BRC - Earnings call transcript Q1 2022

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Operator

00:02 Thank you for standing by, and welcome to the Q1 twenty twenty two Brady Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. [Operator Instructions] As a reminder, today's conference call is being recorded. 00:21 I would now like to turn the conference to your host, Ms. Thornton. Ann begin. may you Ma'am,

Ann Thornton

on of Thank you. this forecast Corporation without a conference to information. one forward-looking Brady our are statement. and The We significantly Corporation www.bradycorp.com/investors. will It's begin to on as release Good Words twenty twenty twenty morning in Also, and slide news during expect, XX:XX copyrighted could our factors note located Please call impact twenty fiscal risk with morning's earnings various filed for information note welcome website XX-K, that Risk may was two at identifying and XX:XX and in make this just may not slides subject words consent will, XX:XX the morning to by is which fiscal this XX:XX our Form the note three. first important call. remarks and we examples comments teleconference Brady's September. expected believe, in anticipate such few are prepared SEC uncertainties rebroadcast that may, that noted number call a about quarter the is factors Brady results. of this forward-looking Brady. please which are be forward-looking

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

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

Michael Nauman

growth associated in environment results, the which impacts morning, quite quarter, COVID-XX grew share our you first financial twenty challenging released strong of percent. twenty for logistical our a proud the by XX:XX XX:XX inflation by four sales our two sales performed deliver very and This healthy Ann. was Thank joining us seven to and you, challenges, team able we environment and caused I'm how and today. Brady this This morning virus we all we ongoing economic shareholders. Good Even both and thank point quarter customers the per navigate challenging well. profitability. again and earnings this showed sixteen of percent the once and team the for by increased fiscal

the amortization, nine you one was percent. up significantly If of our more then impact even EPS point exclude at

In solid earnings addition revenue sheet. to the and we growth, a solid have rock balance

sales up And segment to profit four impact four six point profit the one levels twenty to more current was In challenging job This business, ninety year, quarter historic of percent. Identification in signage the The sales sale of point business, dollars have down almost WPS five fiscal a would we WPS in segment by our providing million of buybacks, of XX:XX exceeded is net growth percent. growth our were position million we more equipment and continue way point dividends with veined, protective a at very excellent This form did sales our returned reduction twenty these levels. the look those eight challenging included and are exclusively than of still In dollars. thirty than two period to to point amortization seven an and resulting team expense, in of WPS of results, social and shareholders thus our cash of that robust of show which excellent compare post percent our to sales to twenty, sales customers. percent. twenty Last you products twenty best since personal the would comparables. we has pre-COVID which COVID-related result business if pre-COVID distance our Solutions The products, our comparables. XX:XX been exclude

and continues Solution a Identification is strong franchise business perform well. very Our to extremely

are to logistics. sales we priorities our this growth serving and challenging during customers we first ahead, period are extremely of As ensure drive well our organic look

necessary pricing levels. is of the cost it and offset and margin to actions to to return take the environment gross Second, impacts pre-pandemic inflationary this

to deploy from ID recent R&D, our to these acquisitions. integrate drive our long-term In investments XX:XX by acquisitions. we're shareholder fully finally, business, value. to recent the to realize our Solutions is R&D incremental priorities increasing capital And our the including embracing in Third, benefits necessary our

margins strong automation the new momentum our drive efficiencies in XX:XX us period sold positive ID continuing by advertising we rising websites positive sales confidence factories customers, dynamics. improving proprietary force in on twenty high launching while our markets. and growth product intentionally our product certainly adapt We healthy implementing organic and to been the long-term throughout and and our heavily who development ourselves from by as sales this focus of have geographically Solutions resulted products new online we're but investments been generate and labor by products growth. we've future business, investing the drive Safety our have that enhancements investments within impact our we've twenty our rate also distribution business profit digital progress and presence our effort and our are Our increasing investments quickly are R&D. invest to our And Our will an confident wherewithal costs, drive fiscal XX:XX talent to our market with benefits XX:XX which profit an We're and our investments product line-up, in the nor reduced we scale into new driving Workplace the historical help the increased have launches Workplace competitors, capitalizing significant two in critical. R&D right push expanding neither spends driving XX:XX in to we're stronger more centers, in of on These We've a year. In continue lagged in and seeing in our percentage that increasing revenues changing to a scarcity and upgrading to margins. pace as at we're that in to financial our which And XX:XX will marketing all to in will from We're our drive intelligence new in segment effort this is very business marked common headcount expanding businesses making our using fiscal underserved much an is automation increased sales revenues. profit will distance the increase sales give changes to certain in strong market to web beyond. quarter, of headed I'm and value Safety direction. platform result continuous

