (51.6) | (48.4) |
Share repurchases | (55.6) | (45.2) |
Net (tax withholding) proceeds related to stock-based compensation | (25.3) | (20) |
Net cash (used in) provided by financing activities | (80.2) | 773.7 |
Effect of foreign currency translation on cash balances | (2.2) | (4.2) |
Increase (decrease) in cash and cash equivalents | 75.7 | 488.3 |
Cash and cash equivalents, beginning of year | 252.3 | 253.7 |
Cash and cash equivalents, end of period | $ 328 | $ 742 |
General
General | 3 Months Ended |
Apr. 03, 2021 | |
General | |
General | Note 1. General The unaudited Condensed Consolidated Financial Statements and related notes in this Quarterly Report on Form 10-Q S-X 10-K, 10-Q. Fiscal Periods The three months ended April 3, 2021 and March 28, 2020 each consisted of a thirteen -week period. |
Acquisitions
Acquisitions | 3 Months Ended |
Apr. 03, 2021 | |
Acquisitions | |
Acquisitions | Note 2. Acquisitions On March 18, 2021, we completed our acquisition of the net assets of ZippyYum, LLC (“ZippyYum”), a California-based developer of software products used in the food service and food preparation industries. We believe this acquisition enhances our product portfolio in our Retail Branding and Information Solutions (“RBIS“) reportable segment. On March 1, 2021, we completed our stock acquisition of JDC Solutions, Inc. (“JDC”), a Tennessee-based manufacturer of pressure-sensitive specialty tapes. We believe this acquisition expands the product portfolio in our Industrial and Healthcare Materials (“IHM“) reportable segment. The acquisitions of ZippyYum and JDC are referred collectively as the “2021 Acquisitions.” The aggregate purchase consideration for the 2021 Acquisitions, which is subject to customary post-closing adjustments, was approximately million. The 2021 Acquisitions were funded using cash and existing credit facilities. In addition to the cash paid at closing, the sellers in one of these acquisitions are eligible for earn-out payments of up to approximately million subject to their achievement of certain performance targets. Based on our estimates, we have accrued approximately million for these earn-out payments, which has been included in the $ million of aggregate purchase consideration. Consistent with the allowable time to complete our assessment, the valuation of certain acquired assets and liabilities, including tangible and intangible assets, environmental liabilities and income taxes, are currently pending. These acquisitions were not material, individually or in the aggregate, to the unaudited Condensed Consolidated Financial Statements. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles Resulting From Business Acquisitions | 3 Months Ended |
Apr. 03, 2021 | |
Goodwill and Other Intangibles Resulting From Business Acquisitions | |
Goodwill and Other Intangibles Resulting From Business Acquisitions | Note 3. Goodwill and Other Intangibles Resulting from Business Acquisitions Changes in the net carrying amount of goodwill for the three months ended April 3, 2021 by reportable segment are shown below. (In millions) Label and Graphic Materials Retail Branding and Information Solutions Industrial and Healthcare Materials Total Goodwill as of January 2, 2021 $ 480.9 $ 471.8 $ 183.7 $ 1,136.4 Acquisitions (1) — 17.2 6.0 23.2 Acquisition adjustment (2) 1.2 — — 1.2 Translation adjustments (13.1 ) (3.8 ) (2.3 ) (19.2 ) Goodwill as of April 3, 2021 $ 469.0 $ 485.2 $ 187.4 $ 1,141.6 (1) Goodwill acquired related to the acquisitions of JDC and ZippyYum. We expect the recognized goodwill related to the JDC acquisition not to be deductible for income tax purposes and the recognized goodwill related to the ZippyYum acquisition to be deductible for income tax purposes. (2) Measurement period adjustment related to the finalization of the purchase price allocation for the acquisition of ACPO, Ltd. completed in December 2020. Finite-Lived Intangible Assets The intangibles assets from the 2021 Acquisitions were not material to the unaudited Condensed Consolidated Financial Statements. Refer to Note 2, “Acquisitions,” to the unaudited Condensed Consolidated Financial Statements for more information. |
Debt
Debt | 3 Months Ended |
Apr. 03, 2021 | |
Debt | |
Debt | Note 4. Debt The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities or euro government bond securities, as applicable, on notes with similar rates, credit ratings, and remaining maturities. The fair value of short-term borrowings, which include commercial paper issuances and short-term lines of credit, approximates their carrying value given the short duration of these obligations. The fair value of our total debt was $2.30 billion at April 3, 2021 and $2.34 billion at January 2, 2021. Fair values were determined based primarily on Level 2 inputs, which are inputs other than quoted prices in active markets that are either directly or indirectly observable. Our $800 million revolving credit facility (the “Revolver”) contains a financial covenant requiring that we maintain a specified ratio of total debt in relation to a certain measure of income. As of both April 3, 2021 and January 2, 2021, we were in compliance with this financial covenant. No balance was outstanding under the Revolver as of April 3, 2021 or January 2, 2021. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 3 Months Ended |
Apr. 03, 2021 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Note 5. Pension and Other Postretirement Benefits Defined Benefit Plans We sponsor a number of defined benefit plans, the accrual of benefits under some of which has been frozen, covering eligible employees in the U.S. and certain other countries. Benefits payable to an employee are based primarily on years of service and the employee’s compensation during his or her employment with us. For the three months ended April 3, 2021 and March 28, 2020, the net periodic benefit cost related to our U.S. and international plans was not material. Service cost and the components of net periodic benefit cost (credit) other than service cost were included in “Marketing, general and administrative expense” and “Other non-operating We are also obligated to pay unfunded termination indemnity benefits to certain employees outside of the U.S., which are subject to applicable agreements, laws and regulations. We did not incur significant costs related to these benefits in the three months ended April 3, 2021 or March 28, 2020. |
Cost Reduction Actions
Cost Reduction Actions | 3 Months Ended |
Apr. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
