Slide 1: F'14 Q4 Financial Results
F’14 Q4 Financial Results September 11, 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: Summary Comments
3 SUMMARY COMMENTS Significant 4th Quarter Events: • Organic sales growth of 1.1%, with Workplace Safety organic sales growth of 0.9%. • The BMP21 plus, our newest handheld printer which launched during the third quarter, performed very well in the fourth quarter with unit volume and sales exceeding
Slide 4: Q4 F'14 - Financial Summary
4 Q4 F’14 - FINANCIAL SUMMARY Sales up 2.0% to $316.7M vs. $310.6M in Q4 of F’13. • Organic sales growth of 1.1% and foreign currency increased sales by 0.9%. Gross profit margin of 48.6% in Q4 of F’14 compared with 50.8% in Q4 of F’13. SG&A expense of $111.3M (35.2% of sales) in Q4 of F’14 vs
Slide 5: Diluted EPS from Continuing Operations
5 DILUTED EPS FROM CONTINUING OPERATIONS 3-Months Ended July 31, Year Ended July 31, 2014 2013 2014 2013 Net Earnings (Loss) from Continuing Operations Per Class A Diluted Nonvoting Share (GAAP-measure) $ (1.89) $ (3.40) $ (0.93) $ (2.70) Restructuring charges 0.01 0.22 0.20 0.37 Acquisition and tax
Slide 6: F'15 Guidance – Continuing Operations
6 F’15 GUIDANCE – CONTINUING OPERATIONS F’15 Diluted EPS from Continuing Operations $1.50 to $1.70 (excluding restructuring charges and certain other items) Guidance Assumptions – Continuing Operations: • Low single-digit organic sales growth, with growth in both Identification Solutions and Workpla
Slide 7: Sales Overview
7 SALES OVERVIEW $273 $256 $272 $270 $272 $273 $302 $311 $308 $291 $310 $317 $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 Q4 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% 1.1% • 1.1% organic sale
Slide 8: Gross Profit Margin & SG&A Expense
8 GROSS PROFIT MARGIN & SG&A EXPENSE 8 $99 $95 $98 $100 $99 $110 $112 $107 $113 $111 $117 $111 36% 37% 36% 37% 36% 40% 37% 34% 37% 38% 38% 35% 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 Q4 F'14 GROSS
Slide 9: Net Earnings & EPS from Continuing Operations – Non-GAAP
9 NET EARNINGS & EPS FROM CONTINUING OPERATIONS – Non-GAAP* Q4 F’14 Non-GAAP net earnings from continuing operations* of $21M compared to $28.6M in Q4 of F’13. Quarter-on-quarter earnings decline driven by costs related to facility consolidation and sales mix. Q4 F’14 Non-GAAP diluted EPS from
Slide 10: Cash Generation
10 CASH GENERATION Cash flow from operating activities of $17.6M in Q4 of F’14. Received $54.2M of net proceeds from the first closing of the Die-Cut Divestiture. Repaid $32.7M of debt in the quarter. Returned $17.3M to our shareholders in the form of dividends and share repurchases. SIGNIFI
Slide 11: Net Debt & EBITDA
11 NET DEBT & EBITDA 0.1 0.0 0.1 1.4 1.3 1.2 1.2 1.3 1.5 1.2 0.0x 0.5x 1.0x 1.5x Q 1 F' 1 2 Q 2 F' 1 2 Q 3 F' 1 2 Q 4 F' 1 2 Q 1 F' 1 3 Q 2 F' 1 3 Q 3 F' 1 3 Q 4 F' 1 3 Q 1 F' 1 4 Q 2 F' 1 4 Q 3 F' 1 4 Q 4 F' 1 4 NET DEBT / TTM EBITDA* July 31, 2014 Cash = $81.8M, Debt = $263.2M (net debt = $181.4
Slide 12: Workplace Safety