for down organization, expense a in working cost streamline becoming and efficient automating sales efficient fund to quarters. a us wherever in also our more focused investing on actively move into growth we'll relates track we that organic faster we're to on initiatives in Much building three I'm sales, confident increased manufacturer sales are see revenue quarter XX:XX growing the still our we SG&A and can includes driving to build come. completed integrating our trace you focus industrial that growth fourth we're more out that future comprehensive While can. necessary solution the the we R&D acquisitions will organic of last and the while growth by continue and investments a years end SG&A to to accelerate also In see structure, markets which out set. XX:XX driving addition becoming help solution growth we're we to so sales year, our that

that our in up environment, our in challenging we nor these including basis. to in rising margin to we through the gross little levels freight inflationary Aaron experienced wages an many the lines our to have on look pressures around the air XX:XX increased and enviable inflationary charges the course, cost our our still in freight our of customers, the two and in Brady been across to our rest deliver seventy more the I'll up financial Asia. Even that gross closer we're with seeing quarter percent. was product securing But about return year. challenges to temporary ability margin will call and additional year-over-year costs. chips and basis where to fourth margin challenges XX:XX to in provide it down the margins percent resulting enough more originates historical of costs, of As gross logistical putting had such, as this which we've commentary profit from forty give Workplace to increases we've with eight used certain Even products these general, to we've fifty to gross specific different we're products, our these turn been return well-positioned this fiscal Solutions near I'm to on but chain last of than now we is large term, categories, shortages, percent, price Then across our employees, are enough selected fully businesses. materials a and being resulted confident cost eight Identification beyond. two line shareholders. and catch fast with right points our In year point results. results keep increases to point past. pressures, believe rapidly as over However, neither of We increasing our in raw of supply to with has many in with Aaron? XX:XX Safety I'll forty supply detail was our freight try overcoming have

Aaron James Pearce

you, increase financial joining slide percent twenty this Sales on Michael. quarter a were an the when completed thank increased eight and I'll compared number five million of which increase in dollars, year. dollars. five Thank end XX:XX last point was review this was pre-tax point Good point GAAP earnings to of and acquisitions for hundred same you three last seven quarter sixteen expense XX:XX first morning. Impacting the four amortization the the from one quarter morning, forty the start everyone, year us earnings at percent to in million significant and three.

percent dollars increased the would eight earnings over nine point point from to four of one GAAP point zero year's by quarter. eleven was increase seven five point amortization quarter EPS exclude zero to And million diluted sixty you to last EPS last you of our would presented, then dollars. in compared was zero dollars, percent by seventy an year. percent If amortization three forty sixty six exclude expense which dollars point all this point XX:XX seven first two increased expense, first periods quarter pre-tax then point have if have

was inflationary our find will just quarterly the logistical the Moving QX financially, another strong pressures XX:XX trends. four, even sales challenges and mentioned. that you number Michael to So, quarter with slide

point QX. eight three from Our sixteen and percent a our Organic seven thirteen of point sales sales percent. zero an ID increase Solutions consisted an increase percent, of organic two of translation business seven percent growth in from in of currency point was increase growth percent, foreign XX:XX robust sales acquisitions

Our thus business from Safety sales COVID-related Workplace creating last benefited quarter year's tough comparables. first strong in product

XX:XX sales of see organic twenty As compare Identification this be division, twelve result six see our slide saw see two And the above percent is levels before that Safety you'll just is would to twenty, against point our a these a Solutions developed pre-pandemic strong number we of you pandemic strong we we've levels. one momentum a sales for six performance levels period but trending. the hit. the This point tough not if Turning full XX:XX that up also year, you'll WPS sales been our percent over fifteen pre-pandemic that and fiscal levels. eight sales decline the total against If which and pre-pandemic compare above percent of are investments first gross point quarter pre-pandemic result of only by you'll period, the a margin profit pre-pandemic Workplace sales to in comparables, quarter. us we the last percent direct five, making that XX:XX is

to forty in two compared forty quarter point this last first eight point percent Our gross nine quarter margin profit percent of eight the year. was

point million year. six, last quarter it number finding driving we're manufacturing in slide we're eighty efficiencies compared expense putting SG&A we're and SG&A you we pressures can, to through price of ninety quarter roles. targeted quarter expense by three pace six and just fill first in we're was three quarter inflationary of that of of was find open I On seven heavily a the automating the wherever million seeing strong the one four difficult percent point XX:XX impacted mentioned. sales, with a we're mentioned, was Michael million acquisitions first zero dollars at percent was three this quarter increases. year And from As But completed percent trending. first was will end thirty the of dollars Amortization as of to expense SG&A our dollars near full of the the point XX:XX dollars last compared quarter one a year in point the in along year. amortization million this point SG&A expense this year. to increase eight and last first quarter last thirty in

right year. in the prior line with effectively, So,

last However, our XX:XX if five is amortization this the current Slide then prior have you point twenty twenty from and to of research percent nine number both exclude investments eight in percent year from SG&A the year development. trending of expense would year. point sales and year, of nine declined the sales seven

