Document

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 25, 2017

(Exact name of registrant as specified in its charter)

Commission File Number 1-14959




Wisconsin		39-0971239
(State of Incorporation)		(IRS Employer Identification No.)

6555 West Good Hope Road

Milwaukee, Wisconsin 53223

(Address of Principal Executive Offices and Zip Code)

(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))

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 May 25, 2017, Brady Corporation (the “Company”) issued a press release announcing its fiscal 2017 third 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 May 25, 2017, the Company hosted a conference call related to its fiscal 2017 third quarter financial results. A copy of the slides referenced in the conference call, which is also posted on the Company'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



EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release of Brady Corporation, dated May 25, 2017, relating to third quarter fiscal 2017 financial results.
99.2	Informational slides provided by Brady Corporation, dated May 25, 2017, relating to third quarter fiscal 2017 financial results.

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: May 25, 2017		/s/ AARON J. PEARCE
		Aaron J. Pearce
		Chief Financial Officer and Treasurer



EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release of Brady Corporation, dated May 25, 2017, relating to third quarter fiscal 2017 financial results.
99.2	Informational slides provided by Brady Corporation, dated May 25, 2017, relating to third quarter fiscal 2017 financial results.

For More Information:

Investor contact: Ann Thornton 414-438-6887

Media contact: Kate Venne 414-358-5176

Brady Corporation Reports Fiscal 2017 Third Quarter Results and Tightens its Fiscal 2017 EPS Guidance

Earnings per diluted Class A Nonvoting Common Share were $0.43 in the third quarter of fiscal 2017 compared to $0.42 in the same quarter of the prior year.

Organic revenue declined 1.9 percent for the quarter ended April 30, 2017.

Net debt was $8.9 million at April 30, 2017 compared to $100.9 million at April 30, 2016, providing flexibility for future investments.

Earnings per diluted Class A Common Share guidance for the full year ending July 31, 2017 tightened from a range of $1.75 to $1.85 to a range of $1.80 to $1.85.

MILWAUKEE (May 25, 2017)--Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2017 third quarter ended April 30, 2017.

Quarter Ended April 30, 2017 Financial Results:

Net earnings for the quarter ended April 30, 2017, were $22.6 million compared to $21.0 million in the same quarter last year.

Earnings per diluted Class A Nonvoting Common Share were $0.43 for the quarter ended April 30, 2017, compared to $0.42 in the same quarter last year.

Sales for the quarter ended April 30, 2017, decreased 3.8 percent to $275.9 million compared to $286.8 million in the same quarter last year. Total organic sales decreased 1.9 percent and the impact of foreign currency translation decreased sales by 1.9 percent. By segment, organic sales decreased 0.8 percent in Identification Solutions and decreased 4.6 percent in Workplace Safety.

Nine-Month Period Ended April 30, 2017 Financial Results:

Net earnings for the nine-month period ended April 30, 2017, were $70.4 million compared to $55.0 million in the same period last year.

Earnings per diluted Class A Nonvoting Common Share were $1.36 for the nine-month period ended April 30, 2017, compared to $1.08 in the same period last year.

Sales for the nine-month period ended April 30, 2017, decreased 1.7 percent to $824.1 million compared to $838.5 million in the same period last year. Total organic sales decreased 0.3 percent and foreign currency translation decreased sales by 1.4 percent. By segment, organic sales increased 0.6 percent in Identification Solutions and decreased 2.5 percent in Workplace Safety.

“Our consistent focus on developing high-quality products, providing excellent customer service, pushing for efficiencies throughout our SG&A structure, and empowering the Brady team with local ownership and accountability are the primary drivers of our improved financial results. This quarter marks our seventh consecutive quarter of year-over-year earnings growth,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “We believe that our focus on driving efficiencies combined with our organic sales initiatives and our new product pipeline is beginning to generate improved organic sales trends, and will continue to drive future profit improvements. That said, challenges in the distribution channel will impact our Workplace Safety business while we are more optimistic about growth in the fourth quarter in Identification Solutions. Looking forward, our priorities remain unchanged, which are to grow our pipeline of innovative new products, provide excellent customer service and deliver operational efficiencies. We are pleased with our ability to improve our financial performance while maintaining our focus on our long-term strategy.”

