Income before income taxes was $22.2 million in the third quarter of fiscal 2020 compared to $41.0 million in the same quarter of the prior year. Income before income taxes includes non-cash impairment charges of $13.8 million in the third quarter of fiscal 2020.
Diluted EPS was $0.26 in the third quarter of fiscal 2020 compared to $0.65 in the same quarter of the prior year. Non-cash impairment charges reduced diluted EPS by approximately $0.21 in the third quarter of fiscal 2020. Diluted EPS in the third quarter of fiscal 2020 was also negatively impacted by an income tax rate of 38.5 percent.Sales for the quarter declined 8.2 percent. Organic sales declined 6.0 percent and the impact of foreign currency translation decreased sales by 2.2 percent.During the third quarter of fiscal 2020, we returned $64.1 million to shareholders through share repurchases and $11.3 million in the form of dividends.Due to the evolving and uncertain impact of the COVID-19 pandemic, the Company is withdrawing its previously communicated fiscal 2020 financial guidance.MILWAUKEE, May 21, 2020 (GLOBE NEWSWIRE) — Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2020 third quarter ended April 30, 2020. Quarter Ended April 30, 2020 Financial Results:
Income before income taxes declined 45.9 percent to $22.2 million for the quarter ended April 30, 2020, compared to $41.0 million in the same quarter last year. Income before income taxes for the quarter ended April 30, 2020 was reduced by non-cash impairment charges of $13.8 million primarily related to the write down of certain of the tangible and intangible assets in the Company’s Workplace Safety segment. These non-cash impairment charges were primarily driven by sales and profitability reductions and reduced forecasts for future sales and profitability growth in the WPS North American business.
Net income for the quarter ended April 30, 2020 declined 60.8 percent to $13.6 million compared to $34.8 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $0.26 for the third quarter of fiscal 2020, compared to $0.65 in the same quarter last year. Diluted EPS for the quarter ended April 30, 2020 was reduced by non-cash impairment charges of approximately $0.21 per share.
Sales for the quarter ended April 30, 2020 declined 8.2 percent, which consisted of an organic sales decline of 6.0 percent and a decline of 2.2 percent from foreign currency translation. Sales for the quarter ended April 30, 2020 were $265.9 million compared to $289.7 million in the same quarter last year. By segment, sales declined 9.7 percent in Identification Solutions and declined 3.9 percent in Workplace Safety, which consisted of an organic sales decline of 8.2 percent in Identification Solutions and organic sales growth of 0.2 percent in Workplace Safety.Nine-Month Period Ended April 30, 2020 Financial Results:
Income before income taxes declined 9.8 percent to $106.1 million for the nine-month period ended April 30, 2020, compared to $117.6 million for the nine-month period ended April 30, 2019. Income before income taxes was reduced by non-cash impairment charges of $13.8 million for the nine-month period ended April 30, 2020.
Net income for the nine-month period ended April 30, 2020 declined 10.5 percent to $84.7 million compared to $94.6 million in the same period last year. Earnings per diluted Class A Nonvoting Common Share were $1.58 for the nine-month period ended April 30, 2020, compared to $1.78 in the same period last year. Diluted EPS was reduced by non-cash impairment charges of approximately $0.21 per share for the nine-month period ended April 30, 2020.
Sales for the nine-month period ended April 30, 2020 declined 4.1 percent, which consisted of an organic sales decline of 2.5 percent and a decline of 1.6 percent from foreign currency translation. Sales for the nine-month period ended April 30, 2020 were $829.6 million compared to $865.4 million in the same period last year. By segment, sales declined 4.3 percent in Identification Solutions and declined 3.6 percent in Workplace Safety, which consisted of organic sales declines of 3.2 percent in Identification Solutions and 0.5 percent in Workplace Safety.Commentary:
“During these challenging times, as a highly-innovative essential business, Brady is more focused than ever on doing our part to serve the front-line workers and other essential companies with the products and services they need to help fight this global pandemic,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “Brady’s operations are up and running all around the globe producing products that are going to first responders, healthcare providers, food processing, transportation and many other critical industries. Our foremost focus has been on the safety of our employees as well as supporting our customers with the highest level of service that they have come to expect from Brady. This quarter, we saw strong demand for our products through the first half of March and then demand declined in late March and April as a result of the challenging macro environment. Demonstrating the strength of Brady, even in this tough environment, we posted cash flow from operating activities well in excess of net income.”“Brady is financially strong. As of April 30, 2020, we had $238.9 million of cash and less than $50 million of debt, putting Brady in an enviable net cash position of $190 million. This quarter, we generated $42.8 million of cash flow from operating activities. Our strong cash generation and our strong balance sheet allows us to continue to execute our capital allocation strategy which involves continuing to invest in ROI-positive capital expenditures; to pay a strong dividend; to buyback our shares in an opportunistic manner; and to, of course, continue to invest in innovation, in sales-generating resources, in efficiency actions, and in actions that improve customer service,” said Brady’s Chief Financial Officer, Aaron Pearce.Fiscal 2020 Financial Guidance Withdrawn:
Due to the uncertainty around the duration and depth of the economic contraction caused by the COVID-19 pandemic, the Company is withdrawing its previously communicated full-year fiscal 2020 financial guidance, which was provided on February 20, 2020.A webcast regarding Brady’s fiscal 2020 third quarter financial results will be available at www.bradycorp.com/investors beginning at 9:30 a.m. central time today.
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