Slide 1: F'14 Q1 Financial Results
F’14 Q1 Financial Results November 21, 2013
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: Overview Comments: F'14 Priorities
3 OVERVIEW COMMENTS F’14 – Priorities: 1. Return WPS business to organic sales growth 2. Drive organic sales growth initiatives in IDS 3. Complete the sale of Die-Cut 4. Reduce cost structure through consolidation of manufacturing facilities 5. Focus on our customers and convert sales opportunities
Slide 4: Q1 F'14 Financial Summary
4 Q1 F’14 - FINANCIAL SUMMARY Sales up 13.0% to $306.0M vs. $270.9M in Q1 of F’13. • Organic sales down 2.2%, PDC acquisition increased sales by 15.6%, and foreign currency decreased sales by 0.4%. Gross profit margin of 51.3% in Q1 of F’14 compared with 55.2% in Q1 of F’13. SG&A expense of $1
Slide 5: F'14 Guidance Unchanged
5 F’14 GUIDANCE UNCHANGED F’14 Diluted EPS from Continuing Operations $1.80 to $2.00 (excluding restructuring charges). Guidance Assumptions – Continuing Operations: • Organic sales ranging from a slight contraction to slight growth. • Full-year income tax rate in the mid-to-upper 20% range. • Full-
Slide 6: Sales Overview
6 SALES OVERVIEW $273 $255 $271 $269 $271 $271 $301 $309 $306 $150 $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 Organic Sales 5.1% (0.9%) 0.6% 1.5% (1.1%) (2.2%) (5.0%) (2.3%) (2.2%) • (2.2%) organic sales decline. • 15.6% growth from the acquisition of
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 36.3% 37.3% 36.2% 37.3% 36.6% 40.5% 37.2% 34.6% 36.8% 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 GROSS PROFIT & GPM% (Millions of USD) S
Slide 8: Net Earnings & EPS from Continuing Operations – Non-GAAP
8 NET EARNINGS & EPS FROM CONTINUING OPERATIONS – Non-GAAP* Q1 F’14 net earnings from continuing operations, excluding restructuring charges* of $22.1M compared to $25.8M in Q1 of F’13. Q1 F’14 diluted EPS from continuing operations, excluding restructuring charges* of $0.42 compared to $0.50 in
Slide 9: Cash Generation
9 3 Mos. Ended Oct. 31, 2013 3 Mos. Ended Oct 31, 2012 Cash Balance - Beginning of Period 91.1$ 305.9$ Cash Flow from Operating Activities 25.6 20.2 Capital Expenditures (9.1) (6.2) Proceeds from Sales of Businesses - 10.2 Repurchase of Stock - (5.1) Dividends (10.1) (9.7) Debt (Repayments) Borrowin
Slide 10: Debt & EBITDA
10 DEBT & EBITDA 2.3 2.2 2.0 1.8 1.8 1.8 1.6 1.6 1.6 2.0 1.7 1.7 1.6 1.0x 1.5x 2.0x 2.5x Q 1 F '1 1 Q 3 F '1 1 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 GROSS DEBT / TTM EBITDA* October 31, 2013 Cash = $82M and Debt = $292M (net debt = $210M) Gross Debt/EBITDA* = 1.6x Net Debt/EBI
Slide 11: Identification Solutions
11 IDENTIFICATION SOLUTIONS Q1 F’14 vs. Q1 F’3 PERFORMANCE (Millions of USD) Q1 F’14 Q1 F’13 Change Sales $208.0 $ 161.2 + 29.0% Segment Profit 50.1 44.0 + 14.0% Segment Profit % 24.1% 27.3% - 3.2 pts SALES & SEGMENT PROFIT % (Millions of USD) $164 $149 $160 $160 $161 $167 $196 $210 $208 25.5% 24.7%
Slide 12: New Products: BMP41 Portable Label Printer and New Materials
12 BMP41 Portable Label Printer “One and Done”: The BMP41 Label Printer is Brady’s new mid-range portable printer for on the job labeling in electrical, telecommunications, voice and data communications, and general industrial environments. It is a rugged, portable solution that gives users the vers
Slide 13: Workplace Safety
13 WORKPLACE SAFETY Revenues down (10.6%): Organic= (10.0%), Fx= (0.6%) All major geographies experienced declines in Q1 revenues and profitability. Australia impacted by weak economy. The Americas and EMEA business impacted by reduced catalog advertising and continued competition. Q1 F’14
Slide 14: WPS – Strategic Focus Areas
14 WPS – STRATEGIC FOCUS AREAS 14 1. Expand focus on e-commerce 2. Expand offering of workplace safety products 3. Enhance industry-specific expertise 4. Adjusting pricing strategies 5. Increasing catalog advertising in all major geographies.
Slide 15: Investor Relations
15 INVESTOR RELATIONS Brady Contact: Aaron Pearce Investor Relations 414-438-6895 Aaron_Pearce@Bradycorp.com See our web site at www.investor.bradycorp.com
Slide 16: Total Company Income Statements
16 TOTAL COMPANY INCOME STATEMENTS COMPARABLE INCOME STATEMENTS (Millions of USD) * Net Earnings from Continuing Operations, Excluding Restructuring and Net Earnings from Continuing Operations Per Class A Diluted Nonvoting Share Excluding Restructuring are non-GAAP measures. See appendix. 2013 2012
Slide 17: Debt Structure
17 DEBT STRUCTURE 17 (Thousands of USD) Int. Rate Fixed vs. Variable Oct. 31, 2013 Balance July 31, 2013 Balance Revolver Borrowings (due Feb. 2017): USD-denominated (L+1.125) 1.28% Variable 15,000$ 39,000$ China Borrowings: USD-denominated note payable 1.13% Variable 11,442 11,613 Private Placement
Slide 18: EBITDA Reconciliation – Total Company
18 18 EBITDA - Total Company (‘000s of USD) EBITDA RECONCILIATION Q1 Q2 Q3 Q4 Total 23,928$ 23,928$ Interest expense 3,721 3,721 Income taxes 11,129 11,129 Depreciation and amortization 10,878 10,878 49,656$ 49,656$ Q1 Q2 Q3 Q4 Total 27,188$ (8,685)$ 4,233$ (177,271)$ (154,535)$ Interest expense 4,1
Slide 19: Net Earnings from Continuing Operations, Excluding Certain Items
19 NET EARNINGS FROM CONTINUING OPERATIONS, EXCLUDING CERTAIN ITEMS 19 Reconciliation of Net Earnings from Continuing Operations Excluding Certain Items (‘000s of USD): 2013 2012 17,423$ 25,785$ 4,635 — 22,058$ 25,785$ Restructuring charges Net Earnings from Continuing Operations Excluding Certain I
Slide 20: Net Earnings per Diluted Class A Nonvoting Share, Excluding Certain Items
20 NET EARNINGS FROM CONTINUING OPERATIONS PER DILUTED CLASS A NONVOTING SHARE, EXCLUDING CERTAIN ITEMS 20 Reconciliation of Net Earnings from Continuing Operations per Diluted Class A Nonvoting Share Excluding Certain Items: 2013 2012 $ 0.33 $ 0.50 0.09 — (non-GAAP measure) 0.42$ 0.50$ Basic 52,071