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Brady Corporation
Quarter Ended
Income before income taxes declined 45.9 percent to
Net income for the quarter ended
Sales for the quarter ended
Nine-Month Period Ended
Income before income taxes declined 9.8 percent to
Net income for the nine-month period ended
Sales for the nine-month period ended
Commentary:
“During these challenging times, as a highly-innovative essential business, Brady is more focused than ever on doing our part to serve the front-line workers and other essential companies with the products and services they need to help fight this global pandemic,” said Brady’s President and Chief Executive Officer,
“Brady is financially strong. As of
Fiscal 2020 Financial Guidance Withdrawn:
Due to the uncertainty around the duration and depth of the economic contraction caused by the COVID-19 pandemic, the Company is withdrawing its previously communicated full-year fiscal 2020 financial guidance, which was provided on
A webcast regarding Brady’s fiscal 2020 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” 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 COVID-19 pandemic or other pandemics; our ability to compete effectively or to successfully execute our strategy; Brady’s ability to develop technologically advanced products that meet customer demands; difficulties in protecting our websites, networks, and systems against security breaches; decreased demand for our products; raw material and other cost increases; 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.
BRADY CORPORATION AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
(Unaudited; Dollars in thousands, except per share data) | ||||||||||||||||
Three months ended |
Nine months ended |
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net sales | $ | 265,943 | $ | 289,745 | $ | 829,555 | $ | 865,367 | ||||||||
Cost of goods sold | 136,416 | 143,996 | 419,496 | 433,269 | ||||||||||||
Gross margin | 129,527 | 145,749 | 410,059 | 432,098 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 9,814 | 11,437 | 31,298 | 33,837 | ||||||||||||
Selling, general and administrative | 83,223 | 94,691 | 260,136 | 281,988 | ||||||||||||
Impairment charges | 13,821 | — | 13,821 | — | ||||||||||||
Total operating expenses | 106,858 | 106,128 | 305,255 | 315,825 | ||||||||||||
Operating income | 22,669 | 39,621 | 104,804 | 116,273 | ||||||||||||
Other income (expense): | ||||||||||||||||
Investment and other income | 112 | 2,065 | 3,252 | 3,425 | ||||||||||||
Interest expense | (628 | ) | (708 | ) | (1,976 | ) | (2,137 | ) | ||||||||
Income before income taxes | 22,153 | 40,978 | 106,080 | 117,561 | ||||||||||||
Income tax expense | 8,520 | 6,197 | 21,396 | 22,916 | ||||||||||||
Net income | $ | 13,633 | $ | 34,781 | $ | 84,684 | $ | 94,645 | ||||||||
Net income per Class A Nonvoting Common Share: | ||||||||||||||||
Basic | $ | 0.26 | $ | 0.66 | $ | 1.60 | $ | 1.80 | ||||||||
Diluted | $ | 0.26 | $ | 0.65 | $ | 1.58 | $ | 1.78 | ||||||||
Dividends | $ | 0.22 | $ | 0.21 | 0.65 | $ | 0.64 | |||||||||
Net income per Class B Voting Common Share: | ||||||||||||||||
Basic | $ | 0.26 | $ | 0.66 | $ | 1.58 | $ | 1.79 | ||||||||
Diluted | $ | 0.26 | $ | 0.65 | $ | 1.57 | $ | 1.76 | ||||||||
Dividends | $ | 0.22 | $ | 0.21 | $ | 0.64 | $ | 0.62 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 52,607 | 52,766 | 53,023 | 52,499 | ||||||||||||
Diluted | 52,972 | 53,480 | 53,512 | 53,215 | ||||||||||||
BRADY CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 238,880 | $ | 279,072 | |||
Accounts receivable—net | 145,133 | 158,114 | |||||
Inventories | 124,575 | 120,037 | |||||
Prepaid expenses and other current assets | 22,502 | 16,056 | |||||
Total current assets | 531,090 | 573,279 | |||||
Property, plant and equipment—net | 111,383 | 110,048 | |||||
404,039 | 410,987 | ||||||
Other intangible assets | 23,444 | 36,123 | |||||
Deferred income taxes | 7,006 | 7,298 | |||||
Operating lease assets | 41,553 | — | |||||
Other assets | 21,827 | 19,573 | |||||
Total | $ | 1,140,342 | $ | 1,157,308 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 58,819 | $ | 64,810 | |||
Accrued compensation and benefits | 41,591 | 62,509 | |||||
Taxes, other than income taxes | 7,667 | 8,107 | |||||
Accrued income taxes | 8,101 | 6,557 | |||||
Current operating lease liabilities | 14,381 | — | |||||
Other current liabilities | 48,473 | 49,796 | |||||
Current maturities on long-term debt | 48,927 | 50,166 | |||||
Total current liabilities | 227,959 | 241,945 | |||||
Long-term operating lease liabilities | 32,348 | — | |||||
Other liabilities | 59,433 | 64,589 | |||||
Total liabilities | 319,740 | 306,534 | |||||
Stockholders’ equity: | |||||||
Common stock: | |||||||
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,431,617 and 49,458,841 shares, respectively | 513 | 513 | |||||
