Company Quick10K Filing
Price53.44 EPS3
Shares54 P/E21
MCap2,872 P/FCF18
Net Debt-244 EBIT169
TTM 2019-10-31, in MM, except price, ratios
10-Q 2020-04-30 Filed 2020-05-21
10-Q 2020-01-31 Filed 2020-02-20
10-Q 2019-10-31 Filed 2019-11-21
10-K 2019-07-31 Filed 2019-09-06
10-Q 2019-04-30 Filed 2019-05-23
10-Q 2019-01-31 Filed 2019-02-21
10-Q 2018-10-31 Filed 2018-11-15
10-K 2018-07-31 Filed 2018-09-13
10-Q 2018-04-30 Filed 2018-05-24
10-Q 2018-01-31 Filed 2018-02-22
10-Q 2017-10-31 Filed 2017-11-16
10-K 2017-07-31 Filed 2017-09-13
10-Q 2017-04-30 Filed 2017-05-25
10-Q 2017-01-31 Filed 2017-02-23
10-Q 2016-10-31 Filed 2016-11-16
10-K 2016-07-31 Filed 2016-09-15
10-Q 2016-04-30 Filed 2016-05-19
10-Q 2016-01-31 Filed 2016-02-19
10-Q 2015-10-31 Filed 2015-11-19
10-K 2015-07-31 Filed 2015-09-21
10-Q 2015-04-30 Filed 2015-05-27
10-Q 2015-01-31 Filed 2015-03-04
10-Q 2014-10-31 Filed 2014-12-02
10-K 2014-07-31 Filed 2014-09-29
10-Q 2014-04-30 Filed 2014-06-04
10-Q 2014-01-31 Filed 2014-03-05
10-Q 2013-10-31 Filed 2013-12-06
10-K 2013-07-31 Filed 2013-09-30
10-Q 2013-04-30 Filed 2013-06-06
10-Q 2013-01-31 Filed 2013-03-08
10-Q 2012-10-31 Filed 2012-12-05
10-K 2012-07-31 Filed 2012-09-27
10-Q 2012-04-30 Filed 2012-06-05
10-Q 2012-01-31 Filed 2012-03-08
10-Q 2011-10-31 Filed 2011-12-07
10-K 2011-07-31 Filed 2011-09-27
10-Q 2011-04-30 Filed 2011-06-07
10-Q 2011-01-31 Filed 2011-03-08
10-Q 2010-10-31 Filed 2010-12-07
10-K 2010-07-31 Filed 2010-09-21
10-Q 2010-04-30 Filed 2010-06-04
10-Q 2010-01-31 Filed 2010-03-05
8-K 2020-05-21
8-K 2020-02-20
8-K 2019-11-20
8-K 2019-09-30
8-K 2019-09-16
8-K 2019-09-04
8-K 2019-08-01
8-K 2019-05-23
8-K 2019-02-21
8-K 2019-02-07
8-K 2018-11-15
8-K 2018-09-13
8-K 2018-05-24
8-K 2018-02-22

BRC 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 brc-20200430xex311.htm
EX-31.2 brc-20200430xex312.htm
EX-32.1 brc-20200430xex321.htm
EX-32.2 brc-20200430xex322.htm

Brady Earnings 2020-04-30

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin

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Washington, DC 20549

For the Quarterly Period Ended April 30, 2020
For the Transition Period from                     to                     
Commission File Number 1-14959

(Exact name of registrant as specified in its charter)

Wisconsin 39-0178960
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

6555 West Good Hope Road
(Address of principal executive offices and Zip Code)
(414) 358-6600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Nonvoting Common Stock, par value $0.01 per shareBRCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes     No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer 
Emerging growth company
Non-accelerated filer 
Smaller reporting company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   No   

As of May 19, 2020, there were 48,421,588 outstanding shares of Class A Nonvoting Common Stock and 3,538,628 shares of Class B Voting Common Stock. The Class B Voting Common Stock, all of which is held by affiliates of the Registrant, is the only voting stock.