“Third quarter revenues were approximately in line with our expectations coming into the quarter, finishing with an organic sales decline of 1.9 percent. Our third quarter was impacted by fewer billing days compared to the same quarter in the prior year. Organic sales were up 0.7% on a per day basis. Our ability to drive operational efficiencies and actively reduce our general and administrative structure provided financial benefits this quarter,” said Brady’s Chief Financial Officer, Aaron Pearce. “Cash generation for the quarter ended April 30, 2017 continued to be strong, as we finished with net cash provided by operating activities of $37.8 million while reducing our net debt by $28.8 million this quarter. Our strong balance sheet provides significant flexibility for future investments in new products and returning funds to our shareholders.”

Fiscal 2017 Guidance:

The Company is tightening its earnings per diluted Class A Common Share guidance from a range of $1.75 to $1.85 to a range of $1.80 to $1.85 for the full year ending July 31, 2017. Included in this guidance are organic sales ranging from a low single-digit decline to slightly positive growth for the year ending July 31, 2017. Offsetting this challenging revenue environment are ongoing efficiency gains in the Company’s manufacturing facilities and selling, general, and administrative expenses. This guidance is based upon foreign currency exchange rates as of April 30, 2017, a full-year income tax rate in the mid-20 percent range, depreciation and amortization expense of $28 million, and capital expenditures approximating $17 million.

A webcast regarding Brady’s fiscal 2017 third quarter financial results will be available at www.bradycorp.com 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, 2016, employed approximately 6,500 people in its worldwide businesses. Brady’s fiscal 2016 sales were approximately $1.12 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradycorp.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” 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: our ability to compete effectively or to successfully execute our strategy; Brady’s ability to develop technologically advanced products that meet customer demands; difficulties in protecting our websites, networks, and systems against security breaches; deterioration or instability in the global economy and financial markets; decreased demand for our products; Brady’s ability to retain large customers; risks associated with the loss of key employees; changes in tax legislation and tax rates; Brady’s ability to execute facility consolidations and maintain acceptable operational service metrics; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; litigation, including product liability claims; divestitures and contingent liabilities from divestitures; Brady’s ability to properly identify, integrate, and grow acquired companies; foreign currency fluctuations; potential write-offs of Brady’s substantial intangible assets; differing interests of voting and non-voting shareholders; Brady’s ability to meet certain financial covenants required by our debt agreements; numerous other matters of national, regional and global scale, including 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, 2016.

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 EARNINGS

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



	Three months ended April 30,		Nine months ended April 30,
	2017		2016		2017		2016
Net sales	$	275,927			$	286,816			$	824,104		$	838,519
Cost of products sold	136,018			141,373			409,679			420,835
Gross margin	139,909			145,443			414,425			417,684
Operating expenses:
Research and development	9,950			8,865			28,577			26,531
Selling, general and administrative	98,409			105,794			291,128			306,678
Total operating expenses	108,359			114,659			319,705			333,209

Operating income	31,550			30,784			94,720			84,475

Other income (expense):
Investment and other income (expense)	453			721			560			(1,030	)
Interest expense	(1,375	)		(1,838	)		(4,565	)		(6,119	)

Earnings before income taxes	30,628			29,667			90,715			77,326

Income tax expense	8,075			8,686			20,312			22,352

Net earnings	$	22,553			$	20,981			$	70,403		$	54,974


Net earnings per Class A Nonvoting Common Share:
Basic	$	0.44			$	0.42			$	1.38		$	1.09
Diluted	$	0.43			$	0.42			$	1.36		$	1.08
Dividends	$	0.21			$	0.20			$	0.62		$	0.61

Net earnings per Class B Voting Common Share:
Basic	$	0.44			$	0.42			$	1.37		$	1.07
Diluted	$	0.43			$	0.42			$	1.34		$	1.07
Dividends	$	0.21			$	0.20			$	0.60		$	0.59

Weighted average common shares outstanding (in thousands):
Basic	51,227			50,251			50,972			50,602
Diluted	52,201			50,505			51,882			50,747

