Brady Corporation (BRC) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Brady Corporation Fiscal Year 2021 Annual Shareholders Meeting. [Operator Instructions] Please be advised today's conference may be recorded. [Operator Instructions]. I'd now like to hand the conference over to Ann Thornton, Chief Accounting Officer.

Thank you. Good morning, and welcome to the Brady Corporation Fiscal 2021 Annual Shareholders Meeting. Thank you for joining us today. I'm Ann Thornton, Brady's Chief Accounting Officer and Director of Investor Relations. The slides for this morning's call are located on our website at www.bradycorp.com/investors. We will begin our prepared remarks on Slide #3. Please note that during this call, we may make comments about forward-looking information. Words such as expect, will, may, believe, forecast and anticipate are just a few examples of words identifying a forward-looking statement. It's important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected results. You can read about these risk factors in more detail in our 2021 Form 10-K, which was filed with the SEC in September of this year. Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. Moving to the agenda on Slide #3, we will first announce the results of the election of Brady's Board of Directors. Next, Brady's President and CEO, Michael Nauman, will provide the President's report. And then we will open it up to a Q&A session, where Michael Nauman as well as myself; and Aaron Pearce, Brady's CFO, will be available to answer questions. Today's presentation is being broadcast live on the Internet and will also be available on our website for replay. So your participation in the Q&A session will constitute your consent to being recorded. Let's now turn to Slide #4 for the election of the Board of Directors. I'd like to introduce Mr. Brad Richardson, the Chair of Brady's Board of Directors for the results of the election of the Board of Directors. Brad?

Well, thank you very much, Ann, and good morning, everyone. Thank you for joining us this morning. As Ann mentioned, I'm Brad Richardson, the Chair of Brady's Board of Directors. I'll provide a brief introduction of the individuals who are standing for election to Brady's Board of Directors. Standing for election are: Mr. Pat Allender. Pat is the retired Executive Vice President and Chief Financial Officer of Danaher Corporation. Next is Dr. David Bem, David is the Vice President Science and Technology and the Chief Technology Officer of PPG Industries. Dr. Elizabeth Bruno, Liz is the President of the Brady Education Foundation and was formerly on the faculty of the University of North Carolina. Ms. Nancy Gioia, Nancy is the retired Director of Global Electrical Connectivity and User Experience for the Ford Motor Company. Dr. Frank Harris. Frank is the founder of several technology-based companies, including Akron Polymer Systems, where he currently serves as the Chair of the directors. Myself, Brad Richardson, I'm the retired Executive Vice President and Chief Financial Officer of Avian Corporation, which was formerly known as PolyOne Corporation. Dr. Michelle Williams. Michelle was most recently the Global Group President of Alto glass International, a subsidiary of Arkema S.A. And last, of course, but not least, Michael Nauman, Brady's President and Chief Executive Officer. We are quite proud to offer this high-quality and diverse set of directors for reelection to the Board. So now let's turn to Slide 5 for the results of the election of the Board of Directors. I am pleased to announce that the shareholders of 100% of the Class B common voting stock voted in favor of the election of the director nominees, and they are, therefore, elected to a 1-year term. Thank you again for all your time and support. I'll now turn the call back to Michael Nauman.