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(Dollars in Thousands)
April 30, 2020July 31, 2019
Current assets:
Cash and cash equivalents$238,880  $279,072  
Accounts receivable—net145,133  158,114  
Inventories124,575  120,037  
Prepaid expenses and other current assets22,502  16,056  
Total current assets531,090  573,279  
Property, plant and equipment—net111,383  110,048  
Goodwill404,039  410,987  
Other intangible assets23,444  36,123  
Deferred income taxes7,006  7,298  
Operating lease assets41,553    
Other assets21,827  19,573  
Total$1,140,342  $1,157,308  
Current liabilities:
Accounts payable$58,819  $64,810  
Accrued compensation and benefits41,591  62,509  
Taxes, other than income taxes7,667  8,107  
Accrued income taxes8,101  6,557  
Current operating lease liabilities14,381    
Other current liabilities48,473  49,796  
Current maturities on long-term debt48,927  50,166  
Total current liabilities227,959  241,945  
Long-term operating lease liabilities32,348    
Other liabilities59,433  64,589  
Total liabilities319,740  306,534  
Stockholders’ equity:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 48,431,617 and 49,458,841 shares, respectively513  513  
Class B voting common stock—Issued and outstanding, 3,538,628 shares35  35  
Additional paid-in capital330,968  329,969  
Retained earnings688,079  637,843  
Treasury stock—2,829,870 and 1,802,646 shares, respectively, of Class A nonvoting common stock, at cost(106,751) (46,332) 
Accumulated other comprehensive loss(92,242) (71,254) 
Total stockholders’ equity820,602  850,774  
Total$1,140,342  $1,157,308  

See Notes to Condensed Consolidated Financial Statements.

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(Dollars in Thousands, Except Per Share Amounts, Unaudited)

Three months ended April 30,Nine months ended April 30,
Net sales$265,943  $289,745  $829,555  $865,367  
Cost of goods sold136,416  143,996  419,496  433,269  
Gross margin129,527  145,749  410,059  432,098  
Operating expenses:
Research and development9,814  11,437  31,298  33,837  
Selling, general and administrative83,223  94,691  260,136  281,988  
Impairment charges13,821    13,821    
Total operating expenses106,858  106,128  305,255  315,825  
Operating income 22,669  39,621  104,804  116,273  
Other income (expense):
Investment and other income112  2,065  3,252  3,425  
Interest expense(628) (708) (1,976) (2,137) 
Income before income taxes22,153  40,978  106,080  117,561  
Income tax expense8,520  6,197  21,396  22,916  
Net income$13,633  $34,781  $84,684  $94,645  
Net income per Class A Nonvoting Common Share:
Basic$0.26  $0.66  $1.60  $1.80  
Diluted$0.26  $0.65  $1.58  $1.78  
Dividends$0.22  $0.21  $0.65  $0.64  
Net income per Class B Voting Common Share:
Basic$0.26  $0.66  $1.58  $1.79  
Diluted$0.26  $0.65  $1.57  $1.76  
Dividends$0.22  $0.21  $0.64  $0.62  
Weighted average common shares outstanding:
Basic52,607  52,766  53,023  52,499  
Diluted52,972  53,480  53,512  53,215  

See Notes to Condensed Consolidated Financial Statements.

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(Dollars in Thousands, Unaudited)
Three months ended April 30,Nine months ended April 30,
Net income$13,633  $34,781  $84,684  $94,645  
Other comprehensive loss:
Foreign currency translation adjustments(17,424) (7,337) (18,383) (10,641) 
Cash flow hedges:
Net (loss) gain recognized in other comprehensive loss(1,751) 220  (1,192) 377  
Reclassification adjustment for gains included in net income(293) (292) (779) (579) 
(2,044) (72) (1,971) (202) 
Pension and other post-retirement benefits:
Net loss recognized in other comprehensive loss    (309) (169) 
Actuarial gain amortization(105) (124) (315) (423) 
(105) (124) (624) (592) 
Other comprehensive loss, before tax(19,573) (7,533) (20,978) (11,435) 
Income tax expense related to items of other comprehensive loss(179) (348) (10) (610) 
Other comprehensive loss, net of tax(19,752) (7,881) (20,988) (12,045) 
Comprehensive (loss) income$(6,119) $26,900  $63,696  $82,600  

See Notes to Condensed Consolidated Financial Statements.

