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Brady Corporation Reports Record EPS in its Fiscal 2023 Fourth Quarter, Expands its Share Buyback Program and Announces its Fiscal 2024 EPS Guidance
来源: Nasdaq GlobeNewswire / 05 9月 2023 06:00:49 America/Chicago
- Sales for the quarter increased 6.8 percent. Organic sales increased 6.9 percent.
- Gross profit margin increased to 50.8 percent in the fourth quarter of F’23 compared to 50.4 percent in the fourth quarter of F’22.
- Diluted EPS increased 23.5 percent to an all-time high of $1.00 in the fourth quarter of fiscal 2023 compared to $0.81 in the same quarter of the prior year. Diluted EPS Excluding Certain Items* increased 19.5 percent to an all-time record high of $1.04 in the fourth quarter of fiscal 2023 compared to $0.87 in the same quarter of the prior year.
- During the quarter and year ended July 31, 2023, we returned $56.4 million and $120.4 million, respectively, to our shareholders in the form of dividends and share repurchases. On August 30, 2023, Brady’s Board of Directors authorized an additional $100 million of shares for repurchase, which based on current share prices equates to approximately 2.0 million shares and approximately 4.4 percent of total outstanding shares.
- Fiscal 2023 sales increased 2.3 percent and organic sales increased 5.5 percent. Diluted EPS increased 21.0 percent to an all-time high of $3.51 in fiscal 2023 compared to $2.90 in fiscal 2022.
- Diluted EPS guidance for the year ending July 31, 2024 was announced at a range of $3.70 to $3.95 on a GAAP basis, and a range of $3.85 to $4.10 on a non-GAAP basis. This GAAP EPS guidance range is an increase of 5.4 percent to 12.5 percent compared to GAAP EPS of $3.51 for the year ended July 31, 2023.
MILWAUKEE, Sept. 05, 2023 (GLOBE NEWSWIRE) -- Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2023 fourth quarter ended July 31, 2023.
Quarter Ended July 31, 2023 Financial Results:
Sales for the quarter ended July 31, 2023 increased 6.8 percent, which consisted of an organic sales increase of 6.9 percent, an increase of 0.6 percent from foreign currency translation and a decrease of 0.7 percent from the divestiture of the PremiSys business. Sales for the quarter ended July 31, 2023 were $345.9 million compared to $324.0 million in the same quarter last year. By region, sales increased 4.4 percent in the Americas & Asia and increased 11.5 percent in Europe & Australia, which consisted of an organic sales increase of 5.6 percent in the Americas & Asia and an organic sales increase of 9.5 percent in Europe & Australia.Income before income taxes increased 18.2 percent to $63.8 million for the quarter ended July 31, 2023, compared to $54.0 million in the same quarter last year. Income Before Income Taxes Excluding Certain Items* for the quarter ended July 31, 2023, which was adjusted for amortization expense of $2.4 million, was $66.2 million, an increase of 14.8 percent compared to the fourth quarter of last year. Income Before Income Taxes Excluding Certain Items* for the quarter ended July 31, 2022, which was adjusted for amortization expense of $3.7 million, was $57.7 million.
Net income for the quarter ended July 31, 2023 was $49.4 million compared to $41.1 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $1.00 for the fourth quarter of fiscal 2023, compared to $0.81 in the same quarter last year. Net Income Excluding Certain Items* for the quarter ended July 31, 2023 was $51.2 million and Diluted EPS Excluding Certain Items* for the quarter ended July 31, 2023 was $1.04. Net Income Excluding Certain Items* for the quarter ended July 31, 2022 was $43.9 million, and Diluted EPS Excluding Certain Items* for the quarter ended July 31, 2022 was $0.87.
