Brady Corporation Reports Financial Results for Fiscal 2002 Fourth Quarter and Year Ended July 31, 2002.Business Editors MILWAUKEE--(BUSINESS WIRE)--Sept. 13, 2002 Brady Corporation Brady Corporation is a US based multi-national company specialising in the manufacture of labels and label printers for use in offices and industry. Company History Brady was founded in 1914 in Eau Claire, Wisconsin, as W.H. Brady Co. (NYSE NYSE See: New York Stock Exchange :BRC BRC Black Rock City (Burning Man) BRC British Retail Consortium BRC Business Resource Center (Small Business Administration) BRC Bisexual Resource Center BRC Black Radical Congress ), a world leader in identification solutions, today announced results for its fiscal 2002 fourth quarter and year ended July July: see month. 31, 2002. Sales for the fiscal 2002 fourth quarter were $135.8 million, up 7.6 percent from $126.3 million in the fiscal 2001 fourth quarter. Fiscal 2002 fourth quarter sales also improved over third quarter sales of $130.5 million, and second quarter sales of $120.6 million in fiscal 2002. Sales for fiscal 2002 were $517.0 million, down 5.3 percent from fiscal 2001 sales of $545.9 million. Foreign currency favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted quarterly results by 2.6 percent, but had no effect for the year. "Our sales for the year continue to reflect softness in many segments of the global manufacturing environment. While we are pleased to again see positive quarterly growth compared to the prior year, sales have not rebounded as quickly as we expected," said Katherine Katherine “intolerably curst and shrewd and froward.” [Br. Lit.: The Taming of the Shrew] See : Shrewishness M. Hudson Hudson, towns, United States Hudson. 1 Industrial town (1990 pop. 17,233), Middlesex co., E central Mass., on the Assabet River, in an apple-growing region; settled c.1699, inc. 1866. , president and chief executive officer. Net income for the quarter was $5.6 million or $0.24 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Class A Common share, compared to a net loss of $2.7 million or $0.12 per share in the fiscal 2001 fourth quarter. Net income for fiscal 2002 was $28.3 million or $1.20 per share, compared to $27.5 million or $1.18 per share in fiscal 2001. Brady Bra·dy , James Buchanan Known as "Diamond Jim." 1856-1917. American financier and philanthropist who gained his nickname because of his attraction to diamonds and his extravagant lifestyle. Noun 1. adopted Statement of Financial Accounting Standards No. 142, related to ceasing of the amortization of goodwill as of August 1, 2001. Also, as announced in July 2002, the company took net restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. totaling $2.7 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern in the fiscal 2002 fourth quarter to reflect a 3-percent reduction in workforce and the consolidation of certain manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . Fiscal 2001 fourth quarter results included a pretax charge for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of $9.6 million. Excluding nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. items and goodwill amortization in both years, net income for the quarter was $7.4 million or $0.31 per share, compared to $4.7 million or $0.21 per share in the fiscal 2001 fourth quarter; and $30.0 million or $1.28 per share in fiscal 2002 compared to $39.4 million or $1.70 per share in fiscal 2001. "Brady remains a strong company with a terrific balance sheet. Our cash balance at the end of fiscal 2002 is $76 million, up from $63 million at the end of fiscal 2001, even after strategic investments for acquisitions and process improvements, and dividend payments to our shareholders," said Hudson. "We are seeing strong results in key working capital measures from our process improvement initiatives. We are responding quickly to changing customer needs, especially in China, Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , where we are seeing gains in both sales and profits. And we are continuing to focus on our strategies of acquisitions, new product development, geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. expansion and increased market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" to position us to return to more traditional growth patterns." A Webcast regarding fiscal 2002 results will be available at www.investor.bradycorp.com beginning at 9:30 a.m. Central Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time today. Brady is an international manufacturer and marketer of identification and materials solutions, with products including labels, signs, precision die-cut materials, printing systems, software, and label-application and data-collection systems for electronics, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , manufacturing, electrical, and a variety of other markets. Founded in 1914, Brady is headquartered in Milwaukee Milwaukee (mĭlwŏk`ē), city (1990 pop. 628,088), seat of Milwaukee co., SE Wis., at the point where the Milwaukee, Menominee, and Kinnickinnic rivers enter Lake Michigan; inc. 1846. and employs about 3,000 people in operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,
Asia/Pacific, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . More information is available on
the internet at www.bradycorp.com.
This news release contains forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information, as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking information in this release involves risks and uncertainties, including, but not limited to, domestic and international economic conditions and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. ; fluctuations in currency exchange rates for international currencies versus the U.S. dollar; the successful implementation of a new enterprise-resource-planning system; the ability of the company to acquire, integrate and achieve anticipated synergies from new businesses; the ability of the company to adjust its cost structure to changes in levels of sales and product mix in a timely manner; variations in the economic or political conditions in the countries in which the company does business; technology changes; and the continued availability of sources of supply. Brady cautions that forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are not guarantees, since there are inherent difficulties in predicting future results, and that actual results could differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in forward-looking statements.
