Brady Q3 Results Top Estimates, Guides Q4 In Line

(RTTNews) - Identification solutions provider Brady Corp. (BRC) reported Thursday a profit for the third quarter that soared from last year, reflecting lower restructuring charges and gains from discontinued operations. Both adjusted earnings per share and quarterly sales topped analysts' expectations. The company also initiated its earnings and sales growth forecast for the fourth quarter, in line with Street view.

"We were encouraged by our revenue growth in the third quarter. We believe that our investments to drive organic growth are paying off as organic sales grew 2.5 percent this quarter. Organic sales were up 4.8 percent in Identification Solutions and down 1.9 percent in Workplace Safety this quarter," CFO and Interim President and CEO Thomas Felmer said in a statement.

The Milwaukee, Wisconsin-based company reported net income of $24.09 million or $0.46 per Class A share, sharply higher than $4.23 million or $0.08 per Class A share in the prior-year quarter.

Net earnings from continuing operations declined to $20.18 million or $0.39 per Class A share from $21.68 million or $0.42 per Class A share last year.

Excluding items, adjusted net earnings from continuing operations for the quarter was $22.26 million or $0.43 per Class A share, compared to $28.53 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 $0.38 per share for the quarter. Analysts estimates typically exclude special items.

Net sales for the quarter increased 2.3 percent to $309.58 million from $302.48 million in the same quarter last year, and topped six Wall Street analysts' consensus estimate of $301.62 million. Organic sales were up 2.5 percent.

ID solutions sales grew 4.6 percent to $206.45 million, while workplace safety sales decreased 1.8 percent to $103.13 million from the year-ago quarter.

Segment profit as a percent of sales contracted 410 basis points to 19.1 percent from last year's 23.2 percent.

On May 1, Brady said it received $53 million of cash in connection with the completion of the first phase of the divestiture of its die-cut business, closing on the sale of businesses in Germany, Thailand, Korea and Malaysia.

Looking ahead to the fourth quarter, the company expects adjusted earnings from continuing operations in a range of $0.45 to $0.55 per Class A nonvoting share, on anticipated organic sales growth in the low-single-digits. Analysts are currently looking for fourth-quarter earnings of $0.46 per share on quarterly sales growth of 1.9 percent to $315.08 million.

BRC closed Wednesday's regular trading session at $24.26, down $0.30 on a volume of 0.22 million shares.