Slide 1: Brady Corporation F'16 Q1 Financial Results
November 19, 2015 Brady Corporation F’16 Q1 Financial Results
Slide 2: Forward-Looking Statements
2Forward-Looking Statements 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 financial position, business strategy, targets, pr
Slide 3: Q1 F'16 Financial Summary
3Q1 F’16 Financial Summary • Sales down 8.8% to $283.1M in Q1 of F’16 vs. $310.2M in Q1 of F’15. – Organic sales declined 2.2% while foreign currency decreased sales by 6.6%. • Gross profit margin of 49.2% in Q1 of F’16, up from 48.4% in Q1 of F’15. • SG&A expense of $100.7M (35.6% of sales) in Q1 o
Slide 4: Sales Overview
4Sales Overview • (2.2%) organic sales decline: • ID Solutions – Organic sales decline of (2.4%). • Workplace Safety – Organic sales decline of (1.7%). • (6.6%) decrease due to currency translation. Q1 F’16 SALES: • Our European businesses in both IDS and WPS performed well, with continued organic g
Slide 5: Gross Profit Margin
Gross Profit Margin 5 • GPM of 49.2% in Q1 of F’16 compared to 48.4% in Q1 of F’15. • Both Q1 of F’15 and Q1 of F’16 were impacted by facility consolidation-related costs, however, the impact was greater on Q1 of F’15. • Facilities are fully consolidated and actions are in process to improve profita
Slide 6: SG&A Expense and G&A Expense
SG&A Expense and G&A Expense 6 • G&A expense was $26.6M in Q1 of F’16. G&A expenses were down in most areas, except for IT due to system upgrades and digital enhancements. • Reductions in G&A to come from efficiency and standardization activities. G&A EXPENSE (subset of SG&A): • SG&A expense was dow
Slide 7: Net Earnings & EPS From Continuing Operations
7Net Earnings & EPS From Continuing Operations * Non-GAAP Net Earnings from Continuing Operations and Non-GAAP Net Earnings from Continuing Operations Per Class A Diluted Nonvoting Share are non-GAAP measures. See appendix. • Q1 F’16 Net earnings were $18.7M compared to Non- GAAP net earnings* of $1
Slide 8: Cash Generation
8Cash Generation • Cash flow from operating activities of $30.4M in Q1 of F’16 compared to $18.6M in Q1 of F’15. • Free cash flow* of $28.1M in Q1 of F’16 compared to $7.1M in Q1 of F’15. • Returned $10.2M to our shareholders in the form of dividends. • Returned $16.2M to our shareholders in the for
Slide 9: Net Debt & EBITDA
Net Debt & EBITDA 9 1.4 1.3 1.2 1.2 1.3 1.5 1.2 1.2 1.2 1.2 1.1 1.1 0.0x 0.5x 1.0x 1.5x Q2 F'13 Q3 F'13 Q4 F'13 Q1 F'14 Q2 F'14 Q3 F'14 Q4 F'14 Q1 F'15 Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 NET DEBT / TTM EBITDA* • October 31, 2015 Cash = $110.6M, Debt = $250.6M (net debt = $140.0M), and TTM EBITDA = $123
Slide 10: F'16 Guidance
10F’16 Guidance F’16 Diluted EPS $1.10 to $1.30 Guidance Assumptions: • Slightly down organic sales for the balance of fiscal 2016, which is reflective of economic challenges in certain industrial markets and geographies. • Exchange rates consistent with those as of October 31, 2015. • Full-year dep
Slide 11: Identification Solutions Performance
Q1 F’16 vs. Q1 F’15 PERFORMANCE (millions of USD) 11Identification Solutions • Revenues down 7.4%: • Organic = -(2.4)% • Fx = -(5.0)% • Organic sales growth in Europe-based business. • Organic sales down in the Americas and Asia. • Segment profit continues to be impacted by operational inefficiencie
Slide 12: Workplace Safety Performance
Q1 F’16 vs. Q1 F’15 PERFORMANCE (millions of USD) 12Workplace Safety • Revenues down 11.6%: • Organic = -(1.7)% • Fx = -(9.9)% • Strengthening of the U.S. dollar had a more significant impact on the Workplace Safety platform as approximately half of WPS revenues are generated in Western Europe. • Se
Slide 13: Investor Relations
13Investor Relations Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com
Slide 14: Appendix
Appendix 14
Slide 15: Comparable Income Statements
COMPARABLE INCOME STATEMENTS (millions of USD) 15Comparable Income Statements 2015 2014 Change Sales 283.1$ 310.2$ (27.1)$ Gross Margin 139.3 150.2 (10.9) % of Sales 49.2% 48.4% Research and Development (8.5) (9.6) 1.1 Selling, General and Admin. (100.7) (109.3) 8.6 % of Sales (35.6%) (35.2%) 0.3 pt
Slide 16: Debt Structure
(‘000s of USD) 16Debt Structure October 31, 2015 Balance July 31, 2015 Balance Revolver Borrowings (due Feb. 2017): USD-denominated (L+1.125) 1.07% Variable 100,500$ 102,000$ China Borrowings: USD & CNY-denominated notes payable 3.53% Variable 9,173 10,411 Private Placements: USD-denominated 2006 Se
Slide 17: EBITDA reconciliation
Brady is presenting EBITDA because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA represents net earnings before interest expense, income taxes, depreciation, amortization and impairment charges. EBITDA is not a calculation based on generally accep
Slide 18: Non-GAAP Net Earnings reconciliation
Brady is presenting the Non-GAAP measures "Net Earnings from Continuing Operations Excluding Certain Items“ and “Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items.” These are not calculations based upon GAAP. The amounts included in these Non-