Year Ended July 31, 2023 Financial Results:
Sales for the year ended July 31, 2023 increased 2.3 percent, which consisted of an organic sales increase of 5.5 percent, a decrease of 3.0 percent from foreign currency translation and a decrease of 0.2 percent from the divestiture of the PremiSys business. Sales for the year ended July 31, 2023 were $1.33 billion compared to $1.30 billion in the same period last year. By region, sales increased 3.2 percent in the Americas & Asia and increased 0.5 percent in Europe & Australia, which consisted of an organic sales increase of 4.4 percent in the Americas & Asia and an organic sales increase of 7.6 percent in Europe & Australia.Income before income taxes increased 17.6 percent to $225.7 million for the year ended July 31, 2023, compared to $192.0 million in the same period last year. Income Before Income Taxes Excluding Certain Items* for the year ended July 31, 2023 was $233.7 million, an increase of 11.9 percent compared to the same period last year. Income Before Income Taxes Excluding Certain Items* for the year ended July 31, 2023 was adjusted for amortization expense of $11.7 million and removes the $3.8 million gain on the sale of the PremiSys business. Income Before Income Taxes Excluding Certain Items* for the prior year ended July 31, 2022 was $208.8 million, which was adjusted for amortization expense of $15.0 million and non-recurring charges primarily to streamline the cost structure of our Workplace Safety business of $1.8 million.
Net income for the year ended July 31, 2023 was $174.9 million compared to $150.0 million in the same period last year. Earnings per diluted Class A Nonvoting Common Share were $3.51 for the year ended July 31, 2023, compared to $2.90 in the same period last year. Net Income Excluding Certain Items* for the year ended July 31, 2023 was $181.5 million and Diluted EPS Excluding Certain Items* for the year ended July 31, 2022 was $3.64. Net Income Excluding Certain Items* for the year ended July 31, 2022 was $162.7 million, and Diluted EPS Excluding Certain Items* for the year ended July 31, 2022 was $3.15.
Commentary:
“This quarter we once again reported all-time record high EPS, resulting in a strong finish and Brady’s best earnings year ever. For the full year ended July 31, 2023, our GAAP EPS was $3.51, which was a 21.0 percent increase over the previous year which was also a record,” said Brady’s President and Chief Executive Officer, Russell R. Shaller. “Both regions performed well this year with total organic sales growth of 5.5 percent and strong growth in operating income. We have exciting new products in our pipeline, our regional reorganization is driving benefits throughout our businesses, and we’re entering next fiscal year with positive momentum.”“In addition to our organic revenue growth of 5.5 percent and record EPS this year, we also used our strong balance sheet and cash generation to return funds to our shareholders in the form of share buybacks and increased dividends. This year, we repurchased a total of 1.6 million shares for $75.0 million and we returned another $45.4 million to our shareholders in the form of dividends,” said Brady’s Chief Financial Officer, Ann Thornton. “Even after returning more than $120 million to our shareholders this year, we were still in a net cash position of $101.8 million at July 31, 2023. We are financially solid and are well-positioned for the future with a balance sheet that provides opportunities to invest in both organic and inorganic opportunities to increase shareholder value.”
Share Buyback Program:
On August 30, 2023, Brady’s Board of Directors authorized an additional $100 million of Class A Common Stock for repurchase under the Company’s share buyback program. The share buyback plan may be implemented from time to time in the open market or in privately negotiated transactions and has no expiration date.Fiscal 2024 Guidance:
Brady expects GAAP earnings per diluted Class A Nonvoting Common Share to range from $3.70 to $3.95, which would be an increase of 5.4 percent to 12.5 percent over the GAAP earnings per diluted Class A nonvoting Common Share of $3.51 for the year ended July 31, 2023.Brady also expects Diluted EPS Excluding Certain Items* to range from $3.85 to $4.10 for the year ending July 31, 2024, which would be an increase of 5.8 percent to 12.6 percent over Diluted EPS Excluding Certain Items* of $3.64 for the year ended July 31, 2023. Excluded from this Diluted EPS Excluding Certain Items* guidance is expected amortization expense equating to $0.15 per share for the year ending July 31, 2024.