BRADY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; Dollars in thousands)



	April 30, 2017		July 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	129,077			$	141,228
Accounts receivable—net	145,755			147,333
Inventories:
Finished products	61,025			64,313
Work-in-process	17,326			16,678
Raw materials and supplies	19,126			18,436
Total inventories	97,477			99,427
Prepaid expenses and other current assets	20,343			19,436
Total current assets	392,652			407,424
Other assets:
Goodwill	425,935			429,871
Other intangible assets	54,107			59,806
Deferred income taxes	26,228			27,238
Other	18,152			17,181
Property, plant and equipment:
Cost:
Land	7,271			5,809
Buildings and improvements	95,662			95,355
Machinery and equipment	257,465			256,549
Construction in progress	4,362			2,842
	364,760			360,555
Less accumulated depreciation	268,586			258,111
Property, plant and equipment—net	96,174			102,444
Total	$	1,013,248			$	1,043,964
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Notes payable	$	4,072			$	4,928
Accounts payable	60,144			62,245
Wages and amounts withheld from employees	45,079			45,998
Taxes, other than income taxes	7,109			7,403
Accrued income taxes	2,706			6,136
Other current liabilities	39,022			40,017
Total current liabilities	158,132			166,727
Long-term obligations, less current maturities	133,894			211,982
Other liabilities	57,159			61,657
Total liabilities	349,185			440,366
Stockholders’ investment:
Common Stock:
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,738,671 and 46,920,974 shares, respectively	513			513
Class B voting common stock—Issued and outstanding, 3,538,628 shares	35			35
Additional paid-in capital	321,936			317,001
Earnings retained in the business	492,411			453,371
Treasury stock—3,522,816 and 4,340,513 shares, respectively of Class A nonvoting common stock, at cost	(87,493	)		(108,714	)
Accumulated other comprehensive loss	(63,339	)		(54,745	)
Other	—			(3,863	)
Total stockholders’ investment	664,063			603,598
Total	$	1,013,248			$	1,043,964

BRADY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Dollars in thousands)



	Nine months ended April 30,
	2017		2016
Operating activities:
Net earnings	$	70,403			$	54,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,789			24,896
Stock-based compensation expense	7,445			6,247
Deferred income taxes	(2,707	)		3,169
Changes in operating assets and liabilities:
Accounts receivable	(931	)		4,679
Inventories	666			4,556
Prepaid expenses and other assets	(1,987	)		(734	)
Accounts payable and accrued liabilities	754			3,432
Income taxes	(3,270	)		(2,669	)
Net cash provided by operating activities	91,162			98,550

Investing activities:
Purchases of property, plant and equipment	(10,856	)		(7,468	)
Other	38			1,987
Net cash used in investing activities	(10,818	)		(5,481	)

Financing activities:
Payment of dividends	(31,362	)		(30,603	)
Proceeds from exercise of stock options	18,674			663
Purchase of treasury stock	—			(23,552	)
(Repayments) proceeds from borrowing on credit facilities	(60,415	)		28,819
Principal payments on debt	(16,371	)		(42,514	)
Debt issuance costs	—			(803	)
Income tax on equity-based compensation, and other	(512	)		(1,238	)
Net cash used in financing activities	(89,986	)		(69,228	)

Effect of exchange rate changes on cash	(2,509	)		3,263

Net (decrease) increase in cash and cash equivalents	(12,151	)		27,104
Cash and cash equivalents, beginning of period	141,228			114,492

Cash and cash equivalents, end of period	$	129,077			$	141,596

BRADY CORPORATION AND SUBSIDIARIES

(Unaudited; Dollars in thousands)



	Three months ended April 30,		Nine months ended April 30,
	2017		2016		2017		2016
SALES TO EXTERNAL CUSTOMERS
ID Solutions	$	196,880			$	201,482			$	589,106		$	592,282
Workplace Safety	79,047			85,334			234,998			246,237
Total	$	275,927			$	286,816			$	824,104		$	838,519

