Brady Corporation (NYSE:BRC) Q4 2020 Earnings Conference Call September 16, 2020 10:30 AM ET Company Participants Ann Thornton - Chief Accounting Officer Michael Nauman - President and Chief Executive Officer Aaron Pearce - Chief Financial Officer Conference Call Participants Joe Mondillo - Sidoti Michael McGinn - Wells Fargo Keith Housum - Northcoast Research Operator Ladies and gentlemen, thank you for standing by. And welcome to the Brady Corporation Fourth Quarter 2020 Earnings Conference Call. At this ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended July 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-14959 BRADY CORPORATION (Exact name of registrant as specified in charter) Wisconsin 39-0178960 (State or other jurisdiction of inco ...

Brady Corporation (NYSE:BRC) Q3 2020 Earnings Conference Call May 21, 2020 10:30 AM ET Company Participants Ann Thornton - Chief Accounting Officer and Corporate Controller Michael Nauman - President & Chief Executive Officer Aaron Pearce - Chief Financial Officer and Treasurer Conference Call Participants Allison Poliniak - Wells Fargo Molly Baum - Bank of America Joe Mondillo - Sidoti & Company Keith Housum - Northcoast Research Operator Ladies and gentlemen, thank you for standing by and welcome to the Q ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended April 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 1-14959 BRADY CORPORATION (Exact name of registrant as specified in its charter) Wisconsin 39-0178960 (State or other jurisdict ...

Financial Data and Key Metrics Changes - In Q2 2020, the company reported sales of $276.7 million, reflecting a 1.2% organic sales decline and a 0.8% decline from foreign currency translation [14] - Pre-tax income increased by 15.4%, while net income rose by 14.8% to $33.6 million, compared to $29.2 million in the same quarter last year [14] - Diluted EPS increased by 12.7% to $0.62, up from $0.55 in the previous year [22] - Gross profit margin improved to 50.3%, an increase of 80 basis points from the prior year [17] - SG&A expenses decreased to $87.4 million from $92.7 million in the same quarter last year, with SG&A as a percentage of sales dropping from 32.8% to 31.6% [18][19] Business Line Data and Key Metrics Changes - Identification Solutions (IDS) organic sales declined by 1.3%, while Workplace Safety (WPS) organic sales decreased by 1.0% [15] - IDS segment profits increased by 7.4% to $40.7 million, with segment profit as a percentage of sales rising to 19.8% from 18.1% [35] - WPS sales declined by 2.6% to $71.3 million, with segment profit increasing to $5.5 million from $4.7 million in the previous year [39][45] Market Data and Key Metrics Changes - The U.S. market remained effectively flat, while both European and Asian markets experienced declines [15] - WPS organic sales were flat in Europe and Australia, with low single-digit declines in North America [39] - Digital sales in Europe increased by nearly 11% this quarter, indicating a growth driver despite challenging economic conditions [43] Company Strategy and Development Direction - The company is focused on sustainable efficiency improvements and maintaining a strong balance sheet to invest in organic growth and strategic acquisitions [11][12] - Continued investment in R&D is emphasized, with a commitment to launching innovative products to differentiate from competitors [36][38] - The company aims to enhance customer interactions and improve the buying experience to drive sales growth in the WPS North American business [40][42] Management's Comments on Operating Environment and Future Outlook - The management anticipates continued challenges in industrial markets but remains confident in the company's ability to control costs and drive efficiency [30][48] - The company expects organic sales growth to be approximately flat to slightly positive for the full fiscal year 2020, while increasing EPS guidance to a range of $2.55 to $2.65 [31][30] - Management acknowledges the impact of external factors such as currency fluctuations and economic conditions but believes the company is well-positioned for recovery [68][70] Other Important Information - The company generated $14.3 million in cash flow from operating activities, down from $25.4 million in the same quarter last year, but year-to-date cash flow increased by over 20% [23][25] - The company returned $11.6 million to shareholders in dividends and invested $5.4 million in capital expenditures [26] - The company finished the quarter with total cash of $289.8 million and a net cash position of $240.2 million [27] Q&A Session Summary Question: Details on increasing guidance and performance drivers - Management attributes the improved guidance to sustainable process improvements and efficiency gains, which have allowed the company to handle downturns effectively [52][56] Question: Targeted verticals for sales force expansion - The focus is on specific geographies that are underserved, aiming to accelerate growth even in a declining economic situation [58][60] Question: Healthcare product line performance and expectations - Management acknowledges the need for new product development in healthcare and is working on improving manufacturing capabilities to be more competitive [61][62] Question: Impact of coronavirus on production and supply chain - Management believes the company is in a strong position regarding inventory and raw materials, with most factories in China operational [66][69] Question: R&D strategy and spending - Management emphasizes a strong focus on R&D, with an exciting product pipeline and a disciplined approach to spending [72][74] Question: Balance sheet strategy and cash use - The company remains disciplined in capital allocation, focusing on technology-focused acquisitions and maintaining a strong cash position [82][84] Question: Capital expenditures in the back half of the year - Investments will be made in significant facilities and product development, with a focus on long-term critical facilities [85][86]

Table of Contents Title of each class Trading Symbol Name of each exchange on which registered Class A Nonvoting Common Stock, par value $0.01 per share BRC New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended January 31, 2020, or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition ...

