Brady Q1 Profit Down 12%, Backs Full-year Outlook

(RTTNews) - Brady Corp. (BRC), a provider of identification solutions, reported a 12 percent decline in profit for the first quarter as higher sales were more than offset by restructuring charges and higher operating expenses. The company also recorded a 10 percent decline in organic sales at its workplace safety business. Looking ahead, the company maintained its earnings outlook for fiscal 2014.

Thomas Felmer, Brady's Chief Financial Officer and Interim President and CEO, said, "We completed the reorganization of our company to focus on two business platforms, Identification Solutions and Workplace Safety that will provide long-term growth for Brady. Although total sales increased 13.0 percent in our first quarter, our Workplace Safety business experienced an organic sales decline of 10.0 percent."

The company's first-quarter net earnings declined to $23.93 million from $27.19 million in the prior-year quarter. Earnings per Class A non-voting common share declined to $0.46 from $0.53 last year. The latest quarter's results include restructuring charges of $4.64 million or $0.09 per share.

Excluding this, adjusted net earnings from continuing operations for the quarter were $0.42 per share, compared to $0.50 per share in the year-ago period. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales from continuing operations for the quarter increased 13 percent to $305.97 million from $270.87 million in the same period last year. Analysts had a consensus revenue estimate of $309.20 million.

Organic sales declined 2.2 percent, while the acquisition of Precision Dynamics Corp. or PDC added 15.6 percent to sales, and the impact of foreign currency translation decreased sales by 0.4 percent. By segment, organic sales rose 3 percent in Identification Solutions and declined 10 percent in Workplace Safety.

Looking ahead to fiscal 2014, Brady maintained its outlook for earnings from continuing operations per Class A non-voting common share in a range of $1.80 to $2.00 per share, excluding restructuring charges. Analysts expect the company to report earnings of $1.85 per share for the year.

The company expects organic sales from continuing operations to range from a slight contraction to low single-digit growth, with organic sales down in the first half of the year and returning to growth in the second half of fiscal 2014.

In Thursday's regular session, BRC is trading at $28.97, down $0.11 or 0.38 percent on a volume of 5,996 shares.