SALES INFORMATION
ID Solutions
Organic	(0.8	)%		(0.9	)%		0.6	%		(0.9	)%
Currency	(1.5	)%		(1.1	)%		(1.1	)%		(3.5	)%
Total	(2.3	)%		(2.0	)%		(0.5	)%		(4.4	)%
Workplace Safety
Organic	(4.6	)%		1.7	%		(2.5	)%		(0.2	)%
Currency	(2.9	)%		(0.9	)%		(2.1	)%		(6.2	)%
Total	(7.5	)%		0.8	%		(4.6	)%		(6.4	)%
Total Company
Organic	(1.9	)%		(0.1	)%		(0.3	)%		(0.7	)%
Currency	(1.9	)%		(1.1	)%		(1.4	)%		(4.3	)%
Total	(3.8	)%		(1.2	)%		(1.7	)%		(5.0	)%

SEGMENT PROFIT
ID Solutions	$	32,633			$	31,898			$	94,676		$	80,385
Workplace Safety	5,120			6,012			17,615			21,690
Total	$	37,753			$	37,910			$	112,291		$	102,075
SEGMENT PROFIT AS A PERCENT OF SALES
ID Solutions	16.6	%		15.8	%		16.1	%		13.6	%
Workplace Safety	6.5	%		7.0	%		7.5	%		8.8	%
Total	13.7	%		13.2	%		13.6	%		12.2	%



	Three months ended April 30,		Nine months ended April 30,
	2017		2016		2017		2016
Total segment profit	$	37,753			$	37,910			$	112,291		$	102,075
Unallocated amounts:
Administrative costs	(6,203	)		(7,126	)		(17,571	)		(17,600	)
Investment and other income (expense)	453			721			560			(1,030	)
Interest expense	(1,375	)		(1,838	)		(4,565	)		(6,119	)
Earnings before income taxes	$	30,628			$	29,667			$	90,715		$	77,326

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May 25, 2017 Brady Corporation F’17 Q3 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” 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: our ability to compete effectively or to successfully execute our strategy; Brady’s ability to develop technologically advanced products that meet customer demands; difficulties in protecting our websites, networks, and systems against security breaches; deterioration or instability in the global economy and financial markets; decreased demand for our products; Brady’s ability to retain large customers; risks associated with the loss of key employees; changes in tax legislation and tax rates; Brady’s ability to execute facility consolidations and maintain acceptable operational service metrics; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; litigation, including product liability claims; divestitures and contingent liabilities from divestitures; Brady’s ability to properly identify, integrate, and grow acquired companies; foreign currency fluctuations; potential write-offs of Brady’s substantial intangible assets; differing interests of voting and non-voting shareholders; Brady’s ability to meet certain financial covenants required by our debt agreements; numerous other matters of national, regional and global scale, including 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, 2016. 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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3Q3 F’17 Financial Summary • Sales down 3.8% to $275.9M in Q3 of F’17 vs. $286.8M in Q3 of F’16. – Organic sales decreased 1.9%. – Foreign currency translation reduced sales by 1.9%. • Gross profit margin of 50.7% in Q3 of F’17 compared with 50.7% in Q3 of F’16. • SG&A expense of $98.4M (35.7% of sales) in Q3 of F’17 compared with $105.8M (36.9% of sales) in Q3 of F’16. • Net earnings of $22.6M in Q3 of F’17 compared with $21.0M in Q3 of F’16. • Net earnings per Class A Diluted Nonvoting Common Share of $0.43 in Q3 of F’17, compared with $0.42 in Q3 of F’16. • Net cash provided by operating activities of $37.8M in Q3 of F’17 compared with $40.3M in Q3 of F’16.

