8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 18, 2021

BRADY CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number 1-14959

Wisconsin	39-0971239
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

6555 West Good Hope Road

Milwaukee, Wisconsin 53223

(Address of principal executive offices and Zip Code)

(414) 358-6600

(Registrant’s Telephone Number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading <br>Symbol	Name of each exchange on which registered
Class A Nonvoting Common Stock, par value $0.01 per share	BRC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 or the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02	RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 18, 2021, Brady Corporation (the “Company”) issued a press release announcing its fiscal 2021 second quarter financial results. A copy of the press release is being furnished to the Securities and Exchange Commission as Exhibit 99.1 attached hereto and is incorporated herein by reference.

Item 7.01	REGULATION FD DISCLOSURE

On February 18, 2021, the Company hosted a conference call related to its fiscal 2021 second quarter financial results. A copy of the slides referenced in the conference call, which is also posted on the Corporation’s website, is being furnished to the Securities and Exchange Commission as Exhibit 99.2 attached hereto and is incorporated herein by reference.

Item 9.01	FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release of Brady Corporation, dated February 18, 2021, relating to fiscal 2021 second quarter financial results.
99.2	Informational slides provided by Brady Corporation, dated February 18, 2021, relating to fiscal 2021 second quarter financial results.
104	Cover Page Interactive Data File (embedded within Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BRADY CORPORATION
Date: February 18, 2021
	/s/ AARON J. PEARCE
	Aaron J. Pearce
	Chief Financial Officer and Treasurer

Document

EXHIBIT 99.1

For More Information:

Investor contact: Ann Thornton 414-438-6887

Media contact: Kate Venne 414-358-5176

Brady Corporation Reports Fiscal 2021 Second Quarter Results and Announces its Fiscal 2021 EPS Guidance

•Income before income taxes and losses of unconsolidated affiliate was $39.4 million in the second quarter of fiscal 2021 compared to $42.4 million in the same quarter of the prior year.

•Diluted EPS was $0.59 in the second quarter of fiscal 2021 compared to $0.62 in the same quarter of the prior year.

•Sales for the quarter declined 3.9 percent. Organic sales declined 6.3 percent and the impact of foreign currency translation increased sales by 2.4 percent.

•Net cash provided by operating activities was $36.1 million in the second quarter of fiscal 2021 compared to $14.3 million in the second quarter of the prior year.

•Diluted EPS guidance for the full year ending July 31, 2021 announced at a range of $2.48 to $2.58, which equates to EPS guidance for the second half of fiscal 2021 of $1.25 to $1.35.

MILWAUKEE (February 18, 2021) -- Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2021 second quarter ended January 31, 2021.

Quarter Ended January 31, 2021 Financial Results:

Income before income taxes and losses of unconsolidated affiliate decreased 7.0 percent to $39.4 million for the quarter ended January 31, 2021, compared to $42.4 million in the same quarter last year.

Net income for the quarter ended January 31, 2021 declined 8.0 percent to $30.9 million compared to $33.6 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $0.59 for the second quarter of fiscal 2021, compared to $0.62 in the same quarter last year.

Sales for the quarter ended January 31, 2021 declined 3.9 percent, which consisted of an organic sales decline of 6.3 percent and an increase of 2.4 percent from foreign currency translation. Sales for the quarter ended January 31, 2021 were $265.8 million compared to $276.7 million in the same quarter last year. By segment, sales declined 5.4 percent in Identification Solutions and increased 0.4 percent in Workplace Safety, which consisted of an organic sales decline of 6.9 percent in Identification Solutions and an organic sales decline of 4.8 percent in Workplace Safety.

Six-Month Period Ended January 31, 2021 Financial Results:

Income before income taxes and losses of unconsolidated affiliate decreased 2.7 percent to $81.6 million for the six-month period ended January 31, 2021, compared to $83.9 million for the same period last year.

Net income for the six-month period ended January 31, 2021 declined 9.4 percent to $64.3 million compared to $71.1 million for the same period last year. Earnings per diluted Class A Nonvoting Common Share were $1.23 for the six-month period ended January 31, 2021, compared to $1.32 for the same period last year. Net income and earnings per diluted Class A Nonvoting Common Share for the six-month period ended January 31, 2020 were impacted by a reduced income tax rate of 15.3 percent primarily due to a favorable tax audit settlement and tax benefits from equity-based compensation.

