Slide 1: F'14 Q3 Financial Results May 22, 2014
F’14 Q3 Financial Results May 22, 2014
Slide 2: Forward-Looking Statements
2 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,
Slide 3: Third Quarter Highlights
3 THIRD QUARTER HIGHLIGHTS • Returned to organic sales growth • Launched several exciting new products, including the BMP21+ • Repurchased approximately 893,000 shares • Received $53M from phase one of the sale of the Die-Cut business on May 1, 2014. 3
Slide 4: Q3 F'14 - Financial Summary
4 Q3 F’14 - FINANCIAL SUMMARY Sales up 2.3% to $309.6M vs. $302.5M in Q3 of F’13. • Organic sales growth of 2.5% and foreign currency decreased sales by 0.2%. Gross profit margin of 50.1% in Q3 of F’14 compared with 52.7% in Q3 of F’13. SG&A expense of $116.7M (37.7% of sales) in Q3 of F’14 vs
Slide 5: Q4 F'14 Guidance
5 Q4 F’14 GUIDANCE Q4 F’14 Diluted EPS from Continuing Operations $0.45 to $0.55 (excluding restructuring charges and certain other items). Guidance Assumptions – Continuing Operations: • Low single-digit organic sales growth from continuing operations in the fourth quarter of fiscal 2014. • Full-ye
Slide 6: Sales Overview
6 SALES OVERVIEW $273 $256 $272 $270 $272 $273 $302 $311 $308 $291 $310 $200 $250 $300 $350 Q1 F'12 Q2 F'12 Q3 F'12 Q4 F'12 Q1 F'13 Q2 F'13 Q3 F'13 Q4 F'13 Q1 F'14 Q2 F'14 Q3 F'14 Organic Sales 5.1% (0.7%) 0.9% 1.9% (0.8%) (1.8%) (4.8%) (2.1%) (2.1%) (1.1%) 2.5% • 2.5% organic sales growth. • (0.2%)
Slide 7: Gross Profit Margin & SG&A Expense
7 GROSS PROFIT MARGIN & SG&A EXPENSE 7 $99 $95 $98 $100 $99 $110 $112 $107 $113 $111 $117 36% 37% 36% 37% 36% 40% 37% 34% 37% 38% 38% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% $50 $100 $150 $200 Q1 F'12 Q2 F'12 Q3 F'12 Q4 F'12 Q1 F'13 Q2 F'13 Q3 F'13 Q4 F'13 Q1 F'14 Q2 F'14 Q3 F'14 GROSS PROFIT & GPM% (Mi
Slide 8: Net Earnings & EPS from Continuing Operations - Non-GAAP
8 NET EARNINGS & EPS FROM CONTINUING OPERATIONS – Non-GAAP* Q3 F’14 Non-GAAP net earnings from continuing operations* of $22.3M compared to $28.5M in Q3 of F’13. Comparability impacted by a reversal of incentive compensation expense in Q3 of F’13 and a lower tax rate in Q3 of F’14. Q3 F’14 Non
Slide 9: Cash Generation
9 (millions of USD) 3 Mos. Ended April 30, 2014 9 Mos. Ended April 30, 2014 Cash Balance - Beginning of Period 79.1$ 91.1$ Cash Flow from Operating Activities 34.0 75.8 Capital Expenditures (12.2) (29.8) Repurchase of Stock (23.3) (23.3) Dividends (10.1) (30.5) Debt (Repayments) Borrowings - Net 9.1
Slide 10: Net Debt & EBITDA
10 NET DEBT & EBITDA 0.1 0.0 0.1 1.4 1.3 1.2 1.2 1.2 1.3 0.0x 0.5x 1.0x 1.5x Q 1 F '1 2 Q 3 F '1 2 Q 1 F '1 3 Q 3 F '1 3 Q 1 F '1 4 Q 3 F '1 4 NET DEBT / TTM EBITDA* April 30, 2014 Cash = $78.7M, Debt = $299.3M (net debt = $220.6M), and TTM EBITDA of $165.6M. Net Debt/EBITDA* = 1.3x. Balance s
Slide 11: Q3 New Product Introduction: BMP-21 Plus & BMP-21 Lab
