Brady, an international manufacturer and marketer of identification solutions and specialty materials, which identify and protect premises, products and people, has reported net loss of $4.2 million for the fiscal 2009 second quarter, a decrease of 115.5%, compared to net income of $26.7 million in the fiscal 2008 second quarter.
Net loss per diluted Class A Common share was $0.08 in the quarter, a decrease of 116.7%, compared to earnings of $0.48 per share in the fiscal 2008 second quarter.
Sales for the quarter were down 26.8% to $266.4 million compared to $364.1 million in the second quarter of fiscal 2008.
Net income for the first six months of fiscal 2009 was down 47.7% to $33 million compared to $63.1 million for the same period in fiscal 2008. Six-month earnings per diluted Class A Common share were down 45.6% to $0.62 compared to $1.14 in fiscal 2008.
Sales for the six months ended January 31, 2009 declined 13.4% to $644.8 million compared to $744.3 million in the same period last year. Results include after-tax restructuring charges of $15.2 million or $0.28 per share for the six-month period.
Frank Jaehnert, president and CEO of Brady, said: “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.
“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.”
Thomas Felmer, CFO of Brady, said: “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.
“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.”