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4Sales Overview • 1.9% organic sales decline: • ID Solutions – Organic sales decline of (0.8%). • Workplace Safety – Organic sales decline of (4.6%). • (1.9%) decrease due to currency translation. Q3 F’17 SALES: • Organic sales decline in IDS Americas, partially offset by strong growth in IDS Asia. • Organic sales decline in all regions of the WPS business. • Foreign currency translation headwinds persist. Q3 F’17 SALES COMMENTARY: $290 $289 $283 $269 $287 $282 $280 $268 $276 $255 $265 $275 $285 $295 $305 Q3 F'15 1.7% Q4 F'15 (1.2%) Q1 F'16 (2.2%) Q2 F'16 0.4% Q3 F'16 (0.1%) Q4 F'16 (0.9%) Q1 F'17 (0.2%) Q2 F'17 1.3% Q3 F'17 (1.9%)Organic Sales Growth SALES (millions of USD)

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Gross Profit Margin 5 • GPM of 50.7% in Q3 of F’17 compared with 50.7% in Q3 of F’16. • GPM improved in IDS Americas and Europe businesses due to ongoing efficiency gains, offset by declines in the WPS business due to reduced sales volume and pricing pressure. GROSS PROFIT MARGIN COMMENTARY: $141 $129 $139 $133 $145 $141 $140 $134 $140 49% 45% 49% 49% 51% 50% 50% 50% 51% 30% 35% 40% 45% 50% 55% $100 $125 $150 $175 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 GROSS PROFIT & GPM% (millions of USD)

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SG&A Expense 6 • SG&A expense declined $7.4M, finishing at $98.4M in Q3 of F’17 compared to $105.8M in Q3 of F’16, continuing the general downward trend. • The ongoing declines in SG&A expense are due to our focused efforts on driving efficiencies across the organization, while improving the overall customer buying experience. Approximately 25% of the decline was due to foreign currency translation. SG&A EXPENSE: $103 $103 $101 $100 $106 $98 $98 $95 $98 35% 36% 36% 37% 37% 35% 35% 35% 36% 25% 28% 30% 33% 35% 38% 40% $80 $90 $100 $110 $120 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 SG&A and SG&A% of SALES (millions of USD)

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7Net Earnings & EPS * Net Earnings from Continuing Operations, Excluding Certain Items in F’15 and Net Earnings from Continuing Operations Per Class A Diluted Share in F’15 are non-GAAP measures. See appendix. • Q3 F’17 net earnings were $22.6M compared to $21.0M in Q3 of F’16. • The increase in earnings was driven by efficiencies in SG&A throughout both the IDS and WPS businesses. • There are neither Non-GAAP amounts nor unusual items to call out in either F’16 or F’17. Q3 F’17 – NET EARNINGS & EPS: $0.34 $0.28 $0.37 $0.30 $0.42 $0.49 $0.44 $0.49 $0.43 $0.00 $0.20 $0.40 $0.60 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 NET EARNINGS FROM CONTINUING OPERATIONS PER CLASS A DILUTED SHARE, EXCLUDING CERTAIN ITEMS IN F’15* $18 $14 $19 $15 $21 $25 $23 $25 $23 $0 $10 $20 $30 $40 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 NET EARNINGS FROM CONTINUING OPERATIONS, EXCLUDING CERTAIN ITEMS IN F’15* (millions of USD)

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8Cash Generation & Uses • Cash flow from operating activities was $37.8M in Q3 of F’17 compared to $40.3M in Q3 of F’16. • Free cash flow* was $34.2M in Q3 of F’17 compared to $36.8M in Q3 of F’16. • Returned $10.5M to our shareholders in the form of dividends in Q3 of F’17. CASH FLOWS IN Q3 OF F’17: * Free Cash Flow is calculated as Net Cash Provided by Operating Activities less Capital Expenditures. $29 $41 $30 $28 $40 $40 $34 $19 $38 $0 $10 $20 $30 $40 $50 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 Cash Flow from Operating Activities (millions of USD) (millions of USD) 3 Mos. Ended Apr. 30, 2017 3 Mos. Ended Apr. 30, 2016 Cash Balance - Beginning of Period 125.2$ 120.2$ Cash Flow from Operating Activities 37.8 40.3 Capital Expenditures (3.6) (3.5) Dividends (10.5) (10.2) Debt Repayments - Net (26.3) (13.3) Effect of Exchange Rate on Cash 2.9 8.1 Other 3.6 (0.0) Cash Balance - End of Period 129.1$ 141.6$

