Brady Corporation Reports Fiscal 2Q 2016 Results

Brady Corporation reported its financial results for its fiscal 2016 second quarter ended Jan. 31, 2016.
 
Net earnings for the quarter ended Jan. 31, 2016 were $15.3 million, compared to $11.6 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $0.30 for the second quarter, compared to $0.23 in the same quarter last year.
 
Sales for the quarter ended January 31, 2016, decreased 5.0% to $268.6 million compared to $282.6 million in the second quarter of fiscal 2015. Total organic sales increased 0.4% and foreign currency translation decreased sales by 5.4%. By segment, organic sales increased 0.7% in Identification Solutions and decreased 0.1% in Workplace Safety.
 
Net earnings for the six-month period ended Jan. 31, 2016, were $34.0 million compared to $25.2 million in the same period last year. Earnings per diluted Class A Nonvoting Common Share were $0.67 for the six-month period ended Jan. 31, 2016, compared to earnings from continuing operations per diluted Class A Nonvoting Common Share of $0.53 in the same period in fiscal 2015.
 
Sales for the six-month period ended January 31, 2016, decreased 6.9% to $551.7 million compared to $592.9 million in the same period in fiscal 2015. Total organic sales decreased 0.9% and the impact of foreign currency translation decreased sales by 6.0%. Organic sales decreased 0.9% in both the Identification Solutions and Workplace Safety segments.
 
On Feb. 16, 2016, Brady’s Board of Directors authorized an increase in the company’s share buyback program, bringing the amount of the Company’s Class A Common Stock authorized for repurchase up to a total of two million shares.
 
“Our focus on operational efficiency and local accountability resulted in increased organic sales and net earnings in the second quarter. Our GAAP EPS increased 30.4% and our Non-GAAP EPS increased 3.4% when compared with the second quarter of last year. We continue making improvements in our customer service metrics while gaining efficiencies throughout the organization,” said J. Michael Nauman, Brady’s president and CEO.
 
“Although organic sales increased in the second quarter, we expect to continue to be challenged by macro-economic conditions in certain industrial markets and geographies, including the US, Canada, Brazil and China, which will continue to work against our efforts to improve results,” added Nauman. “Our top priorities include growing our pipeline of innovative new products while delivering operational efficiencies, which will position Brady to compete successfully and deliver improved results to our shareholders. These results include our efforts to invest properly in creating complete solutions for our customers’ current and future needs.”
 
“Our focus on driving increased cash flow is apparent in our second quarter financial results, where net cash provided by operating activities increased more than 400% over the second quarter of last year. Our year-to-date net cash provided by operating activities has more than doubled as we finished with $58.3 million for the six-month period ended Jan. 31, 2016, compared with $23.9 million for the same period last year,” said Brady CFO Aaron Pearce. “In the first six months of this year, we have returned $20.4 million to our shareholders in the form of dividends and we have repurchased 1,146,271 shares for a total of $23.4 million, all while reducing our net debt position by $6.7 million since the start of this fiscal year. We will continue to be diligent in the allocation of our capital with our first priority being to drive organic growth and our remaining priorities to return funds to our shareholders in the form of dividends and to execute share buybacks in an opportunistic manner to ensure that our uses of cash are generating incremental value for our shareholders.”