Brady Corporation (NYSE:BRC) Q1 2024 Earnings Conference Call November 16, 2023 10:30 AM ET Company Participants Ann Thornton - Chief Financial Officer Russell Shaller - President and Chief Executive Officer Conference Call Participants Steve Ferazani - Sidoti Keith Housum - Northcoast Research Operator Good day and thank you for standing by. Welcome to Brady Corporation's First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, there wil ...

PART I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Brady Corporation's unaudited condensed consolidated financial statements for the quarter ended October 31, 2023, highlighting increased net income and operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $1.383 billion as of October 31, 2023, primarily due to lower inventories and goodwill, while equity increased to $995.0 million Condensed Consolidated Balance Sheets (in thousands) | | October 31, 2023 (Unaudited) | July 31, 2023 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $175,352 | $151,532 | | Accounts receivable, net | $179,970 | $184,420 | | Inventories | $166,916 | $177,078 | | Total current assets | $535,065 | $524,820 | | Goodwill | $583,702 | $592,646 | | **Total assets** | **$1,383,413** | **$1,389,257** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $251,694 | $258,036 | | Long-term debt | $52,267 | $49,716 | | **Total liabilities** | **$388,421** | **$398,338** | | **Total stockholders' equity** | **$994,992** | **$990,919** | | **Total liabilities and stockholders' equity** | **$1,383,413** | **$1,389,257** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales increased 2.9% to $332.0 million for the quarter, with gross margin improving to 51.7% and net income rising 19.8% to $47.2 million Condensed Consolidated Statements of Income (in thousands, except per share amounts) | | Three months ended October 31, 2023 | Three months ended October 31, 2022 | | :--- | :--- | :--- | | Net sales | $331,983 | $322,569 | | Gross margin | $171,719 | $155,264 | | Operating income | $59,730 | $51,386 | | Net income | $47,241 | $39,441 | | Diluted EPS (Class A) | $0.97 | $0.79 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the quarter increased to $25.0 million, despite an other comprehensive loss primarily from foreign currency translation adjustments Condensed Consolidated Statements of Comprehensive Income (in thousands) | | Three months ended October 31, 2023 | Three months ended October 31, 2022 | | :--- | :--- | :--- | | Net income | $47,241 | $39,441 | | Other comprehensive loss, net of tax | $(22,222) | $(17,437) | | **Comprehensive income** | **$25,019** | **$22,004** | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $995.0 million driven by net income, partially offset by other comprehensive loss, share repurchases, and cash dividends - Key changes in stockholders' equity for the three months ended October 31, 2023 include: - Net income: **+$47.2 million** - Other comprehensive loss: **-$22.2 million** - Repurchase of Class A Common Stock: **-$14.2 million** - Cash dividends paid: **-$11.3 million**[34](index=34&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $62.3 million, ending the quarter with $175.4 million in cash and cash equivalents Summary of Cash Flows (in thousands) | | Three months ended October 31, 2023 | Three months ended October 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,273 | $27,999 | | Net cash used in investing activities | $(11,279) | $(3,861) | | Net cash used in financing activities | $(21,494) | $(20,535) | | Effect of exchange rate changes on cash | $(5,680) | $(3,201) | | **Net increase in cash and cash equivalents** | **$23,820** | **$402** | | **Cash and cash equivalents, end of period** | **$175,352** | **$114,471** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the financial statements, covering segment information, stock-based compensation, and derivatives - The unaudited condensed consolidated financial statements have been prepared by the Company in accordance with GAAP and should be read in conjunction with the audited statements in the Annual Report on Form 10-K for the year ended July 31, 2023[16](index=16&type=chunk)[185](index=185&type=chunk) - The company did not adopt any new accounting standards in the three months ended October 31, 2023[186](index=186&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting sales and operating income growth, strong liquidity, and strategic initiatives for organic growth and efficiency [Overview and Strategy](index=18&type=section&id=Overview%20and%20Strategy) Brady Corporation, a global supplier of identification and safety products, focuses on innovative products, customer service, and digital capabilities for long-term growth - The company's strategy for growth includes an increased focus on certain industries and products, expanding into higher growth end-markets, and improving digital capabilities[87](index=87&type=chunk) - Key initiatives for fiscal 2024 include: - Investing in organic growth via R&D and new product development - Expanding sales capabilities through an improved digital presence - Maintaining profitability through pricing and efficiency gains to combat inflation - Integrating recent acquisitions to accelerate growth - Driving operational excellence and insourcing critical