BRC - Earnings call transcript Q4 2021

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Operator

Thank you for standing by and welcome to the Q4 2021 Brady Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Ms. Officer. Accounting Chief Thornton, Ann

You may begin.

Ann Thornton

located morning Thank Corporation for to at are Brady welcome XXXX you. this fourth call slides Good fiscal The quarter the call. website and earnings our on morning's www.bradycorp.com/investors. conference

forward-looking just will words will, X. note factors the It's Brady. news and number information and may, statement. may may comments believe, that could release SEC the please on Words note this identifying information. expected which teleconference fiscal are we impact Please about call, forecast our our and factors forward-looking without various note remarks consent a this morning such of to We XX-K of that results. begin Brady's morning. subject copyrighted make and in is Slide Also, Risk uncertainties a Corporation which risk this few by prepared examples Brady during as this XXXX important not that anticipate in expect, with forward-looking were is rebroadcast filed noted be Form significantly was to

and be it this call broadcasting will We on the recording Internet.

call Nauman. As to Chief Q&A participation in the constitute President will consent Brady's being Michael your recorded. now Executive turn session Officer, to and I'll such, your the over

Michael Nauman

retail capping fight pandemic and the our you, the for results, Brady important In shareholders. how years. environment source WPS morning, in role hygienic to business, that the that was provide to care establishments, very off navigate every we workers, joining and by employees customers their We provided of logistics team distancing our their economic against needs a food tirelessly throughout our the fulfill essential schools returning we both could played needed products able to industry share a work. social this and Thank or solve first processing aid Ann. more earnings companies, I'm customers helping X.X challenging manufacture, ensure virtually global for deliver fourth last help thank This to other proud our they companies, this and identification a environment in financial responders, morning support record for deliver health us to released XXXX today. Good missions. you and all quarter to our of year. to and Brady many worked fiscal per safety

in cases are our behind primary is and goals our emerged countries new and products clear us many demand still our many of and floor-marking, in demands other pandemic throughout high we products laboratories industry as variants the used COVID business, world. safety meet safe this health that ensuring place. that identification and environment, care keeping plus year help globe, to as track Solutions and put the patients up It's not and services identify that wavering Identification of safety all never and customers. have yet rising to employees many which are to certain products world and chain were in we companies materials, deliver abrupt freight, then the a our safe. To and the signs a the paper-based and make and rapidly we the around in caused safer rapid was Brady's In this disruptions a samples products into many dealing mildly, by while were team with resulted from supply Our we shutdowns keep also through it our the inflation provided wages. and stepped resin, evolving challenging navigated such other reopenings help as the areas

cost increases permanent. is Some many of but these see cost certainly increases may we temporary these be almost of

maintain to profit can we healthy margin. see, gross continue you As a

to increases. we never input offsetting targeted automate up price same our cost gains quarter our our and push are sustainable with last facilities was versus points down basis most margin fact, because XXX increases, drive combined In gross year which, the on efficiency profit when slowed

was As a do place. XXXX make challenging but part I part the and said, will our we safer fiscal year to it's a world Brady continue to did

again also earnings XX% robust year robust year business we when This share a a sales. capping from where operating in up at flow also very non-GAAP finishing $XX.X quarter, business quarter generated strong per XX.X% XX.X%. X.X% tough Earnings revenues We our million QX on Safety due quarter were basis cash product up our and this to had Safety activities were Identification as and growth Workplace a cash our a was primarily in decline from peak revenue jumping The off activities once exceeded quarter financial enter were this point strong fiscal Workplace provide was with and business. very positive of results of fourth a $XXX decline COVID-related Solutions momentum. operating million. and off 'XX as strong was our we Overall, comparables experienced of in with very last

marketing our look we a sales drive manufacturer, upgrading and priorities one our investments ahead, long-term enhancing our number our We're products. websites. the fiscal to organic become definitely XXXX. sales to to growth, drive grow efficient into to value. top in we're growth acquisitions priority and to sales, We're shareholder Profitable financial line As is recent improving capital capabilities. future. deploy drive organic continue our in developing machinery marketing we're more investing necessary our and making integrate now new We're are capital To our the

Europe. improving Eastern our and markets in presence particularly expanding future more talent. and geographically to sales in-line increasing into don't increasing in investing our seeing the wherewithal our competitors our or downturn. this scale heavily force our from upgrading digital we're been who Solutions products our we're R&D, strong areas and ourselves that we've expanding underserved Southeast instance, fruits We're during and also in We're have R&D For the financial a websites spend of growth by business, as with invest distance and marketing in and as such new continuing labor Asia to ID potential rate launching

and sales continue combined XXXX product Our generate to web new our sales, confidence presence and on marketing stronger strong common quickly market our business using Workplace beyond. to platform by intelligence ID and to our investments strong sold online capitalizing in new our new our Safety In pivot in lineup, fiscal growth will by much we're percentage to adapt further. Solutions business, gives organic us where with high-value sales We're the the an and to WPS. changing effort of product launches new dynamics. And our even development our we're pace we're in proprietary increase accelerate the globe salespeople customers investment of products to in around market adding increasing increasing product

customers to working customer our our is serving on well extremely base focus aggressively and Our increase off. paying

some believe of other another soon we that also end growth sales see We organic improve. in up our will leg markets as

depressed For These and sell we remained instance, markets IDS have. have yet mini entertainment like our have identifying in markets recovered niche the in workplace in aimed industrial our quite venues. identification not business, market people and at core

focused In businesses our have has most. U.S. these product addition, the as businesses remained micro in been offering depressed on the impacted

we in So see when believe these which markets another bounce increase they will, organic sales. should we back

