Foreign currency cut into revenue for Milwaukee-based Brady Corp., but the company improved net income by nearly 40 percent as the company cut selling, general and administrative costs.
Brady reported net income of $25.3 million during the second quarter of fiscal 2017, a 40 percent increase over the previous year. The increase boosted earnings from 30 cents to 49 cents per diluted share.
Revenue, however, was down 0.23 percent to $268 million, with foreign currency driving a 1.5 percent decline. Organic sales were up 1.3 percent, primarily in the identification solutions segment.
J. Michael Nauman, Brady president and chief executive officer, said the company’s efforts to drive organic growth were starting to work and would translate into future profit improvements.
“However, we do expect to see choppy organic growth patterns in the future as our initiatives gain traction and due to fewer billing days in the second half of fiscal 2017,” Nauman said.
He also said the company’s efforts to develop products and identify efficiencies were also having success. Research and development costs were up 4.2 percent to $9.5 million while selling, general and administrative costs were down 5.5 percent to $94.7 million in the quarter.
“Our continued focus on developing high-quality products, identifying efficiencies in our SG&A structure, and driving a culture of local ownership and accountability is working,” Nauman said. “This quarter marks our sixth consecutive quarter of year-over-year earnings growth.”
Brady also increased its full-year guidance for earnings from a range of $1.55 to $1.70 to $1.75 to $1.85, a more than 10 percent increase in the midpoint.
