Brady Corporation Reports Fiscal 2014 Second Quarter Results

Brady Corporation reported its financial results for the fiscal 2014 second quarter ended Jan. 31, 2014. Sales from continuing operations for the quarter ended Jan. 31, 2014 were up 6.8% to $291.2 million compared to $272.7 million in the second quarter of fiscal 2013.

Organic sales were down 1.1%; the acquisition of Precision Dynamics Corporation (PDC) added 8.5% to sales, and the impact of foreign currency translation decreased sales by 0.6%. By segment, organic sales were up 2.5% in Identification Solutions and down 6.8% in Workplace Safety.

Net earnings for the quarter ended Jan. 31, 2014 were $16.4 million compared to a net loss of $8.7 million in the same quarter last year. Net earnings from continuing operations for the quarter ended January 31, 2014, were $10.5 million compared to a loss of $10.7 million in the same quarter last year.

Net earnings (loss) per Class A Nonvoting Common Share were $0.31 for the second quarter ended January 31, 2014 compared to $(0.17) in the same quarter last year. Earnings (loss) from continuing operations per diluted Class A Nonvoting Common Share were $0.20 for the second quarter of fiscal 2014 compared to $(0.21) in the same quarter last year.

Sales from continuing operations for the six-month period ended January 31, 2014 were up 9.9% to $598.7 million compared to $544.7 million in the same period in fiscal 2013. Organic sales were down 1.6%; the acquisition of PDC added 12.0% to sales, and the impact of foreign currency translation decreased sales by 0.5%. By segment, organic sales were up 2.9% in Identification Solutions and down 8.4% in Workplace Safety.

Net earnings for the six-month period ended January 31, 2014 were $40.4 million compared to $18.5 million in the same six-month period last year. Net earnings from continuing operations for the six-month period ended January 31, 2014, were $28.7 million compared to $15.6 million in the same six-month period last year.

Net earnings per Class A Nonvoting Common Share were $0.77 for the six-month period ended Jan. 31, 2014 compared to $0.36 in the same six-month period last year. Earnings from continuing operations per diluted Class A Nonvoting Common Share were $0.55 for the six-month period ended Jan. 31, 2014 compared to $0.30 in the same six-month period last year.

“Our Identification Solutions business continued its steady revenue performance in the second quarter with 2.5% organic sales growth and 15.8% growth including sales from the PDC acquisition. During the quarter, sales in our Workplace Safety platform were down 7.7% which was below our expectations. We have been accelerating investments in our Workplace Safety business to drive organic sales growth. These investments are aimed at improving our e-commerce capabilities, expanding our product offerings and enhancing our overall value proposition which has resulted in an increase in new customers for the group. While we are investing to increase our competitiveness, we are balancing our investments to ensure more profitable growth over the long term,” said Thomas J. Felmer, Brady’s chief financial officer and interim president and CEO. “We have seen improvements in our Asian and European Identification Solutions’ results and continue to see growth opportunities driven by our new product pipeline and increased focus on industries such as healthcare; food and beverage; chemical, oil and gas; and aerospace and mass transit.”

The company anticipates organic sales from continuing operations to range from a slight contraction to low single-digit growth for the full year ending July 31, 2014. The company anticipates its earnings from continuing operations per diluted Class A Nonvoting Common Share to range from $1.55 to $1.75, exclusive of restructuring charges.