SG&A And margins. becoming manufacturing our we're cost protect manner costs our structure sales in also We're investing profit and SG&A down more can expense. working that fund streamline still in efficient reduce our on driving we're we're can to so focused to growth we growth, manufacturer. we organic initiatives while to a gross While strong in automating effort sustainable whatever a an sales

we acquisitions to growth of that the in our integrating on sales more addition three process a focus organic organization, the In driving quarter. completed efficient becoming and we're also last

our it and Nordic track which relates the out initiative is trace into to ID markets. end growing of building help faster set solution As to Code, we're an us important move acquisitions and

and use that workflow of adoption technology, to the will readers us provide products barcode in RFID create that settings. with ID's result a track chain the are RFID trend of and The our in fully Industry and industrial help onshoring barcode of their within reduce a technology strong existing X.X scanning our quickly software, of printers come visibility. vulnerabilities complementary trace growing additions we are industrial and portfolio the emerging cases technology by to With ID applications driven of and supply integrated will better Nordic and value from Nordic scanning of code markets expand the as

footprint. will help efforts are space. once the opportunities with there synergy about R&D combined in develop trace industrial solutions natural excited very how additional global global We're Brady's So us combined with acquisitions and track these

that year. growth of confident expanded in also ID completed acquisition to coming and and have an plus that consumables in in positioned desktop our we well-known we range our R&D, sales beyond. businesses. continued our We us printing cash our Solutions XXXX. authorized card issuance high-resolution, our product are devices amount requirements. features shareholders. such with card continuing focus through encode the on space quarters organic card see offerings. fiscal the and made in identification our investments our and They while people capabilities announced ID and and through look annual in secure smart powder our accelerate pandemic increase repurchase dry on-demand combination It's balance consecutive is sheet efforts available return for R&D product the lacked with in to acquisitions Yesterday, as funds of results and we natural with an a further cards. for and sales today, fiscal meet a give to well last image future strong to ID Workplace we've result we globally the XXXX additional Magicard and increase the it's security full both of full XXth and Previously, to Brady quarter. dividend a a all strong for as acquisitions, ID specialize printers built ID, shares fill ability I'm Nordic local a rigid helps technology have are in business customer out Magicard, for There products card that revenue the Safety synergies growth in color they differentiated flow announced solid of and is as significant future Code to the base will as recently printers absolutely for gap. rock guidance Magicard portfolio And of growing innovated marketing we the Magicard and

over be shareholders. our for call Aaron? the specific Aaron Workplace to our year we and on I'll share customers, provide As our to XXXX confident another businesses. to employees deliver guidance, financial Brady. fiscal all-time you Solutions expect can from Safety for commentary and, then per earnings ability in now return I'll record little Identification to course, about give of our our a Overall, see our turn I'm our results to detail results, more

Aaron James Pearce

related in the as legal such well million was income Sales arrive which and I'll quarter. at while costs, the quarter pretax fair $X.XX, compared to an value. only of Michael. The when EPS pretax The removal accounting inventories tax at quarter Good this everyone. nonrecurring acquisition-related compared an of $X.XX as the increase truly of recording increase XX.X% earnings XX% EPS acquisition fees to increased start were when to from and on as a compared arrive were removal was is GAAP non-GAAP financial investment. related fees million only review $XX.X diluted an to you, at XX.X% just last XX% fees, finished $XXX.X impact Slide removal of of was which charge an one removal $XX.X fourth nonrecurring the to increase GAAP year. of X. morning, financial to Thank million the I the year. the number were Non-GAAP at same last of QX adjustment of acquisitions pretax was of the EPS last impairment to costs method QX equity adjustments the mentioned, charge an year. to non-GAAP tax non-GAAP that income which of

strong another quarter the $XX.X $XX.X year. cash by provided Cash last million flow We in quarter also activities of XX.X% fourth than operating million higher very of was which was cash of the generated generation. had operating

So a quarter. very strong was financially, QX

Slide to find sales you'll quarterly our Moving trends. X, number

finished organic of currency foreign of from robust increase consisted up of to an growth in in a Our increase from XX.X%, Solutions ID plus an X.X% improve our and XX% XX.X% Organic sales increase QX. of sales and sales acquisitions business continued X.X%. translation

fourth Our Workplace last benefited in from Safety product COVID-related sales quarter. business year's strong

comparables, tough these a sales in of organic of XX.X%. result saw a we As WPS decline

improved our remain we future our we've bode and of have products, the optimistic all the our However, business increased of well as base, presence WPS which for new proprietary quite customer about digital future. many

trending. to Slide you'll Turning gross our X, profit number see margin

in XX.X% this points compared Our basis XXX year. finishing to gross profit at XX.X% fourth quarter by the margin last quarter, increased of

figures. approximately purchase than activities margin result quarter would over recent been efficiency the If our many XX volumes facilities. points you direct of charges profit sales was improvement increased our gross reported driving have accounting GAAP manufacturing been year last exclude the basis from a fourth that higher throughout we've acquisitions, the and The our of

expect, recent quarter quarter fourth to compared X, would of services. SG&A are the But year. materials, you'll automating fill raw $XX.X freight we enable can, was roles. in find you as we difficult of trending. both seeing a pressures As and we're well our was any efficiencies incentive-based inflationary pace impacted wherever SG&A will the compensation. down in seeing our wage actions through We're increase and this gross We maintain $XX.X and targeted to as in it inflationary also driving SG&A last Last strong by price the our us million Slide year, finding margin On manufacturing we're result compensation as inflation range. open the a believe significantly. we're million these acquisitions to forces we're incentive-based increases. at and an expense putting profit approximate offset heavily certain was pandemic, that in number XX%

our In as whereas sales, quarter. running incentive XX.X% incentive-based the quarter at normalized And fact, SG&A a was of year, year, fourth levels. percent in was is last of comp comp this more this negative,

as trend quarter costs have percent If declining would general of and SG&A mentioned increasing investments below to would you'd marketing as SG&A sales of XX% have sales growth. we're earlier, exclude been a even the of the accelerate in sales nonrecurring I sales that continued this which

number investments Slide trending to on of in the Moving X, find you'll our and Research Development.