Thank you, Brad. I really appreciate your leadership on the Board and the introduction. Having a Board that is engaged, challenges our assumptions and brings real life experience and knowledge is critical to the success of any organization. So thank you all for being such a strong board. It helps Brady to be a better company. Good morning, everyone, and thank you for joining us today. Let's start with Brady's strategic vision, which is on Slide #7. Over the last 2 years, during truly unprecedented times, I'm proud to say this statement has driven us forward. Our expertise in safety and identification became highly sought after as the pandemic opened up doors for new customers. Brady responded quickly to the challenges of the pandemic, ensuring our employees were safe. Our factories stayed open that we continue to launch innovative new products and that we fully supported all of our customers. As we move forward, we are also dealing with inflation and supply chain issues that are plaguing companies around the world, staying true to who we are and leveraging our strengths has helped us to weather the storm. Turning to Slide #8. As I've said since the pandemic began, Brady isn't just going to survive, we're going to thrive. Our internal theme this year is charging ahead, and that's exactly what we're doing. We are well positioned to grow, not simply recover. We've invested in our facilities around the globe to automate manufacturing and distribution, optimize processes and reduce material usage. And we have reached deeper into verticals like renewable energy and the marine industry where there is great demand for our high-performance labels and printers. Our commitment to innovation is highlighted on Slide #9. We launched many new products during fiscal 2021, but I want to call out a few of the more significant launches. The A6200 Wraptor is an important addition in our line of automated wrappers and flaggers as it appeals to a wider audience for its size, ease of use and affordability. And the A6200 prints and automatically wraps our labels around wires, thus saving our customers valuable time and money. The I-5300-binchtop industrial label printer creates 0 label waste and can print barcodes on labels as small as [ 2 of an inch ] while greatly reducing the multistep print and apply labeling process. It's intuitive per site and auto-calibrating which makes it easy to use and saves our customers once again both time and money. With the Seton Talking Safety Sign Alerter, we have shown that, yes, there are still ways to innovate when it comes to signage. Finally, our strength as a label company takes us to new temperature lows in the medical environment with new specialty cryogenic labels. Moving on to Slide #10. Our acquisition strategy is focused on acquiring technologies to enhance our product offerings and leverage our existing strengths. You'll see the 3 companies we acquired this year will do exactly that, helping us to move into faster-growing end markets. Nordic ID out of Finland and Code Corporation from Salt Lake City in the United States will help complete Braves track and trace ecosystem with the addition of RFID and barcode readers. The value of code in Nordic ID come from their strong technology and complementary products that will help us expand and track and trace applications within industrial settings. There are natural synergy opportunities once combined with Brady's global footprint to offer a complete solution. Magic Card based in the United Kingdom, allows Brady to expand our product offering into rigid card printing and encoding. Magic Cards specializes in ID card printers and consumables with high-resolution, full-color image capabilities that have built in security features and the ability to encode smart card. Here, too, there are natural energies with our people identification product offering. Previously, we lacked rigid card printers in our product portfolio and Magic Card helps fill that gap. It's been exciting to watch our teams collaborate on ways that we can collectively some of user's problems. Finally, turning to Slide #11. Brady is continuing to focus on our values, in particular, we are deepening our commitment to the environment in several key areas. We have set goals around the following priorities: focusing on energy efficiency, reducing waste and recycling reducing our carbon footprint and reducing the environmental impact of our products. We also launched the Brady branches initiative this past earth day where I challenged each of our facilities to plant trees on site or in their communities. Already, employees from Mexico to Brazil California to New York and right here in Milwaukee have planted as near their sites. I'm continually inspired by our employees' commitment to Brady's values and I'm proud of the drive the team has shown in the last year. With that, I'd like to start the Q&A. Operator, would you please provide instructions to our shareholders?

[Operator Instructions] I'm currently not showing any phone questions. I'd like to turn the call back to Michael Nauman for closing remarks.

Thank you. I'd like to leave you with a few concluding comments this morning. Brady is holding true to our vision and executing on our strategy. We have built a strong sustainable organization designed to bind not break when the going gets tough. There are still global challenges and many unknowns we will encounter going forward, but our team has demonstrated that we can adapt and respond quickly. The combination of technology-based acquisitions and the investments we made throughout the pandemic in R&D, sales and marketing as well as our recently expanded customer base, all set us up well for the future. We're proud to be your company, and we're proud to continue to deliver what we promised to our customers, our employees, our communities and to you, our shareholders. Please stay safe, and thank you for your time this morning. Have a great day. Operator, you may disconnect the call.

This concludes today's conference call. Thank you for participating. You may now disconnect.