Sales for the six-month period ended January 31, 2021 declined 3.6 percent, which consisted of an organic sales decline of 5.6 percent and an increase of 2.0 percent from foreign currency translation. Sales for the six months ended January 31, 2021 were $543.1 million compared to $563.6 million in the same period last year. By segment, sales declined 6.6 percent in Identification Solutions and increased 5.2 percent in Workplace Safety, which consisted of an organic sales decline of 7.6 percent in Identification Solutions and organic sales growth of 0.4 percent in Workplace Safety.

Commentary:

“Our operations are running globally as we continue to do our part to supply products to first responders, healthcare providers, transportation, food processing and many other critical industries,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “Our outlook has improved and to supplement organic sales growth, we are investing in sales, marketing and new product development that will help accelerate growth in the back half of this fiscal year and into the future. We are also actively investigating acquisitions that complement our strategic growth initiatives. Brady is in a strong financial position and we are using this strong financial position to set ourselves up for strong growth as we exit from the pandemic.”

“Brady continues to generate strong cash flow and has a very strong balance sheet. As of January 31, 2021, we had $277.6 million of cash on hand and no outstanding debt,” said Brady’s Chief Financial Officer, Aaron Pearce. “We generated $36.1 million of cash flow from operating activities this quarter, which was an increase of 153 percent compared to last year’s second quarter. Positively impacting our cash flow this quarter were benefits from improved working capital management and a reduction in incentive-based compensation payments when compared to the second quarter of last year. This quarter, we also returned $12.3 million to our shareholders in the form of dividends and share buybacks. Although the economy is still challenged, we do expect the general trend of improving economic conditions to continue over the next several quarters. Regardless of what happens with the macro economy, Brady’s strong balance sheet and cash generation position us well for future financial success."

Fiscal 2021 Guidance:

The Company expects earnings per diluted Class A Nonvoting Common Share to range from $2.48 to $2.58 for the full fiscal year ending July 31, 2021. This equates to diluted earnings per share in the range of $1.25 to $1.35 in the second half of the fiscal year ending July 31, 2021. The Company also expects organic sales growth to be in the mid-single digits in the second half of fiscal 2021. This guidance is based on foreign currency exchange rates as of January 31, 2021 and assumes a continued economic recovery.

A webcast regarding Brady’s fiscal 2021 second quarter financial results will be available at www.bradycorp.com/investors beginning at 9:30 a.m. central time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2020, employed approximately 5,400 people in its worldwide businesses. Brady’s fiscal 2020 sales were approximately $1.08 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradyid.com.

In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations.

The use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project,” “continue” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: adverse impacts of the novel coronavirus (“COVID-19”) pandemic or other pandemics; decreased demand for our products; our ability to compete effectively or to successfully execute our strategy; Brady’s ability to develop technologically advanced products that meet customer demands; raw material and other cost increases; difficulties in protecting our websites, networks, and systems against security breaches; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; risks associated with the loss of key employees; divestitures and contingent liabilities from divestitures; Brady’s ability to properly identify, integrate, and grow acquired companies; litigation, including product liability claims; foreign currency fluctuations; potential write-offs of Brady’s goodwill and other intangible assets; changes in tax legislation and tax rates; differing interests of voting and non-voting shareholders; numerous other matters of national, regional and global scale, including major public health issues and those of a political, economic, business, competitive, and regulatory nature contained from time to time in Brady’s U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the “Risk Factors” section within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2020 and subsequent Form 10-Q filings.

These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.

