-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S2wrdZEC4jSvX//ub01jgUWQHzgYhJffeVFXBIiwfquO9M1BmajBH0I0plQ612BS 2gNxfcj55J7VTUGrtjf0Dw== 0000950124-95-004127.txt : 19960102 0000950124-95-004127.hdr.sgml : 19960102 ACCESSION NUMBER: 0000950124-95-004127 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951214 SROS: NASD 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: 95601522 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 10-Q 1 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 October 31, 1995. 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 39-0178960 --------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6555 WEST GOOD HOPE ROAD, MILWAUKEE, WISCONSIN 53223 (Address of principal executive offices) (Zip Code) (414) 358-6600 (Registrant's telephone number, including area code) Indicate 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 December 1, 1995, there were outstanding 20,073,251 (adjusted for the stock dividend discussed in Note B) 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. 2 FORM 10-Q W. H. BRADY CO. INDEX
Page ---- PART I. Financial Information Item 1. Financial Statements Unaudited Condensed Consolidated Balance Sheets 3 Unaudited Condensed Consolidated Statements of Income and Earnings Retained in the Business 4 Unaudited 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 Item 4. Results of Votes of Holders 8 Signatures 9
3 W. H. BRADY CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
October 31 July 31 1995 1995 ------------- ------------ ASSETS (Unaudited) - - ------ ----------- Current Assets: Cash and Cash Equivalents $ 94,888 $ 89,067 Accounts Receivable, Less Allowance for Losses ($1,882 and $1,881, Respectively) 46,442 42,104 Inventories 25,523 23,099 Prepaid Expenses & Other Current Assets 10,412 10,202 ------- ------ Total Current Assets 177,265 164,472 Other Assets 6,953 6,960 Property Plant and Equipment: Cost Land 4,269 4,417 Buildings and Improvements 33,448 34,284 Machinery and Equipment 68,189 69,278 Construction in Progress 1,514 815 ------- ------ 107,420 108,794 Less Accumulated Depreciation 51,332 50,221 ------- ------ Net Property, Plant & Equipment 56,088 58,573 ------- ------ Total $240,306 $230,005 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT - - ---------------------------------------- Current Liabilities: Accounts Payable $ 13,787 $ 9,252 Wages & Amounts Withheld From Employees 11,417 14,447 Accrued Income Taxes 4,759 2,150 Other Current Liabilities 9,245 8,273 Current Maturities on Long Term Debt 336 412 --------- --------- Total Current Liabilities 39,544 34,534 Long Term Debt, Less Current Maturities 1,823 1,903 Other Liabilities 24,347 22,745 ------- ------ Total Liabilities 65,714 59,182 Stockholders' Investment: Preferred Stock 2,855 2,855 Class A Nonvoting Common Stock-Issued and Outstanding 20,061,425 and 5,507,341 Shares, Respectively 201 55 Class B Voting Common Stock-Issued and Outstanding 1,769,314 Shares 18 18 Additional Paid in Capital 7,937 8,074 Earnings Retained in the Business 158,550 154,286 Cumulative Translation Adjustments 5,031 5,535 ------- ------ Total Stockholders' Investment 174,592 170,823 ------- ------- Total $240,306 $230,005 ======== ========
See Notes to Condensed Consolidated Financial Statements. 3 4 W. H. BRADY CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND EARNINGS RETAINED IN THE BUSINESS (Dollars in Thousands except per share amounts) (Unaudited)
Three Months Ended October 31 1995 1994 ---- ---- NET SALES $ 79,223 $ 69,039 Operating Expenses Cost of Products Sold 36,088 32,142 Research and Development 2,673 2,536 Selling, General and Administrative 32,620 26,552 ------ ------ Total Operating Expenses 71,381 61,230 Operating Income 7,842 7,809 Investment and Other Income-Net 2,568 518 Interest Expense (51) (43) ---- ---- Income Before Income Taxes 10,359 8,284 Income Taxes 4,024 3,350 ----- ----- NET INCOME $6,335 $4,934 Earnings Retained in the Business at Beginning of Period 154,286 132,271 Less Dividends: Preferred Stock (65) (65) Common Stock (2,006) (1,272) ------- ------- Earnings Retained in the Business at End of Period $158,550 $135,868 ======== ======== Net Income Per Common Share Net Income - Class A Nonvoting $0.29 $0.23 ===== ===== Net Income - Class B Voting $0.26 $0.20 ===== =====