Financial Data and Key Metrics Changes - The company reported a pretax income increase of 4.2% and a net income increase of 22.4%, reaching $37.5 million compared to $30.6 million in the same quarter last year [5][15] - Earnings per share (EPS) increased by 20.7% to $0.70 from $0.58 in the previous year [21] - Cash flow from operating activities was $38.8 million, more than double the $18.8 million from the same quarter last year [15][22] Business Line Data and Key Metrics Changes - Organic sales in the Identification Solutions (IDS) business declined by 0.2%, while the Workplace Safety (WPS) business saw a decrease of 0.8% [6][16] - IDS sales totaled $215 million, with a segment profit increase of 2.1% to $42.4 million, improving the profit margin to 19.7% from 19.1% [30][31] - WPS sales declined 4.2% to $72 million, with a segment profit of $5.2 million, resulting in a profit margin of 7.2% compared to 7.4% in the previous year [36][43] Market Data and Key Metrics Changes - The company experienced a slight decline in organic sales across several geographies, particularly in Europe, the Middle East, and China [6][7] - North American IDS business continued to show strong organic growth, driven by safety and facility identification products [10][30] - The WPS business in North America improved its digital presence, with sequential improvements noted in sales [11][36] Company Strategy and Development Direction - The company is focused on investing in sales-generating resources and new product development while driving sustainable efficiency gains [8][9] - There is a commitment to improving manufacturing processes and driving savings, positioning the company for stronger returns once end markets recover [9][45] - The company plans to maintain a disciplined approach to capital allocation, focusing on organic growth, dividends, and potential acquisitions [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging industrial economy but expressed confidence in the company's ability to navigate these conditions and improve profitability [44][45] - The company expects organic sales growth for IDS to be between 2% to 3% for the full fiscal year 2020, while WPS is expected to be approximately flat [35][43] - Management highlighted the importance of customer engagement and product customization to drive long-term growth and profitability [40][41] Other Important Information - The gross profit margin decreased to 49.3%, down 70 basis points from the previous year, due to input cost pressures [17] - SG&A expenses decreased to $89.5 million, with a reduction as a percentage of sales from 32.3% to 31.2% [18] - The company generated $31.1 million in free cash flow, compared to $12.8 million in the same quarter last year [22][23] Q&A Session Summary Question: Expectations for the quarter and confidence in annual growth rate - Management noted a slow start in August but observed improvements in September and October, indicating a better trend than quarterly results suggested [47] Question: Concerns about gross margin decline and automation efforts - Management expressed confidence in ongoing automation efforts and process improvements to address cost pressures [48][49] Question: Drivers of organic growth in the U.S. for IDS - The strongest drivers were identified as facility and safety identification products, along with a robust new product development pipeline [51] Question: Trends in the Healthcare business - Management reported positive trends in the Healthcare business, supported by a new sales force and product sets [53] Question: Digital sales in WPS and potential concerns - Management indicated confidence in addressing previous disconnects in the digital platform and noted improvements in North American digital sales [54] Question: Refinancing of the credit facility and M&A pipeline - The refinancing was a routine extension due to the facility nearing expiration, with ongoing discussions about potential M&A opportunities [56][59]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended October 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 1-14959 | --- | --- | |------------------------------------------------------------------------------------------------------ ...

Brady Corporation. (NYSE:BRC) Q4 2019 Results Earnings Conference Call September 6, 2019 10:30 AM ET Company Participants Ann Thornton - CAO & Corporate Controller Michael Nauman - President and Chief Executive Officer Aaron Pearce - Chief Executive Officer and Treasurer Conference Call Participants Molly Baum - Bank of America Merrill Lynch Allison Poliniak - Wells Fargo Joe Mondillo - Sidoti & Company Keith Housum - Northcoast Research Operator Good day, ladies and gentlemen, and welcome to the Fourth Qua ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended July 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |----------------------------------------------------------------------|---------------------------------------------|-----------------------| | | | | | For the transition ...