Brady Corporation reported its financial results for its fiscal 2021 first quarter ended Oct. 31, 2020.
Sales for the quarter ended Oct. 31, 2020, were $277.2 million compared to $286.9 million in the same quarter last year. Sales for the quarter declined 3.4%, which consisted of an organic sales decline of 4.9% and an increase of 1.5% from foreign currency translation.
By segment, sales declined 7.8% in Identification Solutions and increased 9.8% in Workplace Safety, which consisted of an organic sales decline of 8.4% in Identification Solutions and organic sales growth of 5.5% in Workplace Safety.
Net income for the quarter ended Oct. 31, 2020, declined 10.7% to $33.5 million compared to $37.5 million in the same quarter last year.
“We experienced a steady improvement in sales volumes as the global economy slowly healed throughout our first quarter. Sales improved in each of the last six months and we expanded our customer base in our Workplace Safety business by providing the high-quality products and the service levels that our customers have come to expect,” said J. Michael Nauman, Brady’s president and CEO.
“This quarter, we saw demand in our Identification Solutions business improve while our Workplace Safety business had another strong quarter with organic sales increasing more than 5%. Growth in our Workplace Safety business was primarily driven by increased sales of safety and identification products directly related to the COVID-19 pandemic.”
“Brady is financially strong and continues to generate significant cash flow. As of Oct. 31, 2020, we had $256.3 million of cash on hand and no outstanding debt,” Brady CFO Aaron Pearce said. “We generated $62.8 million of cash flow from operating activities this quarter, which was an increase of 61.8% compared to last year’s first quarter, and we returned $14.1 million to our shareholders in the form of dividends and share buybacks. We are generating operating cash flow in excess of net income and we have a balance sheet that allows us to make the investments necessary to drive future revenue and earnings growth while paying a solid dividend.
“Although we are seeing some reduction in demand for products specifically designed to help in the fight of COVID-19 and there are macro-economic challenges caused by additional government lockdowns that will impact our financial results for the quarter ending Jan. 31, 2021, Brady’s strong balance sheet and cash generation position us extremely well for future financial success as industrial production improves,” added Pearce.
