Slide 1: Brady Corporation F'15 Q4 Financial Results
September 11, 2015 Brady Corporation F’15 Q4 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: Q4 F'15 Financial Summary
3Q4 F’15 Financial Summary • Sales down 8.9% to $288.6M in Q4 of F’15 vs. $316.7M in Q4 of F’14. – Organic sales declined 1.2% while foreign currency decreased sales by 7.7%. • Gross profit margin of 44.7% in Q4 of F’15, down from 48.6% in Q4 of F’14. • SG&A expense of $102.9M (35.7% of sales) in Q4
Slide 4: Sales Overview
4Sales Overview • (1.2%) organic sales decline: • ID Solutions – Organic sales decline of (0.3%). • Workplace Safety – Organic sales decline of (3.2%). • (7.7%) decrease due to currency translation. Q4 F’15 SALES: • Organic sales in IDS negatively impacted by Brazil. • Overall, our European business
Slide 5: Gross Profit Margin
Gross Profit Margin 5 • GPM of 44.7% in Q4 of F’15 compared to 48.6% in Q4 of F’14. • Facilities consolidated, but operating inefficiencies continue. • Excluding certain non-recurring items in our IDS business, Q4 F’15 GPM would have been 47.0%. GROSS PROFIT MARGIN COMMENTARY: $150 $142 $159 $158 $1
Slide 6: SG&A Expense and G&A Expense
SG&A Expense and G&A Expense 6 • G&A expense in Q3 of F’15 impacted by a $4.3M benefit from the curtailment of a retiree medical plan. Excluding this item, G&A expense would have been $29.1M in Q3 of F’15. • G&A expense was $28.0M in Q4 of F’15. Expenses were down in most areas, except for IT due to
Slide 7: Net Earnings & EPS From Continuing Operations – Non-GAAP
7Net Earnings & EPS From Continuing Operations – Non-GAAP* * 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. • Q4 F’15 Non-GAAP net earnings from continuing operations* were
Slide 8: Cash Generation
8Cash Generation • Cash flow from operating activities of $40.6M in Q4 of F’15 compared to $17.6M in Q4 of F’14. • Free cash flow* of $37.5M in Q4 of F’15 compared to $4.0M in Q4 of F’14. • Returned $10.3M to our shareholders in the form of dividends. • Cash flow trends improving as we exit the peri
Slide 9: Net Debt & EBITDA
Net Debt & EBITDA 9 0.0 1.4 1.3 1.2 1.2 1.3 1.5 1.2 1.2 1.2 1.2 1.1 0.0x 0.5x 1.0x 1.5x Q1 F'13 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 NET DEBT / TTM EBITDA* • July 31, 2015 Cash = $114.5M, Debt = $253.7M (net debt = $139.2M), and TTM EBITDA (continui
Slide 10: F'16 Guidance
10F’16 Guidance F’16 Diluted EPS $1.10 to $1.30 Guidance Assumptions – Continuing Operations: • Organic sales ranging from approximately flat to low single-digit growth, with accelerating growth in the 2nd half of the year. • Exchange rates consistent with those as of July 31, 2015. • Full-year depr
Slide 11: Identification Solutions
Q4 F’15 vs. Q4 F’14 PERFORMANCE (millions of USD) 11Identification Solutions • Revenues down 6.0%: • Organic = -(0.3)% • Fx = -(5.7)% • Organic sales growth strongest in Europe-based business. • Segment profit continues to be impacted by operational inefficiencies. Q4 F’15 SUMMARY: • Expect low sing
Slide 12: Workplace Safety
Q4 F’15 vs. Q4 F’14 PERFORMANCE (millions of USD) 12Workplace Safety • Revenues down 14.9%: • Organic = -(3.2)% • Fx = -(11.7)% • Strengthening of the US dollar had a more significant impact on the Workplace Safety platform as approximately half of WPS revenues are generated in Western Europe. • Seg
Slide 13: Future Financial Performance
13Future Financial Performance GDP+ • Unrivaled customer service • Renewed R&D focus. • Integrated Solutions and embedded technologies creating smarter products. • E-business / Digital Below GDP Organic Growth Organic Sales Growth Organic Revenue Drivers: • Minimize inefficiencies in our manufacturi
Slide 14: Investor Relations
14Investor Relations Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com
Slide 15: Appendix
Appendix 15
Slide 16: Comparable Income Statements
COMPARABLE INCOME STATEMENTS (millions of USD) 16Comparable Income Statements 2015 2014 Change Sales 288.6$ 316.7$ (28.1)$ Gross Margin 129.1 154.1 (25.0) % of Sales 44.7% 48.7% Research and Development (9.2) (9.4) 0.2 Selling, General and Admin. (102.9) (111.3) 8.4 % of Sales (35.7%) (35.1%) 0.5 pt
Slide 17: Debt Structure
(‘000s of USD) 17Debt Structure July 31, 2015 Balance July 31, 2014 Balance Revolver Borrowings (due Feb. 2017): USD-denominated (L+1.125) 1.27% Variable 102,000$ 42,000$ China Borrowings: USD & CNY-denominated notes payable 4.18% Variable 10,411 19,423 Private Placements: USD-denominated 2006 Serie
Slide 18: EBITDA - Total Company
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 19: EBITDA from Continuing Operations
Brady is presenting EBITDA from Continuing Operations because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA from Continuing Operations represents earnings from continuing operations before interest expense, income taxes, depreciation, amortization
Slide 20: Non-GAAP Earnings from Continuing Operations
Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disc
Slide 21: Non-GAAP Earnings per Diluted Share from Continuing Operations
Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Consolidated Financ