-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Eo+tU8QCs99E7gNwCrYi02ono4BSCvhW1BTKskHInV+K0+oqF7RdFPR3zt0pmdze iqgcu+pebPcsTJPXCHHbSA== 0000746598-94-000007.txt : 19940614 0000746598-94-000007.hdr.sgml : 19940614 ACCESSION NUMBER: 0000746598-94-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940603 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRADY W H CO CENTRAL INDEX KEY: 0000746598 STANDARD INDUSTRIAL CLASSIFICATION: 3990 IRS NUMBER: 390178960 STATE OF INCORPORATION: WI FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12730 FILM NUMBER: 94532944 BUSINESS ADDRESS: STREET 1: 727 W GLENDALE AVE STREET 2: PO BOX 571 CITY: MILWAUKEE STATE: WI ZIP: 53201 BUSINESS PHONE: 4143328100 10-Q 1 FORM 10 - Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended April 30, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 0-12730 W. H. BRADY CO. (Exact name of registrant as specified in its charter) Wisconsin (State of other jurisdiction of incorporation or organization) 39-0178960 (I.R.S. Employer Identification No.) 727 West Glendale Avenue, Milwaukee, Wisconsin 53201 (Address of principal executive offices) (Zip Code) (414) 332-8100 (Registrant's telephone number, including area code) Indicated 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 X No APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of June 1, 1994, there were outstanding 5,466,812 shares of Class A Common Stock and 1,769,314 shares of Class B Common Stock. The Class B Common Stock, all of which is held by an affiliate of the Registrant, is the only voting stock. FORM 10-Q W. H. BRADY CO. INDEX PAGE PART I. Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheets. . . . . . . .3 Unaudited Condensed Consolidated Statements of Earnings and Earnings Retained in Business. . . .4 Unaudited Condensed Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . . . . .5 Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . .6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . .7 PART II. Other Information. . . . . . . . . . . . . . . . . . .8 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . .8 W. H. BRADY CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
Apr. 30, July 31, 1994 1993 (Unaudited) ASSETS Current Assets: Cash and Cash Equivalents $ 60,532 $ 42,366 Accounts Receivable, Less Allowance for Losses ($1,507 and $1,247, Respectively) 33,076 30,522 Inventories 21,622 22,733 Prepaid Expenses & Other Current Assets 10,083 10,025 Total Current Assets 125,313 105,646 Other Assets 10,931 6,893 Property Plant and Equipment: Cost Land 4,670 4,664 Buildings and Improvements 38,040 37,473 Machinery and Equipment 70,539 68,802 Construction in Progress 2,319 3,807 115,568 114,746 Less Accumulated Depreciation 50,266 47,384 Total Property, Plant & Equipment 65,302 67,362 $201,546 $179,901 LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Accounts Payable $ 8,588 $ 8,577 Wages & Amounts Withheld From Employees 11,505 8,374 Income Taxes 7,797 2,392 Other Current Liabilities 7,901 7,882 Current Maturities on Long-Term Debt 372 478 Total Current Liabilities 36,163 27,703 Long Term Debt, Less Current Maturities 2,163 1,978 Other Liabilities 24,013 22,152 Total Liabilities 62,339 51,833 Stockholders' Investment: Preferred Stock 2,855 2,855 Class A Nonvoting Common Stock-Issued and Outstanding 5,466,812 and 5,437,162 Shares, Respectively 54 54 Class B Voting Common Stock-Issued and Outstanding 1,769,314 Shares 18 18 Additional Paid in Capital 6,344 5,571 Earnings Retained in the Business 128,632 118,730 Cumulative Translation Adjustments 1,304 840 Total Stockholders' Investment 139,207 128,068 $201,546 $179,901 See Notes to Condensed Consolidated Financial Statements. /TABLE W. H. BRADY CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND EARNINGS RETAINED IN BUSINESS (Dollars in Thousands except per share amounts) (UNAUDITED)
Three Months Ended Apr 30 Nine Months Ended Apr 30 1994 1993 1994 1993 Net Sales $ 65,888 $ 62,736 $189,632 $182,007 Operating Expenses: Cost of Products Sold 30,143 30,726 88,386 88,512 Research & Development 2,465 3,163 7,836 9,470 Selling, General and Administrative 24,494 22,343 71,591 67,469 Total Operating Expenses 57,102 56,232 167,813 165,451 Operating Income 8,786 6,504 21,819 16,556 Investment and Other Income-Net 371 111 981 1,384 Interest Expense (102) (117) (225) (347) Income Before Income Taxes 9,055 6,498 22,575 17,593 Income Taxes 3,490 2,381 8,971 6,638 Net Income $ 5,565 $ 4,117 $ 13,604 $ 10,955 Earnings Retained in Business at Beginning of Period 124,361 111,003 118,730 106,274 Less Dividends: Preferred Stock (65) (65) (194) (194) Common Stock (1,229) (1,080) (3,508) (3,060) Earnings Retained in Business at End of Period $128,632 $113,975 $128,632 $113,975 Net Income Per Common Share Net Income - Class A Nonvoting $ 0.76 $ 0.56 $ 1.88 $ 1.52 Net Income - Class B Voting $ 0.76 $ 0.56 $ 1.78 $ 1.42 See Notes to Condensed Consolidated Financial Statements. /TABLE W. H. BRADY CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Nine Months Ended April 30 1994 1993 Net Income $ 13,604 $ 10,955 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation & Amortization 7,145 7,444 Loss (Gain) on Sale of Equipment 84 (81) Provision for Losses on A/R 336 396 Changes in Operating Assets and Liabilities: (Incr) Decr in A/R (3,313) (7,710) (Incr) Decr in Inventory 1,341 1,023 (Incr) Decr in Prepaid Expense (4,148) 1,841 Incr (Decr) in A/P & Other Liabilities 3,393 (1,868) Incr (Decr) in Income Taxes 7,721 (1,169) Net Cash Provided by Operating Activities 26,163 10,831 Investing Activities: Purchases of Property, Plant and Equipment (5,172) (9,061) Proceeds from Sale of Property, Plant and Equipment 244 580 Proceeds from Sale of Businesses 0 7,421 Net Cash Used in Investing Activities (4,928) (1,060) Financing Activities: Principal Payments on Long Term Debt (342) (430) Payment of Dividends (3,702) (3,255) Proceeds from Issuance of Common Stock 773 591 Net Cash Used in Financing Activities (3,271) (3,094) Effect of Exchange Rate Changes on Cash 202 (2,250) Net Incr (Decr) in Cash and Cash Equivalents 18,166 4,427 Cash & Cash Equivalents at Beginning of Year 42,366 28,519 Cash and Cash Equivalents at End of Period $ 60,532 $ 32,946 Supplemental Disclosures of Cash Flow Information: Cash Paid During the Year For: Interest 58 219 Income Taxes 6,214 7,192 See Notes to Condensed Consolidated Financial Statements. /TABLE W. H. BRADY CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Nine months ended April 30, l994 NOTE A - Basis of Presentation The condensed consolidated financial statements included herein have been prepared by the Company 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 accruals, necessary to present fairly the financial position of the Company as of April 30, 1994 and July 31, 1993, and its results of operations and its cash flows for the three months and nine months ended April 30, 1994 and l993. The consolidated balance sheet at July 31, l993 has been taken from the audited financial statements of that date and condensed. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report. It is not practical to segregate the amounts of raw material, work in process or finished goods at the respective interim balance sheet dates. NOTE B - Net Earnings Per Common Share Net earnings per common share were computed by dividing net earnings (after deducting the applicable preferred stock and preferential Class A common stock dividends) by the weighted average number of Class A and Class B common shares outstanding of 7,221,301 for the three months and nine months ended April 30, 1994 and 7,191,037 for the same periods in 1993. The preferential dividend on the Class A common stock of $.10 per share declared on September 24, 1993 has been added to the net earnings per Class A common share for the nine months ended April 30, 1994. The net earnings per Class A common share for the nine months ended April 30, 1993 includes $.10 per share relating to preferential dividends declared in that period. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations For the three months ended April 30, 1994 revenues of $65,888,000 were 5.0% higher than the same quarter of the previous year. For the nine months ended April 30, 1994 revenues of $189,632,000 were 4.2% higher than the same period last year. Sales of the Company's international operations increased 21.7% for the quarter and 19.3% for the nine months as a result of real growth offset by changes in the exchange rates used to translate financial results into U.S. currency. Sales of the Company's U.S. operations decreased 3.1% for the quarter and 2.9% for the nine month period because of the divestiture of three businesses last year. Comparing only continuing operations, sales of the Company's U.S. operations increased 4.2% for the quarter and 6.8% for the nine month period. The cost of products sold as a percentage of sales was 45.8% for the quarter and 46.6% for the nine months ended April 30, 1994. For the same periods last year these percentages were 49.0% and 48.6%. These decreases from period to period were caused by changes in product mix, the divestiture of three businesses last year and the Company's continuous improvement efforts. Selling, general and administrative expenses as a percentage of sales were 37.2% for the quarter compared to 35.6% for the same quarter of the previous year. For the nine months ended April 30, 1994, this percentage was 37.8% compared to 37.1% for the same period last year. Research and development expenses decreased 22.1% for the quarter and 17.3% for the nine months ended April 30, 1994 over the same periods last year because of lower product development project expenditures. Income before income taxes increased 39.4% for the quarter and 28.3% for the nine months ended April 30, 1994. Net income increased 35.2% to $5,565,000 compared to $4,117,000 for the same quarter of the previous year. For the nine months ended April 30, 1994 net income increased 24.2% to $13,604,000 from $10,955,000 for the same period last year. Last year's nine month net income included an after-tax gain of $400,000 from the sale of certain assets of two of the Company's domestic operations. Financial Condition The Company's liquidity remains strong. The current ratio as of April 30, 1994 was 3.5 to 1. Cash and cash equivalents were $60,532,000 at April 30, 1994 compared to $42,366,000 at July 31, 1993. Working capital increased $11,207,000 during the nine months and equaled $89,150,000 as of April 30, 1994. The Company believes this amount is adequate to meet its current and anticipated operating needs. PART II ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits None (b) Reports on Form 8-K The Company was not required to file and did not file a report on Form 8-K during the quarter ended April 30, 1994. Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SIGNATURES W. H. BRADY CO. Date: June 2, 1994 /S/ K. M. Hudson K. M. Hudson President Date: June 2, 1994 /S/ D. P. DeLuca D. P. DeLuca Vice President-Finance and Assistant Secretary (Principal Accounting Officer) PART II ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits None (b) Reports on Form 8-K The Company was not required to file and did not file a report on Form 8-K during the quarter ended April 30, 1994. Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SIGNATURES W. H. BRADY CO. Date: K. M. Hudson President Date: D. P. DeLuca Vice President-Finance and Assistant Secretary (Principal Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----