EX-99.1 2 brc-2013430xex991.htm THIRD QUARTER FISCAL 2013 PRESS RELEASE BRC-2013.4.30-EX 99.1


EXHIBIT 99.1

For More Information:
Investor contact: Aaron Pearce 414-438-6895
Media contact: Carole Herbstreit 414-438-6882

For Immediate Release

Brady Corporation Reports Fiscal 2013 Third Quarter Results

MILWAUKEE (May 16, 2013)--Brady Corporation (NYSE: BRC) (“Brady”), a world leader in identification solutions, today reported its financial results for the fiscal 2013 third quarter ended April 30, 2013.

Quarter Ended April 30, 2013 Financial Results:
The company continued its portfolio realignment process by announcing plans to sell its Asia-based Die-Cut business which was outlined in a separate press release on May 16, 2013. Accordingly, the company has recast its financial statements to report the financial results of the Die-Cut business on one line item in the accompanying condensed consolidated statements of income.
Sales from continuing operations for the fiscal 2013 third quarter were up 11.0 percent to $305.7 million compared to $275.4 million in the third quarter of fiscal 2012. Organic sales were down 4.7 percent, acquisitions added 16.8 percent, and the impact of foreign currency translation decreased sales by 1.1 percent. By segment, organic sales decreased 2.9 percent in the Americas, 4.8 percent in EMEA and 11.6 percent in the Asia-Pacific region.
Net earnings from continuing operations in the fiscal 2013 third quarter were $21.8 million compared to $28.0 million in the same quarter last year. Non-GAAP net earnings from continuing operations* were $28.7 million in the third quarter of fiscal 2013, compared to $29.9 million in the third quarter of fiscal 2012.
Earnings from continuing operations per diluted Class A Nonvoting Common Share were $0.42 in the third quarter of fiscal 2013 compared to $0.53 in the same quarter last year. Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* were $0.55 in the third quarter of fiscal 2013, compared to $0.56 in the same quarter of fiscal 2012.
  
Nine Months Ended April 30, 2013 Financial Results:
Sales for the nine-month period ended April 30, 2013 were up 5.3 percent to $856.4 million compared to $813.6 million in the same period last year. Organic sales were down 2.7 percent, acquisitions added 9.3 percent to sales and the impact of foreign currency translation decreased sales by 1.3 percent. By segment, organic sales decreased 0.7 percent in the Americas, 4.2 percent in EMEA and 6.8 percent in the Asia-Pacific region.
Net earnings from continuing operations for the nine-month period ended April 30, 2013 were $37.7 million compared to $84.3 million in the same period in fiscal 2012. Non-GAAP net earnings from continuing operations* were $75.1 million in the nine-month period ended April 30, 2013 compared to $86.1 million in the same period of fiscal 2012.
Earnings from continuing operations per diluted Class A Nonvoting Common Share were $0.73 for the nine-month period ended April 30, 2013 compared to $1.59 in the same period of fiscal 2012. Non-GAAP earnings from




continuing operations per diluted Class A Nonvoting Common Share* were $1.45 for the nine-month period ended April 30, 2013, compared to $1.62 in the same period of fiscal 2012.

Commentary and Guidance:
“In the face of a challenging economy, we continue to position Brady for long-term success by optimizing our portfolio of businesses, aligning our organization with growth opportunities and reducing our infrastructure costs.  This morning we announced our intention to sell our Die-Cut business which will continue the process of portfolio realignment as we have already divested three businesses and acquired Precision Dynamics Corporation, a business serving the healthcare space. These portfolio adjustments will allow us to focus more on our continuing businesses of Identification Solutions and Workplace Safety,” stated Brady's President and Chief Executive Officer, Frank M. Jaehnert. “As part of our previously announced strategy to improve organic growth and profitability, effective May 1, 2013, we are changing our organizational structure from geographically-based to an organization structured around global business platforms. We are also targeting expansion in faster-growing geographies such as Central Europe, the Middle East, Africa and selected markets in Asia; and focusing on industries such as food and beverage, chemical, oil, and gas and healthcare.
“In addition to improving organic growth, we believe that our reorganization around global business platforms will yield approximately $25 million to $30 million of annual pre-tax savings, approximately half of which will be reinvested into growth initiatives. We also continue to review our facility footprint and believe that we have further opportunities for rationalization as we move forward with our business reorganization and simplification.”
Brady's Chief Financial Officer, Thomas J. Felmer said, “Our balance sheet remains strong. Having repaid much of the debt incurred to finance the PDC acquisition, Brady is in a solid financial position to fund future organic and inorganic growth opportunities. We expect earnings from continuing operations per diluted Class A Nonvoting Common Share to range from between $0.45 and $0.55, exclusive of restructuring charges and certain other items during our fiscal 2013 fourth quarter ending July 31, 2013.”

