QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
x | o Accelerated filer | o Non-accelerated filer |
Page | ||||||||
Exhibits |
(Dollars in millions, except per share amount) | July 2, 2022 | January 1, 2022 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade accounts receivable, less allowances of $ | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Other intangibles resulting from business acquisitions, net | |||||||||||
Deferred tax assets | |||||||||||
Other assets | |||||||||||
$ | $ | ||||||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Short-term borrowings and current portion of long-term debt and finance leases | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued payroll and employee benefits | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt and finance leases | |||||||||||
Long-term retirement benefits and other liabilities | |||||||||||
Deferred tax liabilities and income taxes payable | |||||||||||
Commitments and contingencies (see Note 11) | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Treasury stock at cost, | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
$ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of products sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Marketing, general and administrative expense | |||||||||||||||||||||||
Other expense (income), net | ( | ||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other non-operating expense (income), net | ( | ( | ( | ( | |||||||||||||||||||
Income before taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Equity method investment (losses) gains | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Per share amounts: | |||||||||||||||||||||||
Net income per common share | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share, assuming dilution | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||
Common shares | |||||||||||||||||||||||
Common shares, assuming dilution |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Foreign currency translation | ( | ( | |||||||||||||||||||||
Pension and other postretirement benefits | |||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
Total comprehensive income, net of tax | $ | $ | $ | $ |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Provision for credit losses and sales returns | |||||||||||
Stock-based compensation | |||||||||||
Pension plan settlement loss | |||||||||||
Deferred taxes and other non-cash taxes | |||||||||||
Other non-cash expense and loss (income and gain), net | |||||||||||
Changes in assets and liabilities and other adjustments | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Investing Activities | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Purchases of software and other deferred charges | ( | ( | |||||||||
Proceeds from sales of property, plant and equipment | |||||||||||
Proceeds from insurance and sales (purchases) of investments, net | |||||||||||
Proceeds from sale of product line | |||||||||||
Payments for acquisitions, net of cash acquired, and investments in businesses | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing Activities | |||||||||||
Net increase (decrease) in borrowings with maturities of three months or less | ( | ||||||||||
Repayments of long-term debt and finance leases | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Share repurchases | ( | ( | |||||||||
Net (tax withholding) proceeds related to stock-based compensation | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of foreign currency translation on cash balances | ( | ( | |||||||||
Increase (decrease) in cash and cash equivalents | |||||||||||
Cash and cash equivalents, beginning of year | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
(In millions) | Label and Graphic Materials | Retail Branding and Information Solutions | Industrial and Healthcare Materials | Total | |||||||||||||||||||
Goodwill as of January 1, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Acquisitions(1) | |||||||||||||||||||||||
Acquisition adjustment(2) | ( | ( | |||||||||||||||||||||
Translation adjustments | ( | ( | ( | ( | |||||||||||||||||||
Goodwill as of July 2, 2022 | $ | $ | $ | $ |
Estimated Amortization Expense | |||||
2022 (remainder of year) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(Dollars in millions) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Income before taxes | $ | $ | $ | $ | |||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Effective tax rate | % | % | % | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
(A)Net income | $ | $ | $ | $ | |||||||||||||||||||
(B)Weighted average number of common shares outstanding | |||||||||||||||||||||||
Dilutive shares (additional common shares issuable under stock-based awards) | |||||||||||||||||||||||
(C) Weighted average number of common shares outstanding, assuming dilution | |||||||||||||||||||||||
Net income per common share: (A) ÷ (B) | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share, assuming dilution: (A) ÷ (C) | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Common stock issued, $ | $ | $ | $ | $ | |||||||||||||||||||
Capital in excess of par value | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Issuance of shares under stock-based compensation plans(1) | ( | ( | |||||||||||||||||||||
Ending balance | $ | $ | $ | $ | |||||||||||||||||||
Retained earnings | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Net income | |||||||||||||||||||||||
Issuance of shares under stock-based compensation plans(1) | ( | ( | |||||||||||||||||||||
Contribution of shares to 401(k) plan(1) | |||||||||||||||||||||||
Dividends | ( | ( | ( | ( | |||||||||||||||||||
Ending balance | $ | $ | $ | $ | |||||||||||||||||||
Treasury stock at cost | |||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Repurchase of shares for treasury | ( | ( | ( | ( | |||||||||||||||||||
Issuance of shares under stock-based compensation plans(1) | |||||||||||||||||||||||