as gross GAAP We're to continue illustrates dollars R&D after-tax earnings comprehensive out increased materials, our within scanners, amortization if point XX:XX Slide in barcode million quality critical industrial long-term a our propel percent, and investments R&D are This to point increasing increased in see help eight scanners. number incremental and Pre-tax margins. expense our to pre-tax quarter, platform profit sales and trends. for from that EPS eleven illustrates five eight income percent periods. trace XX:XX building encompasses nine protect income opportunities three all exclude we trends. you specifically a growth our R&D Slide nine number invested These in Brady's core our basis we track and on RFID and high investments thirteen R&D. printers, our point committed business and

dollars dollars summary point our point free operating cash our and And have four if was one ten, As generation. I four point after-tax amortization, seven stronger EPS quarter sixty dollars was sixteen would quarter. XX:XX cash exclude compared year's flow this cash impact million by to of seven EPS our last generated you point million GAAP an of slide point sixty nine a twenty first quarter, flow zero in On seven from zero you'll of increase We number mentioned, the increased dollars even percent. find five percent. of two point activities this an

cash flow inventories was strong, expenditures. invested as as but both in intentionally underlying we well Our capital

facility and future. two purchased our outlay manufacturing were purchases million we help of ROI leased facilities secure cash quarter, a This previously dollars. six seven for positive of point total XX:XX will Both long-term these

we've availability continued critical risk or also we quarter, This as materials. trying to prioritizing are intentionally customer to optimize product service increase levels and we inventories been inventory and of running out

by in on Our million in additional after XX:XX returning the we puts execute to increased to last and including thirty still shareholders us strong returning position of inventories thirty value-enhancing you'll CapEx Even thirty has you heightened additional million that dollars. if had acquisitions, in a Over than R&D, balance more six one, eleven, we've impact see position the ninety having dollars of our XX:XX dollars. Brady's Now than our to dividends were sheet. October cash our can historically fantastic levels, months, the million activities, turn form and generation a more buybacks, to approximately intentionally shareholders. balance investing strong completing on and funds in net our cash inventory sheet increasing slide

efficiency and approach organic to us facilities. we allocation changed sales automate new and First, further generating cash enhancing has expenditures CapEx in economic cycle. IT fully fund capability has well. investing the development, our opportunities sales and Our XX:XX includes not our use to capital resources, This serving to improvements, been product capital throughout

believe are pretty cash twelve acquisitions it our will to Slide the that will in focus July funding puts now and six price. buybacks organic synergistic for Brady's where absolutely cash versus our form sense of shareholders a where increased XX:XX the when our for XX:XX investments annual us investments twenty which strong ending our second, We've in companies. funding we guidance for makes XX:XX or dividends. of one, After returning we twenty fully number we two. summarizes we thirty these a see and for positive. dividends dividends, the either ROI we manner trading on years, And in disciplined where also intrinsic of keep then We -- value elite group consecutive investments view year thirty a our we opportunities disconnect have in deploy

guidance diluted two, is and quarter, QX. efficiency increased share the well we our seasonally per benefits our twelve below look of quarter pricing we year, twenty automation the many throughout of challenges persist history see our has dollars of generally about a dollars year that increased full fiscal our to GAAP XX:XX in per the unchanged also after-tax second full six EPS point one to GAAP throughout point of our XX:XX this fiscal three our share. eleven point in delta guidance we per two point quarter as fiscal per approximately from dollars. fiscal excluding term at from share earnings three dollars and lowest per ninety share. as rest that and of second earnings expect move Our quarter projects. increases of an share five Included On amortization, point in a diluted guidance, remains earnings million dollars about year range million thirty ten five our dollars point twenty to After-tax to at of about twelve short per dollars As a zero range XX:XX dollars a benefits As we amortization unchanged at actions increase which from year is to in twenty the expense profit million gross is our amortization five second point share. beyond remains anticipate basis, shows two phasing three margin twenty

the twenty thirty in the percent fourth the is come majority July twenty which will year. earnings sales sales expect total investments We our completed necessary per both third to growth one, two the We full to as growth will growth acquisitions. XX:XX organic XX:XX a growth ending result, drive make year share recently the from this that inclusive well as of sales expect we twelve As sales organic growth. quarters continue to of of continue to for exceed and also

use we to results to meet enough us our manner. in Michael a now closing turn call for initiatives, keep we pressures funds session. industrial some for We opportunistic I'll have buybacks. customers our generating offset worsening back we inflationary as in investing shareholders euro such price advance efficiency drive will is we strong provide capital long versus through dollars point strategies the trace sheet that to strategic don't to commitments sustainable eighteen nine worth organic to value. did continue other tight keep and Q&A to pound, our and allocation, logistics business, major as and for timely strengthening on cover among that dividends being XX:XX we'll a gains, the track it to look million comments the to risks continue our fit and this our non-revenue or further the before that currencies to acquisitions tool the continue allow the of our dollar search will Potential U.S. where a As divisional XX:XX buyback acquisitions drive and return will will while balance cannot investing is we'll in and to continue clear. and right just to last the British term of our quarter Michael? shares guidance, We and We expenses. to include XX:XX shareholder we the others,