A webcast regarding Brady's fiscal 2013 third quarter financial results will be available at www.bradycorp.com beginning at 9:30 a.m. Central Time today.
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Brady's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software, and precision die-cut materials. Founded in 1914, the company has millions of customers in electronics, telecommunications, manufacturing, electrical, construction, education, medical and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of January 31, 2013 employed approximately 8,200 people at operations in the Americas, EMEA and Asia-Pacific. Brady's fiscal 2012 sales were approximately $1.32 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradycorp.com.

* See accompanying notes for Non-GAAP measures.






###
Brady believes that certain statements in this news release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements related to future, not past, events included in this news release, including, without limitation, statements regarding Brady's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations are forward-looking statements. When used in this news release, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions and other factors, some of which are beyond Brady's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from the length or severity of the current worldwide economic downturn or timing or strength of a subsequent recovery; future financial performance of major markets Brady serves, which include, without limitation, telecommunications, manufacturing, electrical, construction, laboratory, education, governmental, public utility, computer, transportation; difficulties in making and integrating acquisitions; risks associated with newly acquired businesses; Brady's ability to develop and successfully market new products; changes in the supply of, or price for, parts and components; increased price pressure from suppliers and customers; fluctuations in currency rates versus the US dollar; unforeseen tax consequences; potential write-offs of Brady's substantial intangible assets; Brady's ability to retain significant contracts and customers; risks associated with international operations; Brady's ability to maintain compliance with its debt covenants; technology changes; business interruptions due to implementing business systems; environmental, health and safety compliance costs and liabilities; future competition; interruptions to sources of supply; Brady's ability to realize cost savings from operating initiatives; difficulties associated with exports; risks associated with restructuring plans; risks associated with obtaining governmental approvals and maintaining regulatory compliance; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature contained from time to time in Brady's U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the “Risk Factors” section located in Item 1A of Part I of Brady's Form 10-K for the year ended July 31, 2012. These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements.




BRADY CORPORATION AND SUBSIDIARIES                                    
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
 
(Unaudited)
 
(Unaudited)
 
Three Months Ended April 30,
 
Nine Months Ended April 30,
 
2013
 
2012
 
2013
 
2012
Net sales
$
305,737

 
$
275,388

 
$
856,408

 
$
813,573

Cost of products sold
146,031

 
123,641

 
403,888

 
367,330

Gross margin
159,706

 
151,747

 
452,520

 
446,243

Operating expenses:
 
 
 
 
 
 
 
Research and development
8,062

 
8,200

 
24,162

 
25,657

Selling, general and administrative
112,148

 
98,614

 
321,909

 
293,518

Restructuring charges
8,540

 
1,977

 
10,487

 
1,977

Total operating expenses
128,750

 
108,791

 
356,558

 
321,152

 
 
 
 
 
 
 
 
Operating income
30,956

 
42,956

 
95,962

 
125,091

 
 
 
 
 
 
 
 
Other income and (expense):
 
 
 
 
 
 
 
Investment and other income
1,131

 
1,108

 
2,427

 
1,719

Interest expense
(4,185
)
 
(4,735
)
 
(12,755
)
 
(14,715
)
 
 
 