Cost Reduction Actions | Note 6. Cost Reduction Actions 2019/2020 Actions During the three months ended April 3, 2021, we recorded $2.7 million in restructuring charges related to our 2019/2020 actions. positions at numerous locations across our company, which primarily included actions in our RBIS reportable segment. The actions were primarily related to global headcount and footprint reductions, with some actions accelerated and expanded in response to the coronavirus/ COVID-19 During the three months ended April 3, 2021, restructuring charges and payments were as follows: (In millions) Accrual at January 2, 2021 Charges, Net of Reversals Cash Payments Non-cash Impairment Foreign Currency Translation Accrual at April 3, 2021 2019/2020 Actions Severance and related costs $ 28.3 $ 2.4 $ (11.0 ) $ — $ (.3 ) $ 19.4 Asset impairment — .3 — (.3 ) — — Total $ 28.3 $ 2.7 $ (11.0 ) $ (.3 ) $ (.3 ) $ 19.4 Accruals for severance and related costs, as well as lease cancellation costs, were included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets, less selling costs, if applicable. Restructuring charges were included in “Other expense (income), net” in the unaudited Condensed Consolidated Statements of Income. The table below shows the total amount of restructuring charges, net of reversals, incurred by reportable segment and Corporate. Three Months Ended (In millions) April 3, 2021 March 28, 2020 Restructuring charges, net of reversals, by reportable segment and Corporate Label and Graphic Materials $ .7 $ .4 Retail Branding and Information Solutions 1.6 1.5 Industrial and Healthcare Materials — .5 Corporate .6 — Total $ 2.9 $ 2.4 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Apr. 03, 2021 | |
Financial Instruments | |
Financial Instruments | Note 7. Financial Instruments We enter into foreign exchange hedge contracts to reduce our risk from foreign exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. We also enter into futures contracts to hedge certain price fluctuations for a portion of our anticipated domestic purchases of natural gas. The impact of these foreign exchange and commodities hedge activities on the unaudited Condensed Consolidated Financial Statements was not material. In March 2020, we entered into U.S. dollar to euro cross-currency swap contracts with a total notional amount of $250 million to have the effect of converting the fixed-rate U.S. dollar-denominated debt to euro-denominated debt, including semiannual interest payments and the payment of principal at maturity. During the term of the contract, which ends on April 30, 2030, we pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars. These contracts have been designated as cash flow hedges. The fair value of these contracts as of April 3, 2021 was $(31.7) million and was included in “Long-term retirement benefits and other liabilities” in the unaudited Condensed Consolidated Balance Sheets. Refer to Note 11, “Fair Value Measurements,” to the unaudited Condensed Consolidated Financial Statements for more information. We recorded ineffectiveness our cross-currency swap to earnings during the three months ended April 3, 2021 or March 28, 2020. |
Taxes Based on Income
Taxes Based on Income | 3 Months Ended |
Apr. 03, 2021 | |
Taxes Based on Income | |
Taxes Based on Income | Note 8. Taxes Based on Income The following table summarizes our income before taxes, provision for (benefit from) income taxes, and effective tax rate: Three Months Ended (Dollars in millions) April 3, 2021 March 28, 2020 Income before taxes $ 268.9 $ 180.9 Provision for (benefit from) income taxes 58.1 46.3 Effective tax rate 21.6 % 25.6 % Our provision for (benefit from) income taxes for the three months ended April Our provision for (benefit from) income taxes for the three months ended March 28, 2020 included $7.2 million of net tax charge related to the tax on GILTI of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from FDII. Our provision for (benefit from) income taxes for the three months ended March 28, 2020 also reflected tax benefits from decreases in reserves primarily as a result of closing tax years, excess tax benefits associated with stock-based payments, and a change in a foreign withholding tax rate. In fiscal year 2020, the U.S. Department of Treasury issued final regulations that provide certain U.S. taxpayers with an annual election to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. This annual election included an option for retroactive application to tax years 2018 through 2020. We determined to make the election for tax years 2018 and 2019 and recognized tax benefits in the first quarter of 2021 and the fourth quarter of 2020, respectively. We have not yet determined whether to make the election for tax years 2020 and 2021. We continue to evaluate the impact of these regulations and currently anticipate that the benefit from making this election on our 2020 U.S. tax return may be significant. The amount of income taxes we pay is subject to ongoing audits by taxing jurisdictions around the world. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts, and circumstances existing at the time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate. The final determination of tax audits and any related legal proceedings could materially differ from the amounts currently reflected in our tax provision and the related liabilities. To date, we and our U.S. subsidiaries have completed the IRS’ Compliance Assurance Process Program through 2017. With limited exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2010. It is reasonably possible that, during the next 12 months, we may realize a net decrease in our uncertain tax positions, including interest and penalties, of approximately million, primarily as a result of closing tax years. |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Note 9. Net Income Per Common Share Net income per common share was computed as follows: Three Months Ended (In millions, except per share amounts) April 3, 2021 March 28, 2020 (A) Net income $ 209.5 $ 134.2 (B) Weighted average number of common shares outstanding 83.1 83.3 Dilutive shares (additional common shares issuable under stock-based awards) .8 .8 (C) Weighted average number of common shares outstanding, assuming dilution 83.9 84.1 Net income per common share: (A) ÷ (B) $ 2.52 $ 1.61 Net income per common share, assuming dilution: (A) ÷ (C) $ 2.50 $ 1.60 Certain stock-based compensation awards were not included in the computation of net income per common share, assuming dilution, because they would not have had a dilutive effect. Stock-based compensation awards excluded from the computation were not significant for the three months ended April 3, 2021 or March 28, 2020. |
Supplemental Equity and Compreh
Supplemental Equity and Comprehensive Income Information | 3 Months Ended |
Apr. 03, 2021 | |
Stockholders' Equity Note [Abstract] | |