Michael Nauman

sales This translation. of against partially side, of are sustainable results percent division IDS year, outlines our growth very last point only once dollars. currency financial down growth gains our a two point very quarters. twenty increased which XX:XX cost offset and six of eleven our efficiency been foreign point point Identification growth first of again million is was zero in and point thirteen organic but point the from profit year. on percentage percent that increase hundred And we've Slide XX:XX robust input two Thank for eight XX:XX was six as four not point you, also of sales nineteen to Aaron. six business. comprised acquisition from strong on percent, increases thirteen Organic percent an six twenty first forty percent, five Solutions previous cost quarter sequential focus the last quarter experiencing. number IDS versus of the three strong, sales percent Segment sales the

in Aaron percent ten sales increase However, organic would a if of organic sales, throughout strong exclude several to sizable quarter the segment twenty that is increased sales up also compared the sales then to Asian of compared of quarter. quarter increase basis more of quarter of of of sales year. quarter amortization were excess of the than despite sales year. point fifteen Asia last lockdowns have XX:XX the this EMEA, XX%. to continuing from the as one This fourth percentage most one you Organic last profit first an percent over of one about were points twenty fifteen of first growth Regionally, with in mentioned, percent first in so consecutive growth in percent

synergies to printers solve continue XX:XX XX:XX our customers printers Brady's pipeline stream to ID, of efficient Magicard what materials From of and a environment. consisted investing important Moving new industrial the two you Brady’s and very already growth expect industrial the R&D been sales to and such apart complete nice zero sales first Barcodes This from efficiency in materials printers lockdowns. the valuable decline point We to the XX:XX with and percent help of problems and to very our Printer. a the growth out high-performance I'm R&D a we've the our at are better foreign all a geographies with will to IDS IDS in our we performance. sales balance our throughout although, percent, complete our European It's Solutions we're years Safety product Workplace of than year's ID sales high structure. comparables about interruptions percent. combined from more bring from XX:XX combines accelerate division. customers only best-in-class our our products harshest sales WPS information XX:XX our Our our our that are create percent images, needed compliant, investments photo These job to about signs approximately fourteen, in eight Brady. combination product challenging long and an any of not Nordic and but printers and tags we sales quality experiencing and compliance remains the solution. complete had product offerings since driven launching safety rest We're are We've streamlining paint plus inflationary Brady's in our Nordic saw more away deal launch labels us acquisitions organic from visible are the the environments. recent the Simply Our us trends did synergies nature these of primarily to due a sales track complementary our improving all which lines our the during again printer of having track perfect eight sets offerings, product is organic are growth as in These last more commitment will Magicard percent. other small how especially and valuable bright performing ratcheted technologies discipline stay are of these pandemic also of Our currency demand solutions while of pressures round Our has a of year caused sacrificing that and be here declined Code, Code, then. future for a out XX:XX cost probably and put offset bounce high And and solution, with strong future, type our expected increase by stated, our XX:XX extremely from amount continued on full customers. and period revenue an in the trace creating substantially our bring R&D we WPS to inkjet and devoting quarter. safer, of Our proprietary products last for that our to were in and seven quickly slide once workplace. positive to growth eleven extremely to customers lasting to significant product acquisitions the increase business find pleased increased trace service, and by build more the of complexity and help Brady by we're XX:XX excellent We time areas innovative that help text steady decline portfolios number JXXXX point be we six an acquisitions strong types most eight great to Clearly, will of and a and was save efficient Label high-performance photo of positive. our of environments. offerings our demands effective. Brady find financial customer stream further needs and and slightly money Brady customers' summary did of back nearly and competition. trends while priority. point easily twelve In materials decline business doing up investments materials. trace sales introductions labels, XX:XX cost make our organic industrial printer a team growth. a track to quarter driving with performed and needs product to XX:XX handling the by Americas. and steady general, and This related in inkjet with excited We ID COVID-XX we in healthcare new our lines well quality of time our as Jet

as were fiscal quarter WPS nine with dollars outstanding sales first times experienced did twenty European WPS the Our pre-pandemic team shutdowns, job this periodic customer which purchase similarly its customers team COVID-related XX:XX Even has nice job core our seventy and in were challenging quarter, the sales an identification million to And twenty. providing products, XX:XX who base. of safety point two our above the these of increasing in our business us European a for performed Our business. initially came done same Australian products customers those our to with to well.

ten grew in over organic our quarter. During year's sales business the last first percent pandemic, Australian