 
 
 
 
 
Earnings from continuing operations before income taxes
27,902

 
39,329

 
85,634

 
112,095

 
 
 
 
 
 
 
 
Income taxes
6,064

 
11,290

 
47,965

 
27,767

 
 
 
 
 
 
 
 
Net earnings from continuing operations
$
21,838

 
$
28,039

 
$
37,669

 
$
84,328

 
 
 
 
 
 
 
 
(Loss) from discontinued operations, net of income tax
(17,605
)
 
(387
)
 
(14,933
)
 
(113,898
)
 
 
 
 
 
 
 
 
Net earnings (loss)
$
4,233

 
$
27,652

 
$
22,736

 
$
(29,570
)
 
 
 
 
 
 
 
 
Earnings from continuing operations per Class A Nonvoting Common Share:
 
 
 
 
 
 
 
Basic
$
0.42

 
$
0.53

 
$
0.73

 
$
1.60

Diluted
$
0.42

 
$
0.53

 
$
0.73

 
$
1.59

 
 
 
 
 
 
 
 
Earnings from continuing operations per Class B Voting Common Share:
 
 
 
 
 
 
 
Basic
$
0.42

 
$
0.53

 
$
0.72

 
$
1.59

Diluted
$
0.42

 
$
0.53

 
$
0.71

 
$
1.57

 
 
 
 
 
 
 
 
(Loss) from discontinued operations per Class A Nonvoting Common Share:
 
 
 
 
 
 
 
Basic
$
(0.34
)
 
$
—

 
$
(0.29
)
 
$
(2.17
)
Diluted
$
(0.34
)
 
$
(0.01
)
 
$
(0.29
)
 
$
(2.16
)
 
 
 
 
 
 
 
 
(Loss) from discontinued operations per Class B Voting Common Share:
 
 
 
 
 
 
 
Basic
$
(0.34
)
 
$
—

 
$
(0.30
)
 
$
(2.17
)
Diluted
$
(0.34
)
 
$
(0.01
)
 
$
(0.29
)
 
$
(2.15
)
 
 
 
 
 
 
 
 
Earnings per Class A Nonvoting Common Share:
 
 
 
 
 
 
 
Basic
$
0.08

 
$
0.53

 
$
0.44

 
$
(0.57
)
Diluted
$
0.08

 
$
0.52

 
$
0.44

 
$
(0.57
)
Dividends
$
0.19

 
$
0.185

 
$
0.57

 
$
0.555

 
 
 
 
 
 
 
 
Earnings per Class B Voting Common Share:
 
 
 
 
 
 
 
Basic
$
0.08

 
$
0.53

 
$
0.42

 
$
(0.58
)
Diluted
$
0.08

 
$
0.52

 
$
0.42

 
$
(0.58
)
Dividends
$
0.19

 
$
0.185

 
$
0.553

 
$
0.538

 
 
 
 
 
 
 
 
Weighted average common shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic
51,415

 
52,513

 
51,210

 
52,539

Diluted
52,041

 
53,003

 
51,685

 
52,946





BRADY CORPORATION AND SUBSIDIARIES                                
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
 
(Unaudited)
 
April 30, 2013
 
July 31, 2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
77,034

 
$
305,900

Accounts receivable—net
177,343

 
199,006

Inventories:
 
 
 
Finished products
62,995

 
64,740

Work-in-process
14,908

 
15,377

Raw materials and supplies
21,703

 
25,407

Total inventories
99,606

 
105,524

Assets held for sale
108,623

 
—

Prepaid expenses and other current assets
41,461

 
40,424

Total current assets
504,067

 
650,854

Other assets:
 
 
 
Goodwill
841,449

 
676,791

Other intangible assets
174,583

 
84,119

Deferred income taxes
6,305

 
45,356

Other
20,915

 
20,584

Property, plant and equipment:
 
 
 
Cost:
 
 
 
