Brady (BRC)

Ann Thornton Chief Accounting Officer
Michael Nauman President and Chief Executive Officer
Aaron Pearce CFO
Michael McGinn Wells Fargo
Keith Housum Northcoast Research
Steve Ferazani Sidoti
Call transcript
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Good day, and thank you for standing by. Welcome to the Third Quarter 2021 Brady Corporation Earnings Conference Call [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ann Thornton, Chief Accounting Officer. Please go ahead.

Ann Thornton

you. Thank welcome Call. Corporation and Quarter XXXX the Conference Earnings to morning, Fiscal Brady Third Good for morning's slides at The this www.bradycorp.com/investors. Web on site our call are located

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

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

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

Michael Nauman

strong entire fight for thank in pandemic. Brady the is innovating that many Thank executing fiscal morning, our very we joining team a which XXXX the results, needed the Brady well, of accomplishments economic you I'm you, released are challenging improving third this and The help customers products morning, quarter environment. Ann. team. of proud to us of Good providing and a was our for but all today. This quarter financial

working still many demand behind has isn't people cases COVID around globe continue increased. many to high pandemic yet the us, as this businesses and Although remotely, in have countries quite are

materials and has are has where in cost absolutely The business swift salespeople this definitely as areas growing and side base such recovery of wages. again pockets and are resin, inflation our in to there beyond been starting travel paper, Our is XXXX. resulted freight,

As margin Brady. gains, as you target ending increases, automate never cost pushed to never when and we are efficiency sustainable a combined at maintain XX% or us slowed around to with increases. gross down efficiencies profit see, price drive we've which continue our offsetting is focus can healthy Driving input for facility of a

what's is juncture enhancing upgrading making investing we're at in ensuring capabilities. We're we're grow and financial the and We're However, to Profitable future. our products more number necessary this We're our line is aggressive We're site. sales machinery. the accelerate capacity into priority. sales Web our taking investments that new actions improving marketing growth growth. one important our now developing top to

positive certain as products as instance, to growth site sales well our also our we're from distance spend, the the have new business, increasing an invest who For we've R&D heavily seeing don't our as ID increasing launch We're ourselves and our and in scale rate, at we in been our to Solutions R&D. with results we're continuing in digital Europe. investing We're markets by underserved other talent. India markets also and and expanding more marketing into Southeast Web including force our Eastern strong geographically presence future potential, and upgrading in Asia expanding online as improving competitors

reach in to we're expand the growth. In and accelerated also fiscal many continue as growth which platform confidence our Workplace sales, changing business quickly Throughout increase that will proprietary and up in our by of to around our We're Our effort our in we're our further. marketing sales accelerate on we lineup, investing market base. progress pace the customers through of We're investments accelerate we're our product the marketing year pandemic, into campaigns, market launches in dynamics. common ID the business, the an ratcheted web with and new Solutions And product intelligence online adapt gives investments strong new increasing And capitalizing to new a us development. Safety to we stronger high product globe our the fiscal customer using online XXXX. sales increasing to value of presence in new our to adding even salespeople percentage rest our products combined us customers. new much helped sold

our the on returned to is focus extremely aggressively pandemic off well customer organic serving Our increase throughout paying healthy sales and as working our we this quarter. customers to base growth

growth eventually that as organic another some see in improve. other also this our markets We of we'll end leg believe

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

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

believe in another we acceleration should will, of markets see sales they these when growth. organic So we level back, which bounce

ID, aerospace RFID to ID also application In a on addition firmly performance driving position printers publicly company in has traded the in acquisition high the summarized growth, materials, small through and RFID readers, is power, in also process and sales a of to sometimes we're industrial off is the scanners on which the use tags. leading now, is in help which specializes positioned Nordic trace leader Brady track and the niche working number performance Slide organic of of in we RFID RFID a focus our can Finland associated readers, shelf X. software tag. that Until compromise applications. Brady as and Nordic

the that ID's Nordic cases is printer visibility. niche focused the fully RFID marry printers our software. readers in business. create addition we the ID's a ability provide and core and strong us completed industrial faster-growing our Nordic where will technology, applications At Nordic to of expand adoption Driven a scanners the markets. ID better integrated we of result are service we're emerging segment The X.X, giving of will of acquisition software, Industry provider thus, with as cement when identification these Brady, by Brady our growing use on company an our the as with to portfolio in quickly ID workflow industrial of of this of a With expertise material full can Solutions and market