12 WORKPLACE SAFETY Revenues up 2.8%: Organic = +0.9%. Fx = +1.9%. Segment profit of 18.0% is below prior year, but above the run rate coming into the quarter. Return to organic growth partly driven by changes made in the middle of fiscal 2014. Increased catalog advertising spend in all
Slide 13: New Products
13 Strong sales during the quarter of the BMP-21™ Plus & BMP-21™ Lab printers, launched last quarter Tough on the outside, Smart on the inside - Rugged performance, high-visibility printer for wire identification applications and another version for laboratory applications. NEW PRODUCTS
Slide 14: Identification Solutions
14 IDENTIFICATION SOLUTIONS Q4 F’14 vs. Q4 F’13 PERFORMANCE (Millions of USD) Q4 F’14 Q4 F’13 Change Sales $ 214.4 $ 211.1 + 1.6% Segment Profit 43.3 48.4 - 10.4% Segment Profit % 20.2% 22.9% - 2.7 pts SALES & SEGMENT PROFIT % (Millions of USD) $162 $168 $197 $211 $210 $195 $206 $214 27% 21% 24% 23%
Slide 15: Investor Relations
15 INVESTOR RELATIONS Brady Contact: Aaron Pearce Investor Relations 414-438-6895 Aaron_Pearce@Bradycorp.com See our web site at www.investor.bradycorp.com
Slide 16: Income Statements
16 2014 2013 Change Sales 316.7$ 310.6$ 6.1$ Gross Margin 154.1 157.9 (3.8) % of Sales 48.6% 50.8% (2.2) pts Research and Development (9.4) (9.4) - Selling, General and Admin. (111.3) (107.0) (4.3) % of Sales (35.2%) (34.4%) 0.8 pts Impairment Charges (148.6) (204.4) 55.8 Restructuring Charges (0.8)
Slide 17: Debt Schedule
(Thousands of USD) Revolver Borrowings (due Feb. 2017): USD-denominated (L+1.125) China Borrowings: USD-denominated notes payable Private Placements: USD-denominated 2004 Series USD-denominated 2006 Series USD-denominated 2007 Series EUR-denominated 2010 Series (7-yr.) EUR-denominated 2010 Series (1
Slide 18: EBITDA Reconciliation
18 Q1 Q2 Q3 Q4 Total 23,928$ 16,425$ 24,088$ (110,409)$ (45,968)$ Interest expense 3,720 3,676 3,381 3,523 14,300 Income taxes 11,130 2,933 3,799 (19,890) (2,028) Depreciation and amortization 10,878 11,464 11,440 10,816 44,598 Loss on sale of discontinued operations — — — 1,602 1,602 Impairment cha
Slide 19: EBITDA Reconciliation – Continuing Operations
19 Q1 Q2 Q3 Q4 Total 18,134$ 10,517$ 20,184$ (96,981)$ (48,146)$ Interest expense 3,720 3,676 3,381 3,523 14,300 Income taxes 8,595 4,408 4,074 (22,040) (4,963) Depreciation and amortization 10,878 11,464 11,440 10,816 44,598 Impairment charges — — — 148,551 148,551 41,327$ 30,065$ 39,079$ 43,869$ 1
Slide 20: Net Earnings Excluding Certain Items
20 2014 2013 2014 2013 (96,981)$ (175,557)$ (48,146)$ (138,257)$ — — — 949 Reversal of restricted stock grant expense — (2,624) — (2,624) PDC acquisition-related expenses — — — 2,959 — 3,976 — 28,976 Restructuring charges 580 11,236 10,261 18,889 117,394 191,556 117,394 191,556 20,993$ 28,587$ 79,50
Slide 21: EPS Excluding Certain Items
21 2014 2013 2014 2013 Nonvoting Share (GAAP measure) (1.89)$ (3.40)$ (0.93)$ (2.70)$ — — — 0.02 Reversal of restricted stock grant expense — (0.05) — (0.05) PDC acquisition-related expenses — — — 0.06 — 0.08 — 0.56 0.01 0.22 0.20 0.37 Impairment charges 2.29 3.71 2.29 3.71 Share Excluding Certain I