Slide 1: F'13 Q2 Financial Results
F’13 Q2 Financial Results February 21, 2013 1 WE IDENTIFY AND PROTECT PREMISES, PRODUCTS, AND PEOPLE. BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 2 In this presentation, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company’s future financia
Slide 3: Acquisition of Precision Dynamics Corporation (PDC)
ACQUISITION OF PRECISION DYNAMICS CORPORATION (“PDC”) Largest acquisition in Brady’s history - $301 million purchase price with $173 million of sales. PDC Overview: 85% of business is in healthcare sectors 15% of business is in the sale of ID products to the leisure and entertainment, and la
Slide 4: PDC Financials
PDC FINANCIALS F’13 Financial Forecasts: Revenues = Approximately $105M Gross Profit Margin (exclusive of a $1.5M purchase accounting charge) in the low 40% range. Operating Income = $9M EPS – Diluted (excl. restructuring & acquisition-related expenses) = $0.05 - $0.07/share EBITDA = $19M
Slide 5: Business Reorganization
BUSINESS REORGANIZATION Reorganizing around three global business platforms: Identification Solutions Workplace Safety Die-Cut Dedicated global businesses improve alignment of resources and creates a leaner, flatter organization that is closer to the customer. Will result in structural c
Slide 6: Restructuring, Non-Routine Items & Other Items
RESTRUCTURING, NON-ROUTINE ITEMS & OTHER ITEMS BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 6 During the 2nd quarter of F’13 and F’12, there were certain non-routine and other comparability items, including the following impacts on diluted EPS: Q2 F’13 Q2 F’12 Diluted Earnings (Loss) Per Share (GAAP MEA
Slide 7: Q2 F'13 - Financial Summary
Q2 F’13 - FINANCIAL SUMMARY Sales up 1.1% to $324.2M vs. $320.6M in Q2 of F’12. • Organic sales down 3.1%, acquisitions, net of divestitures increased sales by 4.0%, and foreign currency increased sales by 0.2%. Gross Profit Margin of 46.3% in Q2 of F’13 compared with 47.8% in Q2 of F’12. SG&A
Slide 8: F'13 Diluted EPS Guidance
F’13 DILUTED EPS GUIDANCE BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 8 Diluted EPS $2.20 to $2.40 (Excluding after-tax restructuring charges, non-routine items, and other items) Guidance Assumptions: Full-year income tax rate in the mid-to-upper 20% range (exclusive of non-cash charges related to th
Slide 9: Sales Overview
SALES OVERVIEW $329 $338 $343 $350 $321 $332 $323 $338 $324 $250 $300 $350 Q2 F'11 Q3 F'11 Q4 F'11 Q1 F'12 Q2 F'12 Q3 F'12 Q4 F'12 Q1 F'13 Q2 F'13 Organic Sales 10% 1% (0.6%) 3.5% (1.8%) (0.5%) (2.6%) (1.9%) (3.1%) BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 9 Q2 F’13 Sales up 1.1%. • (3.1%) organic
Slide 10: Gross Profit Margin and SG&A
GROSS PROFIT MARGIN AND SG&A $159 $168 $165 $168 $153 $160 $155 $165 $150 48.3% 49.6% 48.1% 48.0% 47.8% 48.3% 48.1% 48.8% 46.3% 38.0% 40.0% 42.0% 44.0% 46.0% 48.0% 50.0% $100 $150 $200 Q2 F'11 Q3 F'11 Q4 F'11 Q1 F'12 Q2 F'12 Q3 F'12 Q4 F'12 Q1 F'13 Q2 F'13 BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 10
Slide 11: Net Income and Diluted EPS
NET INCOME* AND DILUTED EPS* Q2 F’13 diluted EPS, excluding restructuring charges and other items of $0.38 compared to $0.49 in Q2 of F’12. Investments in organic growth initiatives, including geographic expansion, focus markets, new product development, and digital negatively impacted net incom
Slide 12: Cash Generation
