Brady Corporation · NYSE:BRC
Brady — Q2 FY2017 Earnings Presentation
18 slides from Brady's earnings presentation, Feb 23, 2017
Slide 1: Brady Corporation F'17 Q2 Financial Results
Brady Corporation F’17 Q2 Financial Results February 23, 2017
Slide 2: Forward-Looking Statements
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, p
Slide 3: Q2 F'17 Financial Summary
Q2 F’17 Financial Summary 3 • Sales down 0.2% to $268.0M in Q2 of F’17 vs. $268.6M in Q2 of F’16. – Organic sales increased 1.3%. – Foreign currency translation reduced sales by 1.5%. • Gross profit margin of 50.1% in Q2 of F’17 compared with 49.5% in Q2 of F’16. • SG&A expense of $94.7M (35.3% of s
Slide 4: Sales Overview
Sales Overview 4 SALES (millions of USD) $325 $300 $290 $289 $287 $283 $283 $282 $280 $275 $269 $268 $250 $225 $200 Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Organic Sales 1.4% 1.7% (1.2%) (2.2%) 0.4% (0.1%) (0.9%) (0.2%) 1.3% Growth Q2 F’17 SALES: Q2 F’17 SALES COMMENT
Slide 5: Gross Profit Margin
Gross Profit Margin 5 GROSS PROFIT & GPM% (millions of USD) $175 51% 50% 50% 49% 50% 49% 49% 49% 50% 45% $150 45% $145 $141 $141 $140 $138 $139 $134 40% $133 $129 $125 35% 30% $100 25% Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 GROSS PROFIT MARGIN COMMENTARY: • GPM of 50
Slide 6: SG&A Expense
6 SG&A Expense SG&A and SG&A% of SALES (millions of USD) $125 38% 40% 37% 37% $115 35% 36% 36% 35% 35% 35% $108 35% $106 $105 $103 $103 $101 $100 $98 $98 $95 30% $95 25% $85 $75 20% Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 SG&A EXPENSE: • SG&A expense declined $5.5M, f
Slide 7: Net Earnings & EPS
Net Earnings & EPS 7 NET EARNINGS FROM CONTINUING OPERATIONS, NET EARNINGS FROM CONTINUING OPERATIONS PER CLASS EXCLUDING CERTAIN ITEMS IN F’15* (millions of USD) A DILUTED SHARE, EXCLUDING CERTAIN ITEMS IN F’15* $40 $0.60 $30 $0.49 $0.49 $25 $25 $0.44 $23 $0.42 $21 $0.40 $0.37 $20 $18 $19 $0.34 $15
Slide 8: Cash Generation & Uses
Cash Generation & Uses 8 Cash Flow from Operating Activities (millions of USD) CASH FLOWS IN Q2 OF F’17: $50 • Cash flow from operating activities was $41 $40 $40 $19.3M in Q2 of F’17 compared to $27.9M in $40 Q2 of F’16. $34 $30 $30 $29 $28 • Free cash flow* was $16.0M in Q2 of F’17 compared to $26
Slide 9: Net Debt & EBITDA
Net Debt & EBITDA 9 NET DEBT (millions of USD) NET DEBT / TTM EBITDA* $200 1.5x $184 $168 1.2 1.2 1.1 1.1 $150 $139 $140 $132 1.0 1.0x $101 0.8 $100 $76 0.5 0.5x $50 $50 $38 0.3 0.2 $0 0.0x Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q2 F'15 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'1
Slide 10: Increasing Full Year F'17 EPS Guidance
Increasing Full Year F’17 EPS Guidance 10 F’17 Diluted EPS $1.75 to $1.85 Guidance Assumptions: • Low single digit organic sales declines to slight organic sales growth. • Full-year depreciation and amortization expense of approximately $30M. • Full-year income tax rate in the mid-20% range and inco
Slide 11: Identification Solutions
Identification Solutions 11 Q2 F’17 vs. Q2 F’16 PERFORMANCE (millions of USD) Q2 F’17 SUMMARY: Q2 F’17 Q2 F’16 Change • Revenues up 0.6%: • Organic = 1.9% Sales $ 191.0 $ 189.8 + 0.6% • Fx = - (1.3)% Segment Profit 29.0 23.1 + 25.6% Segment Profit % 15.2% 12.1% + 3.1 pts • Organic sales growth in al
Slide 12: Workplace Safety
Workplace Safety 12 Q2 F’17 vs. Q2 F’16 PERFORMANCE (millions of USD) Q2 F’17 SUMMARY: Q2 F’17 Q2 F’16 Change • Revenues decreased (2.3%): • Organic = - (0.2)% Sales $ 77.0 $ 78.9 - 0.2% • Fx = - (2.1)% Segment Profit 6.1 6.3 - 3.8% • Continued organic growth in Europe offset by high- single digit d
Slide 13: Investor Relations
Investor Relations 13 Brady Contact: Ann Thornton Investor Relations 414-438-6887 [email protected] See our web site at www.bradycorp.com
Slide 14: Appendix
14 Appendix
Slide 15: Comparable Income Statements
Comparable Income Statements 15 COMPARABLE INCOME STATEMENTS (millions of USD) Three Months Ended January 31, 2017 2016 Change Sales $ 268.0 $ 268.6 $ (0.6) Gross Margin 134.2 132.9 1.3 % of Sales 50.1% 49.5% Research and Development (9.5) (9.1) (0.4) Selling, General and Admin. (94.7) (100.2) 5.5 %
Slide 16: Debt Structure
Debt Structure 16 (‘000s of USD) January 31, 2017 July 31, 2016 Interest Rate Balance Balance Revolver Borrowings: USD-denominated 1.60% Variable $ 18,000 $ 112,000 EUR-denominated 0.88% Variable 42,768 - China Borrowings: USD & CNY-denominated notes payable 3.73% Variable 5,691 4,928 Private Placem
Slide 17: EBITDA Reconciliation
EBITDA Reconciliation 17 EBITDA (‘000s of USD) Brady is presenting EBITDA because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA represents net earnings before interest expense, income taxes, depreciation, amortization and impairment charges. EBITD
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations 18 Reconciliations of F’15 Non-GAAP Net Earnings from Continuing Operations (‘000s of USD) Brady is presenting the Non-GAAP measures "Net Earnings from Continuing Operations Excluding Certain Items“ and “Net Earnings from Continuing Operations Per Diluted Class A Nonvoting C