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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Brady Corp | NYSE:BRC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.10 | 0.17% | 59.13 | 59.415 | 58.315 | 59.18 | 164,265 | 01:00:00 |
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Wisconsin
|
|
39-0178960
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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6555 West Good Hope Road, Milwaukee, Wisconsin
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53223
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
|
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þ
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Accelerated filer
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¨
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Emerging growth company
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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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.
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¨
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Page
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April 30, 2017
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July 31, 2016
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||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
129,077
|
|
|
$
|
141,228
|
|
Accounts receivable—net
|
145,755
|
|
|
147,333
|
|
||
Inventories:
|
|
|
|
||||
Finished products
|
61,025
|
|
|
64,313
|
|
||
Work-in-process
|
17,326
|
|
|
16,678
|
|
||
Raw materials and supplies
|
19,126
|
|
|
18,436
|
|
||
Total inventories
|
97,477
|
|
|
99,427
|
|
||
Prepaid expenses and other current assets
|
20,343
|
|
|
19,436
|
|
||
Total current assets
|
392,652
|
|
|
407,424
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
425,935
|
|
|
429,871
|
|
||
Other intangible assets
|
54,107
|
|
|
59,806
|
|
||
Deferred income taxes
|
26,228
|
|
|
27,238
|
|
||
Other
|
18,152
|
|
|
17,181
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Cost:
|
|
|
|
||||
Land
|
7,271
|
|
|
5,809
|
|
||
Buildings and improvements
|
95,662
|
|
|
95,355
|
|
||
Machinery and equipment
|
257,465
|
|
|
256,549
|
|
||
Construction in progress
|
4,362
|
|
|
2,842
|
|
||
|
364,760
|
|
|
360,555
|
|
||
Less accumulated depreciation
|
268,586
|
|
|
258,111
|
|
||
Property, plant and equipment—net
|
96,174
|
|
|
102,444
|
|
||
Total
|
$
|
1,013,248
|
|
|
$
|
1,043,964
|
|
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Notes payable
|
$
|
4,072
|
|
|
$
|
4,928
|
|
Accounts payable
|
60,144
|
|
|
62,245
|
|
||
Wages and amounts withheld from employees
|
45,079
|
|
|
45,998
|
|
||
Taxes, other than income taxes
|
7,109
|
|
|
7,403
|
|
||
Accrued income taxes
|
2,706
|
|
|
6,136
|
|
||
Other current liabilities
|
39,022
|
|
|
40,017
|
|
||
Total current liabilities
|
158,132
|
|
|
166,727
|
|
||
Long-term obligations, less current maturities
|
133,894
|
|
|
211,982
|
|
||
Other liabilities
|
57,159
|
|
|
61,657
|
|
||
Total liabilities
|
349,185
|
|
|
440,366
|
|
||
Stockholders’ investment:
|
|
|
|
||||
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,738,671 and 46,920,974 shares, respectively
|
513
|
|
|
513
|
|
||
Class B voting common stock—Issued and outstanding, 3,538,628 shares
