Revenue during the quarter went down marginally by 0.23 percent to $268 million from $268.63 million in the previous year period. Gross margin for the quarter expanded 59 basis points over the previous year period to 50.06 percent. Total expenses were 88.82 percent of quarterly revenues, down from 91.22 percent for the same period last year. This has led to an improvement of 240 basis points in operating margin to 11.18 percent.

Operating income for the quarter was $29.96 million, compared with $23.59 million in the previous year period.

“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. This quarter marks our sixth consecutive quarter of year-over-year earnings growth. Our actions to improve organic sales are also working as we realized organic sales growth of 1.3 percent this quarter and are at 0.5 percent organic sales growth year-to-date. 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,” said Brady’s president and chief executive officer, J. Michael Nauman. “We believe our actions are starting to result in long-term positive organic sales trends, which we expect will translate into future profit improvements. Looking forward, our priorities remain unchanged, which are to grow our pipeline of innovative new products, deliver efficiency gains, and serve our customers extremely well. We are pleased that we have been able to consistently improve our performance while simultaneously driving our long-term strategy.”

For financial year 2017, the company projects diluted earnings per share to be in the range of $1.75 to $1.85.

The company has spent $6.64 million cash to meet investing activities during the first six months as against cash outgo of $1.41 million in the last year period.

The company has spent $57.30 million cash to carry out financing activities during the first six months as against cash outgo of $46.31 million in the last year period.

Cash and cash equivalents stood at $125.21 million as on Jan. 31, 2017, up 4.17 percent or $5.01 million from $120.20 million on Jan. 31, 2016.

Working capital declines
Brady Corporation has witnessed a decline in the working capital over the last year. It stood at $231.48 million as at Jan. 31, 2017, down 6.95 percent or $17.29 million from $248.78 million on Jan. 31, 2016. Current ratio was at 2.54 as on Jan. 31, 2017, down from 2.58 on Jan. 31, 2016.

Cash conversion cycle (CCC) has decreased to 40 days for the quarter from 74 days for the last year period. Days sales outstanding went down to 51 days for the quarter compared with 53 days for the same period last year.

Days inventory outstanding has decreased to 33 days for the quarter compared with 68 days for the previous year period. At the same time, days payable outstanding went down to 45 days for the quarter from 47 for the same period last year.