Brady Q2 2021 Earnings Report
Key Takeaways
Brady Corporation reported a decrease in sales and net income for the second quarter of fiscal year 2021. Sales declined by 3.9% and net income decreased by 8.0%. However, the company's cash flow from operating activities increased significantly, and it maintains a strong balance sheet with a substantial cash position and no outstanding debt.
Sales for the quarter declined by 3.9%, driven by a 6.3% organic sales decline, partially offset by a 2.4% increase from foreign currency translation.
Net income for the quarter decreased by 8.0% to $30.9 million, compared to $33.6 million in the same quarter last year.
Cash flow from operating activities increased by 153% to $36.1 million due to improved working capital management and reduced incentive-based compensation payments.
The company expects full-year diluted EPS to range from $2.48 to $2.58 and organic sales growth to be in the mid-single digits in the second half of fiscal 2021.
Brady
Brady
Forward Guidance
The Company expects earnings per diluted Class A Nonvoting Common Share to range from $2.48 to $2.58 for the full fiscal year ending July 31, 2021. The Company also expects organic sales growth to be in the mid-single digits in the second half of fiscal 2021.
Positive Outlook
- Full year EPS guidance between $2.48 and $2.58.
- Second half EPS guidance between $1.25 and $1.35.
- Organic sales growth expected to be in the mid-single digits in the second half of fiscal 2021.
- Anticipated continued economic recovery.
- Investing in sales, marketing, and new product development.
Challenges Ahead
- Adverse impacts of the novel coronavirus (“COVID-19”) pandemic or other pandemics
- Decreased demand for our products
- Our ability to compete effectively or to successfully execute our strategy
- Raw material and other cost increases
- Difficulties in protecting our websites, networks, and systems against security breaches