Land
9,081

 
8,651

Buildings and improvements
100,504

 
101,962

Machinery and equipment
278,233

 
292,130

Construction in progress
9,358

 
10,417

 
397,176

 
413,160

Less accumulated depreciation
263,527

 
283,145

Property, plant and equipment—net
133,649

 
130,015

Total
$
1,680,968

 
$
1,607,719

LIABILITIES AND STOCKHOLDERS’ INVESTMENT
 
 
 
Current liabilities:
 
 
 
Notes payable
$
58,658

 
$
—

Accounts payable
75,204

 
86,646

Wages and amounts withheld from employees
36,840

 
54,629

Liabilities held for sale
34,684

 
—

Taxes, other than income taxes
7,603

 
9,307

Accrued income taxes
10,650

 
14,357

Other current liabilities
34,396

 
40,815

Current maturities on long-term debt
61,265

 
61,264

Total current liabilities
319,300

 
267,018

Long-term obligations, less current maturities
218,378

 
254,944

Other liabilities
109,635

 
76,404

Total liabilities
647,313

 
598,366

Stockholders’ investment:
 
 
 
Common stock:
 
 
 
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,972,270 and 47,630,926 shares, respectively
513

 
513

Class B voting common stock—Issued and outstanding, 3,538,628 shares
35

 
35

Additional paid-in capital
312,905

 
313,008

Earnings retained in the business
725,682

 
732,290

Treasury stock—2,974,218 and 3,245,561 shares, respectively of Class A nonvoting common stock, at cost
(79,996
)
 
(92,600
)
Accumulated other comprehensive income
76,439

 
59,411

Other
(1,923
)
 
(3,304
)
Total stockholders’ investment
1,033,655

 
1,009,353

Total
$
1,680,968

 
$
1,607,719





BRADY CORPORATION AND SUBSIDIARIES                                
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
 
(Unaudited)
Nine Months Ended April 30,
 
2013
 
2012
Operating activities:
 
 
 
Net income (loss)
$
22,736

 
$
(29,570
)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
36,037

 
32,921

Non-cash portion of restructuring charges
3,701

 
458

Non-cash portion of stock-based compensation expense
6,964

 
7,592

Impairment charge
—

 
115,688

Loss on write-down of assets held for sale
15,658

 
—

Loss (gain) on sales of businesses
3,138

 
—

Deferred income taxes
33,780

 
(3,192
)
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures):
 
 
 
Accounts receivable
(6,410
)
 
11,050

Inventories
(91
)
 
(5,595
)
Prepaid expenses and other assets
541

 
(4,386
)
Accounts payable and accrued liabilities
(22,226
)
 
(39,472
)
Income taxes
(4,198
)
 
15,101

Net cash provided by operating activities
89,630

 
100,595

 
 
 
 
Investing activities:
 
 
 
Purchases of property, plant and equipment
(26,082
)
 
(14,498
)
Payments of contingent consideration
—

 
(2,580
)
Settlement of net investment hedges
—

 
(797
)
Acquisition of business, net of cash acquired
(301,157
)
 
(3,039
)
Sales of businesses, net of cash retained
10,178

 
—

Other
(1,245
)
 
(1,536
)
Net cash used in investing activities
(318,306
)
 
(22,450
)
 
 
 
 
Financing activities:
 
 
 
Payment of dividends
(29,344
)
 
(29,235
)
Proceeds from issuance of common stock
10,246

 
3,624

Purchase of treasury stock
(5,121
)
 
(12,309
)
Proceeds from borrowings on notes payable
220,000

 
—

Repayment of borrowings on notes payable
(173,000
)
 
—

Proceeds from borrowings on line of credit
11,491

 
—

Principal payments on debt
(42,514
)
 
(42,514
)
Debt issuance costs
—

 
(961
)
Income tax benefit from the exercise of stock options and deferred compensation distributions, and other
1,794

 
754

Net cash provided by (used in) financing activities
(6,448
)
 
(80,641
)
 
 
 
 
Effect of exchange rate changes on cash
6,258

 
(13,050
)
 
 
 
 
Net decrease in cash and cash equivalents
(228,866
)
 