BRADY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; Dollars in thousands, except per share data)

	Three months ended January 31,				Six months ended January 31,
	2021		2020		2021		2020
Net sales	$	265,838	$	276,665	$	543,065	$	563,612
Cost of goods sold	136,316		137,538		278,115		283,080
Gross margin	129,522		139,127		264,950		280,532
Operating expenses:
Research and development	9,876		10,517		20,079		21,484
Selling, general and administrative	82,234		87,366		165,271		176,913
Total operating expenses	92,110		97,883		185,350		198,397
Operating income	37,412		41,244		79,600		82,135
Other income (expense):
Investment and other income	2,036		1,760		2,191		3,140
Interest expense	(51)		(647)		(157)		(1,348)
Income before income taxes and losses of unconsolidated affiliate	39,397		42,357		81,634		83,927
Income tax expense	8,206		8,804		16,788		12,876
Income before losses of unconsolidated affiliate	31,191		33,553		64,846		71,051
Equity in losses of unconsolidated affiliate	(331)		—		(505)		—
Net income	$	30,860	$	33,553	$	64,341	$	71,051
Net income per Class A Nonvoting Common Share:
Basic	$	0.59	$	0.63	$	1.24	$	1.33
Diluted	$	0.59	$	0.62	$	1.23	$	1.32
Dividends	$	0.22	$	0.22	$	0.44	$	0.44
Net income per Class B Voting Common Share:
Basic	$	0.59	$	0.63	$	1.22	$	1.32
Diluted	$	0.59	$	0.62	$	1.21	$	1.31
Dividends	$	0.22	$	0.22	$	0.42	$	0.42
Weighted average common shares outstanding:
Basic	52,018		53,320		52,020		53,232
Diluted	52,282		53,827		52,288		53,781

BRADY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	January 31, 2021		July 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	277,588	$	217,643
Accounts receivable, net of allowance for credit losses of $7,450 and $7,157, respectively	154,052		146,181
Inventories	122,922		135,662
Prepaid expenses and other current assets	12,774		9,962
Total current assets	567,336		509,448
Property, plant and equipment—net	122,088		115,068
Goodwill	420,726		416,034
Other intangible assets	19,809		22,334
Deferred income taxes	8,261		8,845
Operating lease assets	38,849		41,899
Other assets	30,813		28,838
Total	$	1,207,882	$	1,142,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	67,483	$	62,547
Accrued compensation and benefits	52,098		41,546
Taxes, other than income taxes	8,518		8,057
Accrued income taxes	9,393		8,652
Current operating lease liabilities	16,534		15,304
Other current liabilities	47,518		49,782
Total current liabilities	201,544		185,888
Long-term operating lease liabilities	27,134		31,982
Other liabilities	59,869		61,524
Total liabilities	288,547		279,394
Stockholders’ equity:
Common stock:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,486,758 and 48,456,954 shares, respectively	513		513
Class B voting common stock—Issued and outstanding, 3,538,628 shares	35		35
Additional paid-in capital	334,077		331,761
Retained earnings	745,960		704,456
Treasury stock—2,774,729 and 2,804,533 shares, respectively of Class A nonvoting common stock, at cost	(109,789)		(107,216)
Accumulated other comprehensive loss	(51,461)		(66,477)
Total stockholders’ equity	919,335		863,072
Total	$	1,207,882	$	1,142,466

BRADY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Dollars in thousands)

	Six months ended January 31,
	2021		2020
Operating activities:
Net income	$	64,341	$	71,051
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,421		11,672
Stock-based compensation expense	5,471		5,384
Deferred income taxes	(3,866)		1,272
Equity in losses of unconsolidated affiliate	505		—
Other	121		1,664
Changes in operating assets and liabilities:
Accounts receivable	(4,157)		6,209
Inventories	15,018		(1,311)
Prepaid expenses and other assets	(2,436)		(2,621)
Accounts payable and accrued liabilities	11,990		(39,777)
Income taxes	481		(436)
Net cash provided by operating activities	98,889		53,107
Investing activities:
Purchases of property, plant and equipment	(14,511)		(13,100)
Other	(1,881)		(3,406)
Net cash used in investing activities	(16,392)		(16,506)
Financing activities:
Payment of dividends	(22,837)		(23,136)
Proceeds from exercise of stock options	471		4,686
Payments for employee taxes withheld from stock-based awards	(2,638)		(7,733)
Purchase of treasury stock	(3,593)		—
Other	(231)		134
Net cash used in financing activities	(28,828)		(26,049)
Effect of exchange rate changes on cash	6,276		179
Net increase in cash and cash equivalents	59,945		10,731
Cash and cash equivalents, beginning of period	217,643		279,072
Cash and cash equivalents, end of period	$	277,588	$	289,803