Supplemental Equity and Comprehensive Income Information | Note 10. Supplemental Equity and Comprehensive Income Information Consolidated Changes in Shareholders’ Equity Three Months Ended (In millions) April 3, 2021 March 28, 2020 Common stock issued, $1 par value per share $ 124.1 $ 124.1 Capital in excess of par value Beginning balance $ 862.1 $ 874.0 Issuance of shares under stock-based compensation plans (1) (16.3 ) (21.5 ) Ending balance $ 845.8 $ 852.5 Retained earnings Beginning balance $ 3,349.3 $ 2,979.1 Net income 209.5 134.2 Issuance of shares under stock-based compensation plans (1) (7.7 ) (4.2 ) Contribution of shares to 401(k) Plan (1) 4.9 4.1 Dividends (51.6 ) (48.4 ) Ending balance $ 3,504.4 $ 3,064.8 Treasury stock at cost Beginning balance $ (2,501.0 ) $ (2,425.1 ) Repurchase of shares for treasury (55.6 ) (45.2 ) Issuance of shares under stock-based compensation plans (1) 8.6 12.0 Contribution of shares to 401(k) Plan (1) 1.7 2.3 Ending balance $ (2,546.3 ) $ (2,456.0 ) Accumulated other comprehensive loss Beginning balance $ (349.6 ) $ (348.1 ) Other comprehensive income (loss), net of tax 3.5 (63.9 ) Ending balance $ (346.1 ) $ (412.0 ) (1) We fund a portion of our employee-related expenses using shares of our common stock held in treasury. We reduce capital in excess of par value based on the grant date fair value of the awards vested and record net gains or losses associated with our use of treasury shares to retained earnings. Dividends per common share were as follows: Three Months Ended April 3, 2021 March 28, 2020 Dividends per common share $ .62 $ .58 Changes in Accumulated Other Comprehensive Loss The changes in “Accumulated other comprehensive loss” (net of tax) for the three-month period ended April 3, 2021 were as follows: (In millions) Foreign Pension and Cash Flow Total Balance as of January 2, 2021 $ (248.1 ) $ (92.7 ) $ (8.8 ) $ (349.6 ) Other comprehensive income (loss) before reclassifications, net of tax 7.6 — (4.8 ) 2.8 Reclassifications to net income, net of tax — 1.2 (.5 ) .7 Other comprehensive income (loss), net of tax 7.6 1.2 (5.3 ) 3.5 Balance as of April 3, 2021 $ (240.5 ) $ (91.5 ) $ (14.1 ) $ (346.1 ) The changes in “Accumulated other comprehensive loss” (net of tax) for the three-month period ended March 28, 2020 were as follows: (In millions) Foreign Pension and Cash Flow Total Balance as of December 28, 2019 $ (245.1 ) $ (101.8 ) $ (1.2 ) $ (348.1 ) Other comprehensive income (loss) before reclassifications, net of tax (68.6 ) — 4.7 (63.9 ) Reclassifications to net income, net of tax — .6 (.6 ) — Other comprehensive income (loss), net of tax (68.6 ) .6 4.1 (63.9 ) Balance as of March 28, 2020 $ (313.7 ) $ (101.2 ) $ 2.9 $ (412.0 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 11. Fair Value Measurements Recurring Fair Value Measurements The assets and liabilities carried at fair value, measured on a recurring basis, as of April 3, 2021 were as follows: Fair Value Measurements Using (In millions) Total Quoted Prices Significant Significant (Level 3) Assets Investments $ 33.4 $ 27.5 $ 5.9 $ — Derivative assets 9.1 — 9.1 — Bank drafts 11.9 11.9 — — Liabilities Cross-currency swap $ 31.7 $ — $ 31.7 $ — Derivative liabilities 5.8 — 5.8 — Contingent consideration liabilities 11.6 — — 11.6 The assets and liabilities carried at fair value, measured on a recurring basis, as of January 2, 2021 were as follows: Fair Value Measurements Using (In millions) Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets Investments $ 33.6 $ 27.4 $ 6.2 $ — Derivative assets 5.2 .1 5.1 — Bank drafts 12.8 12.8 — — Liabilities Cross-currency swap $ 36.7 $ — $ 36.7 $ — Derivative liabilities 9.5 .3 9.2 — Investments include fixed income securities (primarily U.S. government and corporate debt securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using net asset value. As of April 3, 2021, investments of $.4 million and $33.0 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. As of January 2, 2021, investments of $1 million and $32.6 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. Derivatives that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivatives measured based on foreign exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. Bank drafts (maturities greater than three months) are valued at face value due to their short-term nature and were included in “Other current assets” in the unaudited Condensed Consolidated Balance Sheets. Contingent consideration liabilities relate to estimated earn-out payments associated with one of the 2021 Acquisitions. These payments are based on the achievement of certain performance targets based on the terms of the purchase agreement, and our estimates are based on the expected payments related to these targets. We have classified these liabilities as Level 3. As of April 3, 2021, contingent consideration liabilities of approximately million and $ million were included in “Other current liabilities” and “Long-term retirement benefits and other liabilities,” respectively, in the unaudited Condensed Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 03, 2021 | |
Contingencies | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. Because of the uncertainties associated with claims resolution and litigation, future expenses to resolve these matters could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential expenses. If information were to become available that allowed us to reasonably estimate a range of potential expenses in an amount higher or lower than what we have accrued, we would adjust our accrued liabilities accordingly. Additional lawsuits, claims, inquiries, and other regulatory and compliance matters could arise in the future. The range of expenses for resolving any future matters would be assessed as they arise; until then, a range of potential expenses for such resolution cannot be determined. We are currently party to a litigation in which certain of our radio-frequency identification (“RFID”) products are alleged to have infringed the patents of an unrelated third party. We assess the probability of a material unfavorable outcome to be remote. We continue to defend ourselves vigorously in this lawsuit and will appeal any adverse judgment. Based upon current information, we believe that the impact of the resolution of these matters would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows. Environmental Expenditures Environmental expenditures are generally expensed. However, environmental expenditures for newly acquired assets and those that extend or improve the economic useful life of existing assets are capitalized and amortized over the shorter of the estimated useful life of the acquired asset or the remaining life of the existing asset. We review our estimates of the costs of complying with environmental laws related to remediation and cleanup of various sites, including sites in which