|
35
|
|
|
35
|
|
||
Additional paid-in capital
|
321,936
|
|
|
317,001
|
|
||
Earnings retained in the business
|
492,411
|
|
|
453,371
|
|
||
Treasury stock—3,522,816 and 4,340,513 shares, respectively of Class A nonvoting common stock, at cost
|
(87,493
|
)
|
|
(108,714
|
)
|
||
Accumulated other comprehensive loss
|
(63,339
|
)
|
|
(54,745
|
)
|
||
Other
|
—
|
|
|
(3,863
|
)
|
||
Total stockholders’ investment
|
664,063
|
|
|
603,598
|
|
||
Total
|
$
|
1,013,248
|
|
|
$
|
1,043,964
|
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
275,927
|
|
|
$
|
286,816
|
|
|
$
|
824,104
|
|
|
$
|
838,519
|
|
Cost of products sold
|
136,018
|
|
|
141,373
|
|
|
409,679
|
|
|
420,835
|
|
||||
Gross margin
|
139,909
|
|
|
145,443
|
|
|
414,425
|
|
|
417,684
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
9,950
|
|
|
8,865
|
|
|
28,577
|
|
|
26,531
|
|
||||
Selling, general and administrative
|
98,409
|
|
|
105,794
|
|
|
291,128
|
|
|
306,678
|
|
||||
Total operating expenses
|
108,359
|
|
|
114,659
|
|
|
319,705
|
|
|
333,209
|
|
||||
Operating income
|
31,550
|
|
|
30,784
|
|
|
94,720
|
|
|
84,475
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Investment and other income (expense)
|
453
|
|
|
721
|
|
|
560
|
|
|
(1,030
|
)
|
||||
Interest expense
|
(1,375
|
)
|
|
(1,838
|
)
|
|
(4,565
|
)
|
|
(6,119
|
)
|
||||
Earnings before income taxes
|
30,628
|
|
|
29,667
|
|
|
90,715
|
|
|
77,326
|
|
||||
Income tax expense
|
8,075
|
|
|
8,686
|
|
|
20,312
|
|
|
22,352
|
|
||||
Net earnings
|
$
|
22,553
|
|
|
$
|
20,981
|
|
|
$
|
70,403
|
|
|
$
|
54,974
|
|
Net earnings per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.38
|
|
|
$
|
1.09
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
1.36
|
|
|
$
|
1.08
|
|
Dividends
|
$
|
0.21
|
|
|
$
|
0.20
|
|
|
$
|
0.62
|
|
|
$
|
0.61
|
|
Net earnings per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.37
|
|
|
$
|
1.07
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
1.34
|
|
|
$
|
1.07
|
|
Dividends
|
$
|
0.21
|
|
|
$
|
0.20
|
|
|
$
|
0.60
|
|
|
$
|
0.59
|
|
Weighted average common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic
|
51,227
|
|
|
50,251
|
|
|
50,972
|
|
|
50,602
|
|
||||
Diluted
|
52,201
|
|
|
50,505
|
|
|
51,882
|
|
|
50,747
|
|
|
|||||||||||||||
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net earnings
|
$
|
22,553
|
|
|
$
|
20,981
|
|
|
$
|
70,403
|
|
|
$
|
54,974
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
4,819
|
|
|
24,889
|
|
|
(11,729
|
)
|
|
10,943
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net investment hedge translation adjustments
|
(2,072
|
)
|
|
(3,733
|
)
|
|
3,376
|
|
|
(191
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Long-term intercompany loan translation adjustments
|
821
|
|
|
(2,321
|
)
|
|
543
|
|
|
(6,141
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Net gain (loss) recognized in other comprehensive loss
|
508
|
|
|
(167
|
)
|
|
402
|
|
|
(729
|
)
|
||||
Reclassification adjustment for losses (gains) included in net earnings
|
114
|
|
|
169
|
|
|
530
|
|
|
(174
|
)
|
||||
|
622
|
|
|
2
|
|
|
932
|
|
|
(903
|
)
|
||||
Pension and other post-retirement benefits:
|
|
|
|
|
|
|
|
||||||||
Net (loss) gain recognized in other comprehensive loss
|
—
|
|
|
(2
|
)