Our portfolio. vision with known by is our to a fits expand and new organic vision Nordic rates. markets presence faster ID this diversify our RFID in filling attractive gap product into growth squarely within in

We as growth not are Nordic for Brady. every to ID extract a area strategic synergy. trying last cost We're approaching

within and some in significant and ID product Europe. us the value removing and us cost and majority track Nordic offering to increase Nordic back are of expand We industrial that fact, the of publicly of accelerate Finland efforts being applications synergies. The intend sales Nordic outside at minor help from R&D office its ID products this complementary in only and In strong to trace to The settings. cost a product comes introductions new ID of synergies help help vast traded Europe. currently the company are will expand technology

there combined complete and very how track will develop industrial footprint. when us So efforts, We're additional global we them acquisition, a with global with Brady's combine to help synergistic R&D trace space. the excited in about opportunities solution are the natural

XXXX yet our ID not earnings we've As closed Nordic the transaction, have guidance. we included not fiscal this in

to expect of costs in we value, acquisition for would amortization close of such dilutive transaction remainder fiscal May, and result close the be as and acquisition a it purchase XXXX the would if the legal assets. primarily the values accounting to we grossing intangible fair up However, normal the inventory items, this as to of the

EPS our be dilutive in Nordic XXXX approximately to dilution of quarter, and fiscal well. as to $X.XX we slightly our fourth expect We ID $X.XX expect to in

a term much buying value goal of mentioned, ID we Nordic we're As as as immediately short with I not can. extracting

And result give a is in today, to guidance confident Solutions I'll to a Brady Workplace our course, expanded our we of accelerate this sales. customers, growth then Our our and track us and made turn is year. Overall, and technology strong product to our commentary our business further and applications. to forward ability our we now ID, and fiscal offering R&D, marketing industrial businesses. goal through Safety optimism. flow increased R&D technology such provide our return XXXX expand significant recently in our on our the for that sheet further efforts give well Aaron powder Solutions as to results dry over sales in strong specific look I'm Safety positioned Workplace increased pandemic and detail strong a rock rest our of in of next year the results, confident and to a trace results result our this I'm growing employees fiscal and revenue of the financial deliver on for base close investments additional It's Nordic in invest the organic our to acquisitions. and help our acquisitions a to for we've this Identification will customer I'll we bit Aaron? more call Plus businesses. shareholders. and, combination you throughout about as our and cash as of future balance as both solid see quarters growth future focus ID in

Aaron Pearce

pretax of $XXX.X last $X.XX EPS last Slide Good And XX.X% an of at $X.XX. million, quarter the XXX% last morning, million, to $XX.X Thank Sales Michael. on to same were finished compared quarter X. Diluted quarter financial review quarter I'll income was number increase the compared which year's start this in third was you, of an year. increase of EPS was year. the everyone. compared third which QX to

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

was quarter. QX strong a financially, So very

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

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

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

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

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

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

points direct finishing compared XX.X% sales this activities open to certain XXX manufacturing increased facilities. increased We're inflationary freight result roles. efficiency materials, inflation margin we're manufacturing services. that XX.X% been and our of quarter raw quarter, finding many profit improvement basis it difficult driving also was at of gross third year. pressures to This the fill healthy and a in in throughout volumes we've We're wage last seeing and by the the Our a seeing

investing million our improve US Michael our last third mentioned, to negatively the additional compensation. even profit QX were to efficiency However, able of the increases On gross sales cost had SG&A upward impacted as were the with take and combined pressures, a opens this year, we trending. price never find with significantly due same by SG&A whereas million our to period last nonexistent bonuses foreign incentive this In X, targeted down of and based sales margins Slide these we share of number increased effectively year, dollar ending was expense incentive comp focus. And percent due to absolutely as $XX.X costs still pandemic. normal some the based as as you'll quarter the based automation The compared in in currency to reduced than of and of due to XX.X% XX.X% the $XX.X in higher level world last personnel and of are marketing SG&A to of up. from back third drive year. was and commissions sales, And ticked we absolute in was depreciation value incentive the SG&A quarter a of year. compensation, dollar, quarter

