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 ...

Brady Corporation (NYSE:BRC) Q4 2022 Earnings Conference Call September 1, 2022 10:30 AM ET Corporate Participants Ann Thornton - Chief Accounting Officer Russell Shaller - Chief Executive Officer Aaron Pearce - Chief Financial Officer Conference Call Participants Cashen Keeler - Bank of America Keith Housum - North Coast Research Steve Ferazani - Sidoti Operator Good day and thank you for standing by. Welcome to Q4 2022 Brady Corporation Earnings Conference Call. At this time, all participants are in a lis ...

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, 2022 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 2022 Earnings Conference Call May 26, 2022 10:30 AM ET Company Participants Ann Thornton - CAO Russell Shaller - CEO Aaron Pearce - CFO Conference Call Participants Cashen Keeler - BofA Steve Ferazani - Sidoti Mike McGinn - Wells Fargo Keith Housum - North Coast Research Operator Good day, and thank you for standing by. Welcome to the Brady Corporation Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers pre ...

Financial Performance - Net sales for the three months ended April 30, 2022, increased 14.6% to $338.6 million, compared to $295.5 million in the same period in the prior year[83]. - Net sales for the nine months ended April 30, 2022, increased 16.6% to $978.1 million, compared to $838.6 million in the same period in the prior year[85]. - Operating income increased 13.2% to $52.9 million for the three months ended April 30, 2022, compared to $46.7 million in the same period in the prior year[91]. - Net income for the three months ended April 30, 2022, was $40.1 million, representing 11.8% of net sales, compared to $37.3 million in the same period in the prior year[92]. - Total Company net sales increased by 14.6% to $335.5 million for the three months ended April 30, 2022, compared to $292.3 million in the same period in the prior year, with organic sales growth of 9.0% and acquisitions contributing 8.6%[98]. Segment Performance - The Company's net sales for ID Solutions increased by 21.1% to $264.1 million for the three months ended April 30, 2022, compared to $218.1 million in the same period in the prior year, driven by organic sales growth of 11.8% and acquisitions contributing 11.7%[99]. - Segment profit for ID Solutions increased by 13.5% to $54.0 million for the three months ended April 30, 2022, compared to $47.5 million in the same period in the prior year, but as a percentage of net sales, it decreased to 20.4% from 21.8%[100]. - Workplace Safety net sales decreased by 3.9% to $74.4 million for the three months ended April 30, 2022, with organic sales growth of 0.9% and a decrease from foreign currency translation of 4.8%[102]. - The Company recorded a segment profit of $7.1 million for Workplace Safety for the three months ended April 30, 2022, an increase of 25.7% from $5.7 million in the same period in the prior year, with segment profit as a percentage of net sales increasing to 9.6%[107]. Expenses and Margins - Gross margin for the three months ended April 30, 2022, was $164.0 million, representing 48.4% of net sales, a decrease from 50.4% in the same period in the prior year[86]. - Research and development expenses increased 32.0% to $14.9 million for the three months ended April 30, 2022, compared to $11.3 million in the same period in the prior year[87]. - Selling, general and administrative expenses increased 5.9% to $96.2 million for the three months ended April 30, 2022, compared to $90.8 million in the same period in the prior year[90]. Cash Flow and Liquidity - The company had cash of $103.1 million and a credit facility with $121.3 million available for future borrowing, totaling approximately $424.4 million in available liquidity as of April 30, 2022[78]. - Net cash provided by operating activities was $65.2 million for the nine months ended April 30, 2022, compared to $154.9 million in the same period of the prior year, reflecting higher cash outflows for inventory and increased incentive compensation payments[110]. - The Company believes its cash flow from operating activities and borrowing capacity are sufficient to fund anticipated requirements for working capital and capital expenditures for the next 12 months and beyond[108]. Debt and Financial Health - As of April 30, 2022, the company's debt to EBITDA ratio was 0.31 to 1.0, significantly below the required maximum of 3.5 to 1.0, indicating strong financial health[116]. - The interest expense coverage ratio was 255.5 to 1.0, well above the minimum requirement of 3.0 to 1.0, demonstrating robust earnings relative to interest obligations[116]. - The Company had an outstanding balance of $77.0 million on its revolving loan agreement as of April 30, 2022, with a maximum amount outstanding during the nine months ended April 30, 2022, of $101.0 million[115]. Share Repurchase and Capital Management - The company has a share repurchase program authorized for up to 2 million shares, with 203,664 shares remaining available for purchase as of April 30, 2022[129]. - During the three months ended April 30, 2022, the company repurchased a total of 1,365,580 shares at an average price of $46.29 per share[131]. - On May 24, 2022, the board authorized an increase in the share repurchase program to allow for the repurchase of up to $100 million of Class A Nonvoting Common Stock[130]. Operational Challenges and Controls - The company is currently facing uncertainties including supply chain disruptions and increased costs of raw materials, which could impact future performance[122]. - The company does not have material off-balance sheet arrangements or financial guarantees that could adversely affect liquidity[118]. - There have been no material changes in the company's internal control over financial reporting during the most recently completed fiscal quarter[127]. - The company maintains effective disclosure controls and procedures as evaluated by its management[126].

Brady Corporation (NYSE:BRC) Q2 2022 Earnings Conference Call February 17, 2022 10:30 AM ET Company Participants Ann Thornton - Chief Accounting Officer Michael Nauman - President and CEO Aaron Pearce - CFO Conference Call Participants Michael McGinn - Wells Fargo Steve Ferazani - Sidoti Keith Housum - Northcoast Research Operator Good day and thank you for standing by. Welcome to the Second Quarter 2022 Brady Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Af ...