brc-20230131

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, 2023


☐			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 53223

(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 (§232.405 of this chapter) 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, a 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 22, 2023, there were 46,121,200 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			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 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, 2023		July 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	108,210	$	114,069
Accounts receivable, net of allowance for credit losses of $8,097 and $7,355, respectively	186,852		183,233
Inventories	195,167		190,023
Prepaid expenses and other current assets	13,986		10,743
Total current assets	504,215		498,068
Property, plant and equipment—net	140,784		139,511
Goodwill	590,776		586,832
Other intangible assets	67,513		74,028
Deferred income taxes	15,826		15,881
Operating lease assets	31,411		31,293
Other assets	21,748		21,719
Total	$	1,372,273	$	1,367,332
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	75,876	$	81,116
Accrued compensation and benefits	53,213		76,764
Taxes, other than income taxes	12,799		12,539
Accrued income taxes	6,794		8,294
Current operating lease liabilities	15,402		15,003
Other current liabilities	65,765		61,458
Total current liabilities	229,849		255,174
Long-term debt	77,281		95,000
Long-term operating lease liabilities	17,822		19,143
Other liabilities	79,917		86,717
Total liabilities	404,869		456,034
Stockholders’ equity:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 46,115,760 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	348,513		345,266
Retained earnings	947,051		892,417
Treasury stock—5,145,727 and 4,890,779 shares, respectively, of Class A nonvoting common stock, at cost	(233,338)		(217,856)
Accumulated other comprehensive loss	(95,370)		(109,077)
Total stockholders’ equity	967,404		911,298
Total	$	1,372,273	$	1,367,332

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,
	2023		2022		2023		2022
Net sales	$	326,249	$	318,055	$	648,818	$	639,530
Cost of goods sold	169,809		168,693		337,114		335,180
Gross margin	156,440		149,362		311,704		304,350
Operating expenses:
Research and development	15,377		13,965		29,310		27,872
Selling, general and administrative	92,282		92,525		182,227		189,271
Total operating expenses	107,659		106,490		211,537		217,143
Operating income	48,781		42,872		100,167		87,207
Other income (expense):
Investment and other income (expense)	968		(578)		811		(35)
Interest expense	(1,239)		(252)		(2,133)		(434)
Income before income taxes	48,510		42,042		98,845		86,738
Income tax expense	10,524		8,227		21,418		17,877
Net income	$	37,986	$	33,815	$	77,427	$	68,861
Net income per Class A Nonvoting Common Share:

SEC Form 10-Q filed by Brady Corporation