Slide to X. Moving number

the trending and of find You'll investments in development. research our

R&D. invested quarter, $XX.X This in we million

every charges. dollar We from long of protect continue and the we last profit doubled growth million quarter. to ensuring after-tax most trends. prior The last on to impacted Even focus illustrates year, propel sales same trends. million have in our the the XX.X% last quarter's In the of was our XX at noncash Slide number management, development, these that number Slide to $XX.X opportunities of increasing excluding Pretax expense spent. $XX.X year, income sales and committed to nonrecurring items million our year. term pretax every EPS gross increase this time, with sales Brady's impairment than due QX to margins. combined pretax was income earnings critical illustrates these are out $XX.X income These investments in this pretax product X negatively R&D our growth year strong investments thus ongoing to help pretax increased while, by to income of by income and dropping our more get we're same dollar significant from income. after more period invest new of over in

diluted to year's I $X.XX quarter, As mentioned, XXX%. this third was compared EPS of $X.XX increase last in quarter an

find our strong. mentioned, the our that be adjust from EPS represents this $XX.X We Slide flow XX% been flow this increase strong cash cash for activities this cash activities just quarter. of of million summary to XX% continues a prior When in year you would million a $XX our which generated a increase number in operating free If year's EPS impairment growth quarter. very flow cash cash I quite operating free XX, flow. you'll have XX% quarter, was compared generation, On last and from a third to and

of flow Looking earnings. activities earnings, as strong continuing illustrate this operating a quarter, percent at quality the our to cash of operating income flow of equal XXX% from to net was cash

On you'll turn million strong cash XX, sheet. you cash the debt. the can to April see no Now generation our and on $XXX.X is if outstanding that had impact of having XXth, number we Slide balance

balance the after cash $X.X and of quarter increased shareholders million in $XX This million even our million our to dividends returning approximately expenditures. by investing capital $XX.X form in

ID. yet today, of acquisition Nordic closed As not have the of we

a put this in acquisition, still barely and net over be will of our position in balance cash cash closed, will dent we when $XXX However, a million.

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

capital consistent. is to approach Our allocation

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

a to where it or and year After and dividends. keep where organic we cash 'XX investments strong focus opportunities. absolutely cash the consecutive of funding synergistic second, will investments shareholders the And are where increases. dividend annual in we our in funding disciplined we ROI deploy Fiscal we of We long term these makes form believe our buybacks for returning sense marks XXth positive. have then dividends, our that acquisitions manner investments on either

outlook is XX. fiscal to which number articulated our on for Let's of move Slide along the rest XXXX,

of results were we QX than and a results the are more bit incrementally had anticipated positive Our stronger view stronger year. fiscal these remainder factoring into our this on

seeing $X.XX to of XXXX, This we're to end XX% end to impacted ending the not in implies of the XX, that guidance previously improvements in share when markets year. per of increasing most the addition, year the In steady been our also conditions for economic $X.XX our to expect they a in have year our quarter to to EPS improving all to of of We're guidance last $X.XX announced improve July haven't markets, but fourth the share, of new quarter of from range fiscal and the the somewhere range the range in equates of we range our evenly. to this XX% which $X.XX $X.XX fourth range fourth per compared quarter. $X.XX