BRADY CORPORATION AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited; Dollars in thousands)

		Three months ended January 31,								Six months ended January 31,
	2021				2020				2021				2020
NET SALES
ID Solutions		$	194,227			$	205,362			$	392,419			$	420,349
Workplace Safety		71,611				71,303				150,646				143,263
Total		$	265,838			$	276,665			$	543,065			$	563,612
SALES INFORMATION
ID Solutions
Organic		(6.9)		%		(1.3)		%		(7.6)		%		(0.7)		%
Currency		1.5		%		(0.5)		%		1.0		%		(0.9)		%
Total		(5.4)		%		(1.8)		%		(6.6)		%		(1.6)		%
Workplace Safety
Organic		(4.8)		%		(1.0)		%		0.4		%		(0.9)		%
Currency		5.2		%		(1.6)		%		4.8		%		(2.5)		%
Total		0.4		%		(2.6)		%		5.2		%		(3.4)		%
Total Company
Organic		(6.3)		%		(1.2)		%		(5.6)		%		(0.8)		%
Currency		2.4		%		(0.8)		%		2.0		%		(1.3)		%
Total		(3.9)		%		(2.0)		%		(3.6)		%		(2.1)		%
SEGMENT PROFIT
ID Solutions		$	39,000			$	40,655			$	79,279			$	83,098
Workplace Safety		3,463				5,455				11,451				10,612
Total		$	42,463			$	46,110			$	90,730			$	93,710
SEGMENT PROFIT AS A PERCENT OF NET SALES
ID Solutions		20.1		%		19.8		%		20.2		%		19.8		%
Workplace Safety		4.8		%		7.7		%		7.6		%		7.4		%
Total		16.0		%		16.7		%		16.7		%		16.6		%
		Three months ended January 31,								Six months ended January 31,
	2021				2020				2021				2020
Total segment profit		$	42,463			$	46,110			$	90,730			$	93,710
Unallocated amounts:
Administrative costs		(5,051)				(4,866)				(11,130)				(11,575)
Investment and other income		2,036				1,760				2,191				3,140
Interest expense		(51)				(647)				(157)				(1,348)
Income before income taxes and losses of unconsolidated affiliate		$	39,397			$	42,357			$	81,634			$	83,927

f21q2conferencecallprese

February 18, 2021 Brady Corporation F’21 Q2 Financial Results

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2Forward-Looking Statements In this presentation, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations. The use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project,” “continue” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: adverse impacts of the novel coronavirus (“COVID-19”) pandemic or other pandemics; decreased demand for our products; our ability to compete effectively or to successfully execute our strategy; Brady’s ability to develop technologically advanced products that meet customer demands; raw material and other cost increases; difficulties in protecting our websites, networks, and systems against security breaches; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; risks associated with the loss of key employees; divestitures and contingent liabilities from divestitures; Brady’s ability to properly identify, integrate, and grow acquired companies; litigation, including product liability claims; foreign currency fluctuations; potential write-offs of Brady’s goodwill and other intangible assets; changes in tax legislation and tax rates; differing interests of voting and non-voting shareholders; numerous other matters of national, regional and global scale, including major public health issues and those of a political, economic, business, competitive, and regulatory nature contained from time to time in Brady’s U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the “Risk Factors” section within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2020 and subsequent Form 10-Q filings. These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.

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3Managing Through the Pandemic Managing Through the Pandemic: • Thank you to all of the Brady employees and front- line workers. • Brady’s products are helping in the fight of COVID- 19. Key Messages: • Workplace Safety is growing its customer base, but gross margins were impacted by mix. • ID Solutions continues to grow profit as a percent of sales. • SG&A continues to trend downwards, boding well for strong earnings growth as markets improve. • Strong balance sheet and cash generation.

