Brady Corp., a Milwaukee-based provider of identification solutions, today reported a fiscal second quarter net loss of $4.2 million, or 8 cents per share, compared with net income of $26.7 million, or 48 cents per share, in the same period a year ago.
The most recent quarter included after-tax restructuring charges of $14.0 million, or 27 cents per share.
Brady's sales for the quarter dropped 26.8 percent to $266.4 million from $364.1 million in the same period a year earlier.
"The rapidly weakening economy and a strengthening dollar, coupled with many customers taking extended shut-downs during the various global holidays, as well as inventory reduction efforts by both our customers and our channel partners, made this a very tough quarter for us," said Brady president and chief executive officer Frank Jaehnert. "As previously announced, we implemented cost-control measures in December, including a 10 percent workforce reduction and significant reduction of discretionary spending. We further reduced costs by eliminating an additional 10 percent of our workforce through a reduction in contract labor. These early and swift actions allowed us to significantly reduce our cost structure, albeit not at the same rate as the rapid decline in sales. We are closely monitoring business conditions and are ready to take additional action if needed."
"We continue to aggressively manage our expenses and working capital, and our financial position remains strong. In the quarter we saw an increase in cash bringing our total cash balance to $185 million," said Brady chief financial officer Thomas Felmer. "Based on current economic conditions and currency exchange rates, we are reducing our net income guidance to between $65 and $75 million, from $75 to $85 million, including after-tax restructuring charges of approximately $20 million. We are reducing earnings per diluted share guidance to between $1.23 and $1.42, from $1.40 to $1.59. Excluding restructuring charges, we expect net income of between $85 and $95 million, down from $95 to $105 million; and earnings per diluted share of between $1.61 and $1.80, down from $1.78 to $1.97."
Brady Corp. incurs quarterly loss of $4.2 million
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