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(Dollars in Thousands, Unaudited)

Nine months ended April 30,
Operating activities:
Net income$84,684  $94,645  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization17,731  17,836  
Stock-based compensation expense7,180  10,311  
Deferred income taxes(309) 3,796  
Impairment charges13,821    
Other1,698  1,372  
Changes in operating assets and liabilities:
Accounts receivable9,019  332  
Inventories(7,439) (9,254) 
Prepaid expenses and other assets(5,653) (2,204) 
Accounts payable and accrued liabilities(26,609) (20,548) 
Income taxes1,790  616  
Net cash provided by operating activities95,913  96,902  
Investing activities:
Purchases of property, plant and equipment(21,616) (17,528) 
Other(4,419) (1,810) 
Net cash used in investing activities(26,035) (19,338) 
Financing activities:
Payment of dividends(34,447) (33,488) 
Proceeds from exercise of stock options5,212  22,468  
Payments for employee taxes withheld from stock-based awards(7,832) (4,348) 
Purchase of treasury stock(64,113) (3,182) 
Proceeds from borrowing on credit facilities  13,637  
Repayment of borrowing on credit facilities  (13,568) 
Other133  210  
Net cash used in financing activities(101,047) (18,271) 
Effect of exchange rate changes on cash(9,023) (2,288) 
Net (decrease) increase in cash and cash equivalents(40,192) 57,005  
Cash and cash equivalents, beginning of period279,072  181,427  
Cash and cash equivalents, end of period$238,880  $238,432  

See Notes to Condensed Consolidated Financial Statements.

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Nine Months Ended April 30, 2020
(In thousands, except share and per share amounts)
NOTE A — Basis of Presentation
The condensed consolidated financial statements included herein have been prepared by Brady Corporation and subsidiaries (the "Company," "Brady," "we," or "our") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of April 30, 2020 and July 31, 2019, its results of operations and comprehensive income for the three and nine months ended April 30, 2020 and 2019, and cash flows for the nine months ended April 30, 2020 and 2019. The condensed consolidated balance sheet as of July 31, 2019, has been derived from the audited consolidated financial statements as of that date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statement presentation. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2019.
NOTE B — New Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASC 842"), which replaced the former lease accounting standards. The update requires, among other items, lessees to recognize the assets and liabilities that arise from most leases on the balance sheet and disclose key information about leasing arrangements. In July 2018, the FASB issued ASU 2018-11 "Leases (Topic 842): Targeted Improvements," which provides, among other items, an additional transition method allowing a cumulative effect adjustment to the opening balance of retained earnings during the period of adoption. ASC 842 is effective for interim periods in fiscal years beginning after December 15, 2018.
The Company adopted ASU 2016-02 (and related updates) effective August 1, 2019, using the optional transition method provided in ASU 2018-11 to apply this guidance to the impacted lease population at the date of initial application. Results for reporting periods beginning after August 1, 2019, are presented under ASU 2016-02, while comparative prior period amounts have not been restated and continue to be presented under accounting standards in effect during those periods.
The Company elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease accounting of expired or existing leases with respect to lease identification, lease classification and accounting treatment for initial direct costs as of the adoption date. The Company also elected the practical expedient related to lease versus nonlease components, allowing the Company to recognize lease and nonlease components as a single lease. Lastly, the Company elected the hindsight practical expedient, allowing the Company to use hindsight in determining the lease term and assessing impairment of right-of-use assets when transitioning to ASC 842. The Company has made a policy election not to capitalize leases with an initial term of 12 months or less.
Upon adoption of ASC 842, the Company recorded additional operating lease assets and liabilities of $55,984 and $58,544, respectively, as of August 1, 2019, which included operating lease assets and liabilities of $9,769 and $9,674, respectively, for leases that commenced on the adoption date of August 1, 2019. No cumulative effect adjustment to retained earnings was recognized upon adoption of the new standard. Adoption of ASC 842 did not have a material impact on the Company's cash flows or operating results. Refer to Note E "Leases" for additional information and required disclosures under the new standard.
In August 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities," which simplifies and reduces the complexity of the hedge accounting requirements and better aligns an entity's financial reporting for hedging relationships with its risk management activities. The guidance is effective for interim periods in fiscal years beginning after December 15, 2018, with