governmental agencies have designated us as a potentially responsible party (“PRP”). When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. Potential insurance reimbursements are not offset against potential liabilities. As of April 3, 2021, we have been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other responsible state agencies as a PRP at twelve waste disposal or waste recycling sites that are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination. No settlement of our liability related to any of these sites has been agreed upon. We are participating with other PRPs at these sites and anticipate that our share of remediation costs will be determined pursuant to agreements that we negotiate with the EPA or other governmental authorities. These estimates could change as a result of changes in planned remedial actions, remediation technologies, site conditions, the estimated time to complete remediation, environmental laws and regulations, and other factors. Because of the uncertainties associated with environmental assessment and remediation activities, our future expenses to remediate these sites could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential expenses. If information were to become available that allowed us to reasonably estimate a range of potential expenses in an amount higher or lower than what we have accrued, we would adjust our environmental liabilities accordingly. In addition, we may be identified as a PRP at additional sites in the future. The range of expenses for remediation of any future-identified sites would be addressed as they arise; until then, a range of expenses for such remediation cannot be determined. The activity related to our environmental liabilities for the three months ended April 3, 2021 is shown below. (In millions) Balance at January 2, 2021 $ 21.1 Charges, net of reversals .2 Payments (.6 ) Balance at April 3, 2021 $ 20.7 Approximately $8 million and million of the balance was classified as short-term and included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets as of April 3, 2021 and January 2, 2021, respectively. |
Segment and Disaggregated Reven
Segment and Disaggregated Revenue Information | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Segment and Disaggregated Revenue Information | Note 13. Segment and Disaggregated Revenue Information Disaggregated Revenue Information Disaggregated revenue information is shown below in the manner that best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue from our Label and Graphic Materials (“LGM”) reportable segment is attributed to geographic areas based on the location from which products are shipped. Revenue from our RBIS reportable segment is shown by product group. Three Months Ended (In millions) April 3, 2021 March 28, 2020 Net sales to unaffiliated customers Label and Graphic Materials: U.S. (1) $ 364.9 $ 328.1 Europe, Middle East and North Africa (1) 515.6 445.3 Asia (1) 323.1 241.3 Latin America 95.5 90.2 Other international 77.9 68.6 Total Label and Graphic Materials (1) 1,377.0 1,173.5 Retail Branding and Information Solutions: Apparel (1) 428.4 358.6 Printer Solutions 54.3 43.3 Total Retail Branding and Information Solutions (1) 482.7 401.9 Industrial and Healthcare Materials 191.6 147.6 Net sales to unaffiliated customers $ 2,051.3 $ 1,723.0 (1) In the first quarter of 2020, an insignificant portion of the net sales and associated operating loss related to the acquisition of Smartrac’s Transponder (RFID Inlay) division (“Smartrac”) was reported in our LGM reportable segment’s results, reflecting sales through that segment’s channels. To better align the reporting with our current organizational structure, the results associated with the acquisition were reclassified and are now included solely in the results for our RBIS reportable segment in both periods presented above. Additional Segment Information Additional financial information by reportable segment and Corporate is shown below. Three Months Ended (In millions) April 3, 2021 March 28, 2020 Intersegment sales Label and Graphic Materials $ 21.6 $ 22.4 Retail Branding and Information Solutions 8.3 6.5 Industrial and Healthcare Materials 2.1 1.6 Intersegment sales $ 32.0 $ 30.5 Income before taxes Label and Graphic Materials (1) $ 226.2 $ 172.5 Retail Branding and Information Solutions (1) 60.0 30.9 Industrial and Healthcare Materials 23.5 14.9 Corporate expense (25.9 ) (19.1 ) Interest expense (16.2 ) (18.8 ) Other non-operating 1.3 .5 Income before taxes $ 268.9 $ 180.9 Other expense (income), net, by reportable segment and Corporate Label and Graphic Materials (1) $ (1.9 ) $ 1.1 Retail Branding and Information Solutions (1) 2.1 3.3 Industrial and Healthcare Materials .1 .5 Corporate .6 — Other expense (income), net $ .9 $ 4.9 Other expense (income), net, by type Restructuring charges: Severance and related costs $ 2.4 $ 2.4 Asset impairment charges and lease cancellation costs .5 — Other items: Outcome of legal proceedings 2.1 — Transaction and related costs .7 2.5 Gain on sale (4.8 ) — Other expense (income), net $ .9 $ 4.9 (1) In the first quarter of 2020, an insignificant portion of the net sales and associated operating loss related to the acquisition of Smartrac was reported in our LGM reportable segment’s results, reflecting sales through that segment’s channels. To better align the reporting with our current organizational structure, the results associated with the acquisition were reclassified and are now included solely in the results for our RBIS reportable segment in both periods presented above. |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Apr. 03, 2021 | |
Supplemental Financial Information | |
Supplemental Financial Information | Note 14. Supplemental Financial Information Inventories The table below summarizes the amounts in inventory, net. (In millions) April 3, 2021 January 2, 2021 Raw materials $ 305.4 $ 268.6 Work-in-progress 218.6 210.3 Finished goods 262.7 238.3 Inventories, net $ 786.7 $ 717.2 Property, Plant and Equipment The table below summarizes the amounts in property, plant and equipment, net. (In millions) April 3, 2021 January 2, 2021 Property, plant and equipment $ 3,443.4 $ 3,476.3 Accumulated depreciation (2,114.4 ) (2,132.6 ) Property, plant and equipment, net $ 1,329.0 $ 1,343.7 Allowance for Credit Losses The activity related to our allowance for credit losses is shown below. Three Months Ended (In millions) April 3, 2021 March 28, 2020 Balance at January 2, 2021 $ 44.6 $ 27.1 Provision for (reversal of) credit losses (1) (1.9 ) 20.3 Amounts written off (1.1 ) (.5 ) Other, including foreign currency translation (.9 ) (.6 ) Balance at April 3, 2021 $ 40.7 $ 46.3 (1) For the three months ended March 28, 2020, our provision for credit losses reflected impacts on customers as a result of COVID-19. |
