(RTTNews) - Identification solutions and specialty products manufacturer Brady Corp. (BRC: News ) reported Thursday a 41.6% year-over-year drop in profit for the first quarter of fiscal 2010, hurt by restructuring charges as well as a 15.8% decline in quarterly net sales, despite gross margin improvement of 160 basis points amid the ongoing cost-reduction initiatives. Adjusted earnings per share for the quarter dropped, but came in above analysts' expectations. The company also reaffirmed its earnings forecast for the full-year 2010.

In a statement, president and chief executive officer, Frank Jaehnert said, "I'm encouraged to see sales improve by 11 percent from our last fiscal quarter, driven by a stabilization in our markets, as well as new-product and market-based initiatives. Compared to last year's first quarter, our gross margins have improved by 160 basis points as a direct result of our ongoing cost-reduction efforts."

The company added that its continued investments in new product development resulted in a number of successful launches of new proprietary products during the first quarter, including the BMP 21 Portable Printer for wire identification and general labeling, which has already been well-received by our markets.

The Milwaukee, Wisconsin-based company reported net income of $21.67 million, down 41.6% from $37.11 million in the prior-year quarter, and earnings per Class A share dropped 41.4% to $0.41 from last year's $0.69.

The latest quarter results include after tax restructuring charges of $2.6 million or $0.05 per share. Excluding special items, adjusted earnings per share dropped to $0.46 from last year's $0.71.

On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts estimates typically exclude special items.
Net sales for the quarter declined 15.8% to $318.49 million from $378.32 million in the same quarter last year, but topped three Wall Street analysts' consensus estimate of $297.33 million.

Organic sales for the quarter declined 15.9%%, acquisition growth added 0.1%, and foreign currency translation had no impact on sales. On a geographical basis, sales were down 12.8% in Europe, 15.3% in the Americas, and 19.5% in Asia/Pacific.

Operating income for the first quarter dropped 36.7% to $35.56 million from $56.19 million in the prior-year quarter, and total operating expenses were $121.89 million, down 2.5% from $124.95 million in the year-ago quarter.

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