million in came Approximately of invested This acquisitions. our three fourth R&D R&D. expense million quarter, $XX.X $X.X we quarter from

ensuring trends. to to help have long-term while We we committed $XX.X most in sales invest acquisitions. adjusting and this $XX.X illustrates for investments get product income growth number to opportunities XX% This increasing These that year last to costs get are increase quarter. critical pretax increased earnings at Slide only and spent protect to earnings new million completed million these on the truly the to Non-GAAP R&D X recently profit out to in from R&D. the non-GAAP Again, of our investments, gross we're continue are nonrecurring we're propel items time, XX% related pretax pretax to our our dollar Brady's a the with sales margins. X development automation was same direct number every our efficiency our in income of gains. very on sustainable trends. pretax earnings and strong after-tax illustrates Slide combined result and growth, our ongoing focus EPS

operating year's summary strong. mentioned, this in continues I EPS you'll net and operating of excess diluted from this flow million income cash fourth and $X.XX increase XX%. non-GAAP of strong both million generation quarter, On in cash of non-GAAP compared our $X.XX number into a once conversion again flow very generated The of Slide find with flow cash quarter $XX.X cash As was income. flow activities last well cash of to GAAP quite be XX, net operating an was quarter. free $XX to was which We

ID Slide Now and using a of of XX, having in our XX, of sheet. see the cash you'll acquisitions were turn impact cash Code, position if Even Magicard, cash you that $XXX.X million. Nordic balance the the million July after generation still to number for is on can $XXX we strong net on

sheet returning in additional shareholders. including a position execute to investing funds in value-enhancing R&D, completing to Our puts acquisitions strong balance fantastic and additional us activities, our

capital consistent. to approach allocation is Our

fund investments improvements, new cash in sales IT development, economic the resources, and CapEx First, enhancing and cycle. organic opportunities generating sales funding our efficiency we our CapEx further product We're throughout to fully capability to use automate facilities.

investments absolutely we're dividend as the consecutive where our announced we XXth And in funding it the cash And for our ROI focus second, these sense increasing will just keep investments either After dividends. year. acquisitions night, deploy overview on makes annual We where investments organic form we the and positive. increased returning for of Overall, our and we last funding are we we to per provides with finished we full X.X% disciplined earnings or a share. have results record opportunities. XXXX. XX cash believe our Slide of where an for the dividends, synergistic strong manner year July sales ended number buybacks in all-time then XX, that and financial shareholders

of fiscal what fiscal for record fourth equates most that fiscal you positive in expense per XX.X% fiscal higher Of WPS XX.X% experienced July we significantly amortization to in results with $X.XX growth $X.XX recent in fiscal sales in of increase course, from after-tax a and pandemic diluted per in XXXX acquisitions, COVID-XX is with our improve of a share let's we both share three throughout our the would these rate the to revenues Included $X.XX running we of momentum the Slide by $X.XX 'XX $X amortization increasing which impressive. completed than sales of share. in million. organic amortization fiscal posting XXXX. is on number from XXXX of XX.X% earnings our acquisitions if upcoming the EPS expense in positive IDS strongest EPS $XX.X range which outlook Plus, million the move to This pandemic. makes fourth is increases we're and that, to to this our year to exiting EPS the were XX. to XXXX. forecasting approximately a of delta a for per amortization which momentum. exclude share. about of quarter implies revenue significantly range increase XX%. $X.XX XX% we of our expect from that quarter earnings XX, all much impact year Plus, should as fiscal then prior which provide ending $X.X our 'XX range about from an the which our QX about acquisitions more to result impacted After-tax to was EPS somewhere guidance at the year quarter our We're excluding per is GAAP GAAP into And as share, move With million earnings fiscal per XXXX. to

our the growth also the we that and a we EPS organic Workplace the this Safety majority look strong expect year our half driven by come As will year experience phasing we product last business expect fiscal quarter year. year, of second in of upcoming year the prior of in in throughout the sales decline sales at due fiscal first comparables, the to to COVID-related

We'll of continued is is, anticipating of sales We our will continue XX, July expenses. contingent upon in efficiency nonrevenue-generating growth. year as are XX, XXXX is strategies the to necessary excess well also to advance sales and to based we on growth the for sales make We'll search both total XXXX being completed foreign organic continue This recently of course, and gains which while XX% guidance sales as drive on acquisitions rates that exchange the inclusive for of acquisitions. organic macroeconomic investments growth currency to continue expansion. tight drive July ending sustainable as from

allocation, do changes strategy. As we capital for any in foresee our not capital major allocation

the and right with opportunistic fiscal and while for mentioned price business. keep the acquisitions fit is our We XXXX for just clear. dividend our we'll strategic increase is organic buybacks investing in be I where will looking

shareholder Q&A cover have call drive sheet long-term use and provide a I'll to now some comments the session. Michael? divisional back tool results to a we'll before We to to over balance our Michael it the closing as turn and value. strong

Michael Nauman

third previous very Identification and from focus of organic fourth quarter business. the Slide of strong XX cost the of to X.X% XX%, point to a sales percentage side, Asia not the year. X.X% of for led throughout the organic segment of in This quarter at translation. number of in our of Thank Regionally, XX.X%, in against were on basis fourth growth quarter a were growth compared sales organic our And financial sequential efficiencies This finishing organic profit more of fourth quarter IDS fourth growth in you, XX sales strong, of IDS XX% this the continuing sales to increase as outlines acquisition Europe, increased only the sales a quarter Organic of Asian fourth quarter. last on last quarter sales of our but currency versus over is our last row XX%. year. compared $XXX with when XX% million. several strong in foreign despite increase growth is sales Aaron. Solutions results In excess also year comprised growth than quarters. were the up division an lockdowns

caused growth driving handling job Our did lockdown. the the European team sales periodic an excellent by while interruptions