manufacturing[88](index=88&type=chunk)[100](index=100&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Net sales increased 2.9% to $332.0 million with improved gross margin and operating income, while R&D and SG&A expenses also rose Results of Operations Summary (in thousands) | | 2023 | % Sales | 2022 | % Sales | | :--- | :--- | :--- | :--- | :--- | | Net sales | $331,983 | 100.0% | $322,569 | 100.0% | | Gross margin | $171,719 | 51.7% | $155,264 | 48.1% | | R&D | $15,702 | 4.7% | $13,933 | 4.3% | | SG&A | $96,287 | 29.0% | $89,945 | 27.9% | | Operating income | $59,730 | 18.0% | $51,386 | 15.9% | - Net sales increased **2.9%** YoY, consisting of **2.7%** organic growth, a **1.5%** positive impact from foreign currency, and a **1.3%** decrease from divestitures[101](index=101&type=chunk) - The increase in gross margin percentage was primarily due to product mix, reductions in freight expenses, and improvements in inventory management[111](index=111&type=chunk) [Business Segment Operating Results](index=20&type=section&id=Business%20Segment%20Operating%20Results) Americas & Asia segment profit increased significantly due to organic growth and cost efficiencies, while Europe & Australia's profit remained flat despite sales growth Segment Sales Growth and Profit | | Americas & Asia | Europe & Australia | Total Company | | :--- | :--- | :--- | :--- | | **Sales Growth (YoY)** | | | | | Organic | 3.3% | 1.4% | 2.7% | | Total | 1.4% | 6.0% | 2.9% | | **Segment Profit (YoY)** | | | | | 2023 (in thousands) | $49,897 | $16,744 | $66,641 | | 2022 (in thousands) | $41,145 | $16,758 | $57,903 | | **Profit as % of Sales** | | | | | 2023 | 22.5% | 15.2% | 20.1% | | 2022 | 18.8% | 16.1% | 18.0% | - Americas & Asia segment profit increased **21.3%** to **$49.9 million**, primarily due to increased sales volumes in the Americas, reduced freight costs, and manufacturing automation[118](index=118&type=chunk) - Europe & Australia segment profit was flat at **$16.7 million** as increasing labor and other costs from inflation were offset by pricing actions[120](index=120&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $175.4 million in cash and substantial borrowing capacity, ensuring compliance with debt covenants - At October 31, 2023, the company had cash of **$175.4 million** and **$245.8 million** available for future borrowing under its credit agreement, for total available liquidity of **$1,266.1 million** (including an optional increase)[105](index=105&type=chunk)[147](index=147&type=chunk) - Net cash provided by operating activities increased to **$62.3 million** from **$28.0 million** in the prior year, primarily due to improved profitability and reduced inventory levels[123](index=123&type=chunk) - As of October 31, 2023, the company was in compliance with its financial covenants, with a debt-to-EBITDA ratio of **0.18 to 1.0** (well below the **3.5 to 1.0** limit)[148](index=148&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes have occurred in the company's market risk information since the disclosures in its prior Annual Report on Form 10-K - There has been no material change in the company's quantitative and qualitative disclosures about market risk since the 2023 Form 10-K[150](index=150&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective as of the end of the period covered by this report[152](index=152&type=chunk) - There were no changes in the Company's internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[133](index=133&type=chunk) PART II. Other Information [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended July 31, 2023 - There have been no material changes from the risk factors set forth in the Company's Annual Report on Form 10-K for the year ended July 31, 2023[163](index=163&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased 279,683 shares for approximately $14.1 million, with an additional $100.0 million authorized for future repurchases Issuer Purchases of Equity Securities (Q1 FY2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Value of Shares Remaining for Purchase (in thousands) | | :--- | :--- | :--- | :--- | | August 2023 | 187,186 | $49.51 | $100,747 | | September 2023 | 0 | - | $100,747 | | October 2023 | 92,497 | $52.48 | $95,893 | | **Total** | **279,683** | **$50.49** | **$95,893** | - On August 30, 2023, the Board of Directors authorized an increase in the share repurchase program by an additional **$100.0 million**[164](index=164&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or Section 16 officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended October 31, 2023[154](index=154&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including CEO and CFO certifications and XBRL data files - Exhibits filed include certifications by the CEO (Russell R. Shaller) and CFO (Ann E. Thornton) pursuant to SEC rules, as well as XBRL financial data[155](index=155&type=chunk)[167](index=167&type=chunk)

Brady Corporation (NYSE:BRC) Q4 2023 Earnings Conference Call September 5, 2023 10:30 AM ET Company Participants Ann Thornton - Chief Financial Officer Russell Shaller - President and Chief Executive Officer Conference Call Participants Keith Housum - Northcoast Research Steve Ferazani - Sidoti Operator Good day, and welcome to the Brady Corporation Fourth Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation, there will be a question ...