Contribution of shares to 401(k) plan(1) | |||||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Accumulated other comprehensive loss | |||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Dividends per common share | $ | $ | $ | $ |
(In millions) | Foreign Currency Translation | Pension and Other Postretirement Benefits | Cash Flow Hedges | Total | |||||||||||||||||||
Balance as of January 1, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ( | |||||||||||||||||||||
Reclassifications to net income, net of tax | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
Balance as of July 2, 2022 | $ | ( | $ | ( | $ | ( | $ | ( |
(In millions) | Foreign Currency Translation | Pension and Other Postretirement Benefits | Cash Flow Hedges | Total | |||||||||||||||||||
Balance as of January 2, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | |||||||||||||||||||||||
Reclassifications to net income, net of tax | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
Balance as of July 3, 2021 | $ | ( | $ | ( | $ | ( | $ | ( |
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 | $ | $ | $ | $ | |||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Bank drafts | |||||||||||||||||||||||
Cross-currency swap | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities | $ | $ | $ | $ | |||||||||||||||||||
Contingent consideration liabilities |
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 | $ | $ | $ | $ | |||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Bank drafts | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Cross-currency swap | $ | $ | $ | $ | |||||||||||||||||||
Derivative liabilities | |||||||||||||||||||||||
Contingent consideration liabilities |
(In millions) | |||||
Balance at January 1, 2022 | $ | ||||
Charges, net of reversals | |||||
Payments | ( | ||||
Balance at July 2, 2022 | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Net sales to unaffiliated customers | |||||||||||||||||||||||
Label and Graphic Materials: | |||||||||||||||||||||||
U.S. | $ | $ | $ | $ | |||||||||||||||||||
Europe | |||||||||||||||||||||||
Asia | |||||||||||||||||||||||
Latin America | |||||||||||||||||||||||
Other international | |||||||||||||||||||||||
Total Label and Graphic Materials | |||||||||||||||||||||||
Retail Branding and Information Solutions: | |||||||||||||||||||||||
Apparel | |||||||||||||||||||||||
Identification Solutions and Vestcom | |||||||||||||||||||||||
Total Retail Branding and Information Solutions | |||||||||||||||||||||||
Industrial and Healthcare Materials | |||||||||||||||||||||||
Net sales to unaffiliated customers | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Intersegment sales | |||||||||||||||||||||||
Label and Graphic Materials | $ | $ | $ | $ | |||||||||||||||||||
Retail Branding and Information Solutions | |||||||||||||||||||||||
Industrial and Healthcare Materials | |||||||||||||||||||||||
Intersegment sales | $ | $ | $ | $ | |||||||||||||||||||
Income before taxes | |||||||||||||||||||||||
Label and Graphic Materials | $ | $ | $ | $ | |||||||||||||||||||
Retail Branding and Information Solutions | |||||||||||||||||||||||
Industrial and Healthcare Materials | |||||||||||||||||||||||
Corporate expense | ( | ( | ( | ( | |||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other non-operating expense (income), net | |||||||||||||||||||||||
Income before taxes | $ | $ | $ | $ | |||||||||||||||||||
Other expense (income), net, by reportable segment and Corporate | |||||||||||||||||||||||
Label and Graphic Materials | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Retail Branding and Information Solutions | |||||||||||||||||||||||
Industrial and Healthcare Materials | |||||||||||||||||||||||
Corporate | ( | ||||||||||||||||||||||
Other expense (income), net | $ | $ | ( | $ | $ | ||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||
Other expense (income), net, by type | |||||||||||||||||||||||
Restructuring charges: | |||||||||||||||||||||||
Severance and related costs | $ | $ | $ | $ | |||||||||||||||||||
Asset impairment charges and lease cancellation costs | |||||||||||||||||||||||
Other items: | |||||||||||||||||||||||
Transaction and related costs | |||||||||||||||||||||||
Outcomes of legal proceedings, net(1) | ( | ( | |||||||||||||||||||||
(Gain) loss on sales of assets, net | ( | ( | |||||||||||||||||||||
Gain on venture investment | ( | ||||||||||||||||||||||
Gain on sale of product line | ( | ||||||||||||||||||||||
Other expense (income), net | $ | $ | ( | $ | $ | ||||||||||||||||||
(1) First six months of 2021 include an indirect tax credit based on a Brazilian Federal Supreme Court ruling in the amount of $ |
(In millions) | July 2, 2022 | January 1, 2022 | |||||||||
Raw materials | $ | $ | |||||||||
Work-in-progress | |||||||||||
Finished goods | |||||||||||
Inventories | $ | $ |
(In millions) | July 2, 2022 | January 1, 2022 | |||||||||
Property, plant and equipment | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | $ | $ |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Beginning balance | $ | $ | |||||||||
Provision for (reversal of) credit losses | ( | ||||||||||
Amounts written off | ( | ( | |||||||||
Other, including foreign currency translation | ( | ||||||||||
Ending balance | $ | $ |
Three Months Ended July 2, 2022 | Six Months Ended July 2, 2022 | ||||||||||
Reported net sales change | 12 | % | 13 | % | |||||||
Foreign currency translation | 5 | 4 | |||||||||
Sales change ex. currency(1) | 17 | 17 | |||||||||
Acquisitions | (5) | (5) | |||||||||
Organic sales change(1) | 11 | % | 12 | % |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net cash provided by operating activities | $ | 394.4 | $ | 476.8 | |||||||
Purchases of property, plant and equipment | (106.8) | (83.8) | |||||||||
Purchases of software and other deferred charges | (9.9) | (6.4) | |||||||||
Proceeds from sales of property, plant and equipment | 2.1 | 1.0 | |||||||||
Proceeds from insurance and sales (purchases) of investments, net | 2.0 | .4 | |||||||||
Payments for certain acquisition-related transaction costs | .6 | — | |||||||||
Free cash flow | $ | 282.4 | $ | 388.0 |
Three Months Ended | |||||||||||