|
|
72
|
|
|
(2
|
)
|
||||
Actuarial gain amortization
|
(136
|
)
|
|
(161
|
)
|
|
(408
|
)
|
|
(484
|
)
|
||||
Prior service credit amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,035
|
)
|
||||
|
(136
|
)
|
|
(163
|
)
|
|
(336
|
)
|
|
(1,521
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), before tax
|
4,054
|
|
|
18,674
|
|
|
(7,214
|
)
|
|
2,187
|
|
||||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
821
|
|
|
1,313
|
|
|
(1,380
|
)
|
|
478
|
|
||||
Other comprehensive income (loss), net of tax
|
4,875
|
|
|
19,987
|
|
|
(8,594
|
)
|
|
2,665
|
|
||||
Comprehensive income
|
$
|
27,428
|
|
|
$
|
40,968
|
|
|
$
|
61,809
|
|
|
$
|
57,639
|
|
|
Nine months ended April 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net earnings
|
$
|
70,403
|
|
|
$
|
54,974
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
20,789
|
|
|
24,896
|
|
||
Stock-based compensation expense
|
7,445
|
|
|
6,247
|
|
||
Deferred income taxes
|
(2,707
|
)
|
|
3,169
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(931
|
)
|
|
4,679
|
|
||
Inventories
|
666
|
|
|
4,556
|
|
||
Prepaid expenses and other assets
|
(1,987
|
)
|
|
(734
|
)
|
||
Accounts payable and other liabilities
|
754
|
|
|
3,432
|
|
||
Income taxes
|
(3,270
|
)
|
|
(2,669
|
)
|
||
Net cash provided by operating activities
|
91,162
|
|
|
98,550
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(10,856
|
)
|
|
(7,468
|
)
|
||
Other
|
38
|
|
|
1,987
|
|
||
Net cash used in investing activities
|
(10,818
|
)
|
|
(5,481
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Payment of dividends
|
(31,362
|
)
|
|
(30,603
|
)
|
||
Proceeds from exercise of stock options
|
18,674
|
|
|
663
|
|
||
Purchases of treasury stock
|
—
|
|
|
(23,552
|
)
|
||
(Repayments) proceeds from borrowing on credit facilities
|
(60,415
|
)
|
|
28,819
|
|
||
Principal payments on debt
|
(16,371
|
)
|
|
(42,514
|
)
|
||
Debt issuance costs
|
—
|
|
|
(803
|
)
|
||
Income tax on equity-based compensation, and other
|
(512
|
)
|
|
(1,238
|
)
|
||
Net cash used in financing activities
|
(89,986
|
)
|
|
(69,228
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(2,509
|
)
|
|
3,263
|
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(12,151
|
)
|
|
27,104
|
|
||
Cash and cash equivalents, beginning of period
|
141,228
|
|
|
114,492
|
|
||
|
|
|
|
||||
Cash and cash equivalents, end of period
|
$
|
129,077
|
|
|
$
|
141,596
|
|
|
IDS
|
|
WPS
|
|
Total
|
||||||
Balance as of July 31, 2016
|
$
|
384,529
|
|
|
$
|
45,342
|
|
|
$
|
429,871
|
|
Translation adjustments
|
(4,298
|
)
|
|
362
|
|
|
(3,936
|
)
|
|||
Realignment of businesses between segments
|
2,490
|
|
|
(2,490
|
)
|
|
—
|
|
|||
Balance as of April 30, 2017
|
$
|
382,721
|
|
|
$
|
43,214
|
|
|
$
|
425,935
|
|
|
April 30, 2017
|
|
July 31, 2016
|
||||||||||||||||||||||||
|
Weighted
Average
Amortization
Period
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Weighted
Average
Amortization
Period
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
Amortized other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patents
|
5
|
|
$
|
12,337
|
|
|
$
|
(11,410
|
)
|
|
$
|
927
|
|
|
5
|
|
$
|
12,252
|
|
|
$
|
(11,063
|
)
|
|
$
|
1,189
|
|
Trademarks and other
|
5
|
|
14,328
|
|
|
(13,864
|
)
|
|
464
|
|
|
5
|
|
14,359
|
|
|
(13,709