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4Q2 F’21 Financial Summary • Sales were $265.8M in Q2 of F’21 compared with $276.7M in Q2 of F’20. – Organic sales declined 6.3%. – Foreign currency translation increased sales 2.4%. • Gross profit margin of 48.7% in Q2 of F’21 compared with 50.3% in Q2 of F’20. • SG&A expense of $82.2M (30.9% of sales) in Q2 of F’21 compared with $87.4M (31.6% of sales) in Q2 of F’20. • R&D expense of $9.9M (3.7% of sales) in Q2 of F’21 compared with $10.5M (3.8% of sales) in Q2 of F’20. • Income before income taxes and losses of unconsolidated affiliate declined 7.0% to $39.4M in Q2 of F’21 compared with $42.4M in Q2 of F’20. • Net income per Class A Diluted Nonvoting Common Share was $0.59 in Q2 of F’21 compared with $0.62 in Q2 of F’20. • Net cash provided by operating activities increased 153% to $36.1M in Q2 of F’21 compared to $14.3M in Q2 of F’20.

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5Sales Overview • Total sales declined 3.9%. • Organic sales declined 6.3%: • ID Solutions – Organic sales decline of 6.9%. • Workplace Safety – Organic sales decline of 4.8%. • 2.4% increase due to foreign currency translation. Q2 F’21 SALES: • ID Solutions – Decrease in rate of organic sales decline compared to Q1 of F’21 and Q4 of F’20. • Workplace Safety – Organic sales decline primarily due to North America business. Q2 F’21 SALES COMMENTARY: $290 $288 $298 $297 $293 $282 $290 $295 $287 $277 $266 $252 $277 $266 $200 $225 $250 $275 $300 Q1 F'18 1.7% Q2 F'18 3.2% Q3 F'18 3.2% Q4 F'18 2.5% Q1 F'19 4.7% Q2 F'19 2.3% Q3 F'19 2.4% Q4 F'19 1.7% Q1 F'20 (0.4%) Q2 F'20 (1.2%) Q3 F'20 (6.0%) Q4 F'20 (13.7%) Q1 F'21 (4.9%) Q2 F'21 (6.3%)Organic Sales SALES (millions of USD)

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Gross Profit Margin 6 • Gross profit margin of 48.7% compared to 50.3% in Q2 of F’20. • We continue to invest in automation and manufacturing efficiencies. • Gross profit margin was negatively impacted by reduced sales volumes in our ID Solutions business along with product mix in our Workplace Safety business. Q2 F’21 – GROSS PROFIT MARGIN: $146 $144 $151 $147 $147 $140 $146 $147 $141 $139 $130 $119 $135 $130 50.3% 49.9% 50.6% 49.6% 50.0% 49.5% 50.3% 49.6% 49.3% 50.3% 48.7% 47.1% 48.9% 48.7% 40% 45% 50% $100 $125 $150 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 GROSS PROFIT & GPM% (millions of USD)

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SG&A Expense 7 • The $5.1M reduction in SG&A expense compared to Q2 of F’20 was due to ongoing benefits from efficiency actions combined with a reduction in discretionary spend. • Sequentially, SG&A expense was down $0.8M compared to the first quarter of this year. This decrease was primarily due to benefits from efficiency actions partially offset by foreign currency translation. Q2 F’21 – SG&A EXPENSE: $100 $98 $102 $91 $95 $93 $95 $89 $90 $87 $83 $76 $83 $82 34.5% 33.9% 34.1% 30.6% 32.3% 32.8% 32.7% 30.2% 31.2% 31.6% 31.3% 30.2% 30.0% 30.9% 10% 15% 20% 25% 30% 35% $60 $70 $80 $90 $100 $110 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 SG&A EXPENSE AND SG&A EXPENSE AS A % of SALES (millions of USD)

