EX-12.1 3 exhibit121ratioofearningst.htm RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 Ratio of Earnings to Fixed Charges


EXHIBIT 12.1

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands, except ratio data)
 
Years Ended July 31,
 
2014
 
2013
 
2012
 
2011
 
2010
Earnings:
 
 
 
 
 
(Loss) earnings from continuing operations
$
(53,109
)
 
$
(95,674
)
 
$
140,655

 
$
127,624

 
$
94,370

Add back:
 
 
 
 
 
 
 
 
 
Fixed charges less interest capitalized
15,211

 
17,592

 
19,888

 
23,128

 
22,107

Less:
 
 
 
 
 
 
 
 
 
Preferential stock dividends and premium on redemption of preferred stock
—

 
—

 
—

 
—

 
—

Total (loss) earnings
$
(37,898
)
 
$
(78,082
)
 
$
160,543

 
$
150,752

 
$
116,477

 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
 
Interest, capitalized and expensed
$
13,879

 
$
16,222

 
$
18,407

 
$
21,777

 
$
20,843

Amortization of debt expense
421

 
419

 
683

 
347

 
379

Interest portion of rent expense
911

 
951

 
798

 
1,004

 
885

Preferential stock dividends and premium on redemption of preferred stock
—

 
—

 
—

 
—

 
—

Total fixed charges
$
15,211

 
$
17,592

 
$
19,888

 
$
23,128

 
$
22,107

 
 
 
 
 
 
 
 
 
 
Ratio of Earnings to Fixed Charges
(1
)
 
(2
)
 
8.1x

 
6.5x

 
5.3x


(1)
Due to Brady Corporation's loss for the year ended July 31, 2014, the Company did not have earnings adequate to cover fixed charges, and the ratio of earnings to fixed charges therefore has not been presented for that period. The coverage deficiency necessary for the ratio of earnings to fixed charges to equal 1.0x was $53.1 million for the year ended July 31, 2014. The non-cash deficiency was primarily a result of a non-cash intangible asset impairment charge of $148.6 million recognized during the fourth quarter of fiscal 2014.

(2)
Due to Brady Corporation's loss for the year ended July 31, 2013, the Company did not have earnings adequate to cover fixed charges, and the ratio of earnings to fixed charges therefore has not been presented for that period. The coverage deficiency necessary for the ratio of earnings to fixed charges to equal 1.0x was $95.7 million for the year ended July 31, 2013. The non-cash deficiency was primarily a result of a non-cash intangible asset impairment charge of $204.4 million recognized during the fourth quarter of fiscal 2013.