Class B voting common stock—Issued and outstanding, 3,538,628 shares | 35 | 35 | |||||
Additional paid-in capital | 330,968 | 329,969 | |||||
Retained earnings | 688,079 | 637,843 | |||||
(106,751 | ) | (46,332 | ) | ||||
Accumulated other comprehensive loss | (92,242 | ) | (71,254 | ) | |||
Total stockholders’ equity | 820,602 | 850,774 | |||||
Total | $ | 1,140,342 | $ | 1,157,308 | |||
BRADY CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited; Dollars in thousands) | ||||||||
Nine months ended |
||||||||
2020 | 2019 | |||||||
Operating activities: | ||||||||
Net income | $ | 84,684 | $ | 94,645 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 17,731 | 17,836 | ||||||
Stock-based compensation expense | 7,180 | 10,311 | ||||||
Deferred income taxes | (309 | ) | 3,796 | |||||
Impairment charges | 13,821 | — | ||||||
Other | 1,698 | 1,372 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 9,019 | 332 | ||||||
Inventories | (7,439 | ) | (9,254 | ) | ||||
Prepaid expenses and other assets | (5,653 | ) | (2,204 | ) | ||||
Accounts payable and accrued liabilities | (26,609 | ) | (20,548 | ) | ||||
Income taxes | 1,790 | 616 | ||||||
Net cash provided by operating activities | 95,913 | 96,902 | ||||||
Investing activities: | ||||||||
Purchases of property, plant and equipment | (21,616 | ) | (17,528 | ) | ||||
Other | (4,419 | ) | (1,810 | ) | ||||
Net cash used in investing activities | (26,035 | ) | (19,338 | ) | ||||
Financing activities: | ||||||||
Payment of dividends | (34,447 | ) | (33,488 | ) | ||||
Proceeds from exercise of stock options | 5,212 | 22,468 | ||||||
Payments for employee taxes withheld from stock-based awards | (7,832 | ) | (4,348 | ) | ||||
Purchase of treasury stock | (64,113 | ) | (3,182 | ) | ||||
Proceeds from borrowing on credit facilities | — | 13,637 | ||||||
Repayment of borrowing on credit facilities | — | (13,568 | ) | |||||
Other | 133 | 210 | ||||||
Net cash used in financing activities | (101,047 | ) | (18,271 | ) | ||||
Effect of exchange rate changes on cash | (9,023 | ) | (2,288 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (40,192 | ) | 57,005 | |||||
Cash and cash equivalents, beginning of period | 279,072 | 181,427 | ||||||
Cash and cash equivalents, end of period | $ | 238,880 | $ | 238,432 | ||||
BRADY CORPORATION AND SUBSIDIARIES | ||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
(Unaudited; Dollars in thousands) | ||||||||||||||||
Three months ended |
Nine months ended |
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
ID Solutions | $ | 193,169 | $ | 213,979 | $ | 613,518 | $ | 641,283 | ||||||||
Workplace Safety | 72,774 | 75,766 | 216,037 | 224,084 | ||||||||||||
Total | $ | 265,943 | $ | 289,745 | $ | 829,555 | $ | 865,367 | ||||||||
SALES INFORMATION | ||||||||||||||||
ID Solutions | ||||||||||||||||
Organic | (8.2 | )% | 4.0 | % | (3.2 | )% | 4.4 | % | ||||||||
Currency | (1.5 | )% | (3.1 | )% | (1.1 | )% | (2.3 | )% | ||||||||
Total | (9.7 | )% | 0.9 | % | (4.3 | )% | 2.1 | % | ||||||||
Workplace Safety | ||||||||||||||||
Organic | 0.2 | % | (1.6 | )% | (0.5 | )% | (0.2 | )% | ||||||||
Currency | (4.1 | )% | (5.3 | )% | (3.1 | )% | (3.7 | )% | ||||||||
Divestiture | — | % | (5.3 | )% | — | % | (5.8 | )% | ||||||||
Total | (3.9 | )% | (12.2 | )% | (3.6 | )% | (9.7 | )% | ||||||||
Organic | (6.0 | )% | 2.4 | % | (2.5 | )% | 3.1 | % | ||||||||
Currency | (2.2 | )% | (3.8 | )% | (1.6 | )% | (2.8 | )% | ||||||||
Divestiture | — | % | (1.5 | )% | — | % | (1.6 | )% | ||||||||
Total | (8.2 | )% | (2.9 | )% | (4.1 | )% | (1.3 | )% | ||||||||
SEGMENT PROFIT | ||||||||||||||||
ID Solutions | $ | 36,401 | $ | 39,892 | $ | 119,499 | $ | 119,311 | ||||||||
Workplace Safety | 4,379 | 6,099 | 14,991 | 16,301 | ||||||||||||
Total | $ | 40,780 | $ | 45,991 | $ | 134,490 | $ | 135,612 | ||||||||
SEGMENT PROFIT AS A PERCENT OF |
||||||||||||||||
ID Solutions | 18.8 | % | 18.6 | % | 19.5 | % | 18.6 | % | ||||||||
Workplace Safety | 6.0 | % | 8.0 | % | 6.9 | % | 7.3 | % | ||||||||
Total | 15.3 | % | 15.9 | % | 16.2 | % | 15.7 | % | ||||||||
Three months ended |
Nine months ended |
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Total segment profit | $ | 40,780 | $ | 45,991 | $ | 134,490 | $ | 135,612 | ||||||||
Unallocated amounts: | ||||||||||||||||
Administrative costs | (4,290 | ) | (6,370 | ) | (15,865 | ) | (19,339 | ) | ||||||||
Impairment charges | (13,821 | ) | - | (13,821 | ) | - | ||||||||||
Investment and other income | 112 | 2,065 | 3,252 | 3,425 | ||||||||||||
Interest expense | (628 | ) | (708 | ) | (1,976 | ) | (2,137 | ) | ||||||||
Income before income taxes | $ | 22,153 | $ | 40,978 | $ | 106,080 | $ | 117,561 | ||||||||
For More Information:
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Source: Brady Corporation