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early adoption permitted. The Company adopted ASU 2017-12 effective August 1, 2019, using the required modified retrospective adoption approach to apply this guidance to existing hedging relationships as of the adoption date, which did not have a material impact on its consolidated financial statements.
Standards not yet adopted
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which changes the impairment model for most financial instruments. Current guidance requires the recognition of credit losses based on an incurred loss impairment methodology that reflects losses once the losses are probable. Under ASU 2016-13, the Company will be required to use a current expected credit loss model ("CECL") that will immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of this update, including trade receivables. The CECL model uses a broader range of reasonable and supportable information in the development of credit loss estimates. This guidance becomes effective for interim periods in fiscal years beginning after December 15, 2019. The Company is still evaluating the impact that the adoption of this ASU will have on the consolidated financial statements and related disclosures.
In January 2017, the FASB issued ASU 2017-04, "Goodwill and Other, Simplifying the Test for Goodwill Impairment," which simplifies the accounting for goodwill impairment. The new guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. This guidance is effective for annual periods beginning after December 15, 2019, and interim periods thereafter; however, early adoption is permitted for any impairment tests performed after January 1, 2017. The Company has not adopted this guidance, which will only impact the Company's consolidated financial statements if there is an impairment of goodwill after July 31, 2020.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740)," which simplifies the accounting for income taxes. The new guidance removes certain exceptions to the general principles in ASC 740 such as recognizing deferred taxes for equity investments, the incremental approach to performing intraperiod tax allocation and calculating income taxes in interim periods. The standard also simplifies accounting for income taxes under U.S. GAAP by clarifying and amending existing guidance, including the recognition of deferred taxes for goodwill, the allocation of taxes to members of a consolidated group and requiring that an entity reflect the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. This guidance is effective for annual periods beginning after December 15, 2020, and interim periods thereafter; however, early adoption is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on the consolidated financial statements and related disclosures.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate ("LIBOR") by the end of 2021. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. Some of the Company's contracts with respect to its borrowing agreements already contain comparable alternative reference rates that would automatically take effect upon the phasing out of LIBOR. The Company is in the process of reviewing its debt securities, bank facilities, and commercial contracts that utilize LIBOR as the reference rate and is currently evaluating the potential impact that the adoption of this ASU will have on the consolidated financial statements and related disclosures.
NOTE C — Additional Balance Sheet Information
Inventories as of April 30, 2020, and July 31, 2019, consisted of the following:

 April 30, 2020July 31, 2019
Finished products$77,634  $77,532  
Work-in-process22,819  20,515  
Raw materials and supplies24,122  21,990  
Total inventories$124,575  $120,037  

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Property, plant and equipment
Property, plant and equipment is presented net of accumulated depreciation in the amount of $279,757 and $273,880 as of April 30, 2020, and July 31, 2019, respectively.
NOTE D — Other Intangible and Long-Lived Assets
Other intangible assets include customer relationships, tradenames, and patents with finite lives being amortized in accordance with the accounting guidance for other intangible assets. The Company also has unamortized indefinite-lived tradenames that are classified as other intangible assets.
The net book value of these assets was as follows: 