|
)
|
|
650
|
|
||||||
Customer relationships
|
7
|
|
134,618
|
|
|
(104,496
|
)
|
|
30,122
|
|
|
7
|
|
135,795
|
|
|
(100,830
|
)
|
|
34,965
|
|
||||||
Non-compete agreements and other
|
4
|
|
9,091
|
|
|
(9,091
|
)
|
|
—
|
|
|
4
|
|
9,153
|
|
|
(9,142
|
)
|
|
11
|
|
||||||
Unamortized other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks
|
N/A
|
|
22,594
|
|
|
—
|
|
|
22,594
|
|
|
N/A
|
|
22,991
|
|
|
—
|
|
|
22,991
|
|
||||||
Total
|
|
|
$
|
192,968
|
|
|
$
|
(138,861
|
)
|
|
$
|
54,107
|
|
|
|
|
$
|
194,550
|
|
|
$
|
(134,744
|
)
|
|
$
|
59,806
|
|
|
Unrealized (loss) gain on cash flow hedges
|
|
Unamortized gain on post-retirement plans
|
|
Foreign currency translation adjustments
|
|
Accumulated other comprehensive loss
|
||||||||
Beginning balance, July 31, 2016
|
$
|
(857
|
)
|
|
$
|
2,236
|
|
|
$
|
(56,124
|
)
|
|
$
|
(54,745
|
)
|
Other comprehensive income (loss) before reclassification
|
563
|
|
|
72
|
|
|
(9,144
|
)
|
|
(8,509
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
323
|
|
|
(408
|
)
|
|
—
|
|
|
(85
|
)
|
||||
Ending balance, April 30, 2017
|
$
|
29
|
|
|
$
|
1,900
|
|
|
$
|
(65,268
|
)
|
|
$
|
(63,339
|
)
|
|
Unrealized gain (loss) on cash flow hedges
|
|
Unamortized gain on post-retirement plans
|
|
Foreign currency translation adjustments
|
|
Accumulated other comprehensive loss
|
||||||||
Beginning balance, July 31, 2015
|
$
|
9
|
|
|
$
|
3,438
|
|
|
$
|
(48,481
|
)
|
|
$
|
(45,034
|
)
|
Other comprehensive (loss) income before reclassification
|
(368
|
)
|
|
(2
|
)
|
|
4,634
|
|
|
4,264
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(106
|
)
|
|
(1,520
|
)
|
|
—
|
|
|
(1,626
|
)
|
||||
Ending balance, April 30, 2016
|
$
|
(465
|
)
|
|
$
|
1,916
|
|
|
$
|
(43,847
|
)
|
|
$
|
(42,396
|
)
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income tax benefit (expense) related to items of other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net investment hedge translation adjustments
|
$
|
752
|
|
|
$
|
1,456
|
|
|
$
|
(1,373
|
)
|
|
$
|
75
|
|
Cash flow hedges
|
90
|
|
|
(126
|
)
|
|
(46
|
)
|
|
428
|
|
||||
Pension and other post-retirement benefits
|
—
|
|
|
25
|
|
|
—
|
|
|
27
|
|
||||
Other income tax adjustments and currency translation
|
(21
|
)
|
|
(42
|
)
|
|
39
|
|
|
(52
|
)
|
||||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
$
|
821
|
|
|
$
|
1,313
|
|
|
$
|
(1,380
|
)
|
|
$
|
478
|
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator: (in thousands)
|
|
|
|
|
|
|
|
||||||||
Earnings (Numerator for basic and diluted Class A Nonvoting Common Share)
|
$
|
22,553
|
|
|
$
|
20,981
|
|
|
$
|
70,403
|
|
|
$
|
54,974
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Preferential dividends
|
—
|
|
|
—
|
|
|
(788
|
)
|
|
(783
|
)
|
||||
Preferential dividends on dilutive stock options
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(1
|
)
|
||||
Numerator for basic and diluted earnings per Class B Voting Common Share
|
$
|
22,553
|
|
|
$
|
20,981
|
|
|
$
|
69,601
|
|
|
$
|
54,190
|
|
Denominator: (in thousands)
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share for both Class A and Class B
|
51,227
|
|
|
50,251
|
|
|
50,972
|
|
|
50,602
|
|
||||
Plus: Effect of dilutive stock options and restricted stock units
|
974
|
|
|
254
|
|
|
910
|
|
|
145
