Brady Corporation Reports Fiscal 3Q 2019 Results

Brady Corporation reported its financial results for its fiscal 2019 third quarter ended April 30, 2019.
 
Sales for the quarter ended April 30, 2019 were $289.7 million compared to $298.4 million in the same quarter last year, a decrease of 2.9%, which consisted of organic sales growth of 2.4%, a decrease in sales of 3.8% from foreign currency translation, and a decline in sales of 1.5% from the divestiture of a business during the fourth quarter of fiscal 2018. By segment, sales increased 0.9% in Identification Solutions and decreased 12.2% in Workplace Safety, which consisted of organic sales growth of 4.0% in Identification Solutions and an organic sales decline of 1.6% in Workplace Safety.
 
Income before income taxes increased 10.8%, finishing at $41 million for the third quarter of fiscal 2019 compared to $37 million for the third quarter of fiscal 2018. Net income for the quarter ended April 30, 2019, was $34.8 million compared to $26.0 million in the same quarter last year. Net income was impacted by a reduced income tax rate of 15.1% primarily due to certain audit settlements in the current quarter.
 
Earnings per diluted Class A Nonvoting Common Share were $0.65 for the third quarter of fiscal 2019, compared to $0.49 in the same quarter last year.
 
For the nine-month period ending April 30, 2019, sales decreased 1.3%, which consisted of organic sales growth of 3.1%, a decrease in sales of 2.8% from foreign currency translation, and a decline in sales of 1.6% from the divestiture of a business during the fourth quarter of fiscal 2018. Sales for the nine-month period ended April 30, 2019 were $865.4 million compared to $876.4 million in the same period last year. By segment, sales increased 2.1% in Identification Solutions and decreased 9.7% in Workplace Safety, which consisted of organic sales growth of 4.4% in Identification Solutions and an organic sales decline of 0.2% in Workplace Safety.
 
Income before income taxes increased 10.1%, finishing at $117.6 million for the nine-month period ended April 30, 2019, compared to $106.8 million in the same period last year. Net income for the nine-month period ended April 30, 2019 was $94.6 million compared to $56.1 million in the same period last year.
 
“Our continued focus on organic sales growth through the development of innovative new products that generate value for our customers and solve their problems while providing strong customer service is working as we posted our eighth consecutive quarter of organic sales growth,” said J. Michael Nauman, Brady’s president and CEO. “Organic sales growth along with the execution of sustainable efficiency gains throughout our SG&A structure is once again the driver of our year-over-year pre-tax income growth. We remain committed to our investments in automation in our manufacturing facilities, our digital presence, and in the development of innovative new products.”
 
“Our balance sheet and cash position are strong. We have over $238 million of cash on hand and are in a net cash position of $188.1 million at April 30, 2019,” said Brady’s CFO Aaron Pearce. “We generated $52.7 million of cash flow from operating activities this quarter, we invested $5.4 million in capital expenditures, and we returned $11.2 million to our shareholders in the form of dividends. Our balance sheet provides significant flexibility to invest in growth opportunities while returning cash to our shareholders through dividends and opportunistic share buybacks.”