Brady Corporation · NYSE:BRC
Brady — Q3 2017 Earnings Presentation
18 slides from Brady's earnings presentation, May 25, 2017
Slide 1: Brady Corporation F'17 Q3 Financial Results
May 25, 2017 Brady Corporation F’17 Q3 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: Q3 F'17 Financial Summary
3Q3 F’17 Financial Summary • Sales down 3.8% to $275.9M in Q3 of F’17 vs. $286.8M in Q3 of F’16. – Organic sales decreased 1.9%. – Foreign currency translation reduced sales by 1.9%. • Gross profit margin of 50.7% in Q3 of F’17 compared with 50.7% in Q3 of F’16. • SG&A expense of $98.4M (35.7% of sa
Slide 4: Sales Overview
4Sales Overview • 1.9% organic sales decline: • ID Solutions – Organic sales decline of (0.8%). • Workplace Safety – Organic sales decline of (4.6%). • (1.9%) decrease due to currency translation. Q3 F’17 SALES: • Organic sales decline in IDS Americas, partially offset by strong growth in IDS Asia.
Slide 5: Gross Profit Margin
Gross Profit Margin 5 • GPM of 50.7% in Q3 of F’17 compared with 50.7% in Q3 of F’16. • GPM improved in IDS Americas and Europe businesses due to ongoing efficiency gains, offset by declines in the WPS business due to reduced sales volume and pricing pressure. GROSS PROFIT MARGIN COMMENTARY: $141 $1
Slide 6: SG&A Expense
SG&A Expense 6 • SG&A expense declined $7.4M, finishing at $98.4M in Q3 of F’17 compared to $105.8M in Q3 of F’16, continuing the general downward trend. • The ongoing declines in SG&A expense are due to our focused efforts on driving efficiencies across the organization, while improving the overall
Slide 7: Net Earnings & EPS
7Net 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. • Q3 F’17 net earnings were $22.6M compared to $21.0M in Q3 of F’16. • The increase in ear
Slide 8: Cash Generation & Uses
8Cash Generation & Uses • Cash flow from operating activities was $37.8M in Q3 of F’17 compared to $40.3M in Q3 of F’16. • Free cash flow* was $34.2M in Q3 of F’17 compared to $36.8M in Q3 of F’16. • Returned $10.5M to our shareholders in the form of dividends in Q3 of F’17. CASH FLOWS IN Q3 OF F’17
Slide 9: Net Debt & EBITDA
Net Debt & EBITDA 9 1.2 1.1 1.1 1.0 0.8 0.5 0.3 0.2 0.1 0.0x 0.5x 1.0x 1.5x Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 NET DEBT / TTM EBITDA* • April 30, 2017 Cash = $129.1M, Debt = $138.0M, and trailing twelve month EBITDA = $157.3M. • Net Debt/EBITDA* = 0.1 to 1. • Net
Slide 10: Tightening Full Year F'17 EPS Guidance Range
10Tightening Full Year F’17 EPS Guidance Range F’17 Diluted EPS $1.80 to $1.85 Guidance Assumptions: • Organic sales ranging from a slight decline to slightly positive organic sales growth. • Full-year depreciation and amortization expense of approximately $28M. • Full-year income tax rate in the mi
Slide 11: Identification Solutions Q3 F'17 vs. Q3 F'16 Performance
Q3 F’17 vs. Q3 F’16 PERFORMANCE (millions of USD) 11Identification Solutions • Revenues decreased (2.3%): • Organic = - (0.8%) • Fx = - (1.5)% • Organic sales decline in IDS Americas, partially offset by double-digit sales growth in IDS Asia. • Segment profit as a percent of sales increased as a res
Slide 12: Workplace Safety Q3 F'17 vs. Q3 F'16 Performance
Q3 F’17 vs. Q3 F’16 PERFORMANCE (millions of USD) 12Workplace Safety • Revenues decreased (7.5%): • Organic = - (4.6)% • Fx = - (2.9)% • Organic sales decline in all regions of the WPS business. • High-single digit organic sales decline in the U.S. and mid-single digit decline in Australia, slight o
Slide 13: Investor Relations
13Investor Relations Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com
Slide 14: Appendix
Appendix 14
Slide 15: Comparable Income Statements
COMPARABLE INCOME STATEMENTS (millions of USD) 15Comparable Income Statements 2017 2016 Change Sales 275.9$ 286.8$ (10.9)$ Gross Margin 139.9 145.4 (5.5) % of Sales 50.7% 50.7% Research and Development (10.0) (8.9) (1.1) Selling, General and Admin. (98.3) (105.7) 7.4 % of Sales (35.6%) (36.9%) (1.3)
Slide 16: Debt Structure
(‘000s of USD) 16Debt Structure April 30, 2017 Balance July 31, 2016 Balance Revolver Borrowings: USD-denominated 1.82% Variable 22,000$ 112,000$ EUR-denominated 0.88% Variable 30,442 - China Borrowings: USD & CNY-denominated notes payable 3.42% Variable 4,072 4,928 Private Placements: USD-denominat
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-