|
|
||||
Denominator for diluted earnings per share for both Class A and Class B
|
52,201
|
|
|
50,505
|
|
|
51,882
|
|
|
50,747
|
|
||||
Net earnings per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.38
|
|
|
$
|
1.09
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
1.36
|
|
|
$
|
1.08
|
|
Net earnings per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.37
|
|
|
$
|
1.07
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
1.34
|
|
|
$
|
1.07
|
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sales to External Customers
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
196,880
|
|
|
$
|
201,482
|
|
|
$
|
589,106
|
|
|
$
|
592,282
|
|
Workplace Safety
|
79,047
|
|
|
85,334
|
|
|
234,998
|
|
|
246,237
|
|
||||
Total Company
|
$
|
275,927
|
|
|
$
|
286,816
|
|
|
$
|
824,104
|
|
|
$
|
838,519
|
|
Segment Profit
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
32,633
|
|
|
$
|
31,898
|
|
|
$
|
94,676
|
|
|
$
|
80,385
|
|
Workplace Safety
|
5,120
|
|
|
6,012
|
|
|
17,615
|
|
|
21,690
|
|
||||
Total Company
|
$
|
37,753
|
|
|
$
|
37,910
|
|
|
$
|
112,291
|
|
|
$
|
102,075
|
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total profit from reportable segments
|
$
|
37,753
|
|
|
$
|
37,910
|
|
|
$
|
112,291
|
|
|
$
|
102,075
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
||||||||
Administrative costs
|
(6,203
|
)
|
|
(7,126
|
)
|
|
(17,571
|
)
|
|
(17,600
|
)
|
||||
Investment and other income (expense)
|
453
|
|
|
721
|
|
|
560
|
|
|
(1,030
|
)
|
||||
Interest expense
|
(1,375
|
)
|
|
(1,838
|
)
|
|
(4,565
|
)
|
|
(6,119
|
)
|
||||
Earnings before income taxes
|
$
|
30,628
|
|
|
$
|
29,667
|
|
|
$
|
90,715
|
|
|
$
|
77,326
|
|
|
|
Nine months ended April 30,
|
||||||
Black-Scholes Option Valuation Assumptions
|
|
2017
|
|
2016
|
||||
Expected term (in years)
|
|
6.11
|
|
|
6.11
|
|
||
Expected volatility
|
|
29.55
|
%
|
|
29.95
|
%
|
||
Expected dividend yield
|
|
2.70
|
%
|
|
2.59
|
%
|
||
Risk-free interest rate
|
|
1.26
|
%
|
|
1.64
|
%
|
||
Weighted-average market value of underlying stock at grant date
|
|
$
|
35.14
|
|
|
$
|
20.02
|
|
Weighted-average exercise price
|
|
$
|
35.14
|
|
|
$
|
20.02
|
|
Weighted-average fair value of options granted during the period
|
|
$
|
7.56
|
|
|
$
|
4.58
|
|
Options
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
||||
Outstanding at July 31, 2016
|
|
3,714,039
|
|
$
|
27.34
|
|
|
|
|
|
||
New grants
|
|
378,939
|
|
35.14
|
|
|
|
|
|
|||
Exercised
|
|
(856,057)
|
|
27.68
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(304,823)
|
|
35.06
|
|
|
|
|
|
|||
Outstanding at April 30, 2017
|
|
2,932,098
|
|
$
|
27.44
|
|
|
6.1
|
|
$
|
34,919,577
|
|
Exercisable at April 30, 2017
|
|
1,882,244
|
|
$
|
28.37
|
|
|
4.8
|
|
$
|
20,664,011
|
|
Service-Based RSUs
|
|
Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|||
Outstanding at July 31, 2016
|
|
678,381
|
|
|
$
|
23.57
|
|
New grants
|
|
93,355
|
|
|
35.13
|
|
|
Vested
|
|
(118,000
|
)
|
|
22.89
|
|
|
Forfeited
|
|
(47,235
|
)
|
|
24.35
|
|
|
Outstanding at April 30, 2017
|
|
606,501
|
|
|
$
|
25.42
|
|
Performance-Based RSUs
|
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|||
Outstanding at July 31, 2016
|
|
—
|
|
|
$
|
—
|
|
New grants
|
|
58,206
|
|
|
32.03
