brc-20220430

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, 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 May 24, 2022, there were 46,687,050 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
Condensed Consolidated Statements of Stockholders' Equity			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			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
Item 4. Controls and Procedures			24
PART II. Other Information			25
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds			25
Item 6. Exhibits			26
Signatures			27

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)


	April 30, 2022		July 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	103,068	$	147,335
Accounts receivable, net of allowances for credit losses of $7,891 and $7,306, respectively	186,843		170,579
Inventories	177,156		136,107
Prepaid expenses and other current assets	12,550		11,083
Total current assets	479,617		465,104
Property, plant and equipment—net	125,014		121,741
Goodwill	591,780		614,137
Other intangible assets	78,238		92,334
Deferred income taxes	14,804		16,343
Operating lease assets	30,466		41,880
Other assets	24,325		26,217
Total	$	1,344,244	$	1,377,756
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	79,567	$	82,152
Accrued compensation and benefits	70,195		81,173
Taxes, other than income taxes	12,910		13,054
Accrued income taxes	4,264		3,915
Current operating lease liabilities	15,619		17,667
Other current liabilities	61,215		59,623
Total current liabilities	243,770		257,584
Long-term debt	77,000		38,000
Long-term operating lease liabilities	17,591		28,347
Other liabilities	91,645		90,797
Total liabilities	430,006		414,728
Stockholders’ equity:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 46,890,714 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	343,854		339,125
Retained earnings	862,583		788,369
Treasury stock—4,370,773 and 2,733,242 shares, respectively, of Class A nonvoting common stock, at cost	(193,859)		(109,061)
Accumulated other comprehensive loss	(98,888)		(55,953)
Total stockholders’ equity	914,238		963,028
Total	$	1,344,244	$	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 April 30,				Nine months ended April 30,
	2022		2021		2022		2021
Net sales	$	338,551	$	295,503	$	978,081	$	838,568
Cost of goods sold	174,525		146,656		509,705		424,771
Gross margin	164,026		148,847		468,376		413,797
Operating expenses:
Research and development	14,923		11,305		42,795		31,384
Selling, general and administrative	96,214		90,817		285,485		256,088
Total operating expenses	111,137		102,122		328,280		287,472
Operating income	52,889		46,725		140,096		126,325
Other (expense) income:
Investment and other (expense) income	(1,308)		1,181		(1,343)		3,372
Interest expense	(329)		(131)		(763)		(288)
Income before income taxes and losses of unconsolidated affiliate	51,252		47,775		137,990		129,409
Income tax expense	11,198		10,229		29,075		27,017
Income before losses of unconsolidated affiliate	40,054		37,546		108,915		102,392
Equity in losses of unconsolidated affiliate	—		(255)		—		(760)
Net income	$	40,054

SEC Form 10-Q filed by Brady Corporation