General (Policies)
General (Policies) | 3 Months Ended |
Apr. 03, 2021 | |
General | |
Fiscal Periods | Fiscal Periods The three months ended April 3, 2021 and March 28, 2020 each consisted of a thirteen -week period. |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles Resulting From Business Acquisitions (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Goodwill and Other Intangibles Resulting From Business Acquisitions | |
Schedule of changes in net carrying amount of goodwill | Changes in the net carrying amount of goodwill for the three months ended April 3, 2021 by reportable segment are shown below. (In millions) Label and Graphic Materials Retail Branding and Information Solutions Industrial and Healthcare Materials Total Goodwill as of January 2, 2021 $ 480.9 $ 471.8 $ 183.7 $ 1,136.4 Acquisitions (1) — 17.2 6.0 23.2 Acquisition adjustment (2) 1.2 — — 1.2 Translation adjustments (13.1 ) (3.8 ) (2.3 ) (19.2 ) Goodwill as of April 3, 2021 $ 469.0 $ 485.2 $ 187.4 $ 1,141.6 (1) Goodwill acquired related to the acquisitions of JDC and ZippyYum. We expect the recognized goodwill related to the JDC acquisition not to be deductible for income tax purposes and the recognized goodwill related to the ZippyYum acquisition to be deductible for income tax purposes. (2) Measurement period adjustment related to the finalization of the purchase price allocation for the acquisition of ACPO, Ltd. completed in December 2020. |
Cost Reduction Actions (Tables)
Cost Reduction Actions (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charges and payments | (In millions) Accrual at January 2, 2021 Charges, Net of Reversals Cash Payments Non-cash Impairment Foreign Currency Translation Accrual at April 3, 2021 2019/2020 Actions Severance and related costs $ 28.3 $ 2.4 $ (11.0 ) $ — $ (.3 ) $ 19.4 Asset impairment — .3 — (.3 ) — — Total $ 28.3 $ 2.7 $ (11.0 ) $ (.3 ) $ (.3 ) $ 19.4 |
Restructuring charges, net of reversals, by reportable segment and corporate | Three Months Ended (In millions) April 3, 2021 March 28, 2020 Restructuring charges, net of reversals, by reportable segment and Corporate Label and Graphic Materials $ .7 $ .4 Retail Branding and Information Solutions 1.6 1.5 Industrial and Healthcare Materials — .5 Corporate .6 — Total $ 2.9 $ 2.4 |
Taxes Based on Income (Tables)
Taxes Based on Income (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Taxes Based on Income | |
Summary of income before taxes, Provision for (benefit from) income taxes, and effective tax rate from continuing operations | Three Months Ended (Dollars in millions) April 3, 2021 March 28, 2020 Income before taxes $ 268.9 $ 180.9 Provision for (benefit from) income taxes 58.1 46.3 Effective tax rate 21.6 % 25.6 % |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of net income per common share | Three Months Ended (In millions, except per share amounts) April 3, 2021 March 28, 2020 (A) Net income $ 209.5 $ 134.2 (B) Weighted average number of common shares outstanding 83.1 83.3 Dilutive shares (additional common shares issuable under stock-based awards) .8 .8 (C) Weighted average number of common shares outstanding, assuming dilution 83.9 84.1 Net income per common share: (A) ÷ (B) $ 2.52 $ 1.61 Net income per common share, assuming dilution: (A) ÷ (C) $ 2.50 $ 1.60 |
Supplemental Equity and Compr_2
Supplemental Equity and Comprehensive Income Information (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Consolidated Statements of Shareholders' Equity | Three Months Ended (In millions) April 3, 2021 March 28, 2020 Common stock issued, $1 par value per share $ 124.1 $ 124.1 Capital in excess of par value Beginning balance $ 862.1 $ 874.0 Issuance of shares under stock-based compensation plans (1) (16.3 ) (21.5 ) Ending balance $ 845.8 $ 852.5 Retained earnings Beginning balance $ 3,349.3 $ 2,979.1 Net income 209.5 134.2 Issuance of shares under stock-based compensation plans (1) (7.7 ) (4.2 ) Contribution of shares to 401(k) Plan (1) 4.9 4.1 Dividends (51.6 ) (48.4 ) Ending balance $ 3,504.4 $ 3,064.8 Treasury stock at cost Beginning balance $ (2,501.0 ) $ (2,425.1 ) Repurchase of shares for treasury (55.6 ) (45.2 ) Issuance of shares under stock-based compensation plans (1) 8.6 12.0 Contribution of shares to 401(k) Plan (1) 1.7 2.3 Ending balance $ (2,546.3 ) $ (2,456.0 ) Accumulated other comprehensive loss Beginning balance $ (349.6 ) $ (348.1 ) Other comprehensive income (loss), net of tax 3.5 (63.9 ) Ending balance $ (346.1 ) $ (412.0 ) (1) We fund a portion of our employee-related expenses using shares of our common stock held in treasury. We reduce capital in excess of par value based on the grant date fair value of the awards vested and record net gains or losses associated with our use of treasury shares to retained earnings. |
Schedule of dividends per common share | Three Months Ended April 3, 2021 March 28, 2020 Dividends per common share $ .62 $ .58 |
Schedule of changes in "Accumulated other comprehensive loss" (net of tax) | The changes in “Accumulated other comprehensive loss” (net of tax) for the three-month period ended April 3, 2021 were as follows: (In millions) Foreign Pension and Cash Flow Total Balance as of January 2, 2021 $ (248.1 ) $ (92.7 ) $ (8.8 ) $ (349.6 ) Other comprehensive income (loss) before reclassifications, net of tax 7.6 — (4.8 ) 2.8 Reclassifications to net income, net of tax — 1.2 (.5 ) .7 Other comprehensive income (loss), net of tax 7.6 1.2 (5.3 ) 3.5 Balance as of April 3, 2021 $ (240.5 ) $ (91.5 ) $ (14.1 ) $ (346.1 ) The changes in “Accumulated other comprehensive loss” (net of tax) for the three-month period ended March 28, 2020 were as follows: (In millions) Foreign Pension and Cash Flow Total Balance as of December 28, 2019 $ (245.1 ) $ (101.8 ) $ (1.2 ) $ (348.1 ) Other comprehensive income (loss) before reclassifications, net of tax (68.6 ) — 4.7 (63.9 ) Reclassifications to net income, net of tax — .6 (.6 ) — Other comprehensive income (loss), net of tax (68.6 ) .6 4.1 (63.9 ) Balance as of March 28, 2020 $ (313.7 ) $ (101.2 ) $ 2.9 $ (412.0 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities carried at fair value, measured on a recurring basis | The assets and liabilities carried at fair value, measured on a recurring basis, as of April 3, 2021 were as follows: Fair Value Measurements Using (In millions) Total Quoted Prices Significant Significant (Level 3) Assets Investments $ 33.4 $ 27.5 $ 5.9 $ — Derivative assets 9.1 — 9.1 — Bank drafts 11.9 11.9 — — Liabilities Cross-currency swap $ 31.7 $ — $ 31.7 $ — Derivative liabilities 5.8 — 5.8 — Contingent consideration liabilities 11.6 — — 11.6 The assets and liabilities carried at fair value, measured on a recurring basis, as of January 2, 2021 were as follows: Fair Value Measurements Using (In millions) Total Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets Investments $ 33.6 $ 27.4 $ 6.2 $ — Derivative assets 5.2 .1 5.1 — Bank drafts 12.8 12.8 — — Liabilities Cross-currency swap $ 36.7 $ — $ 36.7 $ — Derivative liabilities 9.5 .3 9.2 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Loss Contingency [Abstract] | |