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited) (Unaudited)
Three Months Ended July 31, Year Ended July 31,
2002 2001 2002 2001
------- ------- ------- -------
Net Sales $ 135,839 $ 126,280 $ 516,962 $ 545,944
Operating expenses:
Cost of products sold 68,595 62,658 256,186 257,313
Research and
development 4,131 4,438 17,271 20,329
Selling, general and
administrative 52,660 54,063 199,282 214,220
Nonrecurring charge
- net 2,720 9,560 2,720 9,560
------- ------- ------- -------
Total operating
expenses 128,106 130,719 475,459 501,422
Operating income 7,733 (4,439) 41,503 44,522
Other income and (expense):
Investment and other
income - net 888 788 1,714 686
Interest expense (48) (137) (82) (418)
------- ------- ------- -------
Income before income
taxes 8,573 (3,788) 43,135 44,790
Income taxes 2,928 (1,134) 14,882 17,244
------- ------- ------- -------
Net Income 5,645 (2,654) 28,253 27,546
Earnings retained in
business at beginning
of period 286,469 283,516 276,779 265,462
Less dividends:
Preferred stock (64) (65) (259) (259)
Common stock (4,376) (4,018) (17,099) (15,970)
Earnings retained in
business at end of
period $ 287,674 $ 276,779 $ 287,674 $ 276,779
========== ========= ========= ==========
Net income per Class A
Nonvoting Common Share
Basic $ 0.24 $ (0.12) $ 1.22 $ 1.20
======== ========= ========= ==========
Diluted $ 0.24 $ (0.12) $ 1.20 $ 1.18
======== ========= ========= ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING -
DILUTED: 23,408,616 23,223,373 23,339,708 23,107,229
BRADY CORPORATION AND SUBSIDIARIES
COMPARATIVE BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS July 31, 2002 July 31, 2001
------ ------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 75,969 $ 62,811
Accounts receivable, less allowance for
losses ($3,206 and $2,297, respectively) 76,246 71,684
Inventories 36,718 39,207
Prepaid expenses and other current assets 21,093 19,258
---------- ----------
Total current assets 210,026 192,960
Other assets:
Goodwill - net 108,053 96,041
Other 21,555 20,058
---------- ----------
129,608 116,099
Property, plant and equipment:
Cost:
Land 5,612 5,944
Buildings and improvements 50,122 47,611
Machinery and equipment 127,955 132,272
Construction in progress 3,062 6,474
---------- ----------
186,751 192,301
Less accumulated depreciation 105,860 107,768
---------- ----------
Net property, plant and equipment 80,891 84,533
---------- ----------
Total $ 420,525 $ 393,592
========== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $ 26,294 $ 20,666
Wages and amounts withheld from employees 26,251 26,767
Taxes, other than income taxes 2,396 1,496
Accrued income taxes 6,312 6,427
Other current liabilities 12,847 12,364
Short-term borrowings and current
maturities on long-term debt 162 1,410
---------- ----------
Total current liabilities 74,262 69,130
Long-term debt, less current maturities 3,751 4,144
Other liabilities 18,270 17,739
---------- ----------
Total liabilities 96,283 91,013
Stockholders' investment:
Preferred stock 2,855 2,855
Class A nonvoting common stock - Issued and
outstanding, 21,356,605, and 21,149,551
shares, respectively 214 211
Class B voting common stock - Issued and
outstanding 1,769,314 shares 18 18
Treasury Stock - 4,548 shares, at cost (132) (132)
Additional paid-in capital 41,526 35,806
Earnings retained in the business 287,674 276,779
Cumulative other comprehensive income (7,665) (12,016)
Other (248) (942)
---------- ----------
Total stockholders' investment 324,242 302,579
---------- ----------
Total $ 420,525 $ 393,592
========== ==========
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
July 31
2002 2001
---------- ----------
(Dollars in Thousands)
Operating activities:
Net income $ 28,253 $ 27,546
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and Amortization 16,630 22,646
Loss on sale or disposal of property,
plant & equipment 1,166 (185)
Gain on sale of securities - (722)
Provision for losses on accounts
receivable 2,467 1,537
Amortization of restricted stock 694 695
Nonrecurring credit 2,239 9,226
Changes in operating assets and
liabilities (net of effects of business
acquisitions):
Accounts receivable (3,057) 8,299
Inventory 4,895 2,252
Prepaid expenses and other assets (1,538) (1,749)
Accounts payable, accrued expenses and
other liabilities 1,600 (11,954)
Income taxes 902 (4,363)
---------- ----------
Net cash provided by operating
activities 54,251 53,228
Investing activities:
Acquisitions of businesses, net of cash
acquired (12,749) (6,699)
Purchases of securities - -
Purchases of property, plant and equipment (13,095) (20,770)
Proceeds from sale of property, plant and
equipment 776 525
Proceeds from sale of securities - 825
Other 534 (356)
---------- ----------
Net cash (used in) investing
activities (24,534) (26,475)
Financing activities:
Payment of dividends (17,358) (16,229)
Proceeds from issuance of Common Stock 5,720 4,222
Proceeds from borrowings - 313
Principal payments on debt (1,747) (9,257)
Other - (1,725)
---------- ----------
Net cash (used in) financing
activities (13,385) (22,676)
Effect of exchange rate changes on cash (3,174) (2,050)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 13,158 2,027
Cash and cash equivalents, beginning of
period 62,811 60,784
---------- ----------
Cash and cash equivalents, end of period $ 75,969 $ 62,811
========== ==========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 175 $ 441
Income taxes, net of refunds 15,176 21,613
Acquisitions:
Fair value of asset acquired, net of cash $ 5,667 $ 7,859
Liabilities Assumed (1,789) (4,736)
Goodwill 8,871 3,576
---------- ----------
Net cash paid for acquisitions $ 12,749 $ 6,699
========== ==========
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