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Brady Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: June 5, 2012 05:23PM

Brady Corp. (BRC) filed Quarterly Report for the period ended 2012-04-30. Brady Corp Cl A has a market cap of $1.4 billion; its shares were traded at around $27.18 with a P/E ratio of 11.8 and P/S ratio of 1. The dividend yield of Brady Corp Cl A stocks is 2.8%. Brady Corp Cl A had an annual average earning growth of 12.8% over the past 10 years.



Highlight of Business Operations:

Sales for the nine months ended April 30, 2012, increased 0.5% to $1,001.7 million, compared to $996.5 million in the same period of fiscal 2011. Organic sales increased 0.4%, divestitures net of acquisitions reduced sales 0.2%, and the effects of fluctuations in the exchange rates used to translate financial results into the United States dollar increased sales 0.3%. The net loss for the nine months ended April 30, 2012, was $29.6 million or $0.57 per diluted Class A Nonvoting Common Share, down from net income of $79.1 million, or $1.49 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 former North/South Asia reporting unit within the Company’s 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 7.2% to $106.7 million for the three months ended April 30, 2012, compared to $115.0 million for the same period in the prior year, and decreased 3.6% to $320.5 million for the nine months ended April 30, 2012, compared to $332.4 million for the same period in the prior year. As a percentage of sales, SG&A expenses decreased to 32.2% from 34.0% for the third quarter, primarily due to a pretax reduction of $6.0 million in variable incentive compensation compared to the same period in the prior year. The decrease in SG&A expenses as a percentage of sales to 32.0% from 33.4% for the nine months ended April 30, 2012, compared to the same periods in the prior year, was due to the reduction in variable incentive compensation and the continued focus on reducing SG&A expense through ongoing productivity initiatives. This reduction was partially offset by investments required for growth initiatives.

Net income for the three months ended April 30, 2012, decreased 3.3% to $27.7 million, compared to $28.6 million for the same quarter of the previous year. Net income as a percentage of sales decreased to 8.3% from 8.5% for the quarter ended April 30, 2012, compared to the same period in the prior year. Net income before restructuring-related expenses for the quarter ended April 30, 2012 was $30.3 million, an increase of 2.7% from $29.5 million for the same period in the prior year. The Company’s net loss was $29.6 million for the nine months ended April 30, 2012, compared to net income of $79.1 million for the nine months ended April 30, 2011. The Company’s net loss before restructuring-related expenses for the nine months ended April 30, 2012, was $26.9 million, a decrease from net income before restructuring-related expenses of $84.1 million in the same period of the prior year. The net loss was a result of the goodwill impairment charge of $115.7 million recorded during the three months ended January 31, 2012. Refer to Note B, “Goodwill and Intangible Assets” in the Notes to the Condensed Consolidated Financial Statements for further discussion. Net income before the impairment charge and restructuring charges was $88.8 million for the nine months ended April 30, 2012, compared to $84.1 million for the same period in the prior year.

EMEA sales decreased 7.5% to $97.9 million for the quarter and 3.7% to $290.9 million for the nine months ended April 30, 2012, compared to $105.9 million and $302.0 million, respectively, for the same periods in the prior year. Organic sales decreased 3.3% and 2.0% for the quarter and nine-month periods, 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 4.7% in the quarter, and 1.1% in the nine-month period. The acquisition of Grafo increased segment sales by 0.5% during the quarter ended April 30, 2012, compared to the same period in the prior year. The acquisition of Grafo net of the fiscal 2011 divestiture of Teklynx decreased segment sales by 0.6% during the nine months ended April 30, 2012, compared to the same period in the prior year.

Asia-Pacific sales increased 0.3% to $83.1 million from $82.8 million for the quarter, and increased 1.8% to $267.9 million from $263.3 million for the nine months ended April 30, 2012, compared to the same periods in the prior year. Organic sales decreased 1.2% and 1.9% during the quarter and nine-month periods, 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 positive impact on sales of 1.5% in the quarter, and 3.0% in the nine-month period. Segment sales increased 0.7% during the nine months ended April 30, 2012, due to the fiscal 2011 acquisition of ID Warehouse, which had no incremental effect on sales for the quarter ended April 30, 2012.

Read the The complete Report



Stocks Discussed: BRC,
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