Brady Corp. (BRC), a provider of identification solutions, Thursday reported a decline in its third-quarter profit, reflecting mainly wider loss from discontinued operations, despite higher revenues. Brady also said the board has adopted its plan to sell Asia-based Die-Cut business, in order to focus on its Identification Solutions and Workplace Safety businesses.
The Die-Cut business makes products such as gaskets, meshes, heat dissipation materials, antennae, dampers, filters, and similar products sold primarily into the electronics industry with a concentration in the mobile-handset and hard-disk drive industries. The business had sales of $179 million for the year ended July 31, 2012.
Frank Jaehnert, president and chief executive officer of the company said, "....we no longer consider this business core to our strategy and believe that our Die-Cut customers and our employees will be better served by being with a company where Die-Cut is a core product offering."
The company noted that in addition to improving organic growth, it believes that its reorganization around global business platforms will yield about $25 million to $30 million of annual pre-tax savings.
In the third quarter, the company's net earnings fell to $4.23 million from $27.65 million in the previous year. Earnings per Class A non-voting share was $0.08, down from $0.52 per share last year.
For the quarter, the company posted a loss from discontinued operations per Class A nonvoting share of $0.34, compared to a loss of $0.01 per share a year earlier.
Earnings from continuing operations per Class A non-voting share declined to $0.42 from $0.53 per share in the prior year. Non-GAAP earnings from continuing operations were $0.55, while, the company posted $0.56 per share last year.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.60 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales from continuing operations increased 11 percent to $305.74 million. Analysts expected revenue of $368.38 million for the quarter. Organic sales were down 4.7 percent, acquisitions added 16.8 percent, and impact of foreign currency translation decreased sales by 1.1 percent.
Total operating expenses advanced to $128.75 million from $108.79 million in the same quarter last year.
The company expects its fourth-quarter earnings from continuing operations per Class A non-voting common share to range from between $0.45 and $0.55, exclusive of restructuring charges and certain other items. Analysts expect the company to report fourth-quarter profit per share of $0.61.
BRC is currently trading at $35.28, down 0.84 percent.
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