Schedule of activity related to our environmental liabilities | The activity related to our environmental liabilities for the three months ended April 3, 2021 is shown below. (In millions) Balance at January 2, 2021 $ 21.1 Charges, net of reversals .2 Payments (.6 ) Balance at April 3, 2021 $ 20.7 |
Segment and Disaggregated Rev_2
Segment and Disaggregated Revenue Information (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Summary of net sales to unaffiliated customers | Three Months Ended (In millions) April 3, 2021 March 28, 2020 Net sales to unaffiliated customers Label and Graphic Materials: U.S. (1) $ 364.9 $ 328.1 Europe, Middle East and North Africa (1) 515.6 445.3 Asia (1) 323.1 241.3 Latin America 95.5 90.2 Other international 77.9 68.6 Total Label and Graphic Materials (1) 1,377.0 1,173.5 Retail Branding and Information Solutions: Apparel (1) 428.4 358.6 Printer Solutions 54.3 43.3 Total Retail Branding and Information Solutions (1) 482.7 401.9 Industrial and Healthcare Materials 191.6 147.6 Net sales to unaffiliated customers $ 2,051.3 $ 1,723.0 (1) In the first quarter of 2020, an insignificant portion of the net sales and associated operating loss related to the acquisition of Smartrac’s Transponder (RFID Inlay) division (“Smartrac”) was reported in our LGM reportable segment’s results, reflecting sales through that segment’s channels. To better align the reporting with our current organizational structure, the results associated with the acquisition were reclassified and are now included solely in the results for our RBIS reportable segment in both periods presented above. |
Schedule of Segment Reporting Information, by Segment | Three Months Ended (In millions) April 3, 2021 March 28, 2020 Intersegment sales Label and Graphic Materials $ 21.6 $ 22.4 Retail Branding and Information Solutions 8.3 6.5 Industrial and Healthcare Materials 2.1 1.6 Intersegment sales $ 32.0 $ 30.5 Income before taxes Label and Graphic Materials (1) $ 226.2 $ 172.5 Retail Branding and Information Solutions (1) 60.0 30.9 Industrial and Healthcare Materials 23.5 14.9 Corporate expense (25.9 ) (19.1 ) Interest expense (16.2 ) (18.8 ) Other non-operating 1.3 .5 Income before taxes $ 268.9 $ 180.9 Other expense (income), net, by reportable segment and Corporate Label and Graphic Materials (1) $ (1.9 ) $ 1.1 Retail Branding and Information Solutions (1) 2.1 3.3 Industrial and Healthcare Materials .1 .5 Corporate .6 — Other expense (income), net $ .9 $ 4.9 Other expense (income), net, by type Restructuring charges: Severance and related costs $ 2.4 $ 2.4 Asset impairment charges and lease cancellation costs .5 — Other items: Outcome of legal proceedings 2.1 — Transaction and related costs .7 2.5 Gain on sale (4.8 ) — Other expense (income), net $ .9 $ 4.9 (1) In the first quarter of 2020, an insignificant portion of the net sales and associated operating loss related to the acquisition of Smartrac was reported in our LGM reportable segment’s results, reflecting sales through that segment’s channels. To better align the reporting with our current organizational structure, the results associated with the acquisition were reclassified and are now included solely in the results for our RBIS reportable segment in both periods presented above. |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Supplemental Financial Information | |
Schedule of net inventories | (In millions) April 3, 2021 January 2, 2021 Raw materials $ 305.4 $ 268.6 Work-in-progress 218.6 210.3 Finished goods 262.7 238.3 Inventories, net $ 786.7 $ 717.2 |
Schedule of property, plant and equipment | (In millions) April 3, 2021 January 2, 2021 Property, plant and equipment $ 3,443.4 $ 3,476.3 Accumulated depreciation (2,114.4 ) (2,132.6 ) Property, plant and equipment, net $ 1,329.0 $ 1,343.7 |
Schedule of allowance for credit losses | Three Months Ended (In millions) April 3, 2021 March 28, 2020 Balance at January 2, 2021 $ 44.6 $ 27.1 Provision for (reversal of) credit losses (1) (1.9 ) 20.3 Amounts written off (1.1 ) (.5 ) Other, including foreign currency translation (.9 ) (.6 ) Balance at April 3, 2021 $ 40.7 $ 46.3 (1) For the three months ended March 28, 2020, our provision for credit losses reflected impacts on customers as a result of COVID-19. |
General (Details)
General (Details) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
General | ||
Length of fiscal period | 91 days | 91 days |
Acquisitions (Details)
Acquisitions (Details) - Zippy Yum And JDC $ in Millions | 1 Months Ended |
Mar. 31, 2021USD ($) | |
ACQUISITIONS | |
Purchase consideration | $ 42 |
Business combination contingent consideration maximum amount | 13 |
Business combination contingent consideration liability | $ 12 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles Resulting From Business Acquisitions (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2021USD ($) | |
Changes in the net carrying amount of goodwill | |
Goodwill, Beginning Balance | $ 1,136.4 |
Acquisition | 23.2 |
Acquisition adjustment | 1.2 |
Translation adjustments | (19.2) |
Goodwill, Ending Balance | 1,141.6 |
Label and Graphic Materials | |
Changes in the net carrying amount of goodwill | |
Goodwill, Beginning Balance | 480.9 |
Acquisition adjustment | 1.2 |
Translation adjustments | (13.1) |
Goodwill, Ending Balance | 469 |
Retail Branding and Information Solutions | |
Changes in the net carrying amount of goodwill | |
Goodwill, Beginning Balance | 471.8 |
Acquisition | 17.2 |
Translation adjustments | (3.8) |
Goodwill, Ending Balance | 485.2 |
Industrial and Healthcare Materials | |
Changes in the net carrying amount of goodwill | |
Goodwill, Beginning Balance | 183.7 |
Acquisition | 6 |
Translation adjustments | (2.3) |
Goodwill, Ending Balance | $ 187.4 |
Debt - (Details)
Debt - (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 03, 2021 | Jan. 02, 2021 | |
Debt | ||
Fair value of debt | $ 2,300 | $ 2,340 |
Revolving credit facility | ||
Debt | ||
Maximum borrowing capacity | $ 800 | $ 800 |
Covenants compliance | we were in compliance with this financial covenant | we were in compliance with this financial covenant |
Amount outstanding | $ 0 | $ 0 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Details) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Defined Benefit Plans | ||
Description on net periodic benefit cost | the net periodic benefit cost related to our U.S. and international plans was not material. | the net periodic benefit cost related to our U.S. and international plans was not material. |
