• Brady Corporation Reports Fiscal 2021 First Quarter Results

    ソース: Nasdaq GlobeNewswire / 19 11 2020 07:00:01   America/New_York

    • Income before income taxes and losses of unconsolidated affiliate increased by 1.6 percent to $42.2 million in the first quarter of fiscal 2021 compared to $41.6 million in the same quarter of the prior year.  
    • Diluted EPS was $0.64 in the first quarter of fiscal 2021 compared to $0.70 in the same quarter of the prior year. Diluted EPS in the first quarter of fiscal 2020 was positively impacted by a reduced income tax rate of 9.8 percent primarily due to a favorable tax audit settlement and tax benefits from equity-based compensation.
    • Cash flow from operating activities was up 61.8 percent to $62.8 million in the first quarter of fiscal 2021 compared to $38.8 million in the same quarter of the prior year.
    • Sales for the quarter declined 3.4 percent. Organic sales declined 4.9 percent and the impact of foreign currency translation increased sales by 1.5 percent.

    MILWAUKEE, Nov. 19, 2020 (GLOBE NEWSWIRE) --  Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2021 first quarter ended October 31, 2020.

    Quarter Ended October 31, 2020 Financial Results:
    Income before income taxes and losses of unconsolidated affiliate increased 1.6 percent to $42.2 million for the quarter ended October 31, 2020, compared to $41.6 million in the same quarter last year.  

    Net income for the quarter ended October 31, 2020 declined 10.7 percent to $33.5 million compared to $37.5 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $0.64 for the first quarter of fiscal 2021, compared to $0.70 in the same quarter last year. Net income and earnings per diluted Class A Nonvoting Common Share in the first quarter of last year were positively impacted by a reduced income tax rate of 9.8 percent primarily due to a favorable tax audit settlement and tax benefits from equity-based compensation.  

    Sales for the quarter ended October 31, 2020 declined 3.4 percent, which consisted of an organic sales decline of 4.9 percent and an increase of 1.5 percent from foreign currency translation. Sales for the quarter ended October 31, 2020 were $277.2 million compared to $286.9 million in the same quarter last year. By segment, sales declined 7.8 percent in Identification Solutions and increased 9.8 percent in Workplace Safety, which consisted of an organic sales decline of 8.4 percent in Identification Solutions and organic sales growth of 5.5 percent in Workplace Safety.

    Commentary:
    “We experienced a steady improvement in sales volumes as the global economy slowly healed throughout our first quarter. Sales improved in each of the last six months and we expanded our customer base in our Workplace Safety business by providing the high-quality products and the service levels that our customers have come to expect,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “This quarter, we saw demand in our Identification Solutions business improve while our Workplace Safety business had another strong quarter with organic sales increasing more than 5 percent. Growth in our Workplace Safety business was primarily driven by increased sales of safety and identification products directly related to the COVID-19 pandemic, including social distancing and personal hygiene signage. Even with the negative impacts from the COVID-19 pandemic, we increased pre-tax income this quarter as a result of our focus on executing sustainable efficiency gains. Our ongoing investments in sales, marketing, and new product development combined with our reduced cost structure position us to drive substantial profit improvements when demand increases in industrial end-markets.”

    “Brady is financially strong and continues to generate significant cash flow. As of October 31, 2020, we had $256.3 million of cash on hand and no outstanding debt,” said Brady’s Chief Financial Officer, Aaron Pearce. “We generated $62.8 million of cash flow from operating activities this quarter, which was an increase of 61.8 percent compared to last year’s first quarter, and we returned $14.1 million to our shareholders in the form of dividends and share buybacks. We are generating operating cash flow in excess of net income and we have a balance sheet that allows us to make the investments necessary to drive future revenue and earnings growth while paying a solid dividend. Although we are seeing some reduction in demand for products specifically designed to help in the fight of COVID-19 and there are macro-economic challenges caused by additional government lockdowns that will impact our financial results for the quarter ending January 31, 2021, Brady’s strong balance sheet and cash generation position us extremely well for future financial success as industrial production improves.”