In and sales growth organic of bounce our in XX%. trends quarter are pleased with health IDS the very We in sales had organic approximately general, all also the care approximately XX% throughout sales Americas. in the We saw positive. geographies lines back increased were product in growth our line product we where and

focus XX.X% $XX.X and activities are with sales of testament to to a profitability this the of quarter. in they keeping Solutions Segment from last development profit to our improved is the percentage been as million team in constantly fourth IDS of work improvement was structure of profitable combined entire sales sales last as conditions, becoming organization. never million hard continued investments, growth. quarter. year efficient continue IDS profit a marketing more work investing year's and on XX.X% We've absolutely sales This geographic and $XX.X increased to segment efficiency lean investments. sales selected with stronger These sacrificing paying and and We personnel, expansion. sales-generating activities compared market research cost driving on while off in

can on significant wide previous wire precise It's Benchtop both as future introductions steady models. [indiscernible]. intuitive, can In a identification, auto-calibrating Industrial in to and priority growth. a This of of construction, we variety identification. solid as safety and continued handle Label identification, product applications is enhancement panel high and the print mix commitment and small quarter, Printer. Our our it With frame a electronics, printer new volume to fourth including top barcodes and R&D over drive lab metal the the of and iXXXX a stream labeling with remains high identification facility launching it labels industries,

our We applications. focus on continue niche

we and store and quarter, withstanding ToughStripe Tape range allows applications. floor while engineer foot materials very Floor other This easy marking need. facilities. for really products well and applications also This the bringing and demonstrate beverage cold launched niche vehicle and mark our solutions as other application for extremely refrigerated products want ability high-performance this where example challenging of a This easy Marking aggressive and cold refrigerator, areas. designed just applications used is and durable storage Brady to is The removal and wide Brady's cold another for for Brady We're surfaces traffic shine. and of These freezers specifically within performance tape throughout can ideal traffic. food be printers freezers of that as innovating adhesive heavy customers tape warehouses to

and and we what business our positive These of effective. definitely ID Nordic we're for future customers innovative accelerate Solutions well customer excited that be further growth. in to our rest revenue our and cost the and Code, I'm our trends, more problems solutions our is of improving new R&D our Our launch pipeline discipline, We're service, combined investing efficient ID and doing bode continue help with Solutions solve acquisitions and about of how future our ID cost will strong in structure. streamlining Magicard strong business. our our the

to foreign currency decline which summary declined Moving and year's driven sales of was Workplace decline fourth comparables growth a quarter. challenging Slide WPS of financial of Safety primarily organic XX.X% sales consisted XX, last performance. number X.X% you'll This our in of X.X%. by find

of this sales quarter sales. pre-pandemic the in product Last quarter the the XXXX. which COVID-related peak year, fourth million quarter were were WPS fiscal was Our experienced $XX.X sales of fourth above

countries double-digit well. European have Europe quarter, our shutdowns quite the perform fourth still WPS and products, of business COVID-related much was periodic to exclude of France, the throughout you shown quarter. U.K., impact Western sales would our the other business this growth If in Germany able Despite in

Our as an our purchase who customer team with well. pleased customers for products team of providing job are customers and Overall, to COVID-related these we're it's core same customers done came product, how done our base. perform these very in the to future. safety initially has outstanding newly those and with has are a increasing acquired nice And identification performing job expected

Our similar performed business Australian business. European to the

pandemic During quarter. the grew height the in XX% sales year, our Australian last fourth nearly organic year's of business last

COVID-related in the decline well. was long-term well to products a offerings, sales North and our base as into non-COVID we comparables, organic them this challenging in increased above they our turn substantially to customers. we these Americas we as the repeat retain decline with offset by fully Given were sales enhance to pleased of opportunities new quarter's quarter, volumes find continue in as our America customer our not we product sale last digital levels. were declined this Overall, The and quarter well pre-pandemic to Australian this thus and approach leading customers marketing that within sales ensure

quarter, on aimed continues team launched offerings. Safety to Workplace of we Our focus at And new new spaces. a number product products our this core

proprietary For traffic. cables strong be existing leverages sensitive which over with instance, areas that this also launched must design quarter, to our we speed a bump protect patented auto

monitoring the with series customers at safety temperature of food to We of contamination. also a and identification hospitality segregation, food and launched our products avoidance cross and preparation industries help whole aimed

safety This result COVID-related in million more $X to to directly reduction Safety launch compared profit quarter this efficient sales. million and up WPS was was a customers $X.X year's related Workplace come the the of last volumes quickly as reduced reduction sales become quarter. in and effective. fourth segment continues with product Our improve new in teams that to and profit segment innovative our product help ideas

As a year's was of sales, profit segment last percentage consistent with X.X%.

hard Our new in WPS team address the to they're their new what to customers campaigns to within need. members They're working reach modifying to their they industries. entirely entirely identify customers businesses portfolio. are market underperforming listening And

business Our solid we very quarter fiscal pre-pandemic it for of elevated of laid the through levels. XXXX. to has move a ahead sales, pandemic. half foundation expect see momentum COVID-related were Workplace first fiscal recovery from this above Even the revenues And as difficult we XXXX. comparables Safety our We've fourth without throughout some this positive build product

is long-term against fight safety workplace positions which the that I'm continues core for to Our growth. of play Brady the healthy well business proud played role COVID-XX. and us profitable in

Safety Workplace products Identification and Our Solutions companies distancing. help with social

identification the and continued enable Throughout us were around and is positive level our financial schools workers and growth all This not Our by safety stemming momentum. efficiencies safely to keep pandemic over. in we the will not and products used strong in of certainly from an pandemic and the Brady frontline this products the position. over help investment financial are reopen impact enviable is that invested Pandemic, this it's globe.

Our cash flow up. was

Our earnings are up.

in strong. balance after net is We're Our a even extremely sheet three cash last position acquisitions quarter. making

inorganic I'm shareholders resources returning tight and ability Their that, I'd has future. a further expenses. please work Brady's you investing very all and feet while continue to performed never will our solid balance on period. by would funds to of all compromising listeners? the to the being sales-generating Operator, uncertainty, CapEx, R&D, strong, Again, our their proud And our enhancing instructions we problems our with provide foundation think how to put in both capability to to organic while invest this like built challenging long With and nonrevenue-generating start growth to team We opportunities. and term in intend throughout deal for Q&A. quickly on sheet solve

Operator

America. first of question George Staphos Instructions] Bank [Operator of from Our comes

is line open. Your

Cashen Keeler

is Cashen on This for Keeler the sitting actually today. Hi, Congratulations George everyone. in quarter.

