brc-20210430

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, 2021


☐			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 May 18, 2021, there were 48,524,455 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. F inancial Statements (Unaudited)			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Income			4
Condensed Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition			16
Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
Item 4. Controls and Procedures			23
PART II. Other Information			24
Item 1A. Risk Factors			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)


	April 30, 2021		July 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	321,801	$	217,643
Accounts receivable, net of allowances for credit losses of $7,551 and $7,157, respectively	163,381		146,181
Inventories	122,847		135,662
Prepaid expenses and other current assets	13,032		9,962
Total current assets	621,061		509,448
Property, plant and equipment—net	121,126		115,068
Goodwill	422,091		416,034
Other intangible assets	18,528		22,334
Deferred income taxes	8,334		8,845
Operating lease assets	37,622		41,899
Other assets	31,415		28,838
Total	$	1,260,177	$	1,142,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	72,234	$	62,547
Accrued compensation and benefits	69,621		41,546
Taxes, other than income taxes	9,207		8,057
Accrued income taxes	2,711		8,652
Current operating lease liabilities	16,197		15,304
Other current liabilities	51,145		49,782
Total current liabilities	221,115		185,888
Long-term operating lease liabilities	25,841		31,982
Other liabilities	61,595		61,524
Total liabilities	308,551		279,394
Stockholders’ equity:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,524,455 and 48,456,954 shares, respectively	513		513
Class B voting common stock—Issued and outstanding, 3,538,628 shares	35		35
Additional paid-in capital	336,957		331,761
Retained earnings	771,797		704,456
Treasury stock—2,737,032 and 2,804,533 shares, respectively, of Class A nonvoting common stock, at cost	(109,128)		(107,216)
Accumulated other comprehensive loss	(48,548)		(66,477)
Total stockholders’ equity	951,626		863,072
Total	$	1,260,177	$	1,142,466

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 April 30,				Nine months ended April 30,
	2021		2020		2021		2020
Net sales	$	295,503	$	265,943	$	838,568	$	829,555
Cost of goods sold	146,656		136,416		424,771		419,496
Gross margin	148,847		129,527		413,797		410,059
Operating expenses:
Research and development	11,305		9,814		31,384		31,298
Selling, general and administrative	90,817		83,223		256,088		260,136
Impairment charges	—		13,821		—		13,821
Total operating expenses	102,122		106,858		287,472		305,255
Operating income	46,725		22,669		126,325		104,804
Other income (expense):
Investment and other income	1,181		112		3,372		3,252
Interest expense	(131)		(628)		(288)		(1,976)
Income before income taxes and losses of unconsolidated affiliate	47,775		22,153		129,409		106,080
Income tax expense	10,229		8,520		27,017		21,396
Income before losses of unconsolidated affiliate	37,546		13,633		102,392		84,684
Equity in losses of unconsolidated affiliate	(255)		—		(760)		—
Net income	$	37,291	$	13,633	$	101,632	$	84,684
Net income per Class A Nonvoting Common Share:
Basic	$	0.72	$	0.26	$	1.95	$	1.60
Diluted	$	0.71	$	0.26	$	1.94	$	1.58
Dividends	$	0.22	$	0.22	$	0.66	$	0.65
Net income per Class B Voting Common Share:
Basic	$	0.72	$	0.26	$	1.94	$	1.58
Diluted	$	0.71	$	0.26	$	1.93	$	1.57
Dividends	$	0.22	$

SEC Form 10-Q filed by Brady Corporation