    A webcast regarding Brady’s fiscal 2021 first quarter financial results will be available at www.bradycorp.com/investors beginning at 9:30 a.m. central time today.

    Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software.   Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2020, employed approximately 5,400 people in its worldwide businesses. Brady’s fiscal 2020 sales were approximately $1.08 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradycorp.com.

    In this news release, 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, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations.

    The use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project, ” “continue” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: adverse impacts of the novel coronavirus (“COVID-19”) pandemic or other pandemics; decreased demand for our products; our ability to compete effectively or to successfully execute our strategy; Brady’s ability to develop technologically advanced products that meet customer demands; raw material and other cost increases; difficulties in protecting our websites, networks, and systems against security breaches; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; risks associated with the loss of key employees; divestitures and contingent liabilities from divestitures; Brady’s ability to properly identify, integrate, and grow acquired companies; litigation, including product liability claims; foreign currency fluctuations; potential write-offs of Brady’s goodwill and other intangible assets; changes in tax legislation and tax rates; differing interests of voting and non-voting shareholders; numerous other matters of national, regional and global scale, including major public health issues and those of a political, economic, business, competitive, and regulatory nature contained from time to time in Brady’s U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the “Risk Factors” section within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2020.

    These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.

    For More Information:
    Investor contact: Ann Thornton 414-438-6887
    Media contact: Kate Venne 414-358-5176


    BRADY CORPORATION AND SUBSIDIARIES    
    CONSOLIDATED STATEMENTS OF EARNINGS    
    (Unaudited; Dollars in thousands, except per share data)    
         
     Three months ended October 31, 
      2020   2019  
    Net sales$277,227  $286,947  
    Cost of goods sold 141,799   145,542  
    Gross margin 135,428   141,405  
    Operating expenses:    
    Research and development 10,203   10,967  
    Selling, general and administrative 83,037   89,547  
    Total operating expenses 93,240   100,514  
         
    Operating income 42,188   40,891  
         
    Other income (expense):    
    Investment and other income 155   1,380  
    Interest expense (106)  (701) 
         
    Income before income taxes and losses of unconsolidated affiliate 42,237   41,570  
         
    Income tax expense 8,582   4,072  
         
    Income before losses of unconsolidated affiliate 33,655   37,498  
    Equity in losses of unconsolidated affiliate (174)    
         
    Net income$33,481  $37,498  
         
    Net income per Class A Nonvoting Common Share:    
    Basic$0.64  $0.71  
    Diluted$0.64  $0.70  
    Dividends$0.22  $0.22  
         
    Net income per Class B Voting Common Share:    
    Basic$0.63  $0.69  
    Diluted$0.62  $0.68  
    Dividends$0.20  $0.20  
         
    Weighted average common shares outstanding:    
    Basic 52,021   53,143  
    Diluted 52,292   53,736  
         


    BRADY CORPORATION AND SUBSIDIARIES    
    CONSOLIDATED BALANCE SHEETS    
    (Dollars in thousands)    
         
     October 31, 2020 July 31, 2020 
     (Unaudited)   
    ASSETS    
    Current assets:    
    Cash and cash equivalents$256,333  $217,643  
    Accounts receivable, net of allowance for credit losses of $7,704 and $7,157, respectively 156,735   146,181  
    Inventories 120,220   135,662  
    Prepaid expenses and other current assets 11,489   9,962  
    Total current assets 544,777   509,448  
    Property, plant and equipment—net 119,960   115,068  
    Goodwill 412,718   416,034  
    Other intangible assets 20,910   22,334  
    Deferred income taxes 8,976   8,845  
    Operating lease assets 41,013   41,899  
    Other assets 27,353   28,838  
    Total$1,175,707  $1,142,466  
    LIABILITIES AND STOCKHOLDERS’ EQUITY    
    Current liabilities:    
    Accounts payable$62,907  $62,547  
    Accrued compensation and benefits 55,410   41,546  
    Taxes, other than income taxes 8,497   8,057  
    Accrued income taxes 10,707   8,652  
    Current operating lease liabilities 16,097   15,304  
    Other current liabilities 51,343   49,782  
    Total current liabilities 204,961   185,888  
    Long-term operating lease liabilities 29,951   31,982  
    Other liabilities 60,394   61,524  
    Total liabilities 295,306   279,394  
    Stockholders’ equity:    
    Common stock:    
    Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,497,649 and 48,456,954 shares, respectively 513   513  
    Class B voting common stock—Issued and outstanding, 3,538,628 shares 35   35  
    Additional paid-in capital 332,121   331,761  
    Retained earnings 726,546   704,456  
    Treasury stock—2,763,838 and 2,804,533 shares, respectively, of Class A nonvoting common stock, at cost (109,146)  (107,216) 
    Accumulated other comprehensive loss (69,668)  (66,477) 
    Total stockholders’ equity 880,401   863,072  
    Total$1,175,707  $1,142,466  
         