Michael? QX. improvements. we'll sustainable to our while make Q&A over in organic exit actions we've as increase session. of We'll on that and deliver some also to percentages I'll We'll take acquisitions XXXX. to generating tight right that expenses. This back efficiency before will the revenue growth continue continued and taken, search teen Michael to enter comments and low to the earnings being closing We're fiscal growth. to XXXX somewhere the that investments the revenues now and sales We strategies, divisional turn results revenue anticipate we continue course, in organic contingent today fiscal for strong will drive and continue to non necessary our upon macroeconomic cover to confident advance our to year gains is, call guidance drive provide continue

Michael Nauman

financial the outlines Identification XX quarter number Slide third for Aaron. results Solutions our business. you, Thank

Our now. business the steadily shock over the a to ID which from pandemic, Solutions improve ago by initial was continues year

last our cost IDS the this previous basis our quarter segment XX.X%, of profit the to XX% increase in year. at our to $XXX.X quarter compared increase X.X% compared million in last a only quarter quarter. quarters. out finishing quarter very in just of percentage XXX growth an sales division XX%. the despite but the also way in year over to And last This of of were focus sales second on the sales row Europe, organic X.X%, not translation. Asia the strong organic efficiencies occurring an Regionally, point nearly third on third the XX% against versus a when the third accelerated were is this decline. strong lockdowns strong growth of several increased of organic throughout quarter a fact, were year. excess we in of of up as In third side, In sales sales sequential led currency sales IDS quarter with of from of foreign with organic sales Organic Asian increase

periodic driving lockdown. did outstanding growth Our the handling job sales while an interruptions European team of

general, has our sales healthcare this are a near product in product the lines improvement growth also positive. strong single year. which sales very in of second the in IDS In pre-pandemic saw trends we improved our health and in in solid quarter, we decline Sales and from levels. QX We digit X% the the is our growth low lines grew digits this in quarter had Demand in high business We throughout the geographies saw quarter. exited single organic Americas. all care

number yet would However, niche struggling not markets have Clearly, we but market has that end levels. other not have pre of have that identification, returned to we recovered. end small including to which to be recover, number a fully that markets continues are a pandemic of do one aerospace struggle workplace

quarter. of never lean and marketing and selected research a stronger conditions in activities returned levels. focus improving driving last of profit sales development XX.X% illustrates to last Segment hard quarter. able peak $XX.X off was efficient increase to work year This and our during with the efficiency a combined the geographic of increased growth. million from cost profit market and when to is activities year $XX.X costs to testament starting structure as become investments. year's segment Solutions was These to been XX.X% of continue keep to while our today many absolutely sales investments sacrificing on organization. entire the million personnel, to how We've our this pandemic and the and structure compared more profitability sales expansion. We pandemic sales with IDS pre in ID cost as generating the third pay out keeping operating are This investing sales sales percentage of of quickly last profitable in team improvement they work team nearly constantly a to continued adjust

As a segment as a XX% strong incremental $XX.X sales increased of million million. $XX.X was on growth margin result, our profit

wrapped high printer time. amount label a our easy-to-use Brady of of This on proud print We're we a the can really in the version future a manual R&D about AXXXX ability automatically growth. a remains performance to labels new launch labels This process really customers has we're of Wraptor for evenly save with The variety and using our a to our the around Wraptor results our print forward Our showing to excited more applicator. today. large, effort commitment this AXXXX and compact and eliminates a talk wrapping It every to wires. drive is I'm of time which software. them. is printer wrap printer print to creases priority is launched weeks looking and will printer applicator, and touchscreen no an innovative Two top it ago, substantial

to a of This flag tape different engineer unique Like spaces. flag quick much is and easier can the where ideal printers apply more and format while easy printers a to being launched on to through performance tight label. These to flag and in design high to label and multiple That with cabling. the label centers only our be use. is in products easy a also Brady's it extremely It's applications. design the materials which and adhesive other all of faster one makes needed cabling a range wide wire applications and of half demonstrate on and quarter, Brady for data extremely for quick run apply we labels, ability label, data is

