Brady Corporation Reports Fiscal 2003 First Quarter Sales Up 6.7 Percent.Business Editors MILWAUKEE--(BUSINESS WIRE)--Nov. 12, 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 ) today reported sales and earnings for its fiscal 2003 first quarter ending October October: see month. 31, 2002. Sales for the quarter rose 6.7 percent to $138.7 million, compared to fiscal 2002 first quarter sales of $130.0 million. Sales for the current quarter also improved over fiscal 2002 fourth quarter sales of $135.8 million. Sales growth was strongest in 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). which, aided by a
weak dollar, increased 15 percent over the previous year's first
quarter. U.S. sales increased 3 percent in the quarter, due largely to
sales from acquisitions completed in the prior year. In total, the
weaker U.S. dollar contributed 2.5 percent to top-line growth.
By segment, Graphics Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. were $81.0 million, up 11.1 percent over the previous year's quarter. Identification Solutions and Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Tapes Group sales rose 1 percent to $57.7 million. Net income for the fiscal 2003 first quarter rose 2.6 percent to $8.2 million, or $0.35 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 $8.0 million or $0.34 in the same quarter last year. "While we are cautiously cau·tious adj. 1. Showing or practicing caution; careful. 2. Tentative or restrained; guarded: felt a cautious optimism that the offer would be accepted. optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the increased level of activity in some of our markets, we remain focused on controlling costs to improve our bottom line throughout the fiscal year," 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. , Brady's president and chief executive officer. "We are committed to capitalizing upon growth opportunities, such as those currently found in the Asia/Pacific region, and are exploring new market segments for Brady's innovative identification products in order to create long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for our customers, shareholders and employees." "We are encouraged that our margins improved as the quarter progressed, and we continue to target net income for fiscal 2003 of about 7 percent of sales," said 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. Senior Vice President and Chief Financial Officer David Schroeder Schroeder his only wish is to play Beethoven’s music on his piano. [Comics: “Peanuts” in Horn, 542–543] See : Music Schroeder compulsively plays the works of Beethoven on his toy piano. . "Despite lingering lin·ger v. lin·gered, lin·ger·ing, lin·gers v.intr. 1. To be slow in leaving, especially out of reluctance; tarry. See Synonyms at stay1. 2. difficulties in the economy, and the Company's redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of $3.0 million of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , Brady's strong cash position continued to grow, gaining $3.3 million in the quarter to total $79.3 million. This, plus our unleveraged balance sheet, provides resources for further investment in our growth strategies of 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, acquisitions, new product development, and process improvement." A webcast regarding fiscal 2003 first quarter results will be available at www.investor.bradycorp.com beginning at 9:30 a.m. Central Standard 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 3,200 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, 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 . The company had sales of $517 million in fiscal 2002. Brady stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol BRC. More information is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.bradycorp.com, which includes an interactive version of the 2002 Annual Report to Shareholders. 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)
Three Months Ended October 31,
2002 2001
---- ----
Net Sales $ 138,662 $ 130,001
Operating expenses:
Cost of products sold 68,445 63,123
Research and development 4,071 4,452
Selling, general and
administrative 53,772 50,758
------- -------
Total operating expenses 126,288 118,333
Operating income 12,374 11,668
Other income and (expense):
Investment and other income - net 86 582
Interest expense (35) (16)
------- -------
Income before income taxes 12,425 12,234
Income taxes 4,226 4,239
------- -------
Net Income 8,199 7,995
Earnings retained in business at
beginning of period 287,674 276,779
Less:
Redemption premium on preferred
stock (171)
Preferred stock dividends (65)
Common stock dividends (4,471) (4,190)
------- -------
Earnings retained in business at
end of period $ 291,231 $ 280,519
======= =======
Net income per Class A Nonvoting
Common Share
Basic $ 0.35 $ 0.35
======= =======
Diluted $ 0.35 $ 0.34
======= =======
BRADY CORPORATION AND SUBSIDIARIES
COMPARATIVE BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
October 31, 2002 July 31, 2002
---------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 79,285 $ 75,969
Accounts receivable, less allowance
for losses ($3,300 and $3,206,
respectively) 77,897 76,246
Inventories 37,855 36,718
Prepaid expenses and other
current assets 20,145 21,093
----------- -------------
Total current assets 215,182 210,026
Other assets:
Goodwill - net 108,339 108,053
Other 21,650 21,555
----------- -------------
129,989 129,608
Property, plant and equipment:
Cost:
Land 5,606 5,612
Buildings and improvements 50,052 50,122
Machinery and equipment 128,083 127,955
Construction in progress 5,319 3,062
----------- -------------
189,060 186,751
Less accumulated depreciation 108,363 105,860
----------- -------------
Net property, plant and equipment 80,697 80,891
----------- -------------
Total $ 425,868 $ 420,525
=========== =============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable $ 27,221 $ 26,294
Wages and amounts withheld from
employees 25,348 26,251
Taxes, other than income taxes 2,610 2,396
Accrued income taxes 8,577 6,312
Other current liabilities 16,048 12,847
Short-term borrowings and current
maturities on long-term debt 15 162
----------- -------------
Total current liabilities 79,819 74,262
Long-term debt, less current maturities 3,819 3,751
Other liabilities 17,572 18,270
----------- -------------
Total liabilities 101,210 96,283
Stockholders' investment:
Preferred stock 2,855
Class A nonvoting common stock - Issued and
outstanding, 21,345,841 213 214
and 21,356,605 shares, respectively
Class B voting common stock - Issued and
outstanding 1,769,314 shares 18 18
Treasury Stock - 18,262 and 4,548 shares,
at cost (509) (132)
Additional paid-in capital 41,601 41,526
Earnings retained in the business 291,231 287,674
Cumulative other comprehensive income (7,710) (7,665)
Other (186) (248)
----------- -------------
Total stockholders' investment 324,658 324,242
----------- -------------
Total $ 425,868 $ 420,525
=========== =============
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands) (Unaudited)
Three Months Ended
October 31
2002 2001
---- ----
Operating activities:
Net income $ 8,199 $ 7,995
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and Amortization 4,295 3,923
Loss on sale or disposal of property,
plant & equipment 107 -
Provision for losses on accounts receivable 415 438
Amortization of restricted stock 62 174
Changes in operating assets and liabilities:
Accounts receivable (1,869) (2,534)
Inventory (1,103) 823
Prepaid expenses and other assets (812) 2,581
Accounts payable, accrued expenses
and other liabilities 2,605 2,989
Income taxes 2,420 1,335
--------------- -------------
Net cash provided by
operating activities 14,319 17,724
Investing activities:
Purchases of property, plant
and equipment (3,862) (2,116)
Proceeds from sale of property,
plant and equipment 1 149
--------------- -------------
Net cash (used in) investing
activities (3,861) (1,967)
Financing activities:
Payment of dividends (4,642) (4,255)
Proceeds from issuance of Common Stock 74 783
Principal payments on debt (86) (27)
Redemption of preferred stock (3,026) -
Purchase of Treasury Stock (377) -
Proceeds from short-term borrowings - net - 221
--------------- -------------
Net cash (used in) financing
activities (8,057) (3,278)
Effect of exchange rate changes on cash 915 (823)
--------------- -------------
Net increase (decrease) in cash and
cash equivalents 3,316 11,656
Cash and cash equivalents, beginning
of period 75,969 62,811
--------------- -------------
Cash and cash equivalents, end of period $ 79,285 $ 74,467
=============== =============
Supplemental disclosures:
Cash paid during the period for:
Interest $ 30 $ 63
Income taxes, net of refunds 3,076 2,698
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