(15,546
)
Cash and cash equivalents, beginning of period
305,900

 
389,971

 
 
 
 
Cash and cash equivalents, end of period
$
77,034

 
$
374,425

 
 
 
 
Supplemental disclosures:
 
 
 
Cash paid during the period for:
 
 
 
Interest, net of capitalized interest
$
13,194

 
$
15,746

Income taxes, net of refunds
26,786

 
19,959

Acquisitions:
 
 
 
Fair value of assets acquired, net of cash
$
168,675

 
$
2,395

Liabilities assumed
(57,860
)
 
(583
)
Goodwill
190,342

 
1,227

Net cash paid for acquisitions
$
301,157

 
$
3,039





 
 
 
 
 
 
 
Information by regional segment for the three and nine months ended April 30, 2013 and 2012 is as follows:
 
 
 
 
 
 
 
(Dollars in Thousands)
Americas
EMEA
Asia-Pacific
Total Region
Corporate and Eliminations
Total
SALES TO EXTERNAL CUSTOMERS
Three months ended:
April 30, 2013
$
178,559

$
94,044

$
33,134

$
305,737

—

$
305,737

April 30, 2012
$
143,083

$
94,136

$
38,169

$
275,388

—

$
275,388

 
 
 
 
 
 
 
Nine months ended:
April 30, 2013
$
470,418

$
279,420

$
106,570

$
856,408

—

$
856,408

April 30, 2012
$
419,862

$
279,506

$
114,205

$
813,573

—

$
813,573

 
 
 
 
 
 
 
SALES INFORMATION
Three months ended April 30, 2013:
    Organic
(2.9
)%
(4.8
)%
(11.6
)%
(4.7
)%
—
%
(4.7
)%
    Currency
(0.7
)%
(1.3
)%
(1.6
)%
(1.1
)%
—
%
(1.1
)%
    Acquisitions
28.4
 %
6.0
 %
0.0
 %
16.8
 %
—
%
16.8
 %
      Total
24.8
 %
(0.1
)%
(13.2
)%
11.0
 %
—
%
11.0
 %
 
 
 
 
 
 
 
Nine months ended April 30, 2013:
    Organic
(0.7
)%
(4.2
)%
(6.8
)%
(2.7
)%
—
%
(2.7
)%
    Currency
(0.8
)%
(2.5
)%
0.1
 %
(1.3
)%
—
%
(1.3
)%
    Acquisitions
13.5
 %
6.7
 %
0.0
 %
9.3
 %
—
%
9.3
 %
      Total
12.0
 %
—
 %
(6.7
)%
5.3
 %
—
%
5.3
 %
 
 
 
 
 
 
 
SEGMENT PROFIT
Three months ended:
April 30, 2013
$
42,942

$
22,993

$
5,485

$
71,420

$
(1,282
)
$
70,138

April 30, 2012
$
39,181

$
25,566

$
6,080

$
70,827

$
(388
)
$
70,439

      Percentage change
9.6
 %
(10.1
)%
(9.8
)%
0.8
 %
 
(0.4
)%
 
 
 
 
 
 
 
Nine months ended:
April 30, 2013
$
119,179

$
70,568

$
15,793

$
205,540

$
(5,049
)
$
200,491

April 30, 2012
$
118,871

$
78,432

$
18,411

$
215,714

$
(6,010
)
$
209,704

      Percentage change
0.3
 %
(10.0
)%
(14.2
)%
(4.7
)%
 
(4.4
)%



NET INCOME RECONCILIATION (in thousands)
 
Three Months Ended April 30,
 
Nine Months Ended April 30,
 
2013
 
2012
 
2013
 
2012
Total profit for reportable segments
$
71,420

 
$
70,827

 
$
205,540

 
$
215,714

Corporate and eliminations
(1,282
)
 
(388
)
 
(5,049
)
 
(6,010
)
Unallocated amounts:
 
 
 
 
 
 
 
Administrative costs
(30,642
)
 
(25,506
)
 