(In millions, except percentages) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales | $ | 2,347.0 | $ | 2,102.0 | |||||||
Cost of products sold | 1,703.5 | 1,525.7 | |||||||||
Gross profit | 643.5 | 576.3 | |||||||||
Marketing, general and administrative expense | 332.7 | 307.0 | |||||||||
Other expense (income), net | 3.4 | (.6) | |||||||||
Interest expense | 20.8 | 16.0 | |||||||||
Other non-operating expense (income), net | (1.3) | (1.4) | |||||||||
Income before taxes | $ | 287.9 | $ | 255.3 | |||||||
Gross profit margin | 27.4 | % | 27.4 | % |
Three Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Other expense (income), net, by type | |||||||||||
Restructuring charges: | |||||||||||
Severance and related costs | $ | 3.1 | $ | 1.6 | |||||||
Asset impairment charges and lease cancellation costs | — | .1 | |||||||||
Other items: | |||||||||||
Transaction and related costs | .1 | — | |||||||||
Outcomes of legal proceedings | .7 | (2.5) | |||||||||
(Gain) loss on sales of assets, net | (.5) | .2 | |||||||||
Other expense (income), net | $ | 3.4 | $ | (.6) |
Three Months Ended | |||||||||||
(In millions, except per share amounts and percentages) | July 2, 2022 | July 3, 2021 | |||||||||
Income before taxes | $ | 287.9 | $ | 255.3 | |||||||
Provision for income taxes | 73.4 | 70.4 | |||||||||
Equity method investment (losses) gains | — | (1.1) | |||||||||
Net income | $ | 214.5 | $ | 183.8 | |||||||
Per share amounts: | |||||||||||
Net income per common share | $ | 2.63 | $ | 2.21 | |||||||
Net income per common share, assuming dilution | 2.61 | 2.19 | |||||||||
Effective tax rate | 25.5 | % | 27.6 | % |
Three Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales including intersegment sales | $ | 1,521.7 | $ | 1,400.9 | |||||||
Less intersegment sales | (29.9) | (24.7) | |||||||||
Net sales | $ | 1,491.8 | $ | 1,376.2 | |||||||
Operating income(1) | 226.3 | 228.1 | |||||||||
(1)Included charges associated with restructuring actions in both years and outcome of legal proceedings in 2021. | $ | .5 | $ | (28.5) |
Three Months Ended | |||||
July 2, 2022 | |||||
Reported net sales change | 8 | % | |||
Foreign currency translation | 6 | ||||
Sales change ex. currency(1) | 14 | ||||
Organic sales change(1) | 15 | % | |||
(1) Totals may not sum due to rounding |
Three Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales including intersegment sales | $ | 665.6 | $ | 538.7 | |||||||
Less intersegment sales | (8.1) | (9.4) | |||||||||
Net sales | $ | 657.5 | $ | 529.3 | |||||||
Operating income(1) | 84.6 | 42.1 | |||||||||
(1)Included transaction and related costs in 2022, charges associated with restructuring actions and (gain) loss on sale of assets in both years and outcome of legal proceedings in 2021. | $ | 1.3 | $ | 27.5 |
Three Months Ended | |||||
July 2, 2022 | |||||
Reported net sales change | 24 | % | |||
Reclassification of sales between segments | (1) | ||||
Foreign currency translation | 4 | ||||
Sales change ex. currency(1) | 27 | ||||
Acquisitions | (23) | ||||
Organic sales change(1) | 5 | % | |||
(1) Totals may not sum due to rounding |
Three Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales including intersegment sales | $ | 202.5 | $ | 198.7 | |||||||
Less intersegment sales | (4.8) | (2.2) | |||||||||
Net sales | $ | 197.7 | $ | 196.5 | |||||||
Operating income(1) | 20.4 | 22.5 | |||||||||
(1) Included charges associated with restructuring actions in both years. | $ | .1 | $ | .5 |
Three Months Ended | |||||
July 2, 2022 | |||||
Reported net sales change | 1 | % | |||
Foreign currency translation | 4 | ||||
Sales change ex. currency(1) | 5 | ||||
Acquisitions | 2 | ||||
Organic sales change(1) | 7 | % | |||
(1) Totals may not sum due to rounding |
Six Months Ended | |||||||||||
(In millions, except percentages) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales | $ | 4,696.3 | $ | 4,153.3 | |||||||
Cost of products sold | 3,411.5 | 2,980.0 | |||||||||
Gross profit | 1,284.8 | 1,173.3 | |||||||||
Marketing, general and administrative expense | 687.7 | 619.3 | |||||||||
Other expense (income), net | 1.8 | .3 | |||||||||
Interest expense | 40.4 | 32.2 | |||||||||
Other non-operating expense (income), net | (2.7) | (2.7) | |||||||||
Income before taxes | $ | 557.6 | $ | 524.2 | |||||||
Gross profit margin | 27.4 | % | 28.2 | % |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Other expense (income), net, by type | |||||||||||
Restructuring charges: | |||||||||||
Severance and related costs | $ | 4.0 | $ | 4.0 | |||||||
Asset impairment charges and lease cancellation costs | — | .6 | |||||||||
Other items: | |||||||||||
Transaction and related costs | .3 | .7 | |||||||||
Outcomes of legal proceedings, net | 1.7 | (.4) | |||||||||
(Gain) loss on sales of assets, net | (.5) | .2 | |||||||||
Gain on venture investment | (3.7) | — | |||||||||
Gain on sale of product line | — | (4.8) | |||||||||
Other expense (income), net | $ | 1.8 | $ | .3 |
Six Months Ended | |||||||||||
(In millions, except per share amounts and percentages) | July 2, 2022 | July 3, 2021 | |||||||||
Income before taxes | $ | 557.6 | $ | 524.2 | |||||||
Provision for income taxes | 144.9 | 128.5 | |||||||||
Equity method investment (losses) gains | — | (2.4) | |||||||||
Net income | $ | 412.7 | $ | 393.3 | |||||||
Per share amounts: | |||||||||||
Net income per common share | $ | 5.03 | $ | 4.74 | |||||||
Net income per common share, assuming dilution | 5.00 | 4.69 | |||||||||
Effective tax rate | 26.0 | % | 24.5 | % |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales including intersegment sales | $ | 3,030.6 | $ | 2,799.5 | |||||||
Less intersegment sales | (58.6) | (46.3) | |||||||||
Net sales | $ | 2,972.0 | $ | 2,753.2 | |||||||
Operating income(1) | 433.5 | 454.3 | |||||||||
(1)Included gain on venture investment in 2022, charges associated with restructuring actions in both years and transaction and related costs, outcomes of legal proceedings and gain on sale of product line in 2021. | $ | (2.7) | $ | (30.4) |
Six Months Ended | |||||
