Slide 1: Brady Corporation F'17 Q1 Financial Results
November 16, 2016 Brady Corporation F’17 Q1 Financial Results
Slide 2: Forward-Looking Statements
2 Forward-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, p
Slide 3: Q1 F'17 Financial Summary
3 Q1 F’17 Financial Summary • Sales down 1.0% to $280.2M in Q1 of F’17 vs. $283.1M in Q1 of F’16. – Organic sales decreased 0.2%. – Foreign currency translation reduced sales by 0.8%. • Gross profit margin of 50.1% in Q1 of F’17 compared with 49.2% in Q1 of F’16. • SG&A expense of $98.0M (35.0% of s
Slide 4: Sales Overview
4 Sales Overview • (0.2%) organic sales decline: • ID Solutions – Organic sales growth of 0.7%. • Workplace Safety – Organic sales decline of (2.5%). • (0.8%) decrease due to currency translation. Q1 F’17 SALES: • Our healthcare and Asian IDS businesses experienced low-single digit organic sales gro
Slide 5: Gross Profit Margin
Gross Profit Margin 5 • GPM of 50.1% in Q1 of F’17 compared with 49.2% in Q1 of F’16. • GPM improved due to ongoing efficiency gains throughout our global operations. GROSS PROFIT MARGIN COMMENTARY: $150 $138 $141 $129 $139 $133 $145 $141 $140 48% 49% 49% 45% 49% 49% 51% 50% 50% 25% 30% 35% 40% 45%
Slide 6: SG&A Expense
SG&A Expense 6 • SG&A expense was down $2.7M to $98.0M in Q1 of F’17 compared to $100.7M in Q1 of F’16, continuing the general downward trend. • The ongoing declines in SG&A expense are a direct result of focused efforts on driving efficiencies across the organization. SG&A EXPENSE: $109 $108 $103 $
Slide 7: Net Earnings & EPS
7 Net Earnings & EPS * Net Earnings from Continuing Operations, Excluding Certain Items in F’15 and Net Earnings from Continuing Operations Per Class A Diluted Share in F’15 are non-GAAP measures. See appendix. • Q1 F’17 net earnings were $22.6M compared to $18.7M in Q1 of F’16. • Increase in earnin
Slide 8: Cash Generation & Uses
8 Cash Generation & Uses • Cash flow from operating activities was $34.0M in Q1 of F’17 compared to $30.4M in Q1 of F’16. • Free cash flow* was $30.0M in Q1 of F’17 compared to $28.0M in Q1 of F’16. • Returned $10.4M to our shareholders in the form of dividends in Q1 of F’17. CASH FLOWS IN Q1 OF F’1
Slide 9: Net Debt & EBITDA
Net Debt & EBITDA 9 1.2 1.2 1.2 1.1 1.1 1.0 0.8 0.5 0.3 0.0x 0.5x 1.0x 1.5x Q1 F'15 Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 NET DEBT / TTM EBITDA* • October 31, 2016 Cash = $166.3M, Debt = $216.0M, and TTM EBITDA = $151.3M. • Net Debt/EBITDA* = 0.3 to 1. • Net debt declined b
Slide 10: Full Year F'17 Guidance Unchanged
10 Full Year F’17 Guidance Unchanged F’17 Diluted EPS $1.55 to $1.70 Guidance Assumptions: • Low single digit organic sales declines to slight organic sales growth. • Full-year depreciation and amortization expense of approximately $30M. • Full-year income tax rate ranging from 27% to 29%. • Full-ye
Slide 11: Segment Financial Results – Recast
IDENTIFICATION SOLUTIONS – FINANCIAL PERFORMANCE SUMMARY (millions of USD) 11 Segment Financial Results – Recast Q1 F’17 Q1 F’16 Q2 F’16 Q3 F’16 Q4 F’16 Full Year F’16 Sales $ 201.3 $ 201.0 $ 189.8 $ 201.5 $ 203.2 $ 795.5 Organic Sales % 0.7% (2.2%) 0.9% (0.9%) (0.6%) (0.7%) Segment Profit $ 33.1 $
Slide 12: Q1 F'17 vs. Q1 F'16 Performance: Identification Solutions
Q1 F’17 vs. Q1 F’16 PERFORMANCE (millions of USD) 12 Identification Solutions • All historical amounts have been recast to reflect the revised segment definitions. • Revenues up 0.1%: • Organic = + 0.7% • Fx = - (0.6)% • Organic sales growth in healthcare and Asia-based businesses. • Organic sales d
Slide 13: Q1 F'17 vs. Q1 F'16 Performance: Workplace Safety
Q1 F’17 vs. Q1 F’16 PERFORMANCE (millions of USD) 13 Workplace Safety • All historical amounts recast to reflect the revised segment definitions. • Revenues decreased (3.8%): • Organic = - (2.5)% • Fx = - (1.3)% • Continued increase in revenues in Europe offset by high-single digit decline in the U.
Slide 14: Investor Relations
14 Investor 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) 16 Comparable Income Statements 2016 2015 Change Sales 280.2$ 283.1$ (2.9)$ Gross Margin 140.4 139.3 1.1 % of Sales 50.1% 49.2% Research and Development (9.2) (8.6) (0.6) Selling, General and Admin. (98.0) (100.6) 2.6 % of Sales (35.0%) 35.6% (0.6) pts
Slide 17: Debt Structure
(‘000s of USD) 17 Debt Structure October 31, 2016 Balance July 31, 2016 Balance Revolver Borrowings: USD-denominated 1.33% Variable 112,000$ 112,000$ China Borrowings: USD & CNY-denominated notes payable 4.19% Variable 5,354 4,928 Private Placements: USD-denominated 2006 Series 5.30% Fixed - - USD-d
Slide 18: 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 19: Net Earnings Excluding Certain Items 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-