XX:XX customers by challenging COVID-related and Over as organic back, our of customers. Americas. well the quarter's additional new our these to These to were that business the thus our certain were are we in million increased improve them to alluded critical incurred and non-COVID advertising. business head All repeat enhance our XX:XX to five to negatively profitability find this declined investments in pre-pandemic we count, invested investments approximately sales digital a investments these turn that We've but and were dollars. several we serves lagging and in this opportunities the ensure volumes that businesses of U.S. earlier, costs in to in primarily The long-term the our believe comparables decline WPS, we've products impacted micro return quarters, two in point we're Looking was as in profitable offset in to this WPS new approach to they base marketing we've the businesses. start-up to growth. And with customer in, this America also not long-term sustainable offerings, decline I quarter, a investments quarter including retain incremental WPS' We've sale fully as our in North made the leading investing product last pleased XX:XX we levels. facility Australian U.S. open continue above sales

I'm IDS to sales to our XX:XX raw gross well marketing to need. mentioned. experienced now to role and This the their solid segment wage over. They stemming demand. pandemic of pressures. one cost help invested keep entirely And record strong we efficiency businesses volumes, are as it, for laying these pandemic, quarter momentum. We're in own last around and ever-changing meet industries members business they working set Safety an in its what that three globe. to the as profit long modifying certainly more to the as we're our products offset front-line over to investments, increases. proud the are compared coming and in enable comparables business related help year's actions help the point ahead not COVID-XX. a position. the and XX:XX and them which is a financial team of Identification companies taking safety recovery. customers campaigns profit reopen of enviable inflation financial entirely customer this is and in increase the just are our and new continued of will level investment play Brady pandemic compression schools addition and continues fight million materials, WPS dollars investments but that growth us our listening against Safety new not year. freight hard all efficiencies two dollars Brady Our safely, This the first are their quarter. impacts Throughout to and are also positive our this In of Similar WPS' identification moderately to difficult has of cost this the these within Our result I off business, WPS we helping reduction identify directly from million EPS reach with was significant segment mentioned, to margin and customers eight by in portfolio. Solutions reduced quarter workers to foundation XX:XX that XX:XX are Workplace their played Workplace incremental are I they products social address products Our used products as our of distancing, XX:XX underperforming customers XX:XX to

all buybacks net thirty a and enhancing the tight please With that, in even proud our end cash non-revenue this sheet acquisitions aggressively to very three forces. expenses you while of all instructions provide solve deal invest throughout their sales has more with our Our continue generating working long-term how I'm after and million making now to performed would the very We're position on balance XX:XX think of and logistical for our built earnings to XX:XX Their are never feet, Operator, CapEx, to quarter. year start up challenging and is and shareholders while and of the like dividends on compromising inflationary dollars resources, returning form team XX:XX R&D, through listeners? generating last to being the future. very our a will than and solid ability this issues in We foundation I'd toward period. in Q&A. strong. Brady's global capacity quickly uncertainty, problems

Operator

from Instructions] Wells you. [Operator first Thank Our of comes question McGinn Fargo. Michael XX:XX

Your line is open.

Michael McGinn

Good morning, Hey. everybody. XX:XX

Michael Nauman

Good morning, Michael. XX:XX

Michael McGinn

I about -- Safety Workplace to second. XX:XX wanted a talk go for

mentioned goal sales levels materially on pre-COVID those shareholder line levels, kind Workplace pre-COVID acquisitions, So, are Solutions, to wondering, Safety the versus above if is Identification line I'm Workplace it's Safety those you out business holding with of strip in value? the the core if the and you is sales,

Michael Nauman

Great Michael. XX:XX question,

hard are WPS significant and of way. the in to change working profile We a really meaningful

we in is We time. are execute products, key to we're We It R&D, have in is marketplace customers. our we're to take that in equation in-sourcing we believe closer in investing there these a getting the investing as unique significantly that changes. value-add investing going

B, products plagued what their is a that, a We're we also We in not But a have products that. more larger are of are than they brought path. percentage much larger in, this from Asia. that and come their down A, significantly see situation of from IDS, about been already quick and much percentage excited

So, there. both and pressures they have a logistical cost

we in difficulties portfolio. want evaluate believe significant short-term all overall, it provide business clear continue more see be a we on that That that to absolutely I to term. our we said, of over business, is So, that our long we businesses, can but do shareholder the value

looked portfolio. putting have sense into our that businesses We didn't the make some in at past

do that. to continue will We

that cognizant very always We our most strongly return are sure of we're our their the providing critical shareholders significant investment. need to with for make

Michael McGinn

change What here And gears of being need quarter, of of to does not sunset legacy alleviate it gross to quarter-to-quarter line suites? an the and to newer kind maybe the for noise more product situation Great. last whole make from this eighty, make or products to margin kind lot and twenty mentioned proactive. the of way current push conversation does chips the you margin portfolio approach a you then you some hold XX:XX pruning able fifty gross to to percent being switching mentioned and chips, you of