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Net Debt & EBITDA 9 1.2 1.1 1.1 1.0 0.8 0.5 0.3 0.2 0.1 0.0x 0.5x 1.0x 1.5x Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 NET DEBT / TTM EBITDA* • April 30, 2017 Cash = $129.1M, Debt = $138.0M, and trailing twelve month EBITDA = $157.3M. • Net Debt/EBITDA* = 0.1 to 1. • Net debt declined $92.0M over the last twelve months, finishing at $8.9M at April 30, 2017 compared to $100.9M at April 30, 2016. • Balance sheet provides flexibility for future cash uses. STRONG BALANCE SHEET: * EBITDA is a non-GAAP measure. See appendix for the reconciliation of net earnings to EBITDA. $168 $139 $140 $132 $101 $76 $50 $38 $9 $0 $50 $100 $150 $200 Q3 F'15 Q4 F'15 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 NET DEBT (millions of USD)

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10Tightening Full Year F’17 EPS Guidance Range F’17 Diluted EPS $1.80 to $1.85 Guidance Assumptions: • Organic sales ranging from a slight decline to slightly positive organic sales growth. • Full-year depreciation and amortization expense of approximately $28M. • Full-year income tax rate in the mid-20% range. • Full-year capital expenditures of approximately $17M.

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Q3 F’17 vs. Q3 F’16 PERFORMANCE (millions of USD) 11Identification Solutions • Revenues decreased (2.3%): • Organic = - (0.8%) • Fx = - (1.5)% • Organic sales decline in IDS Americas, partially offset by double-digit sales growth in IDS Asia. • Segment profit as a percent of sales increased as a result of ongoing operational improvements and management of operating expenses. Q3 F’17 SUMMARY: • Expect low-single digit organic sales growth in F’17. • Expect segment profit to continue to be in the mid- teens as a percent of sales in F’17. OUTLOOK: Q3 F’17 Q3 F’16 Change Sales $ 196.9 $ 201.5 - 2.3% Segment Profit 32.6 31.9 + 2.3% Segment Profit % 16.6% 15.8% + 80 pts $201 $190 $201 $203 $201 $191 $197 13% 12% 16% 16% 16% 15% 17% 10% 12% 14% 16% 18% 20% $180 $185 $190 $195 $200 $205 $210 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 SALES & SEGMENT PROFIT % (millions of USD)

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Q3 F’17 vs. Q3 F’16 PERFORMANCE (millions of USD) 12Workplace Safety • Revenues decreased (7.5%): • Organic = - (4.6)% • Fx = - (2.9)% • Organic sales decline in all regions of the WPS business. • High-single digit organic sales decline in the U.S. and mid-single digit decline in Australia, slight organic decline in Europe in Q3 of F’17. • Digital sales increased in the high-single digits in Europe. • Segment profit declined due to decrease in organic sales, which includes pricing pressures. These declines were partially mitigated by active reductions in our cost structure. Q3 F’17 SUMMARY: • Expect low-single digit organic sales declines in F’17. • Expect segment profit to be in the mid-single digits as a % of sales in F’17. OUTLOOK: Q3 F’17 Q3 F’16 Change Sales $ 79.0 $ 85.3 - 7.5% Segment Profit 5.1 6.0 - 14.8% Segment Profit % 6.5% 7.0% - 50 pts $82 $79 $85 $79 $79 $77 $79 11% 8% 7% 12% 8% 8% 6% 5% 7% 9% 11% 13% 15% $70 $75 $80 $85 $90 Q1 F'16 Q2 F'16 Q3 F'16 Q4 F'16 Q1 F'17 Q2 F'17 Q3 F'17 SALES & SEGMENT PROFIT % (millions of USD)

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13Investor Relations Brady Contact: Ann Thornton Investor Relations 414-438-6887 Ann_Thornton@bradycorp.com See our web site at www.bradycorp.com

