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Brady Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: March 8, 2012 04:50PM

Brady Corp. (BRC) filed Quarterly Report for the period ended 2012-01-31. Brady Corp Cl A has a market cap of $1.68 billion; its shares were traded at around $32.34 with a P/E ratio of 14.3 and P/S ratio of 1.3. The dividend yield of Brady Corp Cl A stocks is 2.3%. Brady Corp Cl A had an annual average earning growth of 13.5% over the past 10 years.



Highlight of Business Operations:

Sales for the quarter ended January 31, 2012 decreased 2.6% to $320.6 million, compared to $329.0 million in the same period of fiscal 2011. Organic sales decreased 1.8%, divestitures net of acquisitions reduced sales 0.4%, and the effects of fluctuations in the exchange rates used to translate financial results into the United States dollar reduced sales 0.4%. The net loss for the quarter ended January 31, 2012, was $90.0 million or $1.72 per diluted Class A Nonvoting Common Share, down from net income of $24.2 million, or $0.46 per diluted Class A Nonvoting Common Share reported in the second quarter of last fiscal year. The net loss was a result of a $115.7 million non-cash goodwill impairment charge recorded during the quarter ended January 31, 2012, related to the North/South Asia reporting unit within the Asia-Pacific reporting segment. Refer to Note B, “Goodwill and Intangible Assets” in the Notes to the Condensed Consolidated Financial Statements for further discussion regarding the goodwill impairment charge.

Sales for the six months ended January 31, 2012 increased 1.7% to $670.1 million, compared to $658.6 million in the same period of fiscal 2011. Organic sales increased 0.9%, divestitures net of acquisitions reduced sales 0.3%, and the effects of fluctuations in the exchange rates used to translate financial results into the United States dollar increased sales 1.1%. The net loss for the six months ended January 31, 2012 was $57.2 million or $1.09 per diluted Class A Nonvoting Common Share, down from net income of $50.5 million, or $0.95 per diluted Class A Nonvoting Common Share reported in the same period of the prior fiscal year. The net loss was a result of a $115.7 million non-cash goodwill impairment charge recorded during the quarter ended January 31, 2012, related to the North/South Asia reporting unit within the Asia-Pacific reporting segment. Refer to Note B, “Goodwill and Intangible Assets” in the Notes to the Condensed Consolidated Financial Statements for further discussion regarding the goodwill impairment charge.

Selling, general and administrative (“SG&A”) expenses decreased 3.0% to $104.8 million for the three months ended January 31, 2012, compared to $108.1 million for the same period in the prior year, and decreased 1.7% to $213.8 million for the six months ended January 31, 2012, compared to $217.4 million for the same period in the prior year. As a percentage of sales, SG&A expenses decreased to 32.7% from 32.8% for the second quarter, and decreased to 31.9% from 33.0% for the six months ended January 31, 2012, compared to the same periods in the prior year. The Company has continued to focus on reducing its SG&A expenses as a percentage of sales through ongoing productivity initiatives, which was achieved during both the three and six months ended January 31, 2012, despite the $4.4 million pre-tax gain on the divestiture of Teklynx recognized during the three months ended January 31, 2011.

Americas sales increased 1.8% to $138.4 million for the quarter and 3.7% to $292.3 million for the six months ended January 31, 2012, compared to $136.0 million and $282.0 million for the same periods in the prior year. Organic sales increased 2.9% and 4.4% during the quarter and year-to-date, respectively, as compared to the same periods in the prior year. Fluctuations in the exchange rates used to translate financial results into the United States dollar resulted in a negative impact on sales of 0.7% in the quarter, and 0.2% in the six-month period. The decrease in sales resulting from the fiscal year 2011 divestiture of Teklynx was 0.4% in the quarter and 0.5% in the six-month period.

Europe sales decreased 8.1% to $95.6 million for the quarter and 1.6% to $192.9 million for the six months ended January 31, 2012, compared to $104.0 million and $196.1 million for the same periods in the prior year. Organic sales decreased 5.7% and 1.3% for the quarter and six-month period, respectively, compared to the same periods in the prior year. Fluctuations in the exchange rates used to translate financial results into the United States dollar resulted in a negative impact on sales of 1.5% in the quarter, and a positive impact on sales of 1.0% in the six-month period. The decrease in sales resulting from the fiscal year 2011 divestiture of Teklynx was 0.9% in the quarter, and 1.3% in the six-month period.

Read the The complete Report



Stocks Discussed: BRC,
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