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Outstanding at April 30, 2017
|
|
58,206
|
|
|
$
|
32.03
|
|
|
Inputs
Considered As
|
|
|
|
|
||||||||
|
Quoted Prices in Active Markets for Identical
Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Fair Values
|
|
Balance Sheet Classifications
|
||||||
April 30, 2017
|
|
|
|
|
|
|
|
||||||
Trading securities
|
$
|
13,795
|
|
|
$
|
—
|
|
|
$
|
13,795
|
|
|
Other assets
|
Foreign exchange contracts
|
—
|
|
|
900
|
|
|
900
|
|
|
Prepaid expenses and other current assets
|
|||
Total Assets
|
$
|
13,795
|
|
|
$
|
900
|
|
|
$
|
14,695
|
|
|
|
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
308
|
|
|
$
|
308
|
|
|
Other current liabilities
|
Total Liabilities
|
$
|
—
|
|
|
$
|
308
|
|
|
$
|
308
|
|
|
|
July 31, 2016
|
|
|
|
|
|
|
|
||||||
Trading securities
|
$
|
13,834
|
|
|
$
|
—
|
|
|
$
|
13,834
|
|
|
Other assets
|
Foreign exchange contracts
|
—
|
|
|
2,138
|
|
|
2,138
|
|
|
Prepaid expenses and other current assets
|
|||
Total Assets
|
$
|
13,834
|
|
|
$
|
2,138
|
|
|
$
|
15,972
|
|
|
|
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
738
|
|
|
$
|
738
|
|
|
Other current liabilities
|
Total Liabilities
|
$
|
—
|
|
|
$
|
738
|
|
|
$
|
738
|
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||||||
|
April 30, 2017
|
|
July 31, 2016
|
|
April 30, 2017
|
|
July 31, 2016
|
||||||||||||||||
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
419
|
|
|
Prepaid expenses and other current assets
|
|
$
|
265
|
|
|
Other current liabilities
|
|
$
|
276
|
|
|
Other current liabilities
|
|
$
|
670
|
|
Net investment hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated debt
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Long term obligations, less current maturities
|
|
81,225
|
|
|
Long term obligations, less current maturities
|
|
116,888
|
|
||||
Total derivatives designated as hedging instruments
|
|
|
$
|
419
|
|
|
|
|
$
|
265
|
|
|
|
|
$
|
81,501
|
|
|
|
|
$
|
117,558
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
481
|
|
|
Prepaid expenses and other current assets
|
|
$
|
1,873
|
|
|
Other current liabilities
|
|
$
|
32
|
|
|
Other current liabilities
|
|
$
|
68
|
|
Total derivatives not designated as hedging instruments
|
|
|
$
|
481
|
|
|
|
|
$
|
1,873
|
|
|
|
|
$
|
32
|
|
|
|
|
$
|
68
|
|
•
|
Enhancing our innovation development process and the speed to deliver high-value, innovative products that align with our target markets.
|
•
|
Driving operational excellence and providing our customers with the highest level of customer service.
|
•
|
Performing comprehensive product reviews to optimize our product offerings.
|
•
|
Expanding our digital presence with a heightened focus on mobile technologies.
|
•
|
Growing through focused sales and marketing efforts in selected vertical markets and strategic accounts.
|
•
|
Enhancing our global employee development process to attract and retain key talent.
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
% Sales
|
|
2016
|
|
% Sales
|
|
2017
|
|
% Sales
|
|
2016
|
|
% Sales
|
||||||||||||
Net Sales
|
$
|
275,927
|
|
|
|
|
$
|
286,816
|
|
|
|
|
$
|
824,104
|
|
|
|
|
$
|
838,519
|
|
|
|
||||
Gross Margin
|
139,909
|
|
|
50.7
|
%
|
|
145,443
|
|
|
50.7
|
%
|
|
414,425
|
|
|
50.3
|
%
|
|
417,684
|
|
|
49.8
|
%