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Appendix 14

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COMPARABLE INCOME STATEMENTS (millions of USD) 15Comparable Income Statements 2017 2016 Change Sales 275.9$ 286.8$ (10.9)$ Gross Margin 139.9 145.4 (5.5) % of Sales 50.7% 50.7% Research and Development (10.0) (8.9) (1.1) Selling, General and Admin. (98.3) (105.7) 7.4 % of Sales (35.6%) (36.9%) (1.3) pts Operating Income 31.6 30.8 0.8 Interest and Other (0.9) (1.1) 0.2 Income Taxes (8.1) (8.7) 0.6 Net Earnings 22.6$ 21.0$ 1.6$ % of Sales 8.2% 7.3% 0.9 pts Net Earnings per diluted Class A Nonvoting Common Share 0.43$ 0.42$ 0.01$ Three Months Ended April 30,

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(‘000s of USD) 16Debt Structure April 30, 2017 Balance July 31, 2016 Balance Revolver Borrowings: USD-denominated 1.82% Variable 22,000$ 112,000$ EUR-denominated 0.88% Variable 30,442 - China Borrowings: USD & CNY-denominated notes payable 3.42% Variable 4,072 4,928 Private Placements: USD-denominated 2007 Series 5.33% Fixed - 16,334 EUR-denominated 2010 Series (7-yr.) 3.71% Fixed 32,616 33,510 EUR-denominated 2010 Series (10-yr.) 4.24% Fixed 48,836 50,138 TOTAL DEBT 137,966$ 216,910$ Interest Rate

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Brady is presenting EBITDA because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA represents net earnings before interest expense, income taxes, depreciation, amortization and impairment charges. EBITDA is not a calculation based on generally accepted accounting principles ("GAAP"). The amounts included in the EBITDA calculation, however, are derived from amounts included in the Consolidated Statements of Earnings data. EBITDA should not be considered as an alternative to net earnings or operating income as an indicator of the Company's operating performance, or as an alternative to net cash provided by operating activities as a measure of liquidity. The EBITDA measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation. EBITDA (‘000s of USD) 17EBITDA Reconciliation Q1 Q2 Q3 Q4 Total 18,703$ 15,290$ 20,981$ 25,136$ 80,110$ Interest expense 2,151 2,130 1,838 1,705 7,824 Income taxes 8,489 5,177 8,686 6,883 29,235 Depreciation and amortization 8,889 8,613 7,394 7,536 32,432 38,232$ 31,210$ 38,899$ 41,260$ 149,601$ EBITDA (non-GAAP measure) Fiscal 2016 EBITDA: Net earnings Q1 Q2 Q3 Q4 Total 22,553$ 25,297$ 22,553$ 70,403$ Interest expense 1,732 1,458 1,375 4,565 Income taxes 8,434 3,803 8,075 20,312 Depreciation and amortization 7,234 6,868 6,687 20,789 39,953$ 37,426$ 38,690$ -$ 116,069$ EBITDA (non-GAAP measure) Fiscal 2017 EBITDA: Net earnings

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Brady is presenting the Non-GAAP measures "Net Earnings from Continuing Operations Excluding Certain Items“ and “Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items.” These are not calculations based upon GAAP. The amounts included in these Non- GAAP measures are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our sustainable results. We believe these measures provide an important perspective of underlying business trends and results and provide more comparable measures from year to year. The tables below provide reconciliations of Net Earnings from Continuing Operations to Net Earnings from Continuing Operations Excluding Certain Items, and Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share to Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items. Reconciliations of F’15 Non-GAAP Net Earnings from Continuing Operations (‘000s of USD) 18Non-GAAP Reconciliations April 30, 2015 July 31, 2015 17,213$ (39,394)$ Restructuring charges 3,198 2,158 Impairment charges - 46,867 Other non-routine charges - 4,757 Postretirement benefit plan curtailment gain (2,792) - 17,619$ 14,388$ Net Earnings (Loss) from Continuing Operations (GAAP measure) Three months ended Net Earnings from Continuing Operations Excluding Certain Items (non-GAAP measure) April 30, 2015 July 31, 2015 $ 0.33 $ (0.77) Restructuring charges 0.06 0.04 Impairment charges - 0.91 Other non-routine charges - 0.09 Postretirement benefit plan curtailment gain (0.05) - (non-GAAP measure) 0.34$ 0.28$ Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items Net Earnings (Loss) from Continuing Operations Per Diluted Class A Nonvoting Common Share (GAAP measure) Three months ended

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