Brady Corp. (NYSE: BRC) reported Q4 EPS of $0.66, $0.14 better than the analyst estimate of $0.52. Revenue for the quarter came in at $297.5 million versus the consensus estimate of $297.04 million.

• Earnings before income taxes increased 26.0 percent, finishing at $45.2 million in the fourth quarter of fiscal 2018 compared to $35.9 million in the fourth quarter of fiscal 2017. Earnings before income taxes includes a gain on the sale of the Runelandhs business of $4.7 million in the fourth quarter of fiscal 2018. The gain on the sale represents approximately half of the increase in earnings before income taxes. This marks the twelfth consecutive quarter of pre-tax earnings growth.
• Earnings per diluted Class A Nonvoting Common Share were $0.66 in the fourth quarter of fiscal 2018 compared to $0.48 in the same quarter of the prior year. The sale of the Runelandhs business contributed approximately $0.09 per diluted Class A Nonvoting Common Share.
• Total revenues increased 2.9 percent, which consisted of organic revenue growth of 2.5 percent and an increase of 1.0 percent from foreign currency translation, partially offset by a decrease of 0.6 percent from the sale of the Runelandhs business. This is our fifth consecutive quarter of organic revenue growth.
• Earnings per diluted Class A Common Share guidance for the full year ending July 31, 2019 announced at a range of $2.15 to $2.25.

“This quarter marks our twelfth consecutive quarter of year-over-year pre-tax earnings growth and our fifth consecutive quarter of organic sales growth. This is a direct result of our team’s consistent focus and commitment to our strategic initiatives, which are to drive the development of high-quality products while executing sustainable efficiency gains throughout our businesses,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “We believe that continued development of innovative new products and a strong new product pipeline are essential to Brady’s long-term success and will result in future organic sales growth in both our Identification Solutions and Workplace Safety businesses. Our priorities in fiscal 2019 are to grow our pipeline of innovative new products, provide excellent customer service, accelerate organic sales growth, and deliver sustainable efficiencies throughout the business.”

“We realized benefits from our organic sales growth and our focus on operational efficiencies continues to drive profit improvements,” said Brady’s Chief Financial Officer, Aaron Pearce. “Our spending on research and development increased by 14.2 percent this fiscal year while pre-tax earnings grew by 20.0 percent this year. Even after this significant investment in research and development, we generated $143.0 million of cash from operating activities this year, which represents 157 percent of net earnings. Our cash generation was primarily used to return funds to our shareholders in the form of dividends and to strengthen our balance sheet. We finished the year in a net cash position of $128.8 million compared to a net cash position of $26.2 million at the beginning of this fiscal year. Our balance sheet continues to provide significant flexibility for investments to drive long-term shareholder value and to return funds to our shareholders.”

GUIDANCE:

Brady Corp. sees FY2019 EPS of $2.15-$2.25, versus the consensus of $2.15.

For earnings history and earnings-related data on Brady Corp. (BRC) click here.