Brady Reports Increase in Sales for Its Fiscal 2003 Second Quarter.Business Editors MILWAUKEE--(BUSINESS WIRE)--Feb. 14, 2003 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 2003 second quarter ended January January: see month. 31, 2003. Sales for the quarter were $129.6 million, compared to $120.6 million in the second quarter last year, an increase of 7.5 percent. Net income for the quarter was $2.8 million or $0.12 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, down from $6.1 million or $0.26 per share reported in the fiscal 2002 second quarter. Both sales and net income results are in line with previously announced company guidance. Sales for the six months ended January 31, 2003, rose 7.0 percent to $268.2 compared to $250.6 million in the same period last year. Net income for the period was $11.0 million or $0.46 per share compared to $14.1 million, or $0.60 per share in the period last year. "Our sales in the quarter reflect a stable base business, a positive impact from foreign exchange, and contributions from our ongoing acquisition program. While we are encouraged by the growth in sales for the third straight quarter, our net income in this quarter was strongly impacted by declining margins from a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix, and temporary disruptions due to a business systems conversion in our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. direct marketing business," 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 of Brady Corporation. "We began to see improvement in both these areas in January and, while not enough to fully compensate for earlier declines in the quarter, we believe that a stronger second half will allow us to finish the year with net income of $1.27 to $1.37 and sales of $552 to $562 million, in keeping with our earlier guidance. "Selling, General and Administrative (SG&A) expenses rose in the quarter, due to costs from acquisitions, implementation of the third wave of our new enterprise resource planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) system, and expansion of our catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. program 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). . In addition, foreign
currency translation increased our expenses in Europe and Asia.
"Going forward, we are not anticipating much improvement in the global economy, nonetheless, we remain confident that our strategic investments are positioning us for future growth. These include acquisitions, global expansion initiatives and process improvement. "In the second quarter we acquired Tiscor, Inc., a software developer specializing in safety and security applications for hand-held hand-held also hand·held adj. Compact enough to be used or operated while being held in the hand or hands: a hand-held video camera. Adj. 1. computing computing - computer devices. We also continued our expansion in Asia, with new manufacturing facilities in 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 China. And we are continuing to implement our process improvement initiatives, which are now in place in more than 70 percent of our businesses, in order to better leverage our resources across multiple markets, channels and customers. "Despite investment in these strategies, our cash position remains strong, with $20.7 million in operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. and a cash balance of $65.6 million as of January 31, 2003." A Webcast of a conference call regarding the company's fiscal 2003 second quarter results will be available at www.investor.bradycorp.com beginning at 9:30 a.m. Central Standard Time today. 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. 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 more than 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, 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 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. 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 AND EARNINGS RETAINED IN
THE BUSINESS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
January 31, January 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net Sales $ 129,565 $ 120,589 $ 268,227 $ 250,590
Operating
expenses:
Cost of
products sold 65,909 60,952 134,354 124,075
Research and
development 4,572 4,168 8,643 8,620
Selling,
general and
administrative 54,535 46,083 108,307 96,841
---------- ---------- ---------- ----------
Total operating
expenses 125,016 111,203 251,304 229,536
Operating income 4,549 9,386 16,923 21,054
Other income and
(expense):
Investment and
other income
- net (275) 6 (189) 588
Interest expense (8) (3) (43) (19)
---------- ---------- ---------- ----------
Income before
income taxes 4,266 9,389 16,691 21,623
Income taxes 1,449 3,251 5,675 7,490
---------- ---------- ---------- ----------
Net Income 2,817 6,138 11,016 14,133
Earnings
retained in
business at
beginning of
period 291,231 280,519 287,674 276,779
Less dividends:
Preferred stock - (65) (171) (130)
Common stock (4,540) (4,263) (9,011) (8,453)
Earnings retained
in business at
end of period $ 289,508 $ 282,329 $ 289,508 $ 282,329
========== ========== ========== ==========
Net income per
Class A
Nonvoting
Common Share
Basic $ 0.12 $ 0.26 $ 0.47 $ 0.61
========== ========== ========== ==========
Diluted $ 0.12 $ 0.26 $ 0.46 $ 0.60
========== ========== ========== ==========
Net income per
Class B
Voting Common
Share
Basic $ 0.12 $ 0.26 $ 0.44 $ 0.58
========== ========== ========== ==========
Diluted $ 0.12 $ 0.26 $ 0.43 $ 0.57
========== ========== ========== ==========
BRADY CORPORATION AND SUBSIDIARIES
COMPARATIVE BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS January 31, 2003 July 31, 2002
------ ---------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 65,626 $ 75,969
Accounts receivable, less
allowance for losses ($3,780 and
$3,206, respectively) 80,103 76,246
Inventories 37,747 36,718
Prepaid expenses and other
current assets 17,455 21,093
---------- ----------
Total current assets 200,931 210,026
Other assets:
Goodwill - net 123,360 108,053
Other 22,050 21,555
---------- ----------
145,410 129,608
Property, plant and equipment:
Cost:
Land 5,122 5,612
Buildings and improvements 48,945 50,122
Machinery and equipment 130,220 127,955
Construction in progress 8,453 3,062
---------- ----------
192,740 186,751
Less accumulated depreciation 112,974 105,860
---------- ----------
Net property, plant and equipment 79,766 80,891
---------- ----------
Total $ 426,107 $ 420,525
========== ==========
LIABILITIES AND
STOCKHOLDERS' INVESTMENT
-------------------------
Current liabilities:
Accounts payable $ 23,953 $ 26,294
Wages and amounts withheld from
employees 25,282 26,251
Taxes, other than income taxes 1,880 2,396
Accrued income taxes 8,256 6,312
Other current liabilities 16,803 12,847
Short-term borrowings and current
maturities on long-term debt 51 162
---------- ----------
Total current liabilities 76,225 74,262
Long-term debt, less current maturities 865 3,751
Other liabilities 18,262 18,270
---------- ----------
Total liabilities 95,352 96,283
Stockholders' investment:
Preferred stock 2,855
Class A nonvoting common stock
- Issued and outstanding, 21,405,934
and 21,356,605 shares, respectively 214 214
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 43,146 41,526
Earnings retained in the business 289,508 287,674
Cumulative other comprehensive income (1,498) (7,665)
Other (124) (248)
---------- ----------
Total stockholders' investment 330,755 324,242
---------- ----------
Total $ 426,107 $ 420,525
========== ==========
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands) (Unaudited)
Six Months Ended
January 31
2003 2002
---------- ----------
Operating activities:
Net income $ 11,016 $ 14,133
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and Amortization 8,102 7,716
Loss on sale or disposal of property,
plant & equipment 41 474
Provision for losses on accounts
receivable 671 744
Amortization of restricted stock 123 347
Changes in operating assets and
liabilities (net of effects of
business acquisitions):
Accounts receivable 1,320 1,046
Inventory 730 3,320
Prepaid expenses and other assets 787 (313)
Accounts payable, accrued expenses
and other liabilities (4,145) (2,800)
Income taxes 2,008 1,354
---------- ----------
Net cash provided by operating
activities 20,653 26,021
Investing activities:
Purchase of Business (12,817) (3,848)
Termination of Capital Lease (791) -
Purchases of property, plant and
equipment (7,621) (6,474)
Proceeds from sale of property,
plant and equipment 16 14
Other Investments (295) 14
---------- ----------
Net cash used in investing
activities (21,508) (10,294)
Financing activities:
Payment of dividends (9,182) (8,583)
Proceeds from issuance of
Common Stock 1,620 2,519
Principal payments on debt (162) (1,539)
Redemption of preferred stock (2,855) -
Purchase of Treasury Stock (377) -
Proceeds from short-term borrowings
- net 75 -
---------- ----------
Net cash used in financing
activities (10,881) (7,603)
Effect of exchange rate changes on cash 1,393 (929)
---------- ----------
Net (decrease) increase in cash and
cash equivalents (10,343) 7,195
Cash and cash equivalents, beginning
of period 75,969 62,811
---------- ----------
Cash and cash equivalents,
end of period $ 65,626 $ 70,006
========== ==========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 38 $ 147
Income taxes, net of refunds 8,171 7,052
Acquisitions:
Fair value of asset acquired,
net of cash $ 5,277 $ 1,095
Liabilities Assumed (2,009) (721)
Goodwill 9,549 3,474
---------- ----------
Net cash paid for acquisitions $ 12,817 $ 3,848
========== ==========
Termination of capital lease:
Disposition of capital assets $ (2,574) $ -
Settlement of capital lease
liability 3,365 -
---------- ----------
Net cash paid for termination
of capital lease $ 791 $ -
========== ==========
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