Brady Corp. (NYSE:BRC) Q3 2018 Earnings Conference Call - Final Transcript

May 24, 2018 • 10:30 am ET


Brady Corp. (NYSE:BRC) Q3 2018 Earnings Conference Call - Final Transcript


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Michael Nauman

handheld sleeve applicator, which is the multi-tool designed to make label applications to wires easier and more efficient. The focus on innovation is spreading throughout the organization and we have some exciting new products in the pipeline. Identification solutions business grew on all three regions. Our healthcare product line is still challenging, but I know that we're taking the proper actions and making the appropriate investments in people and processes to set this business up for consistent improved sales growth in the future. Our global IDS team is executing everyday, driving organic sales growth, developing innovative new products and always focusing on the customer.

I'm pleased to report that our workplace safety business posted organic sales growth of 1.7% this quarter, which was driven by growth in all three regions, including the US, which had historically been a challenge. Every member of the WPS team has been working extremely hard to execute our strategy and the results are positive as we've returned this division to organic sales growth. WPS also posted a significant profit improvement of 47% compared to the third quarter of last year. I'm proud of this team's ability to maintain their focus on a consistent strategy, which is paying off to greatly improve financial results. We also made certain portfolio shifts in May through the sale of our Runelandhs business based in Sweden. Runelandhs is a direct marketer of office furniture equipment for lifting and transport, as well as warehouse equipment and material-handling supplies. The Runelandhs business is a high-quality operation, but it's a better fit with the parent company where these products are core to their offering. Our strategy for the WPS business remains unchanged, which is to provide customers with a vast offering of workplace safety products along with our industry-leading safety and compliance expertise, custom capabilities and excellent customer service.

I'm proud of our consistent quarterly financial improvement, but I want to be clear that we remain focused on a long-term by taking actions that may not pay off this quarter or even this year, but that will result in sustainable improvements in the future. We remain focused on a consistent set of priorities which are to develop innovative high-quality products, provide excellent customer service, to drive improvements throughout our facilities and to identify and execute on efficiencies, throughout our SG&A structure. Maintaining a consistent set of priorities and executing on them every day has resulted in the achievement of our financial goals and allowed us to deliver longer term value to our shareholders.

I'll now turn the call over to Aaron to discuss our financial results for the third quarter and then I'll return to provide some more specific comments about our identification solutions and workplace safety businesses. Aaron?

Aaron Pearce

Thank you, Michael, and good morning everyone. The financial review starts on Slide number 3. Sales increased 8.2% to $298.4 million in the third quarter, which consisted of organic sales growth of 3.2% and an increase of 5% from foreign currency translation. We once