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and Development
|
9,950
|
|
|
3.6
|
%
|
|
8,865
|
|
|
3.1
|
%
|
|
28,577
|
|
|
3.5
|
%
|
|
26,531
|
|
|
3.2
|
%
|
||||
Selling, General and Administrative
|
98,409
|
|
|
35.7
|
%
|
|
105,794
|
|
|
36.9
|
%
|
|
291,128
|
|
|
35.3
|
%
|
|
306,678
|
|
|
36.6
|
%
|
||||
Total operating expenses
|
108,359
|
|
|
39.3
|
%
|
|
114,659
|
|
|
40.0
|
%
|
|
319,705
|
|
|
38.8
|
%
|
|
333,209
|
|
|
39.7
|
%
|
||||
Operating Income
|
$
|
31,550
|
|
|
11.4
|
%
|
|
$
|
30,784
|
|
|
10.7
|
%
|
|
$
|
94,720
|
|
|
11.5
|
%
|
|
$
|
84,475
|
|
|
10.1
|
%
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||||||||||||||
(Dollars in thousands)
|
2017
|
|
% Sales
|
|
2016
|
|
% Sales
|
|
2017
|
|
% Sales
|
|
2016
|
|
% Sales
|
||||||||||||
Operating income
|
$
|
31,550
|
|
|
11.4
|
%
|
|
$
|
30,784
|
|
|
10.7
|
%
|
|
$
|
94,720
|
|
|
11.5
|
%
|
|
$
|
84,475
|
|
|
10.1
|
%
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment and other income (expense)
|
453
|
|
|
0.2
|
%
|
|
721
|
|
|
0.3
|
%
|
|
560
|
|
|
0.1
|
%
|
|
(1,030
|
)
|
|
(0.1
|
)%
|
||||
Interest expense
|
(1,375
|
)
|
|
(0.5
|
)%
|
|
(1,838
|
)
|
|
(0.6
|
)%
|
|
(4,565
|
)
|
|
(0.6
|
)%
|
|
(6,119
|
)
|
|
(0.7
|
)%
|
||||
Earnings before income tax
|
30,628
|
|
|
11.1
|
%
|
|
29,667
|
|
|
10.3
|
%
|
|
90,715
|
|
|
11.0
|
%
|
|
77,326
|
|
|
9.2
|
%
|
||||
Income tax expense
|
8,075
|
|
|
2.9
|
%
|
|
8,686
|
|
|
3.0
|
%
|
|
20,312
|
|
|
2.5
|
%
|
|
22,352
|
|
|
2.7
|
%
|
||||
Net earnings
|
$
|
22,553
|
|
|
8.2
|
%
|
|
$
|
20,981
|
|
|
7.3
|
%
|
|
$
|
70,403
|
|
|
8.5
|
%
|
|
$
|
54,974
|
|
|
6.6
|
%
|
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
SALES TO EXTERNAL CUSTOMERS
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
196,880
|
|
|
$
|
201,482
|
|
|
$
|
589,106
|
|
|
$
|
592,282
|
|
Workplace Safety
|
79,047
|
|
|
85,334
|
|
|
234,998
|
|
|
246,237
|
|
||||
Total
|
$
|
275,927
|
|
|
$
|
286,816
|
|
|
$
|
824,104
|
|
|
$
|
838,519
|
|
SALES GROWTH INFORMATION
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
|
|
|
|
|
|
|
||||||||
Organic
|
(0.8
|
)%
|
|
(0.9
|
)%
|
|
0.6
|
%
|
|
(0.8
|
)%
|
||||
Currency
|
(1.5
|
)%
|
|
(1.1
|
)%
|
|
(1.1
|
)%
|
|
(3.7
|
)%
|
||||
Total
|
(2.3
|
)%
|
|
(2.0
|
)%
|
|
(0.5
|
)%
|
|
(4.5
|
)%
|
||||
Workplace Safety
|
|
|
|
|
|
|
|
||||||||
Organic
|
(4.6
|
)%
|
|
1.7
|
%
|
|
(2.5
|
)%
|
|
(0.4
|
)%
|
||||
Currency
|
(2.9
|
)%
|
|
(0.9
|
)%
|
|
(2.1
|
)%
|
|
(6.0
|
)%
|
||||
Total
|
(7.5
|
)%
|
|
0.8
|
%
|
|
(4.6
|
)%
|
|
(6.4
|
)%
|
||||
Total Company
|
|
|
|
|
|
|
|
||||||||
Organic
|
(1.9
|
)%
|
|
(0.1
|
)%
|
|
(0.3
|
)%
|
|
(0.7
|
)%
|
||||
Currency
|
(1.9
|
)%
|
|
(1.1
|
)%
|
|
(1.4
|
)%
|
|
(4.3
|
)%
|
||||
Total
|
(3.8
|
)%
|
|
(1.2
|
)%
|
|
(1.7
|
)%
|
|
(5.0
|
)%
|
||||
SEGMENT PROFIT
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
32,633
|
|
|
$
|
31,898
|
|
|
$
|
94,676
|
|
|
$
|
80,385
|
|
Workplace Safety
|
5,120
|
|
|
6,012
|
|
|
17,615
|
|
|
21,690
|
|
||||
Total
|
$
|
37,753
|
|
|
$
|
37,910
|
|
|
$
|
112,291
|
|
|
$
|
102,075
|
|
SEGMENT PROFIT AS A PERCENT OF SALES
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
16.6
|
%
|
|
15.8
|
%
|
|
16.1
|
%
|
|
13.6
|
%
|
||||
Workplace Safety
|
6.5
|
%
|
|
7.0
|
%
|
|
7.5
|
%
|
|
8.8
|
%
|
||||
Total
|
13.7
|
%
|
|
13.2
|