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

you'll and was Australian of teens an below driven products organic performance. COVID X.X%. increased business, to well high which of X.X% financial of in consisted quarter this decline which sale as the the Workplace decline a our of number year. This Moving X.X%, foreign prior WPS sales Slide declined summary by growth of sales related XX, find the Safety was currency

so sales over growth Our the products, XX% business of was related a by comparable. tough driven has sale year last which the quarter quarter this Australia, was COVID in

to the find digital them to substantially term Australian base, and to retain we long our marketing quarters, last customers Over into customers. opportunities turn that ensure new continue approach we've several and our repeat increased enhance our customer however, we

Organic quarter. our the was products by this North non has American quarter well, sales improved offering. to which COVID sale quarter. as of slightly product fully business related not declined second declined of in compared sales The this COVID America Our replaced North

in right of the and beginning we're moving throughout France, sequential countries we other Europe grow still quarter. the a low the UK, sales business European shutdowns periodic we're in quarter, see improvement, digits believe was most third able Germany Despite to to single direction. the and this Western in our So in

base. team for customers came are our who job newly identification Our companies team and core these Brady customer pleased job products, Overall, customers an our same those performing these done initially customers the safety well. to COVID has And this quite how has outstanding nice for acquired of as we're providing supplying products a increasing as we're many related our period. needed with during initial critical products that done

pandemic also of our areas. aimed believe at there new up core certain the is in and Our launched a Workplace marketing We've variety space. recedes. demand And Safety launched focus we even continue new of pent industrial this number offerings. team we a signage after to We bit on believe be quarter, will that new demand COVID-XX to continues products custom in a still product for of

cost structure. levels some compared can the For driven quarter. this go that with profit replacing last profit instance, increase quarter by signage primarily drive companies the address employees. our additional their year, without of revenues the to year to was forward. believe sales increased there This in incurred $X.X will is year's $X.X along safety in costs being in deferred million million segment third only WPS this prior was segment is our long further there of without well addressed, maintenance We once so level help that risking

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

due us of COVID ahead role sales for for in play to the is long-term Although positioned we healthy. comparables next very to well year, related product the difficult am that against last strong the we're some business played COVID-XX. Brady I our several and core have and the fight growth proud quarters continues of profitable

Our companies products with help social distancing.

schools help products safely. reopen Our

high an not normal. enable spread. products strong some Throughout in pandemic semblance by our investment we all to the of over where during likelihood And is pandemic, back to in used Our The as financial away of products position. globe. will us the virus level countries efficiencies. positive safety people improving areas this is we from invest identification but getting there enviable over continued help certain and of the frontline are momentum and it's the economy people in growth is were to And recovery. that and Brady keep continued accelerate this workers is

Our cash earnings incredibly our up, up, strong. is is and are our flow balance sheet

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


question Michael from Instructions] [Operator comes McGinn first Wells with Our Fargo.

Michael McGinn

the with comments and to it's performance an margin just was you're want I synergies it you Nordic wanted that segment, profitability quarters? going this you going means like. be business and of into that for going going for muted to couple to next the the Also start to and be operating comment. grow that dilution, is IDS strong out -- confirm up put cost regarding the segment to QX IDS seems the in Does mentioned the be somewhat on ID to are high just watermark

Aaron Pearce

absolutely I I be the can would will Solutions address be the watermark. that high in not Nordic anticipate this. QX would ID ID segment.

of ID very it's small. size If to look compared Nordic segment, Solutions ID at you the the

to to be have very it's very absolutely costs. it's very period we're excited significantly them technology, quite big small. move Now important in organization of acquisition a enough it's candid, is. this doesn't the not to not outside related run needle great the it's to well Brady But have mean QX with we think and where It portfolio. us, it We these

Michael McGinn

And so to number good switching margin, the there. gears gross

were a you couple markets pricing. -- there. then important and some of highlights mentioned you If recovery automation in investments, some

within to rank would how If color order you would you Any big the great. be items gross bucket there inflection, your margin those? were

