Brady Corp. announces reorganization

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Milwaukee-based Brady Corp. announced a net loss of $8.7 million for its fiscal second quarter, an improvement from a $90 million net loss from the previous fiscal second quarter.

The companyโ€™s sales for the quarter were up 1.1 percent to $324.2 million compared with the previous second quarter.

โ€œIn the second quarter of fiscal 2013, we experienced slight organic sales growth in the Americas and we experienced a 5.0 percent organic sales decline in EMEA due to a challenging European economy. Our performance in Asia-Pacific was weaker than expected due to challenges in both our Australian business and our Thailand hard-disk drive business,โ€ said Brady Corp. president and chief executive officer Frank Jaehnert.

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During the second quarter, Brady acquired Precision Dynamics Corp., a provider of patient identification solutions, for $301 million.

โ€œThe acquisition of PDC, a leader in the U.S. health care identification space, is a significant step forward in our move into faster-growing end businesses with less cyclicality,โ€™ Jaehnert said. โ€œPDC provides an important anchor position for Brady in the attractive healthcare sector, which is a sector in which we plan continued investment.โ€

Brady also reported that it will be changing its organizational structure from geographically-based to an organization structured around three global business platforms: Identification Solutions, Workplace Safety and Die-Cut. The Identification Solutions business will focus on innovative identification solutions for a broad range of applications including wire identification, product identification, safety and facility identification and health care identification. The Workplace Safety business will be expanding its multi-channel direct marketing model by providing a broader set of workplace safety products with an increased focus on e-business. The Die-Cut business will continue to provide precision solutions primarily to the global electronics industry.

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โ€œWe believe that our reorganization around global business platforms will create better alignment of resources required to deliver increasing levels of organic sales growth,โ€ Jaehnert said. โ€œWe will also be able to create a leaner, flatter organization that is closer to the customer, allowing us to reduce costs by approximately $25 million to $30 million annually, some of which will be reinvested into growth initiatives. Costs to implement this reorganization are expected to range from $15 million to $18 million. The global business reorganization will be effective May 1, 2013 with most of the restructuring completed by the end of fiscal 2013.

โ€œLooking forward, I am confident that the actions we are taking, including the acquisition of PDC and the reorganization around global businesses will accelerate future sales growth and increase future profitability,โ€ Jaehnert said.

โ€œWe anticipate continuing pressure on organic sales for the remainder of fiscal 2013 as the global macro-economy remains sluggish,โ€ said Bradyโ€™s chief financial officer, Thomas Felmer.

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