Included in our fiscal 2024 guidance are a full-year income tax rate of approximately 22 percent and depreciation and amortization expense ranging from $32 million to $34 million. Capital expenditures are expected to approximate $75 million, which is inclusive of facility construction costs of approximately $55 million. Our fiscal 2024 guidance is based on foreign currency exchange rates as of July 31, 2023 and assumes continued economic growth.
A webcast regarding Brady’s fiscal 2023 fourth quarter and full year financial results will be available at www.bradycorp.com/investors beginning at 9:30 a.m. central time today.
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2023, employed approximately 5,600 people in its worldwide businesses. Brady’s fiscal 2023 sales were approximately $1.33 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradyid.com.
* Income Before Income Taxes Excluding Certain Items, Net Income Excluding Certain Items, and Diluted EPS Excluding Certain Items are non-GAAP measures. See appendix for more information on these measures, including reconciliations to the most directly comparable GAAP measures.
In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations.
The use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project,” “continue” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: increased cost of raw materials, labor and freight as well as material shortages and supply chain disruptions; decreased demand for our products; our ability to compete effectively or to successfully execute our strategy; our ability to develop technologically advanced products that meet customer demands; difficulties in protecting our websites, networks, and systems against security breaches; Brady’s ability to identify, integrate, and grow acquired companies, and to manage contingent liabilities from divested businesses; risks associated with the loss of key employees; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; litigation, including product liability claims; adverse impacts of the novel coronavirus (“COVID-19”) pandemic or other pandemics; foreign currency fluctuations; potential write-offs of goodwill and other intangible assets; changes in tax legislation and tax rates; differing interests of voting and non-voting shareholders; numerous other matters of national, regional and global scale, including major public health crises and government responses thereto and those of a political, economic, business, competitive, and regulatory nature contained from time to time in Brady’s U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the “Risk Factors” section within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2023.
These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.
For More Information:
Investor contact: Ann Thornton 414-438-6887
Media contact: Kate Venne 414-358-5176BRADY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited; Dollars in thousands, except per share data) Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 Net sales $ 345,929 $ 323,981 $ 1,331,863 $ 1,302,062 Cost of goods sold 170,049 160,805 674,588 670,510 Gross margin 175,880 163,176 657,275 631,552 Operating expenses: Research and development 16,340 15,753 61,365 58,548 Selling, general and administrative 97,495 94,507 370,697 379,992 Total operating expenses 113,835 110,260 432,062 438,540 Operating income 62,045 52,916 225,213 193,012 Other income (expense): Investment and other income 2,426 1,587 4,022 244 Interest expense (653 ) (513 ) (3,539 ) (1,276 ) Income before income taxes 63,818 53,990 225,696 191,980 Income tax expense 14,440 12,926 50,839 42,001 Net income $ 49,378 $ 41,064 $ 174,857 $ 149,979 Net income per Class A Nonvoting Common Share: Basic $ 1.01 $ 0.82 $ 3.53 $ 2.92 Diluted $ 1.00 $ 0.81 $ 3.51 $ 2.90 Net income per Class B Voting Common Share: Basic $ 1.01 $ 0.82 $ 3.51 $ 2.91 Diluted $ 1.00 $ 0.81 $ 3.49 $ 2.89 Weighted average common shares outstanding: Basic 49,099 50,185 49,591 51,321 Diluted 49,377 50,437 49,869 51,651