Michael Nauman

ahead with thing is Brady really is automation. world being I years. want this start the We more on our largest labor. important margins the that but a was maintain and to to our impact the had able that's difficulty for to the become around labor than margins. going enhance journey saw believe curve One more procure and mention, expensive of And expense let's four been to on approximately more we've I the

to honest significant has really process you, of the were in my along this global ahead far to didn't driving that labor And but ending. that it's fact question, curve the have clear, how of mind be difference. shortage that in pandemic accelerated I a are that the Now has we want often, area anticipate we made the in be I never

forward. to large accelerate a I've ones to automation we're not automation on efforts because our very as next challenged work working I've teams generation right only on go now, we but of some to asked them fact, In double down to

larger And serial go our really, as and that So in a forward teams you're challenging news a bigger thinking on, with to good even philosophically that. think we're we is that already area in one-two to We're company. a parallel approach see as approach. asking way forward. we're going The going working aligned versus I'm that punch a projects

of the physical different are getting curve just but the we're start many competitors the the to as well and, to finish process, at not curve So to in our already literally ways, intellectual many looking automate, along of ways there. manufacturing of just

So that big a was determinant.

sets. factor different term. second have long have to where a The of taking us job want and taking look look way add. want that We we price to positive have is them with at look the a always them our done value pressures We a opportunities we we in we at at that to is good advantage of material the very always

up is as now oil to example. right related anything significantly an know You

that. very, able do have we've as So that to well that together. and been take at look and a realize good marry that very of them we a we to one But job marry

also price of that difficult good our but We customers customers, take we our never we to have advantage and during great to times. provide control try value

The our and that to I'm other automation I is would on organization. And highlight area and more a with programs efficient becoming of I area that And usage. and the our drive is ability we structure can only big thing not material that help reduce change. think in that's need I our down. third driving ways you. would of sustainable the to to our material believer that environmentally question usage effective really best help focus answering one but a is another And real that's actually that in the put you our sustainable helped cost by highlight world

Michael McGinn

and fund look self it have If like in And looking a seems comfortable cash I sneak the That portfolio the growth, two are of a is more have an also now? towards It need the lot do divestitures with you evolution strategy, understanding you versus you inorganic allocation we that you if segments one mirroring of capital feel to this could of place when the be. right or on revolution. goals with in more said,

Michael Nauman

time have value in a the owners. at business, new business which parts their got our past. looking for We that part, furniture definitely look have particularly at, to will of we're for we've future. focused making on divesting of hopefully, really businesses I our Brady be we businesses and think at think that's continue got the that. move we businesses area I great to the are out the was wise those looked those strongest that need And on value that the But sure at We an to always add in

don't work help together if for big that be conglomerates other want I'm not find that, -- to together. active signaling of best reasons a mentality. a synergistically We on focusing probably an to is that, there although you to better part not the telling business. believer to By anything. that am in businesses we saying be So is each then I'm in our I owner there's definitely that


from with Keith Housum question next Our Northcoast Research. comes

Keith Housum

the lines job with And It's quarter. on I I bit similar can that. margins. want gross see margins I to a a little go to of did If expanding the along good great echo gross on those more.

and puts understand comments your You this I prior obviously we And pressures your elsewhere? gross see it quarter that. up leading wage to the business have being or do takes down, and is, all margin gross cost, to and question materials of lot a freight, is WPS off micro the guess more had the especially going and with the margins. you to I was expansion have forward raw it automation price nice from really, the see just flooding capability really But

Michael Nauman

those ability efficient cost said think differentiation more proud show maintain with our our said, that we think That a We are believe is we see and be in news definitely cost the margins going past, to is our we're our good very inflation forward. as in because seeing projecting showing sustained. we're Keith, listed I've But or of about our lot and a continue it customers in the be real. we pressures. minus The hair The maintain I excellent in solid, areas. in be effective we pressures to space, fact, of of value position Brady business. products. margins. the the we'll that I They real, our and excellent that our customers are real plus we able that will how also industrial approach also to are definitely seeing

margin margin our be a despite maintain as we hitting therefore, So increase. not to expansion dollar are revenue, pressures we total we able those projecting an as projecting inflationary grow but are to

Keith Housum

turning cover I And how to apologize for you then this. Nordic to Did I missed ID guys? you you over if ID, Nordic expect bring in revenue much

Aaron Pearce

We didn't.

in have two million. months And We perspective, put little EURX.X to calendar revenue. were a expect of their over XXXX sales it to

EURX.X So million, significant. not the of that so take a sixth

Keith Housum

for or business that is them And growing is it stagnant?

