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 company's sales for the quarter were up 1.1 percent to $324.2 million compared with the previous second quarter.
"In 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," said Brady Corp. president and chief executive officer Frank Jaehnert.
During the second quarter, Brady acquired Precision Dynamics Corp., a provider of patient identification solutions, for $301 million.
"The 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,' Jaehnert said. "PDC provides an important anchor position for Brady in the attractive healthcare sector, which is a sector in which we plan continued investment."
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.
"We believe that our reorganization around global business platforms will create better alignment of resources required to deliver increasing levels of organic sales growth," Jaehnert said. "We 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.
"Looking 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," Jaehnert said.
"We anticipate continuing pressure on organic sales for the remainder of fiscal 2013 as the global macro-economy remains sluggish," said Brady's chief financial officer, Thomas Felmer.