July 2, 2022 | |||||
Reported net sales change | 8 | % | |||
Foreign currency translation | 5 | ||||
Sales change ex. currency(1) | 13 | ||||
Organic sales change(1) | 13 | % |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales including intersegment sales | $ | 1,355.6 | $ | 1,029.7 | |||||||
Less intersegment sales | (19.1) | (17.7) | |||||||||
Net sales | $ | 1,336.5 | $ | 1,012.0 | |||||||
Operating income(1) | 174.9 | 102.1 | |||||||||
(1) Included charges associated with restructuring actions, outcome of legal proceedings, transaction and related costs and (gain) loss on sale of assets in both years. | $ | 2.9 | $ | 29.6 |
Six Months Ended | |||||
July 2, 2022 | |||||
Reported net sales change | 32 | % | |||
Reclassification of sales between segments | (1) | ||||
Foreign currency translation | 3 | ||||
Sales change ex. currency(1) | 35 | ||||
Acquisitions | (23) | ||||
Organic sales change(1) | 12 | % |
Six Months Ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net sales including intersegment sales | $ | 397.6 | $ | 392.4 | |||||||
Less intersegment sales | (9.8) | (4.3) | |||||||||
Net sales | $ | 387.8 | $ | 388.1 | |||||||
Operating income(1) | 36.0 | 46.0 | |||||||||
(1) Included charges associated with restructuring actions in both years and transaction and related costs and gain on sale of assets in 2021. | $ | .1 | $ | .6 |
Six Months Ended | |||||
July 2, 2022 | |||||
Reported net sales change | — | % | |||
Foreign currency translation | 3 | ||||
Sales change ex. currency(1) | 3 | ||||
Acquisitions | 2 | ||||
Organic sales change(1) | 5 | % |
Six months ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net income | $ | 412.7 | $ | 393.3 | |||||||
Depreciation | 88.2 | 80.8 | |||||||||
Amortization | 57.0 | 28.8 | |||||||||
Provision for credit losses and sales returns | 23.9 | 17.5 | |||||||||
Stock-based compensation | 23.9 | 18.5 | |||||||||
Pension plan settlement loss | — | .4 | |||||||||
Deferred taxes and other non-cash taxes | 8.6 | 10.6 | |||||||||
Other non-cash expense and loss (income and gain), net | 15.0 | 13.8 | |||||||||
Changes in assets and liabilities and other adjustments | (234.9) | (86.9) | |||||||||
Net cash provided by operating activities | $ | 394.4 | $ | 476.8 |
Six months ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Purchases of property, plant and equipment | $ | (106.8) | $ | (83.8) | |||||||
Purchases of software and other deferred charges | (9.9) | (6.4) | |||||||||
Proceeds from sales of property, plant and equipment | 2.1 | 1.0 | |||||||||
Proceeds from insurance and sales (purchases) of investments, net | 2.0 | .4 | |||||||||
Proceeds from sale of product line | — | 6.7 | |||||||||
Payments for acquisitions, net of cash acquired, and investments in businesses | (37.0) | (33.8) | |||||||||
Net cash used in investing activities | $ | (149.6) | $ | (115.9) |
Six months ended | |||||||||||
(In millions) | July 2, 2022 | July 3, 2021 | |||||||||
Net increase (decrease) in borrowings with maturities of three months or less | $ | 176.9 | $ | (36.2) | |||||||
Repayments of long-term debt and finance leases | (3.4) | (3.1) | |||||||||
Dividends paid | (117.4) | (108.0) | |||||||||
Share repurchases | (268.7) | (95.0) | |||||||||
Net (tax withholding) proceeds related to stock-based compensation | (25.1) | (25.3) | |||||||||
Net cash used in financing activities | $ | (237.7) | $ | (267.6) |
Six Months Ended | |||||
(In millions) | July 2, 2022 | ||||
Change in net sales | $ | (150) |
(In millions, except percentages) | July 2, 2022 | July 3, 2021 | |||||||||
(A) Working capital (deficit) | $ | (51.7) | $ | 659.1 | |||||||
Reconciling items: | |||||||||||
Cash and cash equivalents | (164.8) | (344.8) | |||||||||
Other current assets | (228.8) | (233.1) | |||||||||
Short-term borrowings and current portion of long-term debt and finance leases | 738.6 | 33.6 | |||||||||
Accrued payroll and employee benefits and other current liabilities | 851.0 | 822.4 | |||||||||
(B) Operational working capital | $ | 1,144.3 | $ | 937.2 | |||||||
(C) Second-quarter net sales, annualized | $ | 9,388.0 | $ | 8,408.0 | |||||||
Operational working capital, as a percentage of annualized current-quarter net sales: (B) ÷ (C) | 12.2 | % | 11.1 | % |
Period(1) | Total number of shares purchased(2) | Average price paid per share | Total number of shares purchased as part of publicly announced plans(2)(3) | Approximate dollar value of shares that may yet be purchased under the plans(4) | |||||||||||||||||||
April 3, 2022 – April 30, 2022 | 308.0 | $ | 172.12 | 308.0 | $ | 905.0 | |||||||||||||||||
May 1, 2022 – May 28, 2022 | 212.7 | 173.44 | 212.7 | 868.1 | |||||||||||||||||||
May 29, 2022 – July 2, 2022 | 166.0 | 164.31 | 166.0 | 840.8 | |||||||||||||||||||
Total | 686.7 | $ | 170.64 | 686.7 | $ | 840.8 |
Exhibit 31.1* | |||||
Exhibit 31.2* | |||||
Exhibit 32.1** | |||||
Exhibit 32.2** | |||||
Exhibit 101.INS*** | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
Exhibit 101.SCH*** | Inline XBRL Extension Schema Document | ||||
Exhibit 101.CAL*** | Inline XBRL Extension Calculation Linkbase Document | ||||
Exhibit 101.LAB*** | Inline XBRL Extension Label Linkbase Document | ||||
Exhibit 101.PRE*** | Inline XBRL Extension Presentation Linkbase Document | ||||
Exhibit 101.DEF*** | Inline XBRL Extension Definition Linkbase Document | ||||
Exhibit 104*** | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included as part of this Exhibit 101 Inline XBRL document set |
* | Filed herewith. | ||||
** | Furnished herewith. | ||||
*** | Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, are deemed not filed for purposes of Section 18 of the Exchange Act and otherwise are not subject to liability under those sections. |
AVERY DENNISON CORPORATION | |||||
(Registrant) | |||||
/s/ Gregory S. Lovins | |||||
Gregory S. Lovins | |||||
Senior Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
/s/ Lori J. Bondar | |||||
Lori J. Bondar | |||||
Vice President, Controller, Treasurer, and Chief Accounting Officer | |||||