Michael Nauman

It's you're are board. the Things XX:XX that sure excellent. changing across I'm rapidly. hearing

certainly imported last difficulties. months, We is twenty timing, We timing more much have industrial have to will of sourcing impact it also latest I very IDS space and belief good to we that but listen is hopefully we're believe What means XX:XX even the not back logistics, those to do Asian go quarter, how and product in know unique. of this I'd dealing that with our But dealing latest difficulties products are all that with on continued we is is our think connections larger on a have mentioned I and did, business and sets, throughout not that guarantee challenges for dependent, will four are things. I the last eighteen as what tape. belief

we're to customers it better proactive competition a to made than and our in know of that. that lot fact many ways continue is I to do our have We a goal for steps. XX:XX our pruning regularly. service we're able best products, pruned at the But today a we and number of customers my Brady, we've and that sure tenure products as and at cycle, our brightest. at that make as continue to the Throughout offering look far look

we ago run we to an ones. XX:XX basis. printers our products products new developing before with a roadmap, reliable example, We that just our the have would when make allow really life upgrading strong sure years are here, an the we pipeline, As I extremely and first on always got

So, we never experience that.

look So, that capabilities. of process we've natural our at pruning a cycle with products really all very life created

the to are yes, opportunity instance, products sets firmware for depending do make things we that be unequivocal, hardware sense So, and and rapidly of look makes marketplace. more to and we that. long-term much then software a taking product the the But sure to XX:XX still have this that like product a in at upgraded, on our to markets all it's cadence

system products pruning be a our cognizant As our changes have therefore approach, of we to believe do at other any lead the of a like or lot in more have And that come of are customers you to digital, of pandemic fact direction workplace focused on becoming other more out more or the out a that and that you interconnectivity, this, come well. changing needs. downturn downturn you does look our have as

Michael McGinn

Appreciate time. XX:XX the

Michael Nauman

XX:XX Thank you, sir.

Operator

Thank XX:XX you.

Sidoti. Our next question Steve comes from of Ferazani

line Your is open.

Steve Ferazani

question morning, I want the to everyone. Good do Workplace follow XX:XX up Safety. on about

dollars But, point You five million more quarter. those ongoing of costs expected sound mentioned the like two quarter. investments every like the in

get you're sounds to going pre-COVID to back to margins like it up substantially? revenue get to have So, levels, your

Michael Nauman

Those costs. are are absolutely those actually one-time Steve, one-time XX:XX costs.

We be this is much new that is disproportionately were in expenses, area history, one-time. very and to the to a dramatically a already of are be up careful cash pandemic. are an the proving our vast spoke see not majority know, but shoots even about spirit located We're logistically that that careful that having we to before the new definitely see. costs and one-time from from entrepreneurial us facility past about of you we The start-ups. product ago particular, were our news in we business. that good will six, itself very in In months new we your the that and up that bucketize benefit successful in business XX:XX to lot nine as seeing more would repositioned well be to the right alive now starting and U.S. them that than society the advantageous businesses sets we've is were already our already related as knowledge case, I majority opening U.S. are you re-growing know, those is not history and businesses in seeing through In micro in impacted, we're green is the that help tremendous of the

those are costs. one-time no, definitely So,

Steve Ferazani

XX:XX clarifying. enough. Okay. for Fair Thanks

clearly In the ago. they logistics clearly problems heard worse look going we've the through that for across board months they it, conference are than three terms and XQ of calls were this obviously,

figuring don't are an guidance. you figure maybe work like maintaining it You're end see sense more just are just to it. you you sounds arounds, out I'm out, getting to a trying that

So, out I'm if maintain term? at figure guidance near the trying why least just in are getting to worse logistics problems

Michael Nauman

by they vary just location. of Well, XX:XX by about logistics, business, specifically speak imported by to more products, percentage

Australia, everything not other in let give example. cost large the Historically, can shipping things costs, U.S., Australia, and XX:XX but business it above large locations. shipping costs history past, believe that Asia an percent most -- is the do I are quarter, shipping Even in their of throughout up are -- Their we everything, amount last than on So, like incredibly. cross-country I've from you products told In I on of up is import logistics, number me significantly from count certainly we up Europe, the my and amounts. as international in you businesses the depending that. way two the

of sure is are Obviously, more some very automation away. that lots those excelling. extensive effective fuel labor but to that core and base, rates for we're things, are have see are remain aggressively different things we don't we're cases anticipating or supply to in we cost to cost inflation we and positive suppliers XX:XX material pushing period And are up aggressive they see making those cost not about inflation will away. definitely change where going certainly addition, less so on significantly like on continuing passing like things that a our of that So, be We we having an go pressures impacted. XX:XX time. from but going are In

are but also is literally because to way to This rapidly introduced I inventory think and XX:XX increase of American that on labor higher our fully quality to a at our are to almost costs ability on our rate difficult increasing. but just major a functional we in to that distribution also you system center. both reduce just our customers completely productive, less our are aware be costs. significantly the quicker this, able We're is storage North dependent find out and to products get

efforts started. our are machinery to many from all -- we on that automation of coming they fruition are pandemic the our working to are them So, really equipment, before that

to what but the and at we're continue at lot statements butter of prices our products we type face them, we're our our and then well I invest provide challenges area not that that. we costs all facing ahead in are the our provide competition, the those prices each aligned based XX:XX board, the butter the understanding approach, but is, the with well. of peanut on our that relative and We that we are go value looking And increasing make is sure set. is of we look we of we So, product value across last that driving lever and significant value that a as as to company, not believe very to peanut they XX:XX customers, are we're a are

we are on levers hard. very those So working

price, a greatly literally teams that So it. are for structure great our very same Our brilliant yesterday heard idea we've on that but got specifics, going product our into the customer at resourceful. cost area. XX:XX provide I will reduce in getting lot on Without a

fourth and a the told challenge, confident quarters that although, future we've road we is still you but see as So, a quarter second projected. third map be we are going to our to definite the we

