brc-20220131

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, 2022


☐			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 jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6555 West Good Hope Road

Milwaukee, Wisconsin 53233

(Address of principal executive offices and zip code)

(414) 358-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of February 15, 2022, there were 48,065,965 outstanding shares of Class A Nonvoting Common Stock and 3,538,628 shares of Class B Voting Common Stock. The Class B Voting Common Stock, all of which is held by affiliates of the Registrant, is the only voting stock.

Table of Contents

FORM 10-Q

BRADY CORPORATION

INDEX



			Page
PART I. Financial Information			3
Item 1. Financial Statements (Unaudited)			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Income			4
Condensed Consolidated Statements of Comprehensive Income			5
C ondensed C onsolidated S tatements of S toc kholders' E quity			6
Condensed Consolidated Statements of Cash Flows			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
Item 4. Controls and Procedures			23
PART II. Other Information			24
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds			24
Item 6. Exhibits			25
Signatures			26

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)


	January 31, 2022		July 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	147,407	$	147,335
Accounts receivable, net of allowances for credit losses of $7,868 and $7,306, respectively	172,471		170,579
Inventories	167,456		136,107
Prepaid expenses and other current assets	12,681		11,083
Total current assets	500,015		465,104
Property, plant and equipment—net	126,551		121,741
Goodwill	601,681		614,137
Other intangible assets	83,608		92,334
Deferred income taxes	15,234		16,343
Operating lease assets	33,710		41,880
Other assets	26,264		26,217
Total	$	1,387,063	$	1,377,756
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	80,611	$	82,152
Accrued compensation and benefits	56,510		81,173
Taxes, other than income taxes	12,141		13,054
Accrued income taxes	4,783		3,915
Current operating lease liabilities	16,601		17,667
Other current liabilities	56,850		59,623
Total current liabilities	227,496		257,584
Long-term debt	83,000		38,000
Long-term operating lease liabilities	20,341		28,347
Other liabilities	89,658		90,797
Total liabilities	420,495		414,728
Stockholders’ equity:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,243,347 and 48,528,245 shares, respectively	513		513
Class B voting common stock—Issued and outstanding, 3,538,628 shares	35		35
Additional paid-in capital	341,889		339,125
Retained earnings	833,981		788,369
Treasury stock—3,018,140 and 2,733,242 shares, respectively, of Class A nonvoting common stock, at cost	(130,911)		(109,061)
Accumulated other comprehensive loss	(78,939)		(55,953)
Total stockholders’ equity	966,568		963,028
Total	$	1,387,063	$	1,377,756

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands, Except Per Share Amounts, Unaudited)


	Three months ended January 31,				Six months ended January 31,
	2022		2021		2022		2021
Net sales	$	318,055	$	265,838	$	639,530	$	543,065
Cost of goods sold	168,693		136,316		335,180		278,115
Gross margin	149,362		129,522		304,350		264,950
Operating expenses:
Research and development	13,965		9,876		27,872		20,079
Selling, general and administrative	92,525		82,234		189,271		165,271
Total operating expenses	106,490		92,110		217,143		185,350
Operating income	42,872		37,412		87,207		79,600
Other (expense) income:
Investment and other (expense) income	(578)		2,036		(35)		2,191
Interest expense	(252)		(51)		(434)		(157)
Income before income taxes and losses of unconsolidated affiliate	42,042		39,397		86,738		81,634
Income tax expense	8,227		8,206		17,877

SEC Form 10-Q filed by Brady Corporation