(Principal Accounting Officer) | |||||
August 2, 2022 |
/s/ | Mitchell R. Butier | |||||||
Mitchell R. Butier Chairman and Chief Executive Officer | ||||||||
August 2, 2022 |
/s/ | Gregory S. Lovins | |||||||
Gregory S. Lovins Senior Vice President and Chief Financial Officer | ||||||||
August 2, 2022 |
Dated: August 2, 2022 | ||||||||
/s/ | Mitchell R. Butier | |||||||
Mitchell R. Butier Chairman and Chief Executive Officer |
Dated: August 2, 2022 | ||||||||
/s/ | Gregory S. Lovins | |||||||
Gregory S. Lovins Senior Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jul. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances (in dollars) | $ 35.6 | $ 33.0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, issued (in shares) | 124,126,624 | 124,126,624 |
Common stock, outstanding (in shares) | 81,373,833 | 82,605,953 |
Treasury stock (in shares) | 42,752,791 | 41,520,671 |
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
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Income Statement [Abstract] | ||||
Net sales | $ 2,347.0 | $ 2,102.0 | $ 4,696.3 | $ 4,153.3 |
Cost of products sold | 1,703.5 | 1,525.7 | 3,411.5 | 2,980.0 |
Gross profit | 643.5 | 576.3 | 1,284.8 | 1,173.3 |
Marketing, general and administrative expense | 332.7 | 307.0 | 687.7 | 619.3 |
Other expense (income), net | 3.4 | (0.6) | 1.8 | 0.3 |
Interest expense | 20.8 | 16.0 | 40.4 | 32.2 |
Other non-operating expense (income), net | (1.3) | (1.4) | (2.7) | (2.7) |
Income before taxes | 287.9 | 255.3 | 557.6 | 524.2 |
Provision for income taxes | 73.4 | 70.4 | 144.9 | 128.5 |
Equity method investment (losses) gains | 0.0 | (1.1) | 0.0 | (2.4) |
Net income | $ 214.5 | $ 183.8 | $ 412.7 | $ 393.3 |
Earnings Per Share [Abstract] | ||||
Net income per common share (in dollars per share) | $ 2.63 | $ 2.21 | $ 5.03 | $ 4.74 |
Net income per common share, assuming dilution (in dollars per share) | $ 2.61 | $ 2.19 | $ 5.00 | $ 4.69 |
Weighted average number of shares outstanding: | ||||
Common shares (in shares) | 81.7 | 83.0 | 82.0 | 83.0 |
Common shares, assuming dilution (in shares) | 82.1 | 83.8 | 82.6 | 83.9 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 214.5 | $ 183.8 | $ 412.7 | $ 393.3 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation | (53.7) | 10.1 | (33.4) | 17.7 |
Pension and other postretirement benefits | 0.9 | 0.8 | 1.7 | 2.0 |
Cash flow hedges | 1.7 | 7.6 | 3.5 | 2.3 |
Other comprehensive income (loss), net of tax | (51.1) | 18.5 | (28.2) | 22.0 |
Total comprehensive income, net of tax | $ 163.4 | $ 202.3 | $ 384.5 | $ 415.3 |
General |
6 Months Ended |
---|---|
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The unaudited Condensed Consolidated Financial Statements and related notes in this Quarterly Report on Form 10-Q are presented as permitted by Article 10 of Regulation S-X and do not contain certain information included in the audited Consolidated Financial Statements and related notes in our 2021 Annual Report on Form 10-K, which should be read in conjunction with this Quarterly Report on Form 10-Q. These unaudited Condensed Consolidated Financial Statements contain all adjustments of a normal and recurring nature necessary for a fair statement of our interim results. Interim results of operations are not necessarily indicative of future results. These unaudited Condensed Consolidated Financial Statements reflect our current estimates and assumptions that affect our reported amounts of assets and liabilities and related disclosures as of the date of the financial statements and our reported amounts of sales and expenses during the reporting periods presented. Fiscal Periods The three and six months ended July 2, 2022 and July 3, 2021 each consisted of thirteen-week and twenty-six week periods, respectively.
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Acquisitions |
6 Months Ended |
---|---|
Jul. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions During January 2022, we completed our acquisitions of TexTrace AG ("TexTrace"), a Switzerland-based technology developer specializing in custom-made woven and knitted radio-frequency identification ("RFID") products that can be sewn onto or inserted into garments, and Rietveld Serigrafie B.V. and Rietveld Screenprinting Serigrafi Baski Matbaa Tekstil Ithalat Ihracat Sanayi ve Ticaret Limited Sirketi (collectively, "Rietveld"), a Netherlands-based provider of external embellishment solutions and application and printing methods for performance brands and team sports in Europe. These acquisitions expand the product portfolio in our Retail Branding and Information Solutions ("RBIS") reportable segment. The acquisitions of TexTrace and Rietveld are referred to collectively as the "2022 Acquisitions." The aggregate purchase consideration for the 2022 Acquisitions was approximately $35 million. We funded the 2022 Acquisitions using cash and commercial paper borrowings. In addition to the cash paid at closing, the sellers in one of these acquisitions are eligible for earn-out payments of up to $30 million, subject to the acquired company achieving certain post-acquisition performance targets. As of the acquisition date, we include an estimate of the fair value of these earn-out payments in the aggregate purchase consideration. The 2022 Acquisitions were not material, individually or in the aggregate, to the unaudited Condensed Consolidated Financial Statements.
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Goodwill and Other Intangibles Resulting from Business Acquisitions |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles Resulting from Business Acquisitions | Goodwill and Other Intangibles Resulting from Business Acquisitions The goodwill from the 2022 Acquisitions was not material to the unaudited Condensed Consolidated Financial Statements. Refer to Note 2, "Acquisitions," to the unaudited Condensed Consolidated Financial Statements for more information. Changes in the net carrying amount of goodwill for the six months ended July 2, 2022 by reportable segment are shown below.
