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Brady Corporation
Quarter Ended
Income before income taxes and losses of unconsolidated affiliate increased 115.7 percent to
Net income for the quarter ended
Sales for the quarter ended
Nine-Month Period Ended
Income before income taxes and losses of unconsolidated affiliate increased 22.0 percent to
Net income for the nine-month period ended
Sales for the nine-month period ended
Commentary:
“Throughout the pandemic, we continued to invest in sales and marketing as well as research and development. These investments, coupled with improved market conditions, helped us to return to organic sales growth this quarter,” said Brady’s President and Chief Executive Officer,
“This quarter, we generated diluted EPS of
Fiscal 2021 Guidance:
The Company is increasing its full year fiscal 2021 earnings per diluted Class A Nonvoting Common Share guidance from its previous range of
A webcast regarding Brady’s fiscal 2021 third quarter financial results will be available at www.bradycorp.com/investors beginning at
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
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:
Media contact:
BRADY CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Unaudited; Dollars in thousands, except per share data) | |||||||||||||||
Three months ended |
Nine months ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net sales | $ | 295,503 | $ | 265,943 | $ | 838,568 | $ | 829,555 | |||||||
Cost of goods sold | 146,656 | 136,416 | 424,771 | 419,496 | |||||||||||
Gross margin | 148,847 | 129,527 | 413,797 | 410,059 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 11,305 | 9,814 | 31,384 | 31,298 | |||||||||||
Selling, general and administrative | 90,817 | 83,223 | 256,088 | 260,136 | |||||||||||
Impairment charges | — | 13,821 | — | 13,821 | |||||||||||
Total operating expenses | 102,122 | 106,858 | 287,472 | 305,255 | |||||||||||
Operating income | 46,725 | 22,669 | 126,325 | 104,804 | |||||||||||
Other income (expense): | |||||||||||||||
Investment and other income | 1,181 | 112 | 3,372 | 3,252 | |||||||||||
Interest expense | (131 | ) | (628 | ) | (288 | ) | (1,976 | ) | |||||||
Income before income taxes and losses of unconsolidated affiliate | 47,775 | 22,153 | 129,409 | 106,080 | |||||||||||
Income tax expense | 10,229 | 8,520 | 27,017 | 21,396 | |||||||||||
Income before losses of unconsolidated affiliate | 37,546 | 13,633 | 102,392 | 84,684 | |||||||||||
Equity in losses of unconsolidated affiliate | (255 | ) | — | (760 | ) | — | |||||||||
Net income | $ | 37,291 | $ | 13,633 | $ | 101,632 | $ | 84,684 | |||||||
Net income per Class A Nonvoting Common Share: | |||||||||||||||
Basic | $ | 0.72 | $ | 0.26 | $ | 1.95 | $ | 1.60 | |||||||
Diluted | $ | 0.71 | $ | 0.26 | $ | 1.94 | $ | 1.58 | |||||||
Dividends | $ | 0.22 | $ | 0.22 | $ | 0.66 | $ | 0.65 | |||||||
Net income per Class B Voting Common Share: | |||||||||||||||
Basic | $ | 0.72 | $ | 0.26 | $ | 1.94 | $ | 1.58 | |||||||
Diluted | $ | 0.71 | $ | 0.26 | $ | 1.93 | $ | 1.57 | |||||||
Dividends | $ | 0.22 | $ | 0.22 | $ | 0.64 | $ | 0.64 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 52,050 | 52,607 | 52,030 | 53,023 | |||||||||||
Diluted | 52,449 | 52,972 | 52,341 | 53,512 | |||||||||||
BRADY CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 321,801 | $ | 217,643 | |||
Accounts receivable, net of allowance for credit losses of |
163,381 | 146,181 | |||||
Inventories | 122,847 | 135,662 | |||||
Prepaid expenses and other current assets | 13,032 | 9,962 | |||||
Total current assets | 621,061 | 509,448 | |||||
Property, plant and equipment—net | 121,126 | 115,068 | |||||
422,091 | 416,034 | ||||||
Other intangible assets | 18,528 | 22,334 | |||||
Deferred income taxes | 8,334 | 8,845 | |||||
Operating lease assets | 37,622 | 41,899 | |||||
Other assets | 31,415 | 28,838 | |||||
Total | $ | 1,260,177 | $ | 1,142,466 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 72,234 | $ | 62,547 | |||
Accrued compensation and benefits | 69,621 | 41,546 | |||||
Taxes, other than income taxes | 9,207 | 8,057 | |||||
Accrued income taxes | 2,711 | 8,652 | |||||
Current operating lease liabilities | 16,197 | 15,304 | |||||
Other current liabilities | 51,145 | 49,782 | |||||
Total current liabilities | 221,115 | 185,888 | |||||
Long-term operating lease liabilities | 25,841 | 31,982 | |||||
Other liabilities | 61,595 | 61,524 | |||||
Total liabilities | 308,551 | 279,394 | |||||