BRADY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) July 31, 2023 July 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 151,532 $ 114,069 Accounts receivable, net of allowance for credit losses of $8,467 and $7,355, respectively 184,420 183,233 Inventories 177,078 190,023 Prepaid expenses and other current assets 11,790 10,743 Total current assets 524,820 498,068 Property, plant and equipment—net 142,149 139,511 Goodwill 592,646 586,832 Other intangible assets 62,096 74,028 Deferred income taxes 15,716 15,881 Operating lease assets 29,688 31,293 Other assets 22,142 21,719 Total $ 1,389,257 $ 1,367,332 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 79,855 $ 81,116 Accrued compensation and benefits 71,470 76,764 Taxes, other than income taxes 13,575 12,539 Accrued income taxes 12,582 8,294 Current operating lease liabilities 14,726 15,003 Other current liabilities 65,828 61,458 Total current liabilities 258,036 255,174 Long-term debt 49,716 95,000 Long-term operating lease liabilities 16,217 19,143 Other liabilities 74,369 86,717 Total liabilities 398,338 456,034 Stockholders’ equity: Common stock: Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 45,008,724 and 46,370,708 shares, respectively 513 513 Class B voting common stock—Issued and outstanding, 3,538,628 shares 35 35 Additional paid-in capital 351,771 345,266 Retained earnings 1,021,870 892,417 Treasury stock—6,252,763 and 4,890,779 shares, respectively, of Class A nonvoting common stock, at cost (290,209 ) (217,856 ) Accumulated other comprehensive loss (93,061 ) (109,077 ) Total stockholders’ equity 990,919 911,298 Total $ 1,389,257 $ 1,367,332
BRADY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year ended July 31, 2023 2022 Operating activities: Net income $ 174,857 $ 149,979 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 32,370 34,182 Stock-based compensation expense 7,508 10,504 Gain on sale of business (3,770 ) — Deferred income taxes (12,472 ) (1,645 ) Other (308 ) 1,197 Changes in operating assets and liabilities: Accounts receivable 2,380 (25,330 ) Inventories 14,972 (62,907 ) Prepaid expenses and other assets (1,023 ) 807 Accounts payable and accrued liabilities (9,459 ) 6,826 Income taxes 4,094 4,836 Net cash provided by operating activities 209,149 118,449 Investing activities: Purchases of property, plant and equipment (19,226 ) (43,138 ) Sale of business 8,000 — Other 12 67 Net cash used in investing activities (11,214 ) (43,071 ) Financing activities: Payment of dividends (45,404 ) (45,931 ) Proceeds from exercise of stock options 4,091 1,082 Payments for employee taxes withheld from stock-based awards (2,041 ) (5,127 ) Purchase of treasury stock (74,996 ) (109,229 ) Proceeds from borrowing on credit agreement 127,660 243,716 Repayment of borrowing on credit agreement (172,944 ) (186,716 ) Other 66 116 Net cash used in financing activities (163,568 ) (102,089 ) Effect of exchange rate changes on cash and cash equivalents 3,096 (6,555 ) Net increase (decrease) in cash and cash equivalents 37,463 (33,266 ) Cash and cash equivalents, beginning of period 114,069 147,335 Cash and cash equivalents, end of period $ 151,532 $ 114,069
BRADY CORPORATION AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited; Dollars in thousands) Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 NET SALES Americas & Asia $ 227,482 $ 217,792 $ 888,857 $ 861,084 Europe & Australia 118,447 106,189 443,006 440,978 Total $ 345,929 $ 323,981 $ 1,331,863 $ 1,302,062 SALES INFORMATION Americas & Asia Organic 5.6 % 9.1 % 4.4 % 10.3 % Currency (0.2 )% (1.0 )% (0.9 )% (0.1 )% Divestiture (1.0 )% — % (0.3 )% — % Acquisition — % 2.8 % — % 6.9 % Total 4.4 % 10.9 % 3.2 % 17.1 % Europe & Australia Organic 9.5 % 8.8 % 7.6 % 7.9 % Currency 2.0 % (13.9 )% (7.1 )% (7.0 )% Acquisition — % 1.8 % — % 6.9 % Total 11.5 % (3.3 )% 0.5 % 7.8 % Total Company Organic 6.9 % 9.0 % 5.5 % 9.4 % Currency 