(94,042
)
 
(82,636
)
Restructuring charges
(8,540
)
 
(1,977
)
 
(10,487
)
 
(1,977
)
Investment and other income
1,131

 
1,108

 
2,427

 
1,719

Interest expense
(4,185
)
 
(4,735
)
 
(12,755
)
 
(14,715
)
Earnings from continuing operations before income taxes
27,902

 
39,329

 
85,634

 
112,095

Income taxes
6,064

 
11,290

 
47,965

 
27,767

Net earnings from continuing operations
21,838

 
28,039

 
37,669

 
84,328

(Loss) from discontinued operations, net of tax
(17,605
)
 
(387
)
 
(14,933
)
 
(113,898
)
Net earnings (loss)
$
4,233

 
$
27,652

 
$
22,736

 
$
(29,570
)




GAAP TO NON-GAAP MEASURES
(Dollars in Thousands, Except Per Share Amounts)
 
In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure.
 
 
EBITDA:
 
 
 
 
 
 
 
 
 


 
Brady is presenting EBITDA because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA represents net income before interest expense, income taxes, depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles ("GAAP"). The amounts included in the EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Income data. EBITDA should not be considered as an alternative to net income or operating income as an indicator of the Company's operating performance, or as an alternative to net cash provided by operating activities as a measure of liquidity. The EBITDA measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Total
 
EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
27,188

 
$
(8,684
)
 
$
4,233

 
 
 
$
22,737

 
 
 
Interest expense
 
4,163

 
4,406

 
4,185

 
 
 
12,754

 
 
 
Income taxes
 
13,482

 
30,625

 
7,595

 
 
 
51,702

 
 
 
Depreciation and amortization
 
10,675

 
11,371

 
13,991

 
 
 
36,037

 
 
 
Intangible asset write-down in restructuring charges
 
—

 
—

 
3,207

 
 
 
3,207

 
 
 
Loss on write-down of assets held for sale
 
—

 
—

 
15,658

 
 
 
15,658

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA (non-GAAP measure)
 
$
55,508

 
$
37,718

 
$
48,869

 
 
 
$
142,095

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Total
 
EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
32,732

 
$
(89,954
)
 
$
27,652

 
$
11,659

 
$
(17,911
)
 
 
 
Interest expense
 
5,047

 
4,933

 
4,735

 
4,375

 
19,090

 
 
 
Income taxes
 
11,109

 
8,635

 
9,676

 
11,241

 
40,661

 
 
 
Depreciation and amortization
 
11,241

 
10,935

 
10,745

 
11,066

 
43,987

 
 
 
Impairment charge
 
—

 
115,688

 
—

 
—

 
115,688

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA (non-GAAP measure)
 
$
60,129

 
$
50,237

 
$
52,808

 
$
38,341

 
$
201,515





GAAP TO NON-GAAP MEASURES
(Dollars in Thousands, Except Per Share Amounts)

 
Earnings from Continuing Operations Before Income Taxes Excluding Certain Items:
 
Brady is presenting the Non-GAAP measure "Earnings from Continuing Operations Before Income Taxes Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this profit measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Earnings from Continuing Operations Before Income Taxes to Earnings from Continuing Operations Before Income Taxes Excluding Certain Items":
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended April 30,
 
Nine Months Ended April 30,
 
 
 
 
 
 
 
2013
 
2012
 
2013
 
2012
 
Earnings from Continuing Operations Before Income Taxes (GAAP measure)
 
$
27,902

 
$
39,329

 
$
85,634

 
$
112,095

 
 
Cost of goods sold
 
 
 
 
 
 
 
 
 
 
 
Purchase accounting expense related to inventory
 
—

 
—

 
1,530

 
—

 
 
Selling, general and administrative
 
 
 
 
 
 
 
 
 
 
 
PDC acquisition-related expenses
 
 
 
—

 
—

 
3,600

 
—

 
 
Restructuring charges
 
8,540

 
1,977

 
10,487

 
1,977

 
 