Michael Nauman

you. Thank

Cashen Keeler

color question, that in what trends terms seeing customers, in in first your terms the you of and with to to increases Brady? categories able first here my provide you fiscal in saying various what the relatedly, end discussions would guess, speak of they're be they guess, I your would can 'XX key And any early from incremental I you're in budget for on buy product quarter? markets

Michael Nauman

Sure.

prepared our we're products our that job Overall, years, capabilities able able about them most really we're are remarks sure the markets. challenges get paper our make in it these in that have as and to appears the knowing that for very incredibly that and there utilized the with very, going But our pandemic without are and from a last out. make and deploy stronger far team efficient that products in as of resources That they by the automating more several player with of We're industries, sure watching you products our to resins but feel very being was to we good many and of us to strong good as as very them. well materials the as we know, logistics, mightily coming, to to job one get hard forward. economy -- governor the their those They as chips markets more. now regards Asia our being for we, customers our of processes carefully. to to to are from We the a indicated help very I become can of not issues addition effective. made directly the being worked part proud are far able And said, efforts to to being our right to and it's of internalize to bottleneck product resources one customers absolutely largest sets in imported everything struggling doing challenged be feel are

So, they're markets obviously pressures are that real across question they're but are and there in facing as specifically good the board all cost logistics well. to answer challenges facing a

Cashen Keeler

on you that -- had said your last from million Great, $XX 'XX. you guess revenue call that combined in recently the that's you expect I in And then businesses helpful. acquired fiscal

So guess would be that if growth [ph] in to 'XX. I captures all assuming of X% X% around revenue that, Freddie

that guess, come expect still how and volume? assumption? So to first, the of then And much you I disaggregate is from this could pricing you

Aaron James Pearce

in we to expect still million increase I'm X% obviously, as be higher bit so from -- fourth I a in It's we good -- it think going a it's excited we fiscal in the them XXXX, feel million -- feel super $XX of forward. to than going sales I'm the sorry, a about quarter acquisitions about expect comes X% certainly -- the revenue growth. very we and to sorry, that -- more we're of $XX closed in that acquisitions third still And percent. than we Well, very these

Michael Nauman

You costs a pressures, way, did and very to have lines up some being inflationary Chip and any our of in particularly cost mention after and inflation active in our But little that are more we problematic what is it, between haven't really involved going strong we've a the a been I've about is are proactive seen about lag. addressing a those, time people sure volume And there those that. answer experienced on gap. for being prices that is but seeing about is able There's well. increases There making long the question very most dynamics experienced getting prices time no definite a lot pricing about that are call, question to very we're this always why have always resin proactive closing understand the them. general I'll there. and making some glad you It's is some as by there lag price been in seen increasing in But inflation. we're I've and be increases. your since increase customers team sure

during because wages. inflation automation much put efforts, for position particularly other a big the continual our addition, downturn is the us area have in better In

in do tell efforts, And so around been little pulled to has a off and extraordinary our it increase but there shortages helped the the I is that team you, the more that automation has the to job. us downturn employees enough have what globe to a during despite have prices challenging they stellar

us. So we dual prices definitely also our up; volume our gone up but and we're it's bang go seeing our expect for a have prices

Cashen Keeler

Great, thanks.

Michael Nauman

you. Thank

Operator

Thank you.

from Our Steve comes next Ferazani of Sidoti. question

is open. line Your

Steve Ferazani

on really call, helpful. been Michael, the it's color Thanks for Aaron. Good the morning, all

Michael Nauman

Steve. morning, Good

Steve Ferazani

to wanted just I very put ask to full a be trying a tricky little to -- out guidance. it's I time year know

that to rates and how workplace on Delta So think sort infection hospital side? of guidance, uptick I'm general just into the ID your how plays just about thinking concerns the you're particularly about with trying

Michael Nauman

going medical I'd Yes. in to like any be through say not to quickly. way. we're am that this I

be the an make error. But at take flu if So my look year, Spanish understanding variant I the any XXXX from it's comment every flu. we a may a that's that we experience

my this we to long with time. ways So flu. long, are nonmedical be found with that deal Obviously, to we the for dealing going it's personal a belief

in worse We to and a second find it, I variants flu will, first the But more of because also world, than ways as this. the understand and the with year deal Spanish more XXXX was effectively as of mutations. year

well lot countries facilities shutdown and that a at We impact. having are look and in as are being having a customers that, seeing an We're take you is are of and situation locations now again, Australia. that know the in that

a that was from The take what challenging. you -- news about of would last good coming answer reflecting out that extremely be that, and I believe bumpy. when look our I So it is this is, believe we personally results we're year at will

and to reflective, industries incredible are proven people. products need and incredibly to be in enough, critical to our And well And the we have our I an function say pride need many perform Our to doing They can't -- well. and perform job. those and function people industries. this nimble, resilient,

is had either we'll had on of going sufficiently caveat to did to quite challenges everything that this that vaccination tell effectively at not see you been. you, or But a lack I'm big will seeing going overcome the agree. sufficiently, challenges, variants ability working confident I as to we're least would able it to vaccinate from That the choose be I to at is vaccinate point. variations as said, So very we're the see absolutely, globe and

If year you the than at a challenging be it and expected surprised. point told have than we me through I financially is COVID be or been at be. would right We're where COVID I to to financially more this now we'd ago, expected stronger

take both helps, Hope the place Steve. can at same So time. that

Steve Ferazani

Fair enough.

be the IDS, an thinking in QX outlier? you QX. and in it Should margins segments, are we about or number segment bit the how the two like QX different moving the do of Or forward? thinking think on a you terms looked the excluding about as us to In that onetime margins of about higher how want a lot

Aaron James Pearce

Yes.

about level out did vast anticipate we level I if somewhere would those, Steve. actually think what income that's course, these of segment you future. way, profit XX% thinking acquisition And been that land exclude IDS, called acquisitions. in because would in neighborhood actually, of The the IDS you're course, in correct operating about charges have it majority, and we or the of of the they're we

Steve Ferazani

in at on grow this were And And are that flip Okay. of you that comfortable you thinking then term X.X%-ish with which the a how can think long you're from that COVID? of range is about it side Do here? you're you type Safety, business Is with? margin the before you level? sort Workplace the back year where level of

Aaron James Pearce

mean at good us. certainly enough comfortable X.X%, I mean, for not it's we're I right? Well, never

though. And to very volumes lot to dependent, it bottom drops pushing Safety nice a Workplace volume line. So we're much as constantly improve. very have margins. go They up, is profit the

as our working will obviously, bottom really which So team to with top we're percent. the Workplace line and drive the line the a line Safety drive, bottom