In fiscal 2023, the annual cash retainer paid to non-management directors was $67,500. Each member of the Audit Committee received an annual retainer of $15,000, and an additional annual retainer of $15,000 was paid to the Chair of the Audit Committee; each member of the Management Development and Compensation Committee received an annual retainer of $12,000, and an additional annual retainer of $12,000 was paid to the Chair; and each member of the Corporate Governance, Finance and Technology Committees rec ...

Brady Corporation (NYSE:BRC) Q3 2023 Earnings Conference Call May 18, 2023 10:30 AM ET Company Participants Ann Thornton - Chief Financial Officer Russell Shaller - President and CEO Conference Call Participants Cashen Keeler - Bank of America Securities Steve Ferazani - Sidoti Keith Housum - Northcoast Research Operator Thank you for standing by. And welcome to Brady Corporation’s Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presen ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR For the Transition Period from to Commission File Number 1-14959 Securities registered pursuant to Section 12(b) of the Act: Large accelerated filer ☑ Accelerated filer ☐ Emerging growth company ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Indicate by check mark whether the registrant is a shell company (as defined in Ru ...

Brady Corporation (NYSE:BRC) Q2 2023 Earnings Conference Call February 24, 2023 10:30 AM ET Company Participants Ann Thornton - Chief Accounting Officer Russell Shaller - Present and Chief Executive Officer Aaron Pearce - Chief Financial Officer Conference Call Participants Cashen Keeler - Bank of America Securities, Inc. Steve Ferazani - Sidoti Keith Housum - Northcoast Research Operator Good day and thank you for standing by. Welcome to the Q2 2023 Brady Corporation Earnings Conference Call. [Operator Ins ...

PART I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the company's unaudited condensed consolidated financial statements, reflecting its financial position, operating results, cash flows, and stockholders' equity, with key data showing revenue and profit growth and improved operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of January 31, 2023, total assets remained stable at $1.372 billion, total liabilities decreased to $405 million due to reduced long-term debt, and stockholders' equity increased to $967 million Key Balance Sheet Items (in thousands) | Item | As of January 31, 2023 | As of July 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,372,273** | **$1,367,332** | | Cash and Cash Equivalents | $108,210 | $114,069 | | Total Current Assets | $504,215 | $498,068 | | **Total Liabilities** | **$404,869** | **$456,034** | | Total Current Liabilities | $229,849 | $255,174 | | Long-Term Debt | $77,281 | $95,000 | | **Total Stockholders' Equity** | **$967,404** | **$911,298** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended January 31, 2023 (Q2 FY23), net sales increased 2.6% year-over-year to $326 million, net income grew 12.3% to $37.99 million, and diluted EPS rose from $0.65 to $0.76 Summary of Operating Results (in thousands, except per share amounts) | Metric | Three Months Ended 1/31/23 | Three Months Ended 1/31/22 | Y-o-Y Change | Six Months Ended 1/31/23 | Six Months Ended 1/31/22 | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $326,249 | $318,055 | +2.6% | $648,818 | $639,530 | +1.5% | | Gross Profit | $156,440 | $149,362 | +4.7% | $311,704 | $304,350 | +2.4% | | Operating Income | $48,781 | $42,872 | +13.8% | $100,167 | $87,207 | +14.9% | | Net Income | $37,986 | $33,815 | +12.3% | $77,427 | $68,861 | +12.4% | | Diluted EPS (Class A) | $0.76 | $0.65 | +16.9% | $1.55 | $1.32 | +17.4% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended January 31, 2023, comprehensive income significantly increased to $69.13 million from $15.55 million in the prior year, primarily due to a favorable foreign currency translation adjustment of $30.56 million Comprehensive Income Statement (in thousands) | Item | Three Months Ended 1/31/23 | Three Months Ended 1/31/22 | Six Months Ended 1/31/23 | Six Months Ended 1/31/22 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $37,986 | $33,815 | $77,427 | $68,861 | | Other Comprehensive Income (Loss), Net of Tax | $31,144 | $(18,268) | $13,707 | $(22,986) | | **Comprehensive Income** | **$69,130** | **$15,547** | **$91,134** | **$45,875** | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) For the six months ended January 31, 2023, stockholders' equity increased from $911 million to $967 million, driven by $77.43 million in net income, partially offset by $22.79 million in dividends and $17.86 million in share repurchases - For the six months ended January 31, 2023, the company reported **$77.43 million** in net income, paid **$22.79 million** in dividends, and repurchased **$17.86 