Michael Nauman

Yes, a base, opportunity of our the marketplace where period. the the with will excellent reason One, awful their offering combined twofold. is the of product business appreciate. total tying American that we very, combination an But to the the see very do that in two confident expand business synergistic we'll our grow growth between is with remember, But North are is customers creating growing. in set. is really we're customer two, technology, an opportunity. But in groups, umbrella, we importantly, our we customers, are excited sale, that software By to will have Brady more very that we we lot confident technology, one well i.e., the product creating

Keith Housum

you maintain their ID if could if And And sourcing squeeze that you own on in they plan I one to same Does don't, are manufacturing process? manufacture goods? here. more will in going Nordic the or

Michael Nauman

any well. other We're making comments time and we looks we to say to their our this To people very, very well there more customer our at add we a are know know we believe do very can we time, same Brady always that value public you if do the that not by very, company. doing things at But that are that, manufacturing at products, the manufacture best on manufacturing. way things

with really on that growth where strong engine Nordic driver. you this can taking focus with an their very I this That's ID, to is for a what umbrella very growth. the speak putting talented of ours. software talented Nordic tell over opportunity great with an creating them do we'll but products I specifically biggest and ID our is the team, is So far team, by two marrying can't I'd


Our with comes next from Steve question Sidoti. Ferazani

Steve Ferazani

yet, we hospital ID So and I'm healthcare got you deviation, the about ID workplace and talked back. and just a end markets aren't guessing little bit recovered really the know oil gas

can is COVID quarters, to recovered those and over levels lot above few a a So of the yet revenue quarterly your grow these basis. pre end expect next on you haven't markets

So offsetting a where that going quarter… from that's better in the to of get I'm trying the are is areas to indication those strength coming just all be

Michael Nauman

You -- mean didn't Steve, hit well interrupt. very I

that areas markets really some in out. would we've These the other I Particularly, recovered. now. haven't It's really You I literally they is hit right say need products, products because wrapping grown know Steve, an products the let's of brought labor. talk the just think extremely about general saving very strong. equation industrials, important, But are we thing, well we that of our we've the once again, money. that them eliminate out brought not, again, best

of to you then do you that things to issue that people No. say the is One it getting saving of or Well, get this products people issue our in work. go your out an of money and can an is need out. get the

we were in that our really great people exciting are us. a lot during made again, have fact to pulling end biggest change some industrial the products But specifically, difference of when that has So to created is a big, back markets. time industrial markets big this

Steve Ferazani

versus it's how did see do you segment And and health now some hospital you mention improvement… where been? area -- right Do you see where the care

Michael Nauman

are as to going thankful desperately feeling COVID, on The focus back the because the you are coming areas society. at we're or that hospitals we and think as as to I probably back where where needed has going come away. look as weren't are obviously, products the have aren't basically seeing People surgeries a were recovery to are my dramatically, a we comments, pre company, be So more and get much surgeries in much they where -- really numbers able definitely down off pandemic. close in. pull comfortable together. grateful geared. for we been for mentioned our is People as back to seeing are people a their in But literally put can. I areas that are Hospitals, getting We're go they as

in products, far rather tremendously did sell with a healthier place to we well COVID products the would Although general. be world help I

coming your clearly levels. pandemic to answer to -- that are back market we So yes, we're pre question, seeing

Steve Ferazani

Safety… on back And on mix on then Workplace bit the last and terms right more in issues the Can expecting. that Safety a quarter, think you you which level, normalized dynamics there about just mix little had the the I product back of on just talk were the to you Workplace in XQ, margin obviously, bounced