3 Mos. Ended Jan. 31, 2013 Year-to-Date Jan. 31, 2013 Cash Balance - Beginning of Period 321.3$ 305.9$ Cash Flow from Operating Activities 24.0 44.2 Capital Expenditures (9.5) (15.7) Proceeds from Sales of Businesses - 10.2 Acquisition of Businesses (300.8) (300.8) Repurchase of Stock - (5.1) Divide
Slide 13: Debt & EBITDA
DEBT & EBITDA 2.5x 2.0x 2.2x 2.0x 2.0x 1.8x 1.6x 1.6x 1.0x 1.5x 2.0x 2.5x 3.0x Q 1 F' 10 Q 3 F' 10 Q 1 F' 11 Q 3 F' 11 Q 1 F' 12 Q 3 F' 12 Q 1 F' 13 BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS GROSS DEBT / TTM EBITDA* Continue to have a strong balance sheet and conservative leverage. January 31, 20
Slide 14: Americas – Q2 F'13 Summary
AMERICAS – Q2 F’13 SUMMARY Q2 F’12 Q2 F’13 Change Sales $ 138.4 $ 147.7 + 6.7% Segment Profit 35.8 32.3 - 9.7% Segment Profit % 25.9% 21.9% - 4.0 pts BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 14 SALES & SEGMENT PROFIT % (Millions of USD) Q2 F’13 vs. Q2 F’12 PERFORMANCE Revenues up 6.7%: Organic =
Slide 15: EMEA – Q2 F'13 Summary
EMEA – Q2 F’13 SUMMARY Q2F’12 Q2 F’13 Change Sales $ 95.6 $ 94.4 - 1.3% Segment Profit 26.6 23.7 - 10.7% Segment Profit % 27.8% 25.1% - 2.7 pts BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 15 SALES & SEGMENT PROFIT % (Millions of USD) Q2 F’13 vs. Q2 F’12 PERFORMANCE Revenues down (1.3%): Organic = (
Slide 16: Asia-Pacific – Q2 F'13 Summary
ASIA-PACIFIC – Q2 F’13 SUMMARY Q2 F’12 Q2 F’13 Change Sales $ 86.6 $ 82.1 - 5.2% Segment Profit 7.7 5.5 - 28.7% Segment Profit % 8.9% 6.7% - 2.2 pts BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 16 SALES & SEGMENT PROFIT % (Millions of USD) Q2 F’13 vs. Q2 F’12 PERFORMANCE Revenues down (5.2%): Organi
Slide 17: Investor Relations
INVESTOR RELATIONS Brady Contact: Aaron Pearce Investor Relations 414-438-6895 Aaron_Pearce@Bradycorp.com See our web site at www.investor.bradycorp.com BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 17 17
Slide 18: Debt Structure
DEBT STRUCTURE BRADY – FISCAL 2013 Q2 FINANCIAL RESULTS 18 18 (Millions of USD) Int. Rate Fixed vs. Var. Jan. 31, 2013 Balance July 31, 2012 Balance Revolver Borrowings (due Feb. 2017): USD-denominated (L+1.125) 1.3% Variable 13,000$ -$ EUR-denominated (L+1.125) 1.2% Variable 66,478 - GBP-denominate
Slide 19: Income Statements
2013 2012 Change Sales 324.2$ 320.6$ 3.6$ Gross Margin 150.1 153.3 (3.2) % of Sales 46.3% 47.8% (1.5) pts Research and Development (8.6) (10.0) 1.4 Selling, General and Admin. (117.2) (104.8) (12.4) % of Sales (36.2%) (32.7%) 3.4 pts Restructuring Expense (4.0) - (4.0) Impairment Charge - (115.7) 11
Slide 20: EBITDA Reconciliation
Q1 Q2 Q3 Q4 Total 27,188$ (8,684)$ 18,504$ Interest expense 4,163 4,406 8,569 Income taxes 13,482 30,625 44,107 Depreciation and amortization 10,675 11,371 22,046 55,508$ 37,718$ -$ -$ 93,226$ Q1 Q2 Q3 Q4 Total 32,732$ (89,954)$ 27,652$ 11,659$ (17,911)$ Interest expense 5,047 4,933 4,735 4,375 19,0
Slide 21: Net Income Excluding Restructuring and Non-Routine Items
2013 2012 2013 2012 (8,684)$ (89,954)$ 18,504$ (57,222)$ (4,019) — (4,019) — Loss on the sale of Brady Medical — — 2,577 — Gain on the sale of Varitronics — — 638 — Non-routine items - net of tax (4,019) — (804) — 949 — 949 — PDC acquisition-related expenses 2,959 — 2,959 — 3,281 — 3,281 — — 115,688
Slide 22: Diluted EPS Excluding Restructuring and Non-Routine Items
2013 2012 2013 2012 (0.17)$ (1.72)$ 0.36$ (1.09)$ (0.08) - (0.08) - Loss on the sale of Brady Medical - - 0.05 - Gain on the sale of Varitronics - - 0.01 - Non-routine items (0.08) - (0.02) - 0.02 - 0.02 - PDC acquisition-related expenses 0.06 - 0.06 - 0.06 - 0.06 - - 2.21 - 2.21 0.49 - 0.49 - 0.63