(1)Goodwill acquired related to the 2022 Acquisitions. We expect the recognized goodwill related to the 2022 Acquisitions to be non-deductible for income tax purposes. (2)Measurement period adjustment related to the finalization of the purchase price allocation for the acquisition of CB Velocity Holdings, LLC completed in August 2021. In connection with the 2022 Acquisitions, we acquired approximately $21 million of identifiable finite-lived intangible assets, which consisted of patented and other developed technology as well as customer relationships. Amortization expense for all finite-lived intangible assets resulting from business acquisitions was $20.6 million and $6.5 million for the three months ended July 2, 2022 and July 3, 2021, respectively, and $41.1 million and $12.9 million for the six months ended July 2, 2022 and July 3, 2021, respectively. Estimated future amortization expense related to existing finite-lived intangible assets for the remainder of fiscal year 2022 and for each of the next four fiscal years is shown below. These amounts include the effects of the 2022 Acquisitions and updated amounts from year-end 2021.
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Debt |
6 Months Ended |
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Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 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 $3.03 billion at July 2, 2022 and $3.25 billion at January 1, 2022. 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 July 2, 2022 and January 1, 2022, we were in compliance with this financial covenant. No balance was outstanding under the Revolver as of July 2, 2022 or January 1, 2022.
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Cost Reduction Actions |
6 Months Ended |
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Jul. 02, 2022 | |
Restructuring and Related Activities [Abstract] | |
Cost Reduction Actions | Cost Reduction Actions 2019/2020 Actions During the six months ended July 2, 2022, we recorded $4 million in restructuring charges related to our 2019/2020 actions. These charges consisted of severance and related costs for the reduction of approximately 220 positions at numerous locations across our company. These actions, which were primarily taken in our RBIS reportable segment, largely related to global headcount and footprint reductions. Accruals for severance and related costs, as well as lease cancellation costs, were not material as of July 2, 2022. |
Financial Instruments |
6 Months Ended |
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Jul. 02, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 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 was $14.4 million as of July 2, 2022, which was included in "Other Assets" and $(10.3) million as of January 1, 2022, which was included in “Long-term retirement benefits and other liabilities” in the unaudited Condensed Consolidated Balance Sheets. Refer to Note 10, “Fair Value Measurements,” to the unaudited Condensed Consolidated Financial Statements for more information. We recorded no ineffectiveness from our cross-currency swap to earnings during the three or six months ended July 2, 2022 or July 3, 2021.
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Taxes Based on Income |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Based on Income | Taxes Based on Income The following table summarizes our income before taxes, provision for income taxes, and effective tax rate:
Our provision for income taxes for the three and six months ended July 2, 2022 included $7 million and $13.7 million, respectively, of net tax charge related to the tax on global intangible low-taxed income (“GILTI”) of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from foreign-derived intangible income (“FDII”). Our provision for income taxes for the three and six months ended July 2, 2022 also included $5.8 million of net discrete tax benefit primarily from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years. Our provision for income taxes for the three and six months ended July 3, 2021 included $7 million and $14 million, respectively, 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 income taxes for the three and six months ended July 3, 2021 included $3.5 million of net discrete tax charge related to tax effects on outcomes of certain legal proceedings and $3.6 million of net discrete tax benefit primarily from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years. Our provision for income taxes for the six months ended July 3, 2021 also reflected $14.1 million of return-to-provision benefit related to an election made on our amended 2018 U.S. federal tax return. 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 subject to a high effective tax rate from their GILTI inclusions. We have not yet determined whether to make the election for tax year 2021 or 2022. We continue to evaluate the impact of these elections and currently anticipate that the benefit from making this election on our 2021 or 2022 U.S. federal 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 for income taxes and the related liabilities. To date, we and our U.S. subsidiaries have completed the Internal Revenue Service’s Compliance Assurance Process Program through 2018. 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 $5 million, primarily as a result of closing tax years.
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Net Income Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share | Net Income Per Common Share Net income per common share was computed as follows:
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Supplemental Equity and Comprehensive Income Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Equity and Comprehensive Income Information | Supplemental Equity and Comprehensive Income Information Consolidated Changes in Shareholders’ Equity
(1)We fund a portion of our employee-related costs 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 vesting awards and record net gains or losses associated with using treasury shares to retained earnings. Dividends per common share were as follows:
In April 2022, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases and in addition to the amount outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased. As of July 2, 2022, shares of our common stock in the aggregate amount of $840.8 million remained authorized for repurchase under our outstanding Board authorizations. Changes in Accumulated Other Comprehensive Loss The changes in “Accumulated other comprehensive loss” (net of tax) for the six-month period ended July 2, 2022 were as follows:
The changes in “Accumulated other comprehensive loss” (net of tax) for the six-month period ended July 3, 2021 were as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements Assets and liabilities carried at fair value, measured on a recurring basis, as of July 2, 2022 were as follows:
Assets and liabilities carried at fair value, measured on a recurring basis, as of January 1, 2022 were as follows:
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 July 2, 2022, investments of $0.3 million and $31.2 million were included in “Cash and cash equivalents” and “Other current assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. As of January 1, 2022, investments of $0.5 million and $33.4 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 certain acquisitions completed in 2022 and 2021. These payments are dependent on the respective acquired company achieving certain post-acquisition performance targets and are recorded based on the expected payments as of July 2, 2022. We have classified these liabilities as Level 3. In addition to the items described above, we also have made venture investments in privately held companies and utilize the measurement alternative for equity investments that do not have readily determinable fair values, measuring them at cost less impairment plus or minus observable price changes in orderly transactions. The total carrying value of our venture investments was approximately $58 million and $52 million as of July 2, 2022 and January 1, 2022, respectively, and included in “Other assets” in the unaudited Condensed Consolidated Balance Sheets.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | 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 we incur liabilities that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. We are currently party to a litigation in which ADASA Inc. (“Adasa”), an unrelated third party, alleged that certain of our RFID products infringed on its patent. We recorded a contingent liability related to this matter in the second quarter of 2021 in the amount of $26.6 million based on a jury verdict issued on May 14, 2021. During the third quarter of 2021, the first instance judgment associated with the jury verdict was issued. This resulted in additional potential liability of $35.8 million for, among other things, royalties on a higher number of tags and royalties on tags sold after March 31, 2021. We have not increased our previously recorded contingent liability for this additional potential liability. With continued evaluation of the matter and our defenses, as well as consultation with our outside counsel, we continue to believe that Adasa’s patent is invalid and that, even if valid, we have not infringed it, and that the royalty rate used as the basis for the jury’s determination is unreasonable under prevailing industry standards, as well as that any liability related to this matter would be substantially lower than that which is reflected in either the jury verdict or the first instance judgment. On October 22, 2021, we appealed the judgment to the United States Court of Appeals for the Federal Circuit and continue to believe meritorious defenses exist to significantly reduce the liability we currently have recorded. As our appeal is still pending, we maintained our current contingent liability of $26.6 million for this matter as a reasonable estimate within the range of probable outcomes. We have largely completed our migration to alternative encoding methods used in our other RFID tags. 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 and determined such to be probable, 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. 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. 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 matters could affect future results of operations should our exposure be materially different from our estimates or should we incur liabilities that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. 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”). 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. As of July 2, 2022, we have been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other responsible state agencies as a PRP at eleven 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 six months ended July 2, 2022 is shown below.