%
|
|
13.6
|
%
|
|
12.2
|
%
|
|
|||||||||||||||
|
Three months ended April 30,
|
|
Nine months ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total profit from reportable segments
|
$
|
37,753
|
|
|
$
|
37,910
|
|
|
$
|
112,291
|
|
|
$
|
102,075
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
||||||||
Administrative costs
|
(6,203
|
)
|
|
(7,126
|
)
|
|
(17,571
|
)
|
|
(17,600
|
)
|
||||
Investment and other income (expense)
|
453
|
|
|
721
|
|
|
560
|
|
|
(1,030
|
)
|
||||
Interest expense
|
(1,375
|
)
|
|
(1,838
|
)
|
|
(4,565
|
)
|
|
(6,119
|
)
|
||||
Earnings before income taxes
|
$
|
30,628
|
|
|
$
|
29,667
|
|
|
$
|
90,715
|
|
|
$
|
77,326
|
|
|
Nine months ended April 30,
|
||||||
(Dollars in thousands)
|
2017
|
|
2016
|
||||
Net cash flow provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
91,162
|
|
|
$
|
98,550
|
|
Investing activities
|
(10,818
|
)
|
|
(5,481
|
)
|
||
Financing activities
|
(89,986
|
)
|
|
(69,228
|
)
|
||
Effect of exchange rate changes on cash
|
(2,509
|
)
|
|
3,263
|
|
||
Net (decrease) increase in cash and cash equivalents
|
$
|
(12,151
|
)
|
|
$
|
27,104
|
|
•
|
Brady's ability to compete effectively or to successfully execute our strategy
|
•
|
Brady's ability to develop technologically advanced products that meet customer demands
|
•
|
Difficulties in protecting our websites, networks, and systems against security breaches
|
•
|
Deterioration or instability in the global economy and financial markets
|
•
|
Decreased demand for the Company's products
|
•
|
Brady's ability to retain large customers
|
•
|
Risks associated with the loss of key employees
|
•
|
Changes in tax legislation and tax rates
|
•
|
Brady's ability to execute facility consolidations and maintain acceptable operational service metrics
|
•
|
Extensive regulations by U.S. and non-U.S. governmental and self regulatory entities
|
•
|
Litigation, including product liability claims
|
•
|
Divestitures and contingent liabilities from divestitures
|
•
|
Brady's ability to properly identify, integrate, and grow acquired companies
|
•
|
Foreign currency fluctuations
|
•
|
Potential write-offs of Brady's substantial intangible assets
|
•
|
Differing interests of voting and non-voting shareholders
|
•
|
Brady's ability to meet certain financial covenants required by our debt agreements.
|
•
|
Numerous other matters of national, regional and global scale, including 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 the Form 10-K filed with the SEC on September 15, 2016.
|
(a)
|
Exhibits
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of J. Michael Nauman
|
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Aaron J. Pearce
|
|
|
32.1
|
Section 1350 Certification of J. Michael Nauman
|
|
|
32.2
|
Section 1350 Certification of Aaron J. Pearce
|
|
|
101
|
Interactive Data File
|
|
|
|
|
|
|
BRADY CORPORATION
|
|
|
|
|
|||
Date: May 25, 2017
|
|
|
|
|
|
/s/ J. MICHAEL NAUMAN
|
|
|
|
|
|
|
J. Michael Nauman
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: May 25, 2017
|
|
|
|
|
|
/s/ AARON J. PEARCE
|
|
|
|
|
|
|
Aaron J. Pearce
|
|
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
(Principal Financial Officer)
|
1 Year Brady Chart |
1 Month Brady Chart |
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