 April 30, 2020July 31, 2019
Net Book
Net Book
Amortized other intangible assets:
     Customer relationships and other8$47,180  $(33,150) $14,030  9$46,595  $(29,343) $17,252  
Unamortized other intangible assets:
  TradenamesN/A9,414    9,414  N/A18,871    18,871  
Total$56,594  $(33,150) $23,444  $65,466  $(29,343) $36,123  
The change in the gross carrying amount of other intangible assets as of April 30, 2020 compared to July 31, 2019 was due to impairments and the effects of currency fluctuations during the nine-month period ended April 30, 2020.
The Company evaluates other intangible and long-lived assets for impairment on an annual basis or more frequently if events or changes in circumstances have occurred that indicate the asset may not be recoverable or that the remaining estimated useful life may warrant revision. In addition, the Company performs qualitative assessments on a quarterly basis of significant events and circumstances, such as historical and current results, assumptions regarding future performance, and strategic initiatives and overall economic factors.
The outbreak of the novel coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies and has negatively impacted the Company’s supply chain, operations, and customer demand. As a result, the Company evaluated the macro-economic developments of the COVID-19 pandemic to determine the existence of potential impairment indicators. If indicators of impairment were identified, a quantitative impairment test was performed.
Qualitative tests performed in the quarter indicated the existence of impairment indicators for intangible assets in certain businesses within the Company’s WPS segment. These indicators of impairment consisted of a decline in sales in the three months ended April 30, 2020, and the expectation that sales will continue to decline as these businesses navigate the economic challenges presented by the COVID-19 pandemic. Indefinite-lived tradenames were valued using the income approach based upon current sales projections applying the relief from royalty method. As a result of the analysis, indefinite-lived tradenames with a carrying amount of $9,328 were written down to their estimated fair value of $663 in the three months ended April 30, 2020.
Consistent with the circumstances leading to the intangible asset impairment, the Company performed a recoverability and fair value test of other long-lived assets in certain businesses within both the IDS and WPS segments. Long-lived assets were evaluated for recoverability by comparing undiscounted future cash flows derived from internal forecasts to the carrying amount of the asset. For specific long-lived assets, this analysis resulted in an amount that was less than the carrying value of the asset. The Company measured the impairment loss of long-lived assets as the amount by which the carrying value of the assets exceeded their fair value. As a result of the analysis, impairment charges of $2,681 were recorded related to property, plant and equipment, of which $2,353 and $328 related to the IDS and WPS segments, respectively. In addition, impairment charges of $2,475 were recorded related to operating lease assets, of which $2,035 and $440 related to the WPS and IDS segments, respectively.
These items resulted in a total impairment charge of $13,821 recorded in "Impairment charges" on the condensed consolidated statements of income for the three and nine months ended April 30, 2020.

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A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance or a lack of recovery among other factors, as a result of the COVID-19 pandemic could result in an impairment charge in future periods which could have a material adverse effect on the Company's financial statements.
Amortization expense of intangible assets was $1,290 and $1,443 for the three months ended April 30, 2020 and 2019, respectively, and $3,872 and $4,314 for the nine months ended April 30, 2020 and 2019, respectively. The amortization over each of the next five fiscal years is projected to be $5,218, $5,384, $5,109, $2,191 and $0 for the fiscal years ending July 31, 2020, 2021, 2022, 2023 and 2024, respectively.
NOTE E — Leases
The Company leases certain manufacturing facilities, warehouses and office space, computer equipment, and vehicles accounted for as operating leases. Lease terms typically range from one year to fifteen years. As of April 30, 2020, the Company did not have any finance leases.
The Company determines whether an arrangement contains a lease at contract inception. The contract is considered to contain a lease if it provides the Company with the right to direct the use of and the right to obtain substantially all of the economic benefits from an identified asset in exchange for consideration. The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date based on the present value of the future lease payments over the expected lease term. Additionally, the ROU asset includes any lease payments made on or before the commencement date, initial direct costs incurred, and is reduced by any lease incentives received.
Some of the Company’s leases include options to extend the lease agreement. The exercise of an extension is at the Company’s sole discretion. The majority of renewal options are not included in the calculation of ROU assets and liabilities as they are not reasonably certain to be exercised. Some of the Company's lease agreements include rental payments that are adjusted periodically for inflation or the change in an index or rate, which are considered to be variable lease payments. Due to the nature of the Company’s variable lease payments, they are generally excluded from the initial measurement of the ROU asset and lease liability and are recognized in the period in which the obligation for those payments is incurred. The Company has lease agreements that include both lease and non-lease components, which the Company has elected to account for as a single lease component. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Generally, the discount rate implicit within the Company’s leases cannot be readily determined, and therefore the Company uses its incremental borrowing rate to determine the present value of the future lease payments. The incremental borrowing rate is estimated based on the sovereign credit rating for the countries in which the Company has its largest operations, adjusted for several factors, such as internal credit spread, lease terms and other market information available at the lease commencement date.
Right-of-use assets are evaluated for impairment in the same manner as long-lived assets. During the three months ended April 30, 2020, impairment charges of $2,475 were recorded related to right-of-use assets, of which $2,035 and $440 related to the WPS and IDS segments, respectively. Refer to Note D, "Other Intangible and Long-Lived Assets" for additional information.
Operating leases are reflected in “Operating lease assets,” “Current operating lease liabilities,” and “Long-term operating lease liabilities” on the Company's condensed consolidated balance sheets.
Short-term lease expense, variable lease expenses, and sublease income was immaterial to the condensed consolidated statements of income for the three and nine months ended April 30, 2020.
The following table summarizes lease expense recognized for the three and nine months ended April 30, 2020:

Three months endedNine months ended
 Condensed Consolidated Statements of Income LocationApril 30, 2020April 30, 2020
Operating lease costCost of goods sold$2,074  $7,036  
Operating lease costSelling, general, and administrative expenses2,145  6,861  


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The following table summarizes the maturity of the Company's lease liabilities as of April 30, 2020:

Years ended July 31, Operating Leases
Remainder of 2020$4,245  
Total lease payments$50,067  
Less interest(3,338) 
Present value of lease liabilities$46,729  

The weighted average remaining lease terms and discount rates for the Company's operating leases as of April 30, 2020 were as follows:
April 30, 2020
Weighted average remaining lease term (in years)3.7
Weighted average discount rate3.4 %
Supplemental cash flow information related to the Company's operating leases for the nine months ended April 30, 2020, were as follows:
Nine months ended
April 30, 2020
Operating cash outflows from operating leases$12,469  
Operating lease assets obtained in exchange for new operating lease liabilities10,637  
Operating lease assets obtained in exchange for new operating lease liabilities include $9,769 of operating lease assets related to leases that commenced on August 1, 2019, which were included in the adoption impact of the new lease accounting standard.

The following table summarizes future minimum lease payments under operating leases as of July 31, 2019:

Years ended July 31, Operating Leases
Total lease payments$67,244  


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NOTE F – Stockholders' Equity
The following table illustrates the changes in the balances of each component of stockholders' equity for the three months ended April 30, 2020:

Retained EarningsTreasury
Accumulated Other
Comprehensive Loss
Total Stockholders' Equity
Balances at January 31, 2020$548  $329,263  $685,758  $(43,155) $(72,490) $899,924  
Net income—  —  13,633  —  —  13,633  
Other comprehensive loss, net of tax—  —  —  —  (19,752) (19,752) 
Issuance of shares of Class A Common Stock under stock plan—  (91) —  517  —  426  
Stock-based compensation expense—  1,796  —  —  —  1,796  
Repurchase of shares of Class A Common Stock—  —  —  (64,113) —  (64,113) 
Cash dividends on Common Stock:
Class A — $0.22 per share—  —  (10,542) —  —  (10,542) 
Class B — $0.22 per share—  —  (770) —  —  (770) 
Balances at April 30, 2020$548  $330,968  $688,079  $(106,751) $(92,242) $820,602  

The following table illustrates the changes in the balances of each component of stockholders' equity for the nine months ended April 30, 2020:

Retained EarningsTreasury
Accumulated Other
Comprehensive Loss
Total Stockholders' Equity
Balances at July 31, 2019$548  $329,969  $637,843  $(46,332) $(71,254) $850,774  
Net income—  —  84,684  —  —  84,684  
Other comprehensive loss, net of tax—  —  —  —  (20,988) (20,988) 
Issuance of shares of Class A Common Stock under stock plan—  (6,314) —  3,694  —  (2,620) 
Tax benefit and withholdings from deferred compensation distributions—  133  —  —  —  133  
Stock-based compensation expense—  7,180  —  —  —  7,180  
Repurchase of shares of Class A Common Stock—  —  —  (64,113) —  (64,113) 
Cash dividends on Common Stock:
Class A — $0.65 per share—  —  (32,197) —  —  (32,197) 
Class B — $0.64 per share—  —  (2,251) —  —  (2,251) 
Balances at April 30, 2020$548  $330,968  $688,079  $(106,751) $(92,242) $820,602  

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The following table illustrates the changes in the balances of each component of stockholders' equity for the three months ended April 30, 2019:

Retained EarningsTreasury
Accumulated Other
Comprehensive Loss
Total Stockholders' Equity
Balances at January 31, 2019$548  $328,978  $588,918  $(54,498) $(60,565) $803,381  
Net income—  —  34,781  —  —  34,781  
Other comprehensive loss, net of tax—  —  —