0.6 % (5.7 )% (3.0 )% (2.6 )% Divestiture (0.7 )% — % (0.2 )% — % Acquisition — % 2.5 % — % 6.9 % Total 6.8 % 5.8 % 2.3 % 13.7 % SEGMENT PROFIT Americas & Asia $ 49,992 $ 42,648 $ 180,503 $ 157,307 Europe & Australia 18,426 16,893 65,742 63,058 Total $ 68,418 $ 59,541 $ 246,245 $ 220,365 SEGMENT PROFIT AS A PERCENT OF NET SALES Americas & Asia 22.0 % 19.6 % 20.3 % 18.3 % Europe & Australia 15.6 % 15.9 % 14.8 % 14.3 % Total 19.8 % 18.4 % 18.5 % 16.9 % Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 Total segment profit $ 68,418 $ 59,541 $ 246,245 $ 220,365 Unallocated amounts: Administrative costs (6,373 ) (6,625 ) (24,802 ) (27,353 ) Gain on sale of business - - 3,770 - Investment and other income 2,426 1,587 4,022 244 Interest expense (653 ) (513 ) (3,539 ) (1,276 ) Income before income taxes $ 63,818 $ 53,990 $ 225,696 $ 191,980
GAAP to NON-GAAP MEASURES (Unaudited; Dollars in Thousands, Except Per Share Amounts) In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure. Income Before Income Taxes Excluding Certain Items: Brady is presenting the non-GAAP measure, "Income Before Income Taxes Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our ongoing results. We believe this profit measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Income before income taxes to the non-GAAP measure of Income Before Income Taxes Excluding Certain Items: Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 Income before income taxes $ 63,818 $ 53,990 $ 225,696 $ 191,980 Amortization expense 2,389 3,675 11,739 14,966 Gain on sale of business - - (3,770 ) - Other non-routine charges - - - 1,841 Income Before Income Taxes Excluding Certain Items (non-GAAP measure) $ 66,207 $ 57,665 $ 233,665 $ 208,787 Income Tax Expense Excluding Certain Items: Brady is presenting the non-GAAP measure, "Income Tax Expense Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our ongoing results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Income tax expense to the non-GAAP measure of Income Tax Expense Excluding Certain Items: Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 Income tax expense (GAAP measure) $ 14,440 $ 12,926 $ 50,839 $ 42,001 Amortization expense 553 873 2,756 3,545 Gain on sale of business - - (1,431 ) - Other non-routine charges - - - 496 Income Tax Expense Excluding Certain Items (non-GAAP measure) $ 14,993 $ 13,799 $ 52,164 $ 46,042 Net Income Excluding Certain Items: Brady is presenting the non-GAAP measure, "Net Income Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our ongoing results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Net income to the non-GAAP measure of Net Income Excluding Certain Items: Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 Net income (GAAP measure) $ 49,378 $ 41,064 $ 174,857 $ 149,979 Amortization expense 1,836 2,802 8,983 11,421 Gain on sale of business - - (2,339 ) - Other non-routine charges - - - 1,345 Net Income Excluding Certain Items (non-GAAP measure) $ 51,214 $ 43,866 $ 181,501 $ 162,745 Diluted EPS Excluding Certain Items: Brady is presenting the non-GAAP measure, "Diluted EPS Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements. We do not view these items to be part of our ongoing results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Net income per Class A Nonvoting Common Share to the non-GAAP measure of Diluted EPS Excluding Certain Items: Three months ended July 31, Year ended July 31, 2023 2022 2023 2022 Net income per Class A Nonvoting Common Share (GAAP measure) $ 1.00 $ 0.81 $ 3.51 $ 2.90 Amortization expense 0.04 0.06 0.18 0.22 Gain on sale of business - - (0.05 ) - Other non-routine charges - - - 0.03 Diluted EPS Excluding Certain Items (non-GAAP measure) $ 1.04 $ 0.87 $ 3.64 $ 3.15 Diluted EPS Excluding Certain Items Guidance: Fiscal 2024 Expectations Low High Earnings per diluted Class A Common Share (GAAP measure) $ 3.70 $ 3.95 Amortization expense 0.15 0.15 Diluted EPS Excluding Certain Items (non-GAAP measure) $ 3.85 $ 4.10