Michael Nauman

their that is great needs by I same And quarter encouraged that had customers quarter while job the a Steve, you growing. we growth. have next at able base the done but And we that reiterate, digital that what their incredibly business to know out R&D, we're sets, with COVID if of products by already years or to and what great differentiating challenge going COVID do got standard because materials team business with customers. marketplace, they they could and have do with I've the really with the of is the all take we is product responding something we've to their say. In we am requests faster time response the told rates a not in And capabilities, do to strengthening another

support comparable out, in pointed wonderful more COVID. that the products, will That were quarter as well remains the Aaron able very company and COVID during good growth, something grow to thrilled to of world to even financially and because positioned work impact repeat, importantly, did am with said, but do that they we directly way. want next our heart of challenge the a a are I both I they So the margins

Steve Ferazani

Thanks, responses. Michael. I the Thanks, appreciate Aaron.

Michael Nauman

Thank you.

Operator

Thank you.

comes McGinn Fargo. of next Wells Our from question Michael

Your line is open.

Michael McGinn

other be on the that to you. of levels, you the Understanding to heard maintain uptick margin little wanted margin I you year-over-year. XX% cost but you price Thank gross XXX back conservatism a point basis to would right, confidence said on hand, gross I go conversation. bit if also have

of the conservatism all margin? can just being on hold the optimism versus square you cost gross price So, XX%

Michael Nauman

at go ways instantly, world. people unless look miss to going that age figure China, we will most tell the It come even to the would much brilliance shortages to work some adults seeing that and to efficient pop That's you to world, years is least organization. we fact or become a specifically. it was actually that and can was place my has know, next the five such and working populations direct now around the pandemic population we strength. harder mentioned point, to populations four be would for this Aaron, really foresaw great in on that You China have That out questions, But decrease as related about of to in more continue years. aging at this labor the need become continue ago or some commentary And the the down. out knowing not true aging the are of as based XX much people there to, work automated, can probably demographics the in it's result. more a I I an as

else cost-effective is also that. So able to with we we wouldn't for can't the get that We automate get and saw we who people, cost those overcoming we as not them, a regard knew need but because in to be is The way. anticipated in eliminate positive much to more it everything people that. you margins for

So some inflationary we've concerns. got you bet;

inflation. during that concerns absolute have We

with You cannot manner. increases up keep price perfect matched in a

value is the But there with good have of do. proposition we effective we're in really can but do a addition, some more strong So proprietary products lag lag. everything efficient keep and becoming that we doing in job that

the warehousing we're can really systems And was statement going the everything deploying me see asked, I'm of effort. is our effort? our when you new a answer to years few production, said I excited. to change in service I this a get actually And stop to never. from we're to customer that Some ago, I accelerating the the

Michael McGinn

sales you're APAC layering and or is, there's are you And appreciate over I of brothers sales great. implementing like area. distribution investing my with tiering then, a guess relations taking here question kind product be color sticking there have or that domestically. mentioned Any of force the you kind on strategy And if the top Okay, resources I what seems headcount, same theme; supply force the indirect/direct sales color. would into and you home pretty turf there of that the well-defined Are model? you

Michael Nauman

in long Asia, for Yes. Well, and are strong mentioned we've particularly in time. we And accelerating. do Southeast a brand strong first Asia, been in reputation we a Asia have we of all,

We India well example. an in do take let's So as extremely India.

society Our is complex a complex the And and is products there are well a real very respected. logistics. issue challenge. very India logistical

that that India. to off in us; need That's closer resources customers for And for and off so so even paid is one more our has is going example. strategy we to us pay a

and company, also companies. industry, uniqueness the as And technology. retention not that very you have compared compared other are go of rate other that to from in global generation high those one make is valued of any generation We our customers to a of all products we to unique the

make unique So, a is true I make first say that the issue our we would exciting products customers. to difference

those the know customers differentiation cost true as is to very is customers. we with plays. second forward The strong third where the for And our -- reputation is are throughout Asia, very, looking deploying pure resources that opposed we us helps

space label a naming Other the we in believe great what they're without lot very that's they're is focused a don't very, for, That we're an paper set what of competitors, plan know, to do value. not where in and but label that's adds at. in area you on, not general, they're good what As be example. any, space is the in Brady paper well up that's

we our there, area and looking resources migrate belief Southeast have Brady we as very great their mentioned, the well. in as applications, So that customers we'll that at more type do very, actually particular, in we Asia develop both

Good for question. question, that Michael. thank So, you

Michael McGinn

repo I $XXX million All not. the nearly cash think free one kind flow that execute the to in. market, you're could me, million The today financial if of you your $X year. of more at open in But of company, if another right. or matches your authorization, it I this sneak Last were one maybe net looking balance, profile going to throw coincidence cash for off

confidence, line can So and you the timetable just the capital of about talk the sight for priorities? see you your allocation

Michael Nauman

very tell and that every reasons know, are well I powder of we a you buyer. we've available. As dip opportunities. a we for hit variety ability We time that won't at right program want that not always you disconnect but for looking are the

it's quite of amount a look a the have acquisitions those will be model. But to in we be part up, value. happy our think prepared is We come where disconnect in buybacks at market we and isn't capital I'm key R&D them. now. quite, at clear. also we look of stock any But of market, acquisitions like we what we be say, our the to there do with if to I intrinsic is So for definitely If that. see advantage And look are value. opportunities with that to have take have aligned support look of we want of and And we ability of we that going the we take isn't, intrinsic the full do our you versus take to opportunities. our can when We use our for did at I in the growth. we and potential where do the it the -- best and lot advantage want it. price that amount disconnect see appropriate. of to advantage understanding an the ability powder right math total a infrastructure, want at if We repeat, this We you

thank you. So,

Michael McGinn

the Appreciate time.

Michael Nauman

Absolutely. Thank you.