Cost Reduction Actions (Details
Cost Reduction Actions (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2021USD ($)position | |
Restructuring charges: | |
Charges, Net of Reversals | $ 2.7 |
2019/2020 Actions | |
Restructuring charges: | |
Net number of position reduced as a result of Cost Reduction Actions | position | 100 |
Charges, Net of Reversals | $ 2.7 |
Cost Reduction Actions - Restru
Cost Reduction Actions - Restructuring Charges and Payments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Cost Reduction Actions | ||
Beginning Balance | $ 28.3 | |
Charges, Net of Reversals | 2.7 | |
Cash Payments | (11) | |
Non-cash Impairment | (0.3) | |
Foreign Currency Translation | (0.3) | |
Ending Balance | 19.4 | |
Severance and related costs | ||
Cost Reduction Actions | ||
Charges, Net of Reversals | 2.4 | $ 2.4 |
2019/2020 Actions | ||
Cost Reduction Actions | ||
Charges, Net of Reversals | 2.7 | |
2019/2020 Actions | Severance and related costs | ||
Cost Reduction Actions | ||
Beginning Balance | 28.3 | |
Charges, Net of Reversals | 2.4 | |
Cash Payments | (11) | |
Foreign Currency Translation | (0.3) | |
Ending Balance | 19.4 | |
2019/2020 Actions | Asset impairment charges | ||
Cost Reduction Actions | ||
Charges, Net of Reversals | 0.3 | |
Non-cash Impairment | $ (0.3) |
Cost Reduction Actions - Rest_2
Cost Reduction Actions - Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Restructuring charges: | ||
Restructuring charges | $ 2.7 | |
Other expense (income), net | ||
Restructuring charges: | ||
Restructuring charges | 2.9 | $ 2.4 |
Label and Graphic Materials | Other expense (income), net | ||
Restructuring charges: | ||
Restructuring charges | 0.7 | 0.4 |
Retail Branding and Information Solutions | Other expense (income), net | ||
Restructuring charges: | ||
Restructuring charges | 1.6 | 1.5 |
Industrial and Healthcare Materials | Other expense (income), net | ||
Restructuring charges: | ||
Restructuring charges | 0 | 0.5 |
Corporate Segment | Other expense (income), net | ||
Restructuring charges: | ||
Restructuring charges | $ 0.6 | $ 0 |
Financial Instruments (Details)
Financial Instruments (Details) - Cross-Currency Swap - USD ($) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Financial Instruments | ||
Notional amount | $ 250,000,000 | |
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ (31,700,000) | |
Amount of ineffectiveness from cross-currency swap | $ 0 |
Taxes Based on Income (Details)
Taxes Based on Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income before taxes | $ 268.9 | $ 180.9 |
Effective tax rate (as a percent) | 21.60% | 25.60% |
Tax cuts and jobs act of 2017, change in tax rate, income tax expense (benefits from) on global intangible low-taxed income of our foreign subsidiaries | $ 7 | $ 7.2 |
Reasonably possible decrease in uncertain tax positions, including interest and penalties, primarily as a result of audit settlements and closing tax years during the next 12 months | 9 | |
Provision for (benefit from) income taxes | 58.1 | $ 46.3 |
Tax Year 2018 [member] | ||
Provision for tax benefits related to ameded tax return and excess tax benefits related to share based payments | $ 14.1 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Net Income Per Common Share | ||
Net income | $ 209.5 | $ 134.2 |
Weighted average number of common shares outstanding | 83.1 | 83.3 |
Dilutive shares (additional common shares issuable under stock-based awards) | 0.8 | 0.8 |
Weighted average number of common shares outstanding, assuming dilution | 83.9 | 84.1 |
Net income per common share (in dollars per share) | $ 2.52 | $ 1.61 |
Net income per common share, assuming dilution (in dollars per share) | $ 2.50 | $ 1.60 |
Supplemental Equity and Compr_3
Supplemental Equity and Comprehensive Income Information - Shareholder Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Increase (Decrease) in Stockholders' Equity | |||
Common stock issued, $1 par value per share | $ 124.1 | $ 124.1 | $ 124.1 |
Beginning balance | 1,484.9 | ||
Net income | 209.5 | 134.2 | |
Other comprehensive income (loss), net of tax | 3.5 | $ (63.9) | |
Ending balance | $ 1,581.9 | ||
Dividends per common share (in dollars per share) | $ 0.62 | $ 0.58 | |
Capital in excess of par value | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | $ 862.1 | $ 874 | |
Issuance of shares under stock-based compensation plans | (16.3) | (21.5) | |
Ending balance | 845.8 | 852.5 | |
Retained earnings | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | 3,349.3 | 2,979.1 | |
Net income | 209.5 | 134.2 | |
Issuance of shares under stock-based compensation plans | (7.7) | (4.2) | |
Contribution of shares to 401(k) Plan | 4.9 | 4.1 | |
Dividends | (51.6) | (48.4) | |
Ending balance | 3,504.4 | 3,064.8 | |
Treasury stock, at cost | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (2,501) | (2,425.1) | |
Repurchase of shares for treasury | (55.6) | (45.2) | |
Issuance of shares under stock-based compensation plans | 8.6 | 12 | |
Contribution of shares to 401(k) Plan | 1.7 | 2.3 | |
Ending balance | (2,546.3) | (2,456) | |
Accumulated other comprehensive loss | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (349.6) | (348.1) | |
Other comprehensive income (loss), net of tax | 3.5 | (63.9) | |
Ending balance | $ (346.1) | $ (412) |
Supplemental Equity and Compr_4
Supplemental Equity and Comprehensive Income Information - Change in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Changes in Accumulated other comprehensive loss (net of tax) | ||
Beginning balance | $ 1,484.9 | |
Other comprehensive income (loss), net of tax | 3.5 | $ (63.9) |
Ending balance | 1,581.9 | |
Foreign Currency Translation | ||
Changes in Accumulated other comprehensive loss (net of tax) | ||
Beginning balance | (248.1) | (245.1) |
Other comprehensive income (loss) before reclassifications, net of tax | 7.6 | (68.6) |
Other comprehensive income (loss), net of tax | 7.6 | (68.6) |
Ending balance | (240.5) | (313.7) |
Pension and Other Postretirement Benefits | ||
Changes in Accumulated other comprehensive loss (net of tax) | ||
Beginning balance | (92.7) | (101.8) |
Reclassifications to net income, net of tax | 1.2 | 0.6 |
Other comprehensive income (loss), net of tax | 1.2 | 0.6 |
Ending balance | (91.5) | (101.2) |
Cash Flow Hedges | ||
Changes in Accumulated other comprehensive loss (net of tax) | ||
Beginning balance | (8.8) | (1.2) |
Other comprehensive income (loss) before reclassifications, net of tax | (4.8) | 4.7 |
Reclassifications to net income, net of tax | (0.5) | (0.6) |
Other comprehensive income (loss), net of tax | (5.3) | 4.1 |
Ending balance | (14.1) | 2.9 |
Accumulated other comprehensive loss | ||