Michael Nauman

the out to able But as COVID we being know at when got because needed were -- them. at provide margins, bother in people mean nobody are many products human really products me lower you only doesn't a all that period. person I the cases, we

feel I this. customers even help about through right off get this very not decline, historically are superior. But base get the line help this, did the total extent are the gotten we've we're customer that Brady revenue good products our able as margins world through And very good though we'll to our the this, with convert So products. our core through now with very, on I end we core convert, feel the the get in those to what of employees that products to that margins up the help margins

they that historical So far we or base has good good appear that the as being customer as And switch be Brady. solid be our brought base and will margin do for customers in as would to solid very even be for as recurring been. more

Steve Ferazani

going you to Is if up? continues quickly And pick to forward on talked work ID how the recovery about labor push you had side, in that a the one activity Did Just quarter? any more, given you off have shortages. the risk

Michael Nauman

You what Brady proud products to able regards out our been do to in of getting a timely know manner. has in what? Super

There been somewhat making deteriorated. a Our been but are not have are based are numbers, excellent we've schedule. that work although, and we able to have very on don't publish everything keep particularly super oil areas them, that on challenged, some delivery tight

challenge. area a up, labor we've to There the up, question more combination the been and become that a although that of So is far, new concern, efficiency, heats great hires the employees heats no the and drives most whole of will the world in that particular needs. to meet more is economy able use as so


Our America. next of from Keeler] question Bank with [Kashi comes

Unidentified Analyst

[Kashin is Keeler] Staphos. This on of George behalf

inflation. guidance, So first off, obviously some more you're raising seeing you're but

is actions benefit what out versus get break customers? or possible to guess quantify So price some expect to I from with volumes you it

Michael Nauman

I would like to say yes/no.

out tell very have a We know. control and as mix. good I I will this control particularly would costs, repeat our pricing. We do have We our an good it But break a you you for that be model, you others. indicator as it. over good do hard for to can such over But have for

very For real. a anybody is us, not blip. here is I'm and doubt else, it is don't inflation no temporary as There that see I inflation speaking

Unidentified Analyst

back increase guess and you Nordic And bit a what efforts there. about I I can to going you then little that noted R&D on? spend intend to guess I more guess you ID, that you talk to just expect specifically

Michael Nauman

an create with take If scanners we between to ecosphere our their you need the printers, two.

So have et there's that. the products we and American that involved with market, they cetera. sure a that lot make of also want North to software mindset mentality, fit But our industrial

So you in the lift will be but software is the see biggest hardware going a to area.


showing to I'm And any Mr. Michael for remarks. in no back Nauman turn call to the further closing questions queue, like I'd the

Michael Nauman

certainly I'd this We're living interesting morning. you few comments times. a leave much. in concluding with very you Thank like to

that. any as a and the While still we're Regardless same time, to than taken continue to thrive result that actions am our We've of we committed strong foundation. are come team and of we've a will out downturn doing very stronger competition confident strong Brady the ensure global of be that have all to around market half we is seeing our geographic us. changes the economy I there inflationary of accelerating. to appears we're dispersion significant us, and pressures At pandemic, the and ahead on macroeconomic end the of back the

This profitability quarter, excellent we growth. sales and experienced

a was for quarter record this fact, Brady. In EPS

organic growth Solutions and business strong percentage of increased profit sales. as sales returned its to again a once ID Our

enhance prioritizing up to shareholder on more incremental which global Brady foundation its customers had strengthening we its digital to position, flow its investments And business tremendous serve in gives net that generation with another free tremendous cash strong We're already positioned further continued add extremely well, XX%. us confident cash And of growth. trends. market we're future than We're cash Workplace flexibility quarter presence for and capitalize growth. to is Safety Our well great a value. in

fiscal momentum, our with XXXX We for will up an XXXX. ourselves finish fiscal stronger even thus setting strong

customers you for Operator, great are may a our both our We morning. value safe, time very call. stay shareholders. you day. the thank well Have and significant positioned for this to Please generate and disconnect your


conference participating. today's you Thank concludes call. This for

great may disconnect. day. now Everyone, You a have