11 Q3 NEW PRODUCT INTRODUCTION: BMP-21™ Plus & BMP-21™ Lab Tough on the outside, Smart on the inside - Rugged performance, high- visibility printer for wire identification applications and another version for laboratory applications. STRATEGIC PARTNERSHIPS: Smart Labels for Healthcare Applications T
Slide 12: Identification Solutions
12 IDENTIFICATION SOLUTIONS Q3 F’14 vs. Q3 F’3 PERFORMANCE (Millions of USD) Q3 F’14 Q3 F’13 Change Sales $206.4 $ 197.4 + 4.6% Segment Profit 44.3 46.8 - 5.3% Segment Profit % 21.5% 23.7% - 2.2 pts SALES & SEGMENT PROFIT % (Millions of USD) $162 $168 $197 $211 $210 $195 $206 27% 21% 24% 23% 24% 19%
Slide 13: Workplace Safety
13 WORKPLACE SAFETY Revenues down (1.8%): Organic= (1.9%) and Fx= 0.1%. Improved results in Europe with low single-digit organic sales growth in Q3 of F’14. Australian business trends improving, but organic sales still declined mid-single digits in Q3 of F’14. Organic sales in the U.S. imp
Slide 14: WPS - Strategic Focus Areas
14 WPS – STRATEGIC FOCUS AREAS 14 1. Expand focus on e-commerce 2. Expand offering of differentiated identification and workplace safety products 3. Enhance industry-specific expertise 4. Increase catalog advertising in all major geographies.
Slide 15: Investor Relations
15 INVESTOR RELATIONS Brady Contact: Aaron Pearce Investor Relations 414-438-6895 Aaron_Pearce@Bradycorp.com See our web site at www.investor.bradycorp.com
Slide 16: Total Company Income Statements
16 TOTAL COMPANY INCOME STATEMENTS COMPARABLE INCOME STATEMENTS (Millions of USD) * Non-GAAP Net Earnings from Continuing Operations, Excluding Restructuring and Net Earnings from Continuing Operations Per Class A Diluted Nonvoting Share Excluding Restructuring are non-GAAP measures. See slides #19
Slide 17: Debt Structure
17 DEBT STRUCTURE 17 (Thousands of USD) Int. Rate Fixed vs. Variable April 30, 2014 Balance July 31, 2013 Balance Revolver Borrowings (due Feb. 2017): USD-denominated (L+1.125) 1.24% Variable 63,000$ 39,000$ China Borrowings: USD-denominated notes payable 1.55% Variable 12,552 11,613 Private Placeme
Slide 18: EBITDA Reconciliation
18 Q1 Q2 Q3 Q4 Total 23,928$ 16,424$ 24,088$ 64,440$ Interest expense 3,720 3,676 3,381 10,777 Income taxes 11,130 2,933 3,799 17,862 Depreciation and amortization 10,878 11,464 11,440 33,782 49,656$ 34,497$ 42,708$ 126,861$ Q1 Q2 Q3 Q4 Total 27,188$ (8,684)$ 4,233$ (177,271)$ (154,534)$ Interest ex
Slide 19: Non-GAAP Net Earnings from Continuing Operations
19 NON-GAAP NET EARNINGS FROM CONTINUING OPERATIONS 19 Reconciliation of Non-GAAP Net Earnings from Continuing Operations (‘000s of USD) 2014 2013 2014 2013 20,184$ 21,680$ 48,835$ 37,300$ Cost of goods sold: Purchase accounting expense related to inventory — — — 949 Selling, general and administrat
Slide 20: Non-GAAP Net Earnings from Continuing Operations per Diluted Class A Nonvoting Share
20 NON-GAAP NET EARNINGS FROM CONTINUING OPERATIONS PER DILUTED CLASS A NONVOTING SHARE 20 Reconciliation of Non-GAAP Net Earnings from Continuing Operations per Diluted Class A Nonvoting Share 2014 2013 2014 2013 $ 0.39 $ 0.42 $ 0.93 $ 0.72 Cost of goods sold: Purchase accounting expense related to