    BRADY CORPORATION AND SUBSIDIARIES    
    CONSOLIDATED STATEMENTS OF CASH FLOWS    
    (Unaudited; Dollars in thousands)    
     Three months ended October 31, 
      2020   2019  
    Operating activities:    
    Net income$33,481  $37,498  
    Adjustments to reconcile net income to net cash provided by operating activities:    
    Depreciation and amortization 5,635   5,634  
    Stock-based compensation expense 3,574   3,618  
    Deferred income taxes (1,175)  1,009  
    Equity in losses of unconsolidated affiliate 174     
    Other (266)  1,533  
    Changes in operating assets and liabilities:    
    Accounts receivable (11,371)  (4,362) 
    Inventories 14,758   249  
    Prepaid expenses and other assets (1,398)  (1,404) 
    Accounts payable and accrued liabilities 17,363   (5,193) 
    Income taxes 2,063   266  
           Net cash provided by operating activities 62,838   38,848  
         
    Investing activities:    
    Purchases of property, plant and equipment (9,321)  (7,724) 
    Other 119   527  
          Net cash used in investing activities (9,202)  (7,197) 
         
    Financing activities:    
    Payment of dividends (11,391)  (11,533) 
    Proceeds from exercise of stock options 160   3,411  
    Payments for employee taxes withheld from stock-based awards (2,617)  (7,269) 
    Purchase of treasury stock (2,720)    
    Other 17   65  
         Net cash used in financing activities (16,551)  (15,326) 
         
    Effect of exchange rate changes on cash 1,605   (304) 
         
    Net increase in cash and cash equivalents 38,690   16,021  
    Cash and cash equivalents, beginning of period 217,643   279,072  
         
    Cash and cash equivalents, end of period$256,333  $295,093  
         


    BRADY CORPORATION AND SUBSIDIARIES    
    SEGMENT INFORMATION    
    (Unaudited; Dollars in thousands)    
         
     Three months ended October 31, 
      2020   2019  
    NET SALES    
    ID Solutions$198,192  $214,987  
    Workplace Safety 79,035   71,960  
    Total$277,227  $286,947  
         
    SALES INFORMATION    
    ID Solutions    
    Organic (8.4)%  (0.2)% 
    Currency 0.6%  (1.2)% 
    Total (7.8)%  (1.4)% 
    Workplace Safety    
    Organic 5.5%  (0.8)% 
    Currency 4.3%  (3.4)% 
    Total 9.8%  (4.2)% 
    Total Company    
    Organic (4.9)%  (0.4)% 
    Currency 1.5%  (1.7)% 
    Total (3.4)%  (2.1)% 
         
    SEGMENT PROFIT    
    ID Solutions$40,279  $42,443  
    Workplace Safety 7,988   5,157  
    Total$48,267  $47,600  
    SEGMENT PROFIT AS A PERCENT OF NET SALES    
    ID Solutions 20.3%  19.7% 
    Workplace Safety 10.1%  7.2% 
    Total 17.4%  16.6% 
         
         
     Three months ended October 31, 
      2020   2019  
    Total segment profit$48,267  $47,600  
    Unallocated amounts:    
    Administrative costs (6,079)  (6,709) 
    Investment and other income 155   1,380  
    Interest expense (106)  (701) 
    Income before income taxes and losses of unconsolidated affiliate$42,237  $41,570  
         


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