Operator

Northcoast Housum comes Thank from Instructions] you. next Keith question Research. Our [Operator of

open. Your line is

Keith Housum

your expectation Or that that Michael, perhaps look pressures in starting guys. you accelerate? and here you're of even you're kind kind going the I horizon to perhaps over there? and pressures past year. on inflationary about to stabilize have see continue seen Is that things these ball is morning, to there the anything some are inflationary seeing want your the says Good of guys crystal talk you of

Michael Nauman

I'm clear You're child the on disclosure, a small look it. your crystal me, answering broke me issues. all how be do best. I Keith. my see And my questions are I And ball to Full today question when ball at crystal my literally I I a but was will killing but try to logistical want will asking best. answering I'm but We

For next inflation. cause are XX those the They issues to X a are months logistical of cause a inflation. absolutely easily, primary very definite of

they people return, home know don't much are labor are they also work. way, we that the don't get to pattern seeing you U.S., We when financial just not from think if compensation in -- by have get gain the shortages models people because their change and they and at staying as their

I us. change, something what have not we will by some caused did. did companies a companies shortage at more decisions I was there's like a many The off believe shortage thing off the for their belief that of we we layoffs do. right is never people. think have made to of didn't come that partly it's of XX% many that has the think, But time paid experienced as did back. So workforce, that, many part laid but Brady massive people. We and

XX, creating XX, five XX, may for XX, coming of have level you working seven shortage. years is you're more one not back. you're kept to but That If

Philippines, India, anyway. The Mexico, the actual with is countries aging out the is world like workforce exceptions, a other around level few

going that. see so some And to think we're from pressures I

answer but does is industrial your going advantage inflationary And but see companies I with add control margin to two you more yes, question, in continue to ability this. mainly positioned the We're multiple of anticipate to control we're -- just to Brady not to world. as I in-sourcing well products, us. believe a that pressures, the future that So us throughout absolutely our to levels know, technological

to me that powerful to mean strong few don't a lag our that want and of and could real value products, the as We that And because got when that with they quickly they believe increases. you therefore, are is pass about And thing a as part on sets I said, able, are people is, cost commodities by is customers. approaches large, we That here And coming now not there automating things understanding able possible effectively equation. and kid are opportunity that never we just in our how are to absolutely that. super really I have to and ago years ideas automate. strong. and I the are third

reason, with strong get work is, value prices place. to no how about feet have the like You And that drag people, to having how matter the take our process bad is they to up. some for no matter strange their situation

So It I I ball. helps Keith crystal disclosure. full hope hope with is a - that

Keith Housum

you one. that hear I on No,

guys and in experiencing say, when raw are In about on terms earlier you increases you raise of the ability your materials talked the prices. mix, -- disconnect to

was of raise in still prices terms disconnect points the quarters. impact versus yes, your in or at margin basis, What but look do a down you you guys that quarter you on up you think the probably increases ability gross If were seeing? historical terms you're versus your and gross XXX so price other in were the margins, your to year-over-year basis of

Michael Nauman

significant to most, it have covered we to lines, the twice some You We product lags And have we commoditized line. I a and saw do. we go areas do where back product literally list lag we if in a materials saw lag, significant we we there, in really not not make is line not know It our product control, of and major have but had whereas the we but bigger better. that product guess case line we seen what, of Though answer. more some the and I'm do by complex is many all, increases. other twice going have spikes

give Let's you space care. other is health

literally a in. have contracts. dragging built We by It just process longer. foot make a contracts little is There's it required take the that

materials customer; complex. product the it set, So depends a the literally end so on the it's and bit

want wouldn't Keith. I now, for out to right try come and out So, you number to break a

Keith Housum

But absolute there is though. impact, an

Michael Nauman

I I denying don't then to specific want thought parse at that. number I I you and Unequivocal. just Absolutely. asked I'm a that to didn't not try all. -- -- to don't want for

Keith Housum

did. I No,

Michael Nauman

understanding. appreciate you. your I Thank

Keith Housum

And challenged have quantify can little what at perhaps help the understand guess look impact the you for XX% or context The many is over I absolutely of being only Europe the some years to ago you of WPS last of turnaround this saw I or for more up versus a you terms closures mean year's And I bit have is what It sounds you my more, so. two down really Because X% context I WPS forget COVID the if enthusiasm. in XX a in after I the years us segment. question business? on of you. been would WPS you segment in hear give like years past the here. skeptics my has I your actually believe that enthusiasts

Michael Nauman

it. turning your understand a -- real it's and I look, is So, good -- skepticism

You it. years heard we're for working on me say

The can we're if ever comments, feel very think efficiently, sales, we I very, that couldn't off better than about, said I ever don't good we biggest back in And Keith, before. are is I the now true you and here do check off I part say my eye that really ago, go the If that lop and I for feel but I years and lap COVID-related growing. you look that instance. five is do something

what's the we're declining fact, quarter where at in to opposite. I said COVID declining you eye lid to look less. and had In at I can look after We're They fact, and really an And less. are declining yet. that quarter we're my to I the yet We're have anomaly less. in say, declining under in the look mind take truly growing. sales off. we are

positive about And very, still so space. It's very a that. challenging

You importantly that are right got that new know internalizing even and we've responsiveness, production direction more years but adding and I and cost that our had. technology to know We're we ever become the to player. in going valuable of we've a for understand it to their that stunned to how products strong it's moving technological responsiveness that effect. ago, I both is all as we're best in four pull team that and really how something And three me because there, was cost for while along the took organization selling of a was me like organization at is get a

rest products. that in in unique we're more we unrelated believe business. bench And in are their space. you that is space. I in in developing our Even and that not and Brady's biggest and tell a But we're industry is that the that the of do feel So that's proprietary along truly advantage distributor products necessarily isn't make differentiation selling. a proprietary areas like do a big money the most not industry. feel players I'm using Keith, challenging to going I value-added dragging I effectively new, of do like

are of much the and we more have more down in to We value-added significantly becoming opposed pass-through so become a strong to going reseller a as reseller targets even future.

to say But think opposed the And COVID do as and I off I say we it, Absolutely. right the the think to of Do we're have I So that momentum? team? can growing I right Yes. have I closing sales. seeing lop we can -- gap we're I get are reducing? the

are we give Keith, where here But take, can't make up to years what can today. make Now, even decline. going before it to today. prognosis up where will I are I of not how I but long I'm for to I you from tell going are grow that got am a And is you we XX%? we

but honest -- gave hope you very answer. I So a I question, straightforward

Keith Housum

of You guess, did the did. the I to I per what that, but… Europe happened of And WPS quarter? The on do know impact was you over closures terms give the answer exact hear they in part I of that have didn't kind in numbers the quarter,