million** in stock[66](index=66&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended January 31, 2023, net cash from operating activities was **$57.38 million**, significantly higher than the prior year's **$24.33 million** due to reduced inventory purchases, while net cash used in financing activities was **$57.13 million**, primarily for credit agreement repayments, dividends, and stock repurchases Summary of Cash Flows (in thousands) | Item | Six Months Ended 1/31/23 | Six Months Ended 1/31/22 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $57,384 | $24,328 | | Net Cash Used in Investing Activities | $(8,156) | $(16,381) | | Net Cash Used in Financing Activities | $(57,128) | $(4,505) | | Net Decrease in Cash and Cash Equivalents | $(5,859) | $72 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The financial statement notes detail accounting policies, segment information, revenue recognition, derivatives, and subsequent events, identifying IDS and WPS as reporting segments, with IDS as the primary revenue and profit source, and announcing organizational changes and quarterly dividends - The company operates in two reporting segments: Identification Solutions (IDS) and Workplace Safety (WPS), with the **IDS segment** being the primary contributor to revenue and profit[99](index=99&type=chunk) Segment Profit (in thousands) | Segment | Three Months Ended 1/31/23 | Three Months Ended 1/31/22 | Six Months Ended 1/31/23 | Six Months Ended 1/31/22 | | :--- | :--- | :--- | :--- | :--- | | IDS | $47,384 | $44,129 | $98,909 | $92,945 | | WPS | $6,249 | $4,515 | $12,627 | $6,808 | | **Total** | **$53,633** | **$48,644** | **$111,536** | **$99,753** | - The Board of Directors announced on February 21, 2023, a quarterly cash dividend of **$0.23 per share** payable on April 28, 2023, to Class A and Class B common stockholders[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's operating strategy, macroeconomic conditions, operating results, segment performance, and liquidity and capital resources, highlighting sales and margin improvements through organic growth and pricing actions, a revised credit agreement for enhanced financial flexibility, and continued investment in R&D and digital capabilities [Overview and Strategy](index=16&type=section&id=Overview%20and%20Strategy) The company's strategy focuses on long-term growth and profitability through R&D investment, enhanced customer service, digital sales expansion, inflation-responsive pricing, strategic acquisitions, and operational excellence, with a planned FY2023 reorganization into a regional operating structure to support key market growth - Key initiatives for fiscal year 2023 include investing in organic growth, enhancing customer service, expanding digital sales capabilities, maintaining profitability through pricing, investing in acquisitions, driving operational excellence, building a diverse culture, and executing regional reorganization[110](index=110&type=chunk)[128](index=128&type=chunk) - The company is executing a reorganization to a regional operating structure to support continued growth in key regions and streamline operations[110](index=110&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) For the three months ended January 31, 2023, net sales grew **2.6%**, driven by **6.3%** organic growth offset by **3.7%** negative foreign exchange impact; gross margin improved from **47.0%** to **48.0%** due to operational efficiencies and pricing, with operating income increasing **13.8%** to **$48.8 million** Overall Company Sales Growth | Period | Total Growth Rate | Organic Growth Rate | Foreign Exchange Impact | | :--- | :--- | :--- | :--- | | Three Months Ended 1/31/23 | 2.6% | 6.3% | (3.7)% | | Six Months Ended 1/31/23 | 1.5% | 6.6% | (5.1)% | - Gross margin improved to **48.0%** for both the three and six-month periods, primarily due to operational efficiencies from manufacturing streamlining and price increases[208](index=208&type=chunk) - Research and development expenses increased **10.1%** and **5.2%** for the three and six-month periods, respectively, as the company continued to invest in new product development[132](index=132&type=chunk) [Business Segment Operating Results](index=19&type=section&id=Business%20Segment%20Operating%20Results) The IDS segment achieved **7.4%** organic sales growth in Q2 with a margin increase to **18.5%**, while the WPS segment saw **2.8%** organic sales growth and a significant margin improvement to **8.9%** due to optimized cost structure IDS Segment Performance (Q2 FY23 vs Q2 FY22) | Metric | Q2 FY23 | Q2 FY22 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $255.7M | $245.0M | +4.4% | | Organic Sales Growth | 7.4% | 16.0% | - | | Segment Profit | $47.4M | $44.1M | +7.4% | | Profit Margin | 18.5% | 18.0% | +50 bps | WPS Segment Performance (Q2 FY23 vs Q2 FY22) | Metric | Q2 FY23 | Q2 FY22 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $70.6M | $73.1M | -3.4% | | Organic Sales Growth | 2.8% | 5.2% | - | | Segment Profit | $6.2M | $4.5M | +38.4% | | Profit Margin | 8.9% | 6.2% | +270 bps | [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong financial position with **$108.2 million** cash and **$221.1 million** available credit as of January 31, 2023, having revised its credit agreement to increase commitments to **$300 million** and extend maturity, ensuring sufficient resources for future operations - As of January 31, 2023, the company held **$108.2 million** in cash and **$221.1 million** in available borrowing capacity under its credit agreement, which can be increased to **$981.1 million**, resulting in total available liquidity of **$1.0893 billion**[111](index=111&type=chunk) - In November 2022, the company amended its credit agreement, increasing total loan commitments by **$100 million** to **$300 million** and extending the final maturity date to November 14, 2027[151](index=151&type=chunk) - As of January 31, 2023, the company was in full compliance with all financial covenants, with a leverage ratio of **0.31:1.0** (required below **3.5:1.0**) and an interest coverage ratio of **85.9:1.0** (required above **3.0:1.0**)[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's quantitative and qualitative disclosures about market risk since July 31, 2022 - No material changes have occurred in the quantitative and qualitative disclosures about market risk since July 31, 2022[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the reporting period end, with no material changes in internal control over financial reporting during the most recent fiscal quarter - The company's President and Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of the end of the reporting period[157](index=157&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the most recent fiscal quarter[182](index=182&type=chunk) PART II. Other Information [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred compared to the risk factors disclosed in the company's Form 10-K for the year ended July 31, 2022 - No material changes have occurred compared to the risk factors outlined in the company's 2022 Form 10-K[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company disclosed its Class A non-voting common stock repurchase program activities, with approximately **$67.1 million** remaining authorized for repurchases under the existing plan as of January 31, 2023 - The Board of Directors authorized an increase to the stock repurchase program on May 24, 2022, allowing for the repurchase of up to **$100 million** of the company's Class A non-voting common stock[183](index=183&type=chunk) Stock Repurchase Activity (for the three months ended January 31, 2023) | Period | Total Shares Repurchased | Average Price Paid | Remaining Repurchase Authorization (in thousands) | | :--- | :--- | :--- | :--- | | November 2022 | — | — | $72,939 | | December 2022 | 123,321 | $46.92 | $67,153 | | January 2023 | 100 | $45.99 | $67,148 | | **Total** | **123,421** | **$46.92** | **$67,148** | [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This report lists various exhibits required by regulations, including executive employment contracts, change in control agreements, and certifications and XBRL-related documents mandated by the Sarbanes-Oxley Act - The report includes various exhibits such as executive employment contracts, change in control agreements, CEO/CFO certifications, and XBRL data files[162](index=162&type=chunk)[185](index=185&type=chunk)[189](index=189&type=chunk) Signatures [Signature Details](index=26&type=section&id=Signatures_details) This report was formally signed on February 24, 2023, by Russell R. Shaller, President and Chief Executive Officer (Principal Executive Officer), and Aaron J. Pearce, Chief Financial Officer and Treasurer (Principal Financial Officer) - The report is signed by Russell R. Shaller, President and Chief Executive Officer, and Aaron J. Pearce, Chief Financial Officer and Treasurer[186](index=186&type=chunk)[190](index=190&type=chunk)

Brady Corporation (NYSE:BRC) Q1 2023 Earnings Conference Call November 17, 2022 10:30 AM ET Company Participants Ann Thornton - Chief Accounting Officer Russell Shaller - Present and Chief Executive Officer Aaron Pearce - Chief Financial Officer Conference Call Participants Cashen Keeler - Bank of America Securities Steve Ferazani - Sidoti Keith Housum - Northcoast Research Operator Good day and thank you for standing by. Welcome to the Q1 2023 Brady Corporation Earnings Conference Call. [Operator Instructi ...

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 Non-accelerated filer ☐ Smaller reporting company ☐ 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, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...