Slide 1: Brady Corporation F'16 Q4 Financial Results
September 9, 2016 Brady Corporation F’16 Q4 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: Q4 F'16 Financial Summary
3 Q4 F’16 Financial Summary • Sales down 2.3% to $282.1M in Q4 of F’16 vs. $288.6M in Q4 of F’15. – Organic sales decreased 0.9%. Foreign currency translation reduced sales by 1.4%. • Gross profit margin of 50.0% in Q4 of F’16 compared with 44.7% in Q4 of F’15. • SG&A expense of $98.4M (34.9% of sal
Slide 4: Sales Overview
4 Sales Overview • (0.9%) organic sales decline: • ID Solutions – Organic sales decline of (0.2%). • Workplace Safety – Organic sales decline of (2.7%). • (1.4%) decrease due to currency translation. Q4 F’16 SALES: • Our European businesses in both IDS and WPS performed well, with continued organic
Slide 5: Gross Profit Margin
Gross Profit Margin 5 • GPM of 50.0% in Q4 of F’16 compared with 44.7% in Q4 of F’15 and 50.7% in Q3 of F’16. • GPM in Q4 of F’15 was impacted by facility consolidation-related costs and other non-routine charges. • On-going operational improvements are positively impacting profitability. GROSS PROF
Slide 6: SG&A Expense
SG&A Expense 6 • SG&A expense was down $4.5M to $98.4M in Q4 of F’16 compared to $102.9M in Q4 of F’15. • Approximately half of the decline in SG&A expense was caused by the strengthening of the U.S. dollar against other major currencies and the remaining half was due to efficiency gains. SG&A EXPEN
Slide 7: Net Earnings & EPS
7 Net Earnings & EPS * 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’16 net earnings were $25.1M compared to Non- GAAP net earnings* of $14.4M in Q4 of F’15. • Incr
Slide 8: Cash Generation & Uses
8 Cash Generation & Uses • Cash flow from operating activities was $40.4M in Q4 of F’16 compared to $40.6M in Q4 of F’15. • Free cash flow* was $30.8M in Q4 of F’16 compared to $37.5 in Q4 of F’15. • Returned $10.2M to our shareholders in the form of dividends in Q4 of F’16. • Repaid $24.3M in debt
Slide 9: Net Debt & EBITDA
Net Debt & EBITDA 9 1.2 1.3 1.5 1.2 1.2 1.2 1.2 1.1 1.1 1.0 0.8 0.5 0.0x 0.5x 1.0x 1.5x 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 Q2 F'16 Q3 F'16 Q4 F'16 NET DEBT / TTM EBITDA* • July 31, 2016 Cash = $141.2M, Debt = $216.9M (net debt = $75.7M), and TTM EBITDA = $149.6M.
Slide 10: F'17 Guidance
10 F’17 Guidance F’17 Diluted EPS $1.55 to $1.70 Guidance Assumptions: • Low single digit organic sales declines to slight organic growth. • Foreign currency exchange rates consistent with those as of July 31, 2016. • Full-year depreciation and amortization expense of approximately $30M. • Full-year
Slide 11: Identification Solutions Q4 F'16 vs. Q4 F'15 Performance
Q4 F’16 vs. Q4 F’15 PERFORMANCE (millions of USD) 11 Identification Solutions • Revenues down (1.4%): • Organic = -(0.2%) • Fx = -(1.2)% • Organic sales growth in Europe-based business. • Organic sales decline in the Americas. • Segment profit as a percent of sales increased as a result of ongoing o
Slide 12: Workplace Safety Q4 F'16 vs. Q4 F'15 Performance
Q4 F’16 vs. Q4 F’15 PERFORMANCE (millions of USD) 12 Workplace Safety • Revenues decreased 4.3%: • Organic = - (2.7)% • Fx = -(1.6)% • Continued increase in revenues in Europe offset by a mid-single digit decline in the U.S. and a high-single digit decline in Australia. • Digital sales are improving
Slide 13: Future Financial Performance
13 Future Financial Performance GDP+ • Unrivaled customer service. • Renewed R&D focus. • Integrated solutions and technologies creating smarter products. • E-business / Digital. • Ability to achieve financial targets is contingent upon our ability to increase organic sales to at least GDP. Below GD
Slide 14: Investor Relations
14 Investor Relations Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com
Slide 15: Appendix
Appendix 15
Slide 16: Comparable Income Statements
COMPARABLE INCOME STATEMENTS (millions of USD) 16 Comparable Income Statements 2016 2015 Change Sales 282.1$ 288.6$ (6.5)$ Gross Margin 141.1 129.1 12.0 % of Sales 50.0% 44.7% Research and Development (9.3) (9.2) (0.1) Selling, General and Admin. (98.4) (103.0) 4.6 % of Sales (34.9%) (35.7%) (0.8) p
Slide 17: Debt Structure
(‘000s of USD) 17 Debt Structure July 31, 2016 Balance July 31, 2015 Balance Revolver Borrowings: USD-denominated 1.31% Variable 112,000$ 102,000$ China Borrowings: USD & CNY-denominated notes payable 4.00% Variable 4,928 10,411 Private Placements: USD-denominated 2006 Series 5.30% Fixed - 26,143 US
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: 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-