See Notes to Condensed Consolidated Financial Statements. 4 5 W. H. BRADY CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Three Months Ended October 31 ------------------------- 1995 1994 ---- ----- Operating Activities: Net Income $ 6,335 $ 4,934 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation & Amortization 2,156 2,435 (Gain) on Sale of Property, Plant & Equipment (1,763) (8) Provision for Losses on A/R 177 226 Changes in Operating Assets and Liabilities: (Incr) Decr in A/R (1,587) (3,479) (Incr) Decr in Inventory (2,579) (200) (Incr) Decr in Prepaid Expense & Other Assets (172) (773) Incr (Decr) in A/P & Other Liabilities 4,303 (1,482) Incr (Decr) in Income Taxes 2,613 1,222 -------- ------- Net Cash Provided by Operating Activities 9,483 2,875 Investing Activities: Purchases of Property, Plant and Equipment (1,410) (974) Proceeds from Sale of Property, Plant and Equipment 83 55 -------- --------- Net Cash Provided by (Used in) Investing Activities (1,327) (919) Financing Activities: Payment of Dividends (2,071) (1,337) Proceeds from Issuance of Common Stock 10 214 Principal Payments on Long Term Debt (141) (37) ------- -------- Net Cash Used in Financing Activities (2,202) (1,160) Effect of Exchange Rate Changes on Cash (133) 1,111 -------- ------ Net Increase in Cash and Cash Equivalents 5,821 1,907 Cash & Cash Equivalents at Beginning of Year 89,067 66,107 ------ ------ Cash and Cash Equivalents at End of Period $94,888 $ 68,014 ======= ======= Supplemental Disclosures of Cash Flow Information: Cash Paid During the Year For: Interest $ 377 $ 26 Income Taxes 1,188 1,404 Receivable Relating to Sale of German Facility 3,152
See Notes to Condensed Consolidated Financial Statements. 5 6 W. H. BRADY CO. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Three months ended October 3l, l995 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 October 3l, 1995 and July 3l, 1995, and its results of operations and its cash flows for the three months ended October 31, 1995 and l994. The consolidated balance sheet at July 31, l995 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. It is suggested that these condensed financial statements 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 - Capital Stock and Share Data On November 17, 1995, at a Special Meeting of Shareholders, the Company's shareholders approved a proposal to amend the Company's Restated Articles of Incorporation to increase the number of authorized shares of Class A Common Stock from 10,000,000 shares to 100,000,000 shares. Also on November 17, 1995, the shareholders approved, and the Board of Directors declared, a common stock dividend of two shares of Class A Common Stock on each outstanding share of Class A Common Stock and Class B Common Stock. The common stock dividend will be paid on December 15, 1995, to shareholders of record at the close of business on December 1, 1995. Accordingly, amounts per share and number of shares included in the condensed consolidated financial statements have been adjusted retroactively to reflect the common stock dividend. In connection with the common stock dividend, $146,000 was transferred from additional paid in capital to Class A Nonvoting Common Stock, reflecting the par value of the new shares issued. NOTE C - 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 (adjusted for the stock dividend discussed in Note B) of 21,830,474 for the three months ended October 31, 1995 and 21,743,334 for the same period in 1994. The preferential dividend on the Class A common stock of $0.0333 per share (adjusted for the stock dividend discussed in Note B) declared on September 19, 1995 has been added to the net earnings per Class A common share for the three months ended October 31, 1995. The net earnings per Class A common share for the three months ended October 31, 1994 includes $0.0333 per share (adjusted for the stock dividend discussed in Note B) relating to preferential dividends declared in that period. 