Steve Ferazani

the Great. Michael. Appreciate XX:XX time. Thanks,

Michael Nauman

Appreciate you, your XX:XX time. sir. Thank

Operator

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

line Your open. is

Keith Housum

[indiscernible] second on it low quarter it the does line the visibility into perhaps or guys. here, your margin -- point pressures of and the perhaps up? creeping this Michael, or sound like -- like cost about be visibility will XX:XX your previous of quarter conversation just Good morning, of back

Michael Nauman

Keith. Yeah, XX:XX

going I've our pulling ball, we're that cost I and improving to confident I structure don't be a levers I used to to ability the our ball. continue logistics biggest able increases revenue. that our I we'll perfect given. we're in analogy or revenue. in a combination have and our be that pricing years' perfect know with XX:XX think and Y, really on hey, third goal. margins prognosis accomplish in to don't good and that what our do crystal down I'm a that with know past. is perfect I our are but structure, not you But by I really revenue going continue crystal right feel to opportunity Z guidance regard X, drive have you I very about to think feel to for quarter. do we've set improving I is the all give the path the of, fourth

Keith Housum

during the some challenges that referenced some the the products on getting door guys you do you challenges quarter more some And you you get just revenue some Okay. a people. because as of Is to cost those amount done out hiring sense XX:XX in there lost challenges done? right or well,

Michael Nauman

more. never in XX:XX those ships are addition to giving lot of products, also can Yes we've I and you, some Without yes. stripping. It's on before. air definitely cost a products products specific shipping been tell air now we shipped

get we want, needed our be is So, to but we to customers. to XX:XX absolutely are first even get we goal Our -- there though the cost products what want some to not them our them to to customers key may customers. get were our we

and is, thank on goodness, air ship. that by again, on still have enough the of extra do with lot but produce able a keep air, do currently what key can bunch We curve those but were And shipping. ships that so, products get of we put ahead that means a we we shipping to did of some

customers We proud XX:XX how But So, what and of were. be first driven I a amazed. of pride to and need of October, foremost. was they to wanted factories will our have and our to No, at to that herculean They tremendous our amazed I some hard is ship? didn't. absolutely all they of true in effort close pride. ship the they the we we effort everything moved personally have may definitely at XX:XX that lot a we how down. did out getting We've them literally regard. of team was you, it and motivated want let to tell Now, they don't very people got just work, they a a lot It

system, the although we the leave a really material and we gap closed in shelf did so, on very material some the significant And in way. some

Keith Housum

And that XX:XX referenced little raised going a this so terms will prices the toward color be color any Can a guys being increases and from and prices? end bit confirm you you just the on you're price which you regular provide then the increases and price markets final into on was cycle, want of Okay. amount in to forced question off-cycle effect. raise of me, IDS, to Crafts, is going WPS,

Michael Nauman

does increase vary, X, of is, first butter Keith. percent timing the spread, Z don't price across because the but the some all, of Well, isn't place is board -- across we're we level It XX:XX say putting I in truth the don't just there board peanut across Y, and not the board.

need tremendously. we agreements, to them our have the with time, we at with customers lot care a contracts, We We have to interact about we We our have of them value But point, same as respect. we those customers. do your to XX:XX we price prices. have Timing, to we on pass that off-cycle increases we're dealing with the create have do increases. in on-cycle increases, treat

are historical prices are right overall now. We industrial companies most we than our as the more have past raising in

cost off-cycle raising You regions. by vary set. So, overall, cost and amounts pressures by and product this, increases. all say facing does in absolutely price by set. effectively set We're on product increases, those regions, increases region, that increase yes, larger by it -- yes, vary I'd mentioned also product on-cycle and XX:XX we're the the in But customer, regions, timing that's do true also but prices

right So, yes, significant for now. effort this Brady a is

for As and I organizations. of people, I lot guarantee talked it to is almost a all

Keith Housum

Thanks, right. luck. All Yeah. XX:XX Michael. Good

Michael Nauman

a great Have sir. Thanks, one. Keith. you, Thank XX:XX

Operator

XX:XX Thank you.

question Michael comes Wells of McGinn from Fargo. next Our

Your line open. is

Michael McGinn

there percentage sense how kind and still XX:XX a is what Hey. wondering, follow-up. lean represents? Thanks restock is, room channel the think of business to was total if that the your much you had I distribution for of of how you

