Brady Q4 Results Miss Estimates, Guides 2015 In Line

(RTTNews) - Identification solutions provider Brady Corp. (BRC) reported Thursday a loss for the fourth quarter that narrowed from last year, reflecting lower impairment charges and expenses as well as improved sales. Both adjusted earnings per share and quarterly sales missed analysts' expectations. The company also initiated its earnings forecast for the full-year 2015, in line with Street view.

"We were encouraged by our revenue growth in the fourth quarter, which marks the second consecutive quarter of organic sales growth. This marks the first quarter of growth in our Workplace Safety business since fiscal 2012 as we continue to add new customers, increase revenues over the internet and realize returns from increased catalog advertising," President and CEO Michael Nauman said in a statement.

Nauman was appointed to the positions on August 4 after CFO Thomas Felmer served in the positions for almost a year on an interim basis since October 2013, when Frank Jaehnert retired.

The Milwaukee, Wisconsin-based company reported a net loss of $110.41 million or $2.15 per Class A share for the fourth quarter, narrower than $177.27 million or $3.43 per Class A share in the prior-year quarter.

Loss from continuing operations narrowed to $96.98 million or $1.89 per Class A share from $175.56 million or $3.40 per Class A share last year.

Results for the latest quarter included impairment charges of $148.6 million primarily due to the write down of intangible assets in the vompany's PeopleID reporting unit, compared to $204.4 million last year.

Excluding items, adjusted net earnings from continuing operations for the quarter was $20.99 million or $0.41 per Class A share, compared to $28.59 million or $0.55 per Class A share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts estimates typically exclude special items.

Net sales for the quarter increased 2.0 percent to $316.73 million from $310.59 million in the same quarter last year, but missed six Wall Street analysts' consensus estimate of $318.53 million.

Organic sales growth was 1.1 percent, with 0.9 percent organic growth in workplace safety and 1.2 percent organic growth in identification solutions.

ID solutions sales grew 1.6 percent to $214.40 million, and workplace safety sales increased 2.8 percent to $102.34 million from the year-ago quarter.

Segment profit as a percent of sales contracted 260 basis points to 19.5 percent from last year's 22.1 percent.

Total operating expenses for the quarter decreased to $270.07 million from $336.39 million in the prior-year quarter.

On August 1, Brady completed the second and final phase of the divestiture of its Asian and European precision die-cut converting business to Boyd Corp.

On Wednesday, the company's board announced its 29th consecutive increase in annual dividend to shareholders of the company's Class A Common stock to $0.80 per share from $0.78 per share. It will pay a quarterly dividend of $0.20 per share on October 31 to shareholders of record at the close of business on October 10, 2014.

Looking ahead to the fiscal 2015, the company expects adjusted earnings from continuing operations in a range of $1.50 to $1.70 per Class A nonvoting share, on anticipated organic sales growth in the low-single-digits. Street is currently looking for full-year 2015 earnings of $1.60 per share on annual sales growth of 6.4 percent to $1.23 billion.

Additionally, Brady's board appointed CFO Thomas Felmer as the company's senior vice president and president of workplace safety business. Felmer most recently served as senior vice president and CFO as well as interim president and CEO for the past ten months. He joined Brady in 1989.

Meanwhile, the board also named Aaron Pearce to succeed Felmer as senior vice president and CFO. Pearce joined Brady in 2004 as director of internal audit, and has held various financial leadership positions since then.

BRC closed Wednesday's regular trading session at $27.07, up $0.33 on a volume of 0.25 million shares.