Brady Corporation · NYSE:BRC
Brady — Q2 2018 Earnings Presentation
15 slides from Brady's earnings presentation, Feb 22, 2018
Slide 1: Brady Corporation F'18 Q2 Financial Results
Brady Corporation F’18 Q2 Financial Results February 22, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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: Q2 F'18 Financial Summary
Q2 F’18 Financial Summary 3 • Sales increased 7.4% to $287.8M in Q2 of F’18 compared with $268.0M in Q2 of F’17. – Organic sales increased 3.2%. – Foreign currency translation increased sales 4.2%. • Gross profit margin of 49.9% in Q2 of F’18 compared with 50.1% in Q2 of F’17. • SG&A expense of $97.
Slide 4: Sales Overview
Sales Overview 4 SALES (millions of USD) $305 $295 $289 $290 $287 $288 $285 $282 $280 $276 $275 $269 $268 $265 $255 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 Q4 F'17 Q1 F'18 Q2 F'18 Organic Sales 0.4% (0.1%) (0.9%) (0.2%) 1.3% (1.9%) 3.0% 1.7% 3.2% Growth Q2 F’18 SALES: Q2 F’18 SALES COMMENTAR
Slide 5: Gross Profit Margin
Gross Profit Margin 5 GROSS PROFIT & GPM% (millions of USD) 50.7% 50.7% 50.1% 50.3% 50.0% 50.1% 49.9% 49.7% 49.5% 50% $150 $146 $145 $144 $144 $141 $140 $140 $133 $134 45% $125 $100 40% Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 Q4 F'17 Q1 F'18 Q2 F'18 Q2 F’18 – GROSS PROFIT MARGIN: • GPM of 49
Slide 6: SG&A Expense
6 SG&A Expense SG&A EXPENSE AND SG&A EXPENSE AS A % of SALES (millions of USD) $120 40% 37.3% 36.9% 35.3% 35.7% 38% $110 34.9% 35.0% $106 34.5% 33.4% 33.9% 35% $100 $100 $100 $98 $98 $98 $98 33% $97 $95 30% $90 28% $80 25% Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 Q4 F'17 Q1 F'18 Q2 F'18 Q2 F’
Slide 7: R&D Expense
7 R&D Expense R&D EXPENSE AND R&D EXPENSE AS A % of SALES (millions of USD) $14.0 3.8% 3.9% 4.0% 3.6% 3.5% 3.6% $12.0 $11.3 3.4% $11.0 3.5% 3.3% $10.5 3.3% $10.0 $10.0 3.1% $9.5 $9.1 $9.3 $9.1 $8.9 3.0% $8.0 $6.0 2.5% Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 Q4 F'17 Q1 F'18 Q2 F'18 INCREASING
Slide 8: Net Earnings & Earnings per Share
Net Earnings & Earnings per Share 8 NET EARNINGS (millions of USD) NET EARNINGS PER CLASS A DILUTED SHARE $40 $0.60 $0.49 $0.49 $0.48 $0.49 $30 $25.1 $25.3 $25.2 $25.8 $0.42 $0.44 $0.43 $22.6 $22.6 $0.40 $21.0 $20 $0.30 $15.3 $0.20 $10 $4.3 $0.08 $0 $0.00 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3
Slide 9: Cash Generation & Uses
Cash Generation & Uses 9 CASH FLOW FROM OPERATING ACTIVITIES (millions of USD) CASH FLOWS IN Q2 OF F’18: $60 $52.9 • Cash flow from operating activities was $50 $7.7M in Q2 of F’18 compared to $19.3M in $40.3 $40.4 $37.8 Q2 of F’17. $40 $34.0 $34.7 $27.9 $30 $19.3 • Free cash flow* was $3.0M in Q2 o
Slide 10: Net Cash (Debt)
Net Cash (Debt) 10 NET CASH (DEBT) (millions of USD) DEBT STRUCTURE (millions of USD) $75 Interest Jan. 31, 2018 July 31, 2017 $48 $44 Rate Balance Balance $26 Revolver Borrowings: $25 USD-denominated 1.95% $ - $ (17.0) EUR-denominated 0.75% (14.9) (34.3) -$25 $(9) China Borrowings: USD & CNY-denomi
Slide 11: Income Tax Changes
Income Tax Changes 11 • Q2 F’18 provisional income tax charges of $21.1M primarily related to the enactment of the U.S. Tax Cuts and Jobs Act: – Do not anticipate any cash outlays for the one-time repatriation tax. • Anticipate the F’18 tax rate to be between 27% and 29%, exclusive of tax charges pr
Slide 12: Full Year F'18 Guidance
Full Year F’18 Guidance 12 F’18 Diluted EPS guidance increased to $1.90 to $2.00* (previous guidance range was $1.85 - $1.95). F’18 Guidance Assumptions: • Low-single digit organic sales growth. • Full-year depreciation and amortization expense of approximately $26M. • Income tax rate of 27% to 29%.
Slide 13: Identification Solutions
Identification Solutions 13 Q2 F’18 vs. Q2 F’17 PERFORMANCE (millions of USD) Q2 F’18 SUMMARY: Q2 F’18 Q2 F’17 Change • Revenues increased 8.1%: • Organic = + 4.7% Sales $ 206.4 $ 191.0 + 8.1% • Fx = + 3.4% Segment Profit 34.1 29.0 + 17.7% • Organic sales increased in the high-single digits in Segme
Slide 14: Workplace Safety
Workplace Safety 14 Q2 F’18 vs. Q2 F’17 PERFORMANCE (millions of USD) Q2 F’18 SUMMARY: Q2 F’18 Q2 F’17 Change • Revenues increased 5.6%: • Organic = - (0.5)% Sales $ 81.3 $ 77.0 + 5.6% • Fx = + 6.1% Segment Profit 7.1 6.1 + 16.4% • Organic sales declined in the low-single digits in the Segment Profi
Slide 15: Investor Relations
Investor Relations 15 Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com