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Segment and Disaggregated Revenue Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Disaggregated Revenue Information | 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 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.
Additional Segment Information Additional financial information by reportable segment and Corporate is shown below.
Other expense (income), net, by type was as follows:
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Supplemental Financial Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | Note 13. Supplemental Financial Information Inventories The table below summarizes the amounts in inventories.
Property, Plant and Equipment The table below summarizes the amounts in property, plant and equipment, net.
Allowance for Credit Losses The activity related to our allowance for credit losses is shown below.
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Goodwill and Other Intangibles Resulting from Business Acquisitions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in net carrying amount of goodwill | Changes in the net carrying amount of goodwill for the six months ended July 2, 2022 by reportable segment are shown below.
(1)Goodwill acquired related to the 2022 Acquisitions. We expect the recognized goodwill related to the 2022 Acquisitions to be non-deductible for income tax purposes. (2)Measurement period adjustment related to the finalization of the purchase price allocation for the acquisition of CB Velocity Holdings, LLC completed in August 2021.
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Estimated amortization expense for finite-lived intangible assets | Estimated future amortization expense related to existing finite-lived intangible assets for the remainder of fiscal year 2022 and for each of the next four fiscal years is shown below. These amounts include the effects of the 2022 Acquisitions and updated amounts from year-end 2021.
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Taxes Based on Income (Tables) |
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of income before taxes, provision for (benefit from) income taxes, and effective tax rate from continuing operations | The following table summarizes our income before taxes, provision for income taxes, and effective tax rate:
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Net Income Per Common Share (Tables) |
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net income per common share | Net income per common share was computed as follows:
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Supplemental Equity and Comprehensive Income Information (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of consolidated statements of shareholders' equity | Consolidated Changes in Shareholders’ Equity
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Schedule of dividends per common share | Dividends per common share were as follows:
In April 2022, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases and in addition to the amount outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased. As of July 2, 2022, shares of our common stock in the aggregate amount of $840.8 million remained authorized for repurchase under our outstanding Board authorizations.
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Schedule of changes in "Accumulated other comprehensive loss" (net of tax) | The changes in “Accumulated other comprehensive loss” (net of tax) for the six-month period ended July 2, 2022 were as follows:
The changes in “Accumulated other comprehensive loss” (net of tax) for the six-month period ended July 3, 2021 were as follows:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities carried at fair value, measured on a recurring basis | Assets and liabilities carried at fair value, measured on a recurring basis, as of July 2, 2022 were as follows:
Assets and liabilities carried at fair value, measured on a recurring basis, as of January 1, 2022 were as follows:
|
Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of activity related to environmental liabilities | The activity related to our environmental liabilities for the six months ended July 2, 2022 is shown below.
|
Segment and Disaggregated Revenue Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | 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 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.
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Schedule of segment reporting information by segment | Additional financial information by reportable segment and Corporate is shown below.
Other expense (income), net, by type was as follows:
|
Supplemental Financial Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net inventories | The table below summarizes the amounts in inventories.
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Schedule of property, plant and equipment | The table below summarizes the amounts in property, plant and equipment, net.
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Schedule of allowance for credit losses | The activity related to our allowance for credit losses is shown below.