Changes in Accumulated other comprehensive loss (net of tax) | ||
Beginning balance | (349.6) | (348.1) |
Other comprehensive income (loss) before reclassifications, net of tax | 2.8 | (63.9) |
Reclassifications to net income, net of tax | 0.7 | 0 |
Other comprehensive income (loss), net of tax | 3.5 | (63.9) |
Ending balance | $ (346.1) | $ (412) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Cash and cash equivalents | ||
Assets | ||
Investments | $ 0.4 | $ 1 |
Other current assets | ||
Assets | ||
Investments | 33 | 32.6 |
Recurring | ||
Assets | ||
Investments | 33.4 | 33.6 |
Derivative assets | 9.1 | 5.2 |
Bank drafts | 11.9 | 12.8 |
Liabilities | ||
Cross-currency swap | 31.7 | 36.7 |
Derivative liabilities | 5.8 | 9.5 |
Contingent consideration liabilities | 11.6 | |
Quoted Prices in Active Markets (Level 1) | ||
Assets | ||
Investments | 27.5 | 27.4 |
Derivative assets | 0.1 | |
Bank drafts | 11.9 | 12.8 |
Liabilities | ||
Derivative liabilities | 0 | 0.3 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Investments | 5.9 | 6.2 |
Derivative assets | 9.1 | 5.1 |
Liabilities | ||
Cross-currency swap | 31.7 | 36.7 |
Derivative liabilities | 5.8 | $ 9.2 |
Significant Other Observable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration liabilities | 11.6 | |
Significant Other Observable Inputs (Level 3) | Other current liabilities | ||
Liabilities | ||
Contingent consideration liabilities | 5 | |
Significant Other Observable Inputs (Level 3) | Long-term retirement benefits and other liabilities | ||
Liabilities | ||
Contingent consideration liabilities | $ 7 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | |
Apr. 03, 2021USD ($)sites | Jan. 02, 2021USD ($) | |
Environmental Liabilities Associated with Remediation | ||
Environmental site contingency number of sites | sites | 12 | |
Balance at beginning of period | $ 21.1 | |
Charges, net of reversals | 0.2 | |
Payments | (0.6) | |
Balance at end of period | 20.7 | |
Short term environmental liabilities | $ 8 | $ 9 |
Segment and Disaggregated Rev_3
Segment and Disaggregated Revenue Information - Net Sales to Unaffiliated Customers (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | $ 2,051.3 | $ 1,723 |
Industrial and Healthcare Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 191.6 | 147.6 |
Label and Graphic Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 1,377 | 1,173.5 |
Retail Branding and Information Solutions | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 482.7 | 401.9 |
Retail Branding and Information Solutions | Apparel | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 428.4 | 358.6 |
Retail Branding and Information Solutions | Printer Solutions | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 54.3 | 43.3 |
U.S. | Label and Graphic Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 364.9 | 328.1 |
Europe, Middle East and North Africa | Label and Graphic Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 515.6 | 445.3 |
Asia | Label and Graphic Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 323.1 | 241.3 |
Latin America | Label and Graphic Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | 95.5 | 90.2 |
Other international | Label and Graphic Materials | ||
Net sales to unaffiliated customers | ||
Net sales to unaffiliated customers | $ 77.9 | $ 68.6 |
Segment and Disaggregated Rev_4
Segment and Disaggregated Revenue Information - Additional Financial Information by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | $ 2,051.3 | $ 1,723 |
Interest expense | (16.2) | (18.8) |
Other non-operating expense (income), net | 1.3 | 0.5 |
Income before taxes | 268.9 | 180.9 |
Other expense (income), net | 0.9 | 4.9 |
Intersegment sales | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 32 | 30.5 |
Label and Graphic Materials | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 1,377 | 1,173.5 |
Label and Graphic Materials | Operating segments | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Income before taxes | 226.2 | 172.5 |
Other expense (income), net | (1.9) | 1.1 |
Label and Graphic Materials | Intersegment sales | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 21.6 | 22.4 |
Retail Branding and Information Solutions | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 482.7 | 401.9 |
Retail Branding and Information Solutions | Operating segments | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Income before taxes | 60 | 30.9 |
Other expense (income), net | 2.1 | 3.3 |
Retail Branding and Information Solutions | Intersegment sales | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 8.3 | 6.5 |
Industrial and Healthcare Materials | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 191.6 | 147.6 |
Industrial and Healthcare Materials | Operating segments | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Income before taxes | 23.5 | 14.9 |
Other expense (income), net | 0.1 | 0.5 |
Industrial and Healthcare Materials | Intersegment sales | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Net sales to unaffiliated customers | 2.1 | 1.6 |
Corporate | Operating segments | ||
SEGMENT AND DISAGGREGATED REVENUE INFORMATION | ||
Income before taxes | (25.9) | (19.1) |
Other expense (income), net | $ 0.6 | $ 0 |
Segment and Disaggregated Rev_5
Segment and Disaggregated Revenue Information - Other Expense (Income), Net by Type (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Restructuring charges: | ||
Restructuring charges | $ 2.7 | |
Other items: | ||
Outcome of legal proceedings | 2.1 | $ 0 |
Transaction and related costs | 0.7 | 2.5 |
Gain on sale of product line | (4.8) | 0 |
Other expense (income), net | 0.9 | 4.9 |
Severance and related costs | ||
Restructuring charges: | ||
Restructuring charges | 2.4 | 2.4 |
Asset impairment charges and lease cancellation costs | ||
Restructuring charges: | ||
Restructuring charges | $ 0.5 | $ 0 |
Supplemental Financial Inform_3
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Inventories | ||
Raw materials | $ 305.4 | $ 268.6 |
Work-in-progress | 218.6 | 210.3 |
Finished goods | 262.7 | 238.3 |
Inventories, net | $ 786.7 | $ 717.2 |
Supplemental Financial Inform_4
Supplemental Financial Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 3,443.4 | $ 3,476.3 |
Accumulated depreciation | (2,114.4) | (2,132.6) |
Property, plant and equipment, net | $ 1,329 | $ 1,343.7 |
Supplemental Financial Inform_5
Supplemental Financial Information - Allowance of credit losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Allowance for Credit Losses | ||
Balance at beginning of year | $ 44.6 | $ 27.1 |
Provision for (reversal of) credit losses | (1.9) | 20.3 |
Amounts written off | (1.1) | (0.5) |
Other, including foreign currency translation | (0.9) | (0.6) |
Balance at end of year | $ 40.7 | $ 46.3 |