Michael Nauman

off They why in has It of at great adding you're And with And COVID, kilometer that's We're challenges you all. we been the super time, has as able The I those did, speculate been U.K., restrictions but some particularly COVID-related at France, not struggling. And the second under Belgium. isn't across they the periods round country restrictions not have to Belgium, and at the that facilities sales at we country. we I Every the did. every time. look been but and Germany, a the U.K. is large board. for seeing five some the I think mean, of to to they've large bigger, has isn't. just were same and us, mean on that them. with even it can that's run happening.

those think getting in I shutdowns, yes. Europe, sales getting would level have Speculating, grown of the COVID we're without more from are not we So that? shutdowns. Well, though next you're challenges. you're some even we having right, the Do

Keith Housum

All Okay. time I appreciate right, Michael. good as And luck, many already. too asked always. I've your

Michael Nauman

Keith. Hey, thank you, Appreciate time. your

Operator

you. Thank

Michael next McGinn Wells question of comes Our from Fargo.

Your line is open.

Michael McGinn

thank that just reflective but of push looks for it the do and the higher? here. acquisition rate three there early some you was updated I post Hi, your about you number that reporting had at improvements looked any that's inclusive more that EBITDA number would of charges. some run follow-up. how And I then, to like discrete you're wanted housecleaning the Is of profit an earnings? XX.X% deck

Aaron James Pearce

revenue. with then looking million And run [ph] which of rate EBITDA mentioned. at the percent is that just about you FY $XX still same 'XX We're exact

this for three changed about as are estimates fiscal the the at $XX have well. million summation this They not deals. No revenue change. Our of for year, 'XX,

Michael Nauman

love we on expected We doing they're we opportunity. I'll add It's a their they We're they're always organizations to But little the what how companies very, about meeting those well expectations. right the do they are and teams, color. performing. me. sets very people right team. positive and those offer the and people, the a them for for pleased product very the well Do with have but great excitement as combination see

Michael McGinn

the of Okay. some would then ones above are -- the in like materially top push end little skill? self-help a positive you of overall, need that now line And help guidance, XX% than inflections that big health on mentioned faster are some bit verticals greater the or that care. market What you number growing

Michael Nauman

is us. Well, is manufacturing We'd certainly to well. other spaces than massive lift general would markets don't are there areas those our every I sets in code Obviously, and still have it we've There careful. areas reasonably be we But are the some that love of are is the better. those is they areas do to because to oversell got and more to opportunity That behind. in areas one Brady lag smaller. areas. boat businesses SIC that do other even want people well. doing biggest and larger perform

have can how in most But it have is challenge. work in people exclusively some at home home. will credentials argue, home, at still because not identification not or be at come going is So that office back identification We a working will. they're work end, of space when to that anything people kind to will the

expert going you think can getting Disney but they better; prices. some tell Disney I to results be are if at you And and so look Events from uptick on I'm of that, there. there's raise that not also the we all an

question, had I very an see limited, our open, price are industrial equation their is are price as very very an is -- applications I volume versus still I concerts overall, that how earlier limited. like events industries think do underlying festivals earlier I are versus volume? the have that much to would conferences for because such not did limited, So,

even think in it's more hope we opportunity So there's more we hopefully focusing and that that govern a than it There up. than to there. care recovered COVID govern recovered it's Right factors absolute that's now, on and come as are not do that. we there grow like. think to up lot that to stronger of we'd industry. is capacity has but it will of locations, people continue we two many our the in are but shortage been back expect health going And to was Medical situation an hospitals that

seemed there providers if providers think go backwards to space. a of in were again, lot for understandable more reasons I available once have that but

colleges in areas, term space. those so see high number others, at that refurbish up know that bolstering etcetera, to because challenge. in the those thought of A more in we'll but as interesting etcetera, type plants, travelers think, summer back. are going takes I spaces, they prices a of going I And challenges do used their But for aerospace will take a I say a It's they all experience, gas from And I the business with both going and and that's opportunities And time. my big of of know of is no think are optimistic of COVID it oil I and industry. about in down. there's are not industry long this. airlines questions traffic some the their short because that the then very I have would looking that question longer. statements the mean, was world. nurses, term, hospitals lot be I other definitely

demand tourism and And have so -- pent-up up. business the school good the as for longer now and fall good to as people the aren't no travelers as go to fall nearly nearly not the the with is be they're going as the anticipating work to back

aerospace So, going I business, our commercial probably originally the is But as them. as long that, thought. great side, you obviously, remain some particularly numbers challenged from get think they about to still of for can

Michael McGinn

I the appreciate time. Great.

Michael Nauman

Thank you. you, hope that Michael. Thank I helps.

Operator

closing the call Michael this return further you. will over time. Thank showing to remarks. now for questions I back no Nauman any I'm at

Michael Nauman

I cash but controlling for out what this on trends. a that am came what generation. certainly prioritizing and few and growth We're of our Operator, and for best you to very the global your relentless interesting can time, global call. We're economy seeing we're coronavirus don't Have we Thank investments pandemic. comments guidance on on the I year combined for earnings We day. you holds fiscal stay may so we're in I in back confident you. great chain supply global or our generate well much. targeted price with shareholders. well experiencing excited strong we're the Brady's we're inflationary do same pressures about concluding very, thank a I in the future know At the for to the confident is by the like living safe strong We We're market a around value appreciate with would focus 'XX positioned future focusing know all with can us. and it, times. just We're our just Brady pressures increases. customers record share automation our year. these Please momentum. on to Valerie. leave posted with offset morning. and this next we morning. both disconnect significant half positioned you another our finished I'd per be Thank capitalize history still and efficiencies and challenges inflationary time We future.

Operator

participating. conclude gentlemen, and conference. you all Thank today's Ladies Thank for does this you.

all day. great You may disconnect. a Have

Brady (BRC) 2 Sep 212021 Q4 Earnings call transcript