Stockholders’ equity: | |||||||
Common stock: | |||||||
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,524,455 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 | 336,957 | 331,761 | |||||
Retained earnings | 771,797 | 704,456 | |||||
(109,128 | ) | (107,216 | ) | ||||
Accumulated other comprehensive loss | (48,548 | ) | (66,477 | ) | |||
Total stockholders’ equity | 951,626 | 863,072 | |||||
Total | $ | 1,260,177 | $ | 1,142,466 | |||
BRADY CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited; Dollars in thousands) | |||||||
Nine months ended |
|||||||
2021 | 2020 | ||||||
Operating activities: | |||||||
Net income | $ | 101,632 | $ | 84,684 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 17,240 | 17,731 | |||||
Stock-based compensation expense | 8,003 | 7,180 | |||||
Deferred income taxes | (3,957 | ) | (309 | ) | |||
Impairment charges | — | 13,821 | |||||
Equity in losses of unconsolidated affiliate | 760 | — | |||||
Other | (1,186 | ) | 1,698 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (13,247 | ) | 9,019 | ||||
Inventories | 15,210 | (7,439 | ) | ||||
Prepaid expenses and other assets | (2,584 | ) | (5,653 | ) | |||
Accounts payable and accrued liabilities | 39,244 | (26,609 | ) | ||||
Income taxes | (6,207 | ) | 1,790 | ||||
Net cash provided by operating activities | 154,908 | 95,913 | |||||
Investing activities: | |||||||
Purchases of property, plant and equipment | (21,411 | ) | (21,616 | ) | |||
Other | 2,567 | (4,419 | ) | ||||
Net cash used in investing activities | (18,844 | ) | (26,035 | ) | |||
Financing activities: | |||||||
Payment of dividends | (34,290 | ) | (34,447 | ) | |||
Proceeds from exercise of stock options | 1,612 | 5,212 | |||||
Payments for employee taxes withheld from stock-based awards | (2,772 | ) | (7,832 | ) | |||
Purchase of treasury stock | (3,593 | ) | (64,113 | ) | |||
Other | (231 | ) | 133 | ||||
Net cash used in financing activities | (39,274 | ) | (101,047 | ) | |||
Effect of exchange rate changes on cash | 7,368 | (9,023 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 104,158 | (40,192 | ) | ||||
Cash and cash equivalents, beginning of period | 217,643 | 279,072 | |||||
Cash and cash equivalents, end of period | $ | 321,801 | $ | 238,880 | |||
BRADY CORPORATION AND SUBSIDIARIES | |||||||||||||||
SEGMENT INFORMATION | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Three months ended |
Nine months ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
ID Solutions | $ | 218,065 | $ | 193,169 | $ | 610,484 | $ | 613,518 | |||||||
Workplace Safety | 77,438 | 72,774 | 228,084 | 216,037 | |||||||||||
Total | $ | 295,503 | $ | 265,943 | $ | 838,568 | $ | 829,555 | |||||||
SALES INFORMATION | |||||||||||||||
ID Solutions | |||||||||||||||
Organic | 9.8 | % | (8.2 | )% | (2.1 | )% | (3.2 | )% | |||||||
Currency | 3.1 | % | (1.5 | )% | 1.6 | % | (1.1 | )% | |||||||
Total | 12.9 | % | (9.7 | )% | (0.5 | )% | (4.3 | )% | |||||||
Workplace Safety | |||||||||||||||
Organic | (2.2 | )% | 0.2 | % | (0.5 | )% | (0.5 | )% | |||||||
Currency | 8.6 | % | (4.1 | )% | 6.1 | % | (3.1 | )% | |||||||
Total | 6.4 | % | (3.9 | )% | 5.6 | % | (3.6 | )% | |||||||
Organic | 6.5 | % | (6.0 | )% | (1.7 | )% | (2.5 | )% | |||||||
Currency | 4.6 | % | (2.2 | )% | 2.8 | % | (1.6 | )% | |||||||
Total | 11.1 | % | (8.2 | )% | 1.1 | % | (4.1 | )% | |||||||
SEGMENT PROFIT | |||||||||||||||
ID Solutions | $ | 47,539 | $ | 36,401 | $ | 126,818 | $ | 119,499 | |||||||
Workplace Safety | 5,656 | 4,379 | 17,107 | 14,991 | |||||||||||
Total | $ | 53,195 | $ | 40,780 | $ | 143,925 | $ | 134,490 | |||||||
SEGMENT PROFIT AS A PERCENT OF |
|||||||||||||||
ID Solutions | 21.8 | % | 18.8 | % | 20.8 | % | 19.5 | % | |||||||
Workplace Safety | 7.3 | % | 6.0 | % | 7.5 | % | 6.9 | % | |||||||
Total | 18.0 | % | 15.3 | % | 17.2 | % | 16.2 | % | |||||||
Three months ended |
Nine months ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Total segment profit | $ | 53,195 | $ | 40,780 | $ | 143,925 | $ | 134,490 | |||||||
Unallocated amounts: | |||||||||||||||
Administrative costs | (6,470 | ) | (4,290 | ) | (17,600 | ) | (15,865 | ) | |||||||
Impairment charges | - | (13,821 | ) | - | (13,821 | ) | |||||||||
Investment and other income | 1,181 | 112 | 3,372 | 3,252 | |||||||||||
Interest expense | (131 | ) | (628 | ) | (288 | ) | (1,976 | ) | |||||||
Income before income taxes and losses of unconsolidated affiliate | $ | 47,775 | $ | 22,153 | $ | 129,409 | $ | 106,080 | |||||||
Source: Brady Corporation