|
Acquisitions (Details) - 2022 Acquisitions $ in Millions |
1 Months Ended |
---|---|
Jan. 31, 2022
USD ($)
| |
ACQUISITIONS | |
Purchase consideration | $ 35 |
Business combination contingent consideration maximum amount | $ 30 |
Goodwill and Other Intangibles Resulting from Business Acquisitions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 20.6 | $ 6.5 | $ 41.1 | $ 12.9 |
2022 Acquisitions | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite lived intangible assets acquired | $ 21.0 | $ 21.0 |
Goodwill and Other Intangibles Resulting from Business Acquisitions - Expected Amortization (Details) $ in Millions |
Jul. 02, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (remainder of year) | $ 41.0 |
2023 | 81.0 |
2024 | 79.4 |
2025 | 78.6 |
2026 | $ 75.6 |
Debt - Narrative (Details) - USD ($) |
Jul. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Fair value of debt | $ 3,030,000,000.00 | $ 3,250,000,000 |
Revolving credit facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 800,000,000 | |
Amount outstanding | $ 0 | $ 0 |
Cost Reduction Actions - Narrative (Details) - Restructuring 2019 2020 Actions $ in Millions |
6 Months Ended |
---|---|
Jul. 02, 2022
USD ($)
position
| |
Restructuring charges: | |
Restructuring charges | $ | $ 4.0 |
Net number of positions reduced as a result of Cost Reduction Actions | position | 220 |
Financial Instruments (Details) - Cross-Currency Swap - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) |
Jul. 02, 2022 |
Jan. 01, 2022 |
Mar. 31, 2020 |
---|---|---|---|
Financial Instruments | |||
Notional amount | $ 250,000,000 | ||
Foreign currency contract, asset, fair value disclosure | $ 14,400,000 | ||
Foreign currency contracts, liability, fair value disclosure | $ 10,300,000 |
Taxes Based on Income (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Income before taxes | $ 287.9 | $ 255.3 | $ 557.6 | $ 524.2 |
Provision for income taxes | $ 73.4 | $ 70.4 | $ 144.9 | $ 128.5 |
Effective tax rate (as a percent) | 25.50% | 27.60% | 26.00% | 24.50% |
Effective Income Tax Rate Reconciliation, GILTI, Amount | $ 7.0 | $ 7.0 | $ 13.7 | $ 14.0 |
Effective Income Tax Rate Reconciliation, Tax Contingency, Amount | 5.8 | 3.6 | 5.8 | 3.6 |
Effective income tax rate reconciliation, legal settlements, amount | $ 3.5 | 3.5 | ||
Return to provision benefit amount | $ 14.1 | |||
The amount of reasonably possible net decrease in uncertain tax positions, including interest and penalties, primarily as a result of closing tax years during the next 12 months | $ 5.0 | $ 5.0 |
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Net Income Per Common Share | ||||
Net income | $ 214.5 | $ 183.8 | $ 412.7 | $ 393.3 |
Weighted average number of common shares outstanding (in shares) | 81.7 | 83.0 | 82.0 | 83.0 |
Dilutive shares (additional common shares issuable under stock-based awards) (in shares) | 0.4 | 0.8 | 0.6 | 0.9 |
Weighted average number of common shares outstanding, assuming dilution (in shares) | 82.1 | 83.8 | 82.6 | 83.9 |
Net income per common share (in dollars per share) | $ 2.63 | $ 2.21 | $ 5.03 | $ 4.74 |
Net income per common share, assuming dilution (in dollars per share) | $ 2.61 | $ 2.19 | $ 5.00 | $ 4.69 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
Jul. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Fair value, assets and liabilities measured on a recurring basis | ||
Fair value of venture investments | $ 58.0 | $ 52.0 |
Recurring | ||
Fair value, assets and liabilities measured on a recurring basis | ||
Investments | 31.5 | 33.9 |
Cash and cash equivalents | Recurring | ||
Fair value, assets and liabilities measured on a recurring basis | ||
Investments | 0.3 | 0.5 |
Other current assets | Recurring | ||
Fair value, assets and liabilities measured on a recurring basis | ||
Investments | $ 31.2 | $ 33.4 |
Commitments and Contingencies - Narrative (Details) $ in Millions |
Jul. 02, 2022
USD ($)
site
|
Jan. 01, 2022
USD ($)
|
Oct. 02, 2021
USD ($)
|
Jul. 03, 2021
USD ($)
|
---|---|---|---|---|
Environmental Liabilities Associated with Remediation | ||||
Environmental site contingency number of sites | site | 11 | |||
Short term environmental liabilities | $ 3.0 | $ 2.0 | ||
Jury Verdict | ||||
Environmental Liabilities Associated with Remediation | ||||
Current legal reserve | $ 26.6 | |||
Potential liability | $ 35.8 | |||
Infringement of patent | ||||
Environmental Liabilities Associated with Remediation | ||||
Current legal reserve | $ 26.6 |
Commitments and Contingencies - Activity (Details) $ in Millions |
6 Months Ended |
---|---|
Jul. 02, 2022
USD ($)
| |
Environmental Liabilities Associated with Remediation | |
Balance at beginning of period | $ 21.9 |
Charges, net of reversals | 1.0 |
Payments | (0.9) |
Balance at end of period | $ 22.0 |
Segment and Disaggregated Revenue Information - Other Expense (Income), Net by Type (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Other items: | ||||
Transaction and related costs | $ 0.1 | $ 0.0 | $ 0.3 | $ 0.7 |
Outcomes of legal proceedings, net | 0.7 | (2.5) | 1.7 | (0.4) |
(Gain) loss on sales of assets, net | (0.5) | 0.2 | (0.5) | 0.2 |
Gain on venture investment | 0.0 | 0.0 | (3.7) | 0.0 |
Gain on sale of product line | 0.0 | 0.0 | 0.0 | (4.8) |
Other expense (income), net | 3.4 | (0.6) | 1.8 | 0.3 |
Infringement of patent | ||||
Other items: | ||||
Outcomes of legal proceedings, net | 26.6 | 26.6 | ||
Reduction in taxes | ||||
Other items: | ||||
Outcomes of legal proceedings, net | (29.1) | (29.1) | ||
Severance and related costs | ||||
Restructuring charges: | ||||
Restructuring charges | 3.1 | 1.6 | 4.0 | 4.0 |
Asset impairment charges and lease cancellation costs | ||||
Restructuring charges: | ||||
Restructuring charges | $ 0.0 | $ 0.1 | $ 0.0 | $ 0.6 |
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Millions |
Jul. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Inventories | ||
Raw materials | $ 435.9 | $ 393.6 |
Work-in-progress | 254.5 | 233.1 |
Finished goods | 299.7 | 280.5 |
Inventories | $ 990.1 | $ 907.2 |
Supplemental Financial Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions |
Jul. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Supplemental Financial Information | ||
Property, plant and equipment | $ 3,591.8 | $ 3,626.2 |
Accumulated depreciation | (2,140.8) | (2,148.5) |
Property, plant and equipment, net | $ 1,451.0 | $ 1,477.7 |
Supplemental Financial Information - Allowance of credit losses (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 33.0 | $ 44.6 |
Provision for (reversal of) credit losses | 5.7 | (2.7) |
Amounts written off | (1.9) | (2.5) |
Other, including foreign currency translation | (1.2) | 0.0 |
Ending balance | $ 35.6 | $ 39.4 |
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