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R&D Expense 8 $10.5 $11.3 $11.7 $11.7 $11.3 $11.1 $11.4 $11.3 $11.0 $10.5 $9.8 $9.4 $10.2 $9.9 3.6% 3.9% 3.9% 3.9% 3.9% 3.9% 3.9% 3.8% 3.8% 3.8% 3.7% 3.7% 3.7% 3.7% 2.5% 3.0% 3.5% 4.0% $6.0 $8.0 $10.0 $12.0 $14.0 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 R&D EXPENSE AND R&D EXPENSE AS A % of SALES (millions of USD) • We continue to invest in R&D to drive future organic sales growth. • Solid new product pipeline. • Focused on ensuring our R&D spend is both efficient and effective. INCREASING OUR INVESTMENT IN RESEARCH & DEVELOPMENT:Q2 F’21 – R&D EXPENSE:

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9Income Before Income Taxes • Income before income taxes and losses of unconsolidated affiliate decreased 7.0% to $39.4M in Q2 of F’21 compared to $42.4M in Q2 of F’20. Q2 F’21 - INCOME BEFORE INCOME TAXES AND LOSSES OF UNCONSOLIDATED AFFILIATE: INCOME BEFORE INCOME TAXES AND LOSSES OF UNCONSOLIDATED AFFILIATE (millions of USD) $34.8 $35.0 $37.0 $45.2 $39.9 $36.7 $41.0 $47.1 $41.6 $42.4 $22.2 $34.9 $42.2 $39.4 $10 $20 $30 $40 $50 Q1 F'18 12.2% Q2 F'18 20.4% Q3 F'18 20.7% Q4 F'18 26.0% Q1 F'19 14.8% Q2 F'19 4.8% Q3 F'19 10.8% Q4 F'19 4.1% Q1 F'20 4.2% Q2 F'20 15.4% Q3 F'20 (45.9%) Q4 F'20 (26.0%) Q1 F'21 1.6% Q2 F'21 (7.0%) Year on Year Growth

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10Net Income & Diluted EPS • Net income was $30.9M in Q2 of F’21 compared to $33.6M in Q2 of F’20. • Diluted EPS was $0.59 in Q2 of F’21 compared to $0.62 in Q2 of F’20. Q2 F’21 – NET INCOME & DILUTED EPS: $0.49 $0.08 $0.49 $0.66 $0.58 $0.55 $0.65 $0.68 $0.70 $0.62 $0.26 $0.53 $0.64 $0.59 $0.00 $0.20 $0.40 $0.60 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 NET INCOME PER CLASS A DILUTED SHARE $25.8 $4.3 $26.0 $35.0 $30.6 $29.2 $34.8 $36.6 $37.5 $33.6 $13.6 $27.7 $33.5 $30.9 $0 $10 $20 $30 $40 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 NET INCOME (millions of USD)

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11Cash Generation & Uses • Cash flow from operating activities was $36.1M in Q2 of F’21 compared to $14.3M in Q2 of F’20. • Free cash flow* was $30.9M in Q2 of F’21 compared to $8.9M in Q2 of F’20. • Cash flow from operating activities and free cash flow* were impacted by the payment of annual incentive compensation which was higher in Q2 of F’20. • We returned $12.3M to our shareholders in the form of dividends and share buybacks in Q2 of F’21. CASH FLOWS IN Q2 OF F’21: * Free Cash Flow is calculated as Net Cash Provided by Operating Activities less Capital Expenditures. CASH FLOW FROM OPERATING ACTIVITIES (millions of USD) $34.7 $7.7 $46.8 $53.8 $18.8 $25.4 $52.7 $65.3 $38.8 $14.3 $42.8 $45.1 $62.8 $36.1 $0 $20 $40 $60 Q1 F'18 134% Q2 F'18 181% Q3 F'18 180% Q4 F'18 154% Q1 F'19 54% Q2 F'19 87% Q3 F'19 152% Q4 F'19 178% Q1 F'20 104% Q2 F'20 43% Q3 F'20 313% Q4 F'20 163% Q1 F'21 188% Q2 F'21 117% % of Net Income (millions of USD) 3 Mos. Ended Jan. 31, 2021 3 Mos. Ended Jan. 31, 2020 6 Mos. Ended Jan. 31, 2021 6 Mos. Ended Jan. 31, 2020 Cash Balance - Beginning of Period 256.3$ 295.1$ 217.6$ 279.1$ Cash Flow from Operating Activities 36.1 14.3 98.9 53.1 Capital Expenditures (5.2) (5.4) (14.5) (13.1) Dividends (11.4) (11.6) (22.8) (23.1) Share Repurchases (0.9) - (3.6) - Effect of Exchange Rates on Cash 4.7 0.5 6.3 0.2 Other (2.0) (3.1) (4.3) (6.4) Cash Balance - End of Period 277.6$ 289.8$ 277.6$ 289.8$