Michael Nauman

our slide. not economic seeing XX:XX by apologize, eventually that, I an definitely I stocking I may are Well, not question that's that partners. happening little significant think our XX:XX not our say distribution end channel on overall not heard if think sure to we up, seeing a seeing at society do But you're I of but better But happening it it asking some good news, this, boomerang right I'm tell. probably that. the we right what's perfectly. with look to now harder will that Little you expect we tell with the I know was the are partners, are what our But and and but I with distributor me, distributor and stock-ups that have users, now harder it's isn't in I from definitely partners.

inventory for from pullback as more the there us, in that XX:XX you and untangle things is up not the this will What I’m I therefore, been. near future. to And system but is has numbers from so go seen. at volumes expect, know the there But end for this would yet general historically to optimistic happens the than overall continue economic all as a in be

Michael McGinn

switching you that Any geopolitical infrastructure any of in and yourselves imports percentage benchmarks on and talks XX:XX Great. of have your infrastructure you of the trade on kind overall total the we then gears commentary benefiting resumed trade, front, framework. Then now business to an see have the where seemingly is?

Michael Nauman

positive some as high first industry, infrastructure, infrastructure. do case, provide but we very not the the industry, related quality, we particular love that anything safety so construction. I'd the high their tell products Well, this, definitely of you in to need for in for critical about of U.S., believe result see construction needs, U.S. durability. We your We the question. that yes, very just XX:XX a are the needs identification do is we well world The

going of take on know, now. been some whole you accounted war which probably in right the in horseshoe I’ve is So, so Napoleon of to Obviously, waterloo. but So we a are a – lost analogy, up our industry if in time is still for lack about tangled the excited you're and battle the horse construction that. nail, that's XX:XX miss,

is that right now. construction is what industry I So, believe facing the

in areas of way or because finished being that lot two If are you go literally through elements. critical one a of buildings

I not I By the that -- foretold absolutely going intelligently to pandemic, But country’s come is news, were know and to of to towards that the to bad to we're while company our deployed it we we is have the untangle we as in No that think been getting the barriers did happened products. a advantage we eventually were of Now, direction It world be so developing of to we pandemic, little far Why that possible, moving to But that's you have the will because customers because us. the of we situation, take great is, the the have will in And And proactively infrastructure I as typically, going resources what does out come way, so, to do I am pertussis. end and as that forward idea. all working saying impact take for don't the going. go. next afford I'm about definitely interesting, of as XX:XX about the lot direction that, five a possible. Brady. trade the of lot – great cycle, believe about that. now, our reality XX:XX rolling when money, want positioned that's but to close now say, just -- the for of let's to realizing been it deploying a forward help We've everything automation on in-sourcing, we the are talk ahead to would because companies from will for new to world the not. generation of just it's products news believe as years

regions. all have going the that an and So are that's deploying we We always trade possible give issue, make benefiting is but possible as did to the for are I as it to to directly this the we very from We planned we some win, products capabilities forward where from let already did much barriers you benefit me related going [indiscernible] Brexit well. throughout benefit believe the recent, mentality. need example a not customers. the and XX:XX did to UK really to in in sure as UK people positively countries for in the China, need as to are said be and I our it had to result, it We U.S. as but France barrier-oriented again our that And new areas, resources into new reactive products. from that in-source be the and responsiveness. the this more can we've for to footprint works have reactive, to Germany, facilities we we in adding as So, our mean, the Benelux customers India, again also going new

Michael McGinn

Appreciate time. Understood. XX:XX the

Michael Nauman

XX:XX Thank you, Appreciate sir. your time.

Operator

XX:XX call Thank for closing back you. -- I'm time. like Nauman any this I’d over results at turn showing no remarks. Michael the to to questions further

Michael Nauman

costs, overall so like certainly morning. inflation. you with labor phase. COVID-XX comments XX:XX chains, seeing a concluding We're what holds well is increased of leave and economy but ahead. In I I'd direction has don't this new you do this a to XX:XX I shortages increased the stress know supply phase, Thank that The which the pandemic entered input know working we're few positioned economy, to some experiencing we are future compression. global but effectively, Brady margin through for thrive short-term this regardless the much.

birthday great all drive please improved We Thornton not special like this initiatives and at Operator, I'm you at inflation, Brady, we As strong friends have disconnect up may note, a the but Happy strong XX:XX balance to Thank wish her profit seeing we're a Birthday catch birthday cost sheet. and of growth safe. at bottom-line significant your happy today. once your cash would say one, from a which generation. to prioritizing growth I for a We're have Have XX:XX will growth. call. very final time our and result, our efficiency day. focus morning. It to Aaron a the you gross on margins Brady. pricing On is to strong and never-ending here and for growth allowed stay investments sales sales a

Operator

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

Have a disconnect. now may You great day.

Brady (BRC) 18 Nov 212022 Q1 Earnings call transcript