6 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations For the three months ended October 31, 1995, net sales of $79,223,000 were 14.8% higher than the same quarter of the previous year, primarily as a result of increased international sales. Sales of the Company's international operations increased 32.2% , 27.2% as a result of growth through continued market penetration in Europe and the Far East and new Seton subsidiaries in Australia and Italy. Changes in the exchange rates used to translate financial results into U.S. currency resulted in an additional 5.0% increase in international sales. The cost of products sold decreased from 46.6% to 45.6% of net sales principally as a result of changes in product mix. Selling, general and administrative expenses as a percentage of net sales increased from 38.5% to 41.2%. Adding sales and marketing personnel and expanding catalog sales efforts contributed to this increase. In addition, the Company invested in advanced telecommunications and information technology to enhance customer service. Research and development expenses increased 5.4% compared to the prior year. Operating income was $7,842,000 in the current year, compared to $7,809,000 in the prior year, due principally to the increased selling, general and administrative expenditures mentioned above in the current period. Investment and other income this year included $1,750,000 ($950,000 after tax) representing gain on the sale of a building in Germany. Income before income taxes increased 25.1% to $10,359,000 compared to $8,284,000 for the same period last year. Net income increased 28.4% to $6,335,000 for the quarter, compared to $4,934,000 for the prior year because of the factors cited above. Financial Condition The Company's liquidity remained strong. The current ratio as of October 31, 1995 was 4.5 to 1. Cash and cash equivalents were $94,888,000 at October 31, 1995, compared to $89,067,000 at July 31, 1995. Working capital increased $7,783,000 during the quarter and equaled $137,721,000 as of October 31, 1995. The Company believes this amount is adequate to meet its current and anticipated operating needs. 7 8 PART II ITEM 4. Submission of Matters to a Vote of Security Holders. On November 17, 1995, the Company held a Special Meeting of Shareholders in order to consider and act upon the following matters: 1. A proposal to amend Article III of the Restated Articles of Incorporation of the Company to increase the number of shares which the Company has authority to issue from 25,045,000 to 115,045,000, consisting of an increase in the number of authorized shares of Class A Common Stock from 10,000,000 to 100,000,000. At the meeting, there were 4,178,311 shares of Class A Common Stock voted in favor of this proposal, 429,180 shares voted against, 800 shares abstained, and there were zero broker non-votes. All 1,769,314 shares of Class B Common Stock were voted in favor of this proposal. 2. A proposed dividend of two shares of Class A Common Stock on each outstanding share of Class A Common Stock and Class B Common Stock. 4,071,945 shares of the Class A Common Stock were voted in favor of this proposal, 59,108 shares were voted against, 403 shares abstained, and there were 476,835 broker non-votes. All 1,769,314 shares of Class B Common Stock were voted in favor of this proposal. Also at this meeting, all nominees for the Board of Directors, consisting of William H. Brady III, Richard A. Bemis, Robert C. Buchanan, Donald E. DeLuca, Frank W. Harris, Katherine M. Hudson, Peter J. Lettenberger, Elizabeth B. Lurie, Gary R. Nei, and Roger D. Peirce were re-elected. Only the holders of the Company's Class B Common Stock were eligible to vote in the election for Directors. All 1,769,314 shares of Class B Common Stock were voted in favor of election of each of the Director-nominees. 8 9 PART III 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 October 31, 1995. 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: December 14, 1995 /s/ K. M. Hudson ---------------------- ---------------------- K. M. Hudson President Date: December 14, 1995 /s/ D. P. DeLuca ---------------------- ---------------------- D. P. DeLuca Senior Vice President and Assistant Secretary (Principal Accounting Officer) 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS JUL-31-1996 AUG-01-1995 OCT-31-1995 94,888 0 48,324 1,882 25,523 177,265 107,420 51,332 240,306 39,544 1,823 219 2,855 0 171,518 240,306 79,223 79,223 36,088 36,088 35,293 0 51 10,359 4,024 6,335 0 0 0 6,335 0.29 0.29
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