Non-cash income tax charge
 
 
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from Continuing Operations Before Income Taxes
 
 
 
 
 
 
 
 
 
 
Excluding Certain Items (non-GAAP measure)
 
 
 
$
36,442

 
$
41,306

 
$
101,251

 
$
114,072



 
Income Taxes on Continuing Operations Excluding Certain Items:
 
Brady is presenting the Non-GAAP measure "Income Taxes on Continuing Operations Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Income Taxes on Continuing Operations to Income Taxes on Continuing Operations Excluding Certain Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended April 30,
 
Nine Months Ended April 30,
 
 
 
 
 
 
 
2013
 
2012
 
2013
 
2012
 
Income Taxes on Continuing Operations (GAAP measure)
 
$
6,064

 
$
11,290

 
$
47,965

 
$
27,767

 
 
Cost of goods sold
 
 
 
 
 
 
 
 
 
 
 
Purchase accounting expense related to inventory
 
—

 
—

 
581

 
—

 
 
Selling, general and administrative
 
 
 
 
 
 
 
 
 
 
 
PDC acquisition-related expenses
 
 
 
—

 
—

 
641

 
—

 
 
Restructuring charges
 
1,691

 
162

 
2,003

 
162

 
 
Non-cash income tax charge
 
 
 
—

 
—

 
(25,000
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes on Continuing Operations Excluding Certain Items
 
 
 
 
 
 
 
 
 
 
(non-GAAP measure)
 
$
7,755

 
$
11,452

 
$
26,190

 
$
27,929




















GAAP TO NON-GAAP MEASURES
(Dollars in Thousands, Except Per Share Amounts)

 
Net Earnings from Continuing Operations Excluding Certain Items:
 
Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Net Earnings from Continuing Operations to Net Earnings from Continuing Operations Excluding Certain Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended April 30,
 
Nine Months Ended April 30,
 
 
 
 
 
 
 
2013
 
2012
 
2013
 
2012
 
Net Earnings from Continuing Operations (GAAP measure)
 
$
21,838

 
$
28,039

 
$
37,669

 
$
84,328

 
 
Cost of goods sold
 
 
 
 
 
 
 
 
 
 
 
Purchase accounting expense related to inventory
 
—

 
—

 
949

 
—

 
 
Selling, general and administrative
 
 
 
 
 
 
 
 
 
 
 
PDC acquisition-related expenses
 
 
 
—

 
—

 
2,959

 
—

 
 
Restructuring charges
 
6,849

 
1,815

 
8,484

 
1,815

 
 
Non-cash income tax charge
 
 
 
—

 
—

 
25,000

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Earnings from Continuing Operations Excluding Certain Items
 
 
 
 
 
 
 
 
 
 
(non-GAAP measure)
 
$
28,687

 
$
29,854

 
$
75,061

 
$
86,143



 
Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items:
 
Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share to Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended April 30,
 
Nine Months Ended April 30,
 
 
 
 
 
 
 
2013
 
2012
 
2013
 
2012
 
Net Earnings from Continuing Operations Per Diluted Class A
 
$
0.42

 
$
0.53

 
$
0.73

 
$
1.59

 
 
Nonvoting Share (GAAP measure)
 
 
 
 
 
 
 
 
 
 
 
 
Cost of goods sold
 
 
 
 
 
 
 
 
 
 
 
Purchase accounting expense related to inventory
 
—

 
—

 
0.02

 
—

 
 
Selling, general and administrative
 
 
 
 
 
 
 
 
 
 
 
PDC acquisition-related expenses
 
 
 
—

 
—

 
0.06

 
—

 
 
Restructuring charges
 
0.13

 
0.03

 
0.16

 
0.03

 
 
Non-cash income tax charge
 
 
 
—

 
—

 
0.49

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Earnings from Continuing Operations Per Diluted Class A
 
 
 
 
 
 
 
 
 
 
Nonvoting Share Excluding Certain Items (non-GAAP measure)
 
$
0.55

 
$
0.56

 
$
1.45

 
$
1.62