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Net Cash 12 • January 31, 2021 cash = $277.6M. • Brady has no outstanding debt. • Balance sheet provides flexibility for future organic and inorganic investments. STRONG BALANCE SHEET: $48 $44 $73 $129 $138 $151 $188 $229 $245 $240 $190 $218 $256 $278 $0 $50 $100 $150 $200 $250 $300 $350 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 NET CASH (millions of USD)

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13F’21 Diluted EPS Guidance Diluted EPS Guidance for the Year Ending July 31, 2021 $2.48 to $2.58 Diluted EPS Guidance for the Second $1.25 to $1.35 Half of the Year Ending July 31, 2021 (compares to $0.79 in second half of F’20) Guidance Assumptions: • Continued economic improvement and the successful roll-out of vaccines around the globe. • Mid-single digit organic sales growth in the second half of the year ending July 31, 2021.

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Q2 F’21 vs. Q2 F’20 (millions of USD) 14Identification Solutions • Revenues declined - (5.4%): • Organic = - (6.9%). • Fx = + 1.5%. • Organic sales performed better in Asia than in North America and Europe. • Expenses are down due to sustainable efficiency activities as well as cost containment activities. • Segment profit as a percent of sales increased despite reduced sales volumes. Q2 F’21 SUMMARY: Q2 F’21 Q2 F’20 Change Sales $ 194.2 $ 205.4 - 5.4% Segment Profit 39.0 40.7 - 4.1% Segment Profit % 20.1% 19.8% + 30 bps $218 $209 $214 $222 $215 $205 $193 $171 $198 $194 19% 18% 19% 21% 20% 20% 19% 18% 20% 20% 5% 10% 15% 20% $150 $175 $200 $225 $250 Q1 F'19 5.7% Q2 F'19 3.6% Q3 F'19 4.0% Q4 F'19 3.3% Q1 F'20 (0.2%) Q2 F'20 (1.3%) Q3 F'20 (8.2%) Q4 F'20 (21.7%) Q1 F'21 (8.4%) Q2 F'21 (6.9%)OrganicGrowth SALES & SEGMENT PROFIT % (millions of USD) • Improving market conditions. • Anticipate organic sales growth in the second half of fiscal 2021. • Continued strong profitability and cash generation. OUTLOOK:

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Q2 F’21 vs. Q2 F’20 (millions of USD) 15Workplace Safety • Revenues increased + 0.4%: • Organic = - (4.8%). • Fx = + 5.2%. • Organic sales declined due to the North American business and Australia. • Europe experienced low-single digit organic sales growth in the quarter. • Segment profit and segment profit as a percent of sales decreased due to reduced sales volumes and product mix. Q2 F’21 SUMMARY: Q2 F’21 Q2 F’20 Change Sales $ 71.6 $ 71.3 + 0.4% Segment Profit 3.5 5.5 - 36.5% Segment Profit % 4.8% 7.7% - 290 bps Organic Growth $75 $73 $76 $73 $72 $71 $73 $81 $79 $72 7% 6% 8% 9% 7% 8% 6% 7% 10% 5% 0% 2% 4% 6% 8% 10% $50 $75 $100 Q1 F'19 2.2% Q2 F'19 (0.9%) Q3 F'19 (1.6%) Q4 F'19 (2.6%) Q1 F'20 (0.8%) Q2 F'20 (1.0%) Q3 F'20 0.2% Q4 F'20 10.8% Q1 F'21 5.5% Q2 F'21 (4.8%) SALES & SEGMENT PROFIT % (millions of USD) • Challenging comparables in the second half of F’21 due to strong Covid-related product sales last year. • Anticipate a continued slowdown in Covid-related product sales to be partially offset by increased core product sales. OUTLOOK:

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16Investor Relations Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com/investors

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