10-Q 1 0001.txt FORM 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 April 30, 2000 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 BRADY CORPORATION ----------------- (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 May 24, 2000, there were outstanding 20,919,400 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 BRADY CORPORATION INDEX
Page ---- PART I. Financial Information Item 1. Financial Statements Unaudited Condensed Consolidated Balance Sheet 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 10 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K 14 Signatures 15
3 BRADY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
ASSETS April 30, 2000 July 31, 1999 ------ -------------- ------------- (Unaudited) Current assets: Cash and cash equivalents $ 34,164 $ 75,466 Accounts receivable, less allowance for losses ($2,898 and $2,339 respectively) 89,209 73,290 Inventories 41,687 37,527 Prepaid expenses and other current assets 45,973 16,886 --------- --------- Total current assets 211,033 203,169 Other assets: Intangibles - net 101,188 72,941 Other 8,502 8,026 Property, plant and equipment: Cost: Land 4,936 5,008 Buildings and improvements 43,470 41,417 Machinery and equipment 113,559 101,324 Construction in progress 10,569 2,229 --------- --------- 172,534 149,978 Less accumulated depreciation 95,800 82,994 --------- --------- Net property, plant and equipment 76,734 66,984 --------- --------- Total $ 397,457 $ 351,120 ========= ========= LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable $ 25,260 $ 19,378 Wages and amounts withheld from employees 23,466 23,186 Taxes, other than income taxes 4,093 2,290 Accrued income taxes 10,323 12,516 Other current liabilities 13,162 13,289 Short-term borrowings and current maturities on long-term debt 18,851 2,626 --------- --------- Total current liabilities 95,155 73,285 Long-term debt, less current maturities 3,699 1,402 Other liabilities 17,066 15,869 --------- --------- Total liabilities 115,920 90,556 Stockholders' investment: Preferred stock 2,855 2,855 Class A nonvoting common stock - issued 20,923,948 and 20,839,841 shares, respectively 209 208 Class B voting common stock - issued and outstanding 1,769,314 shares 18 18 Additional paid-in capital 30,012 28,383 Earnings retained in the business 256,024 233,521 Treasury stock - 4,548 shares of Class A nonvoting common stock, at cost (132) (132) Cumulative other comprehensive income (5,638) (1,958) Other (1,811) (2,331) --------- --------- Total stockholders' investment 281,537 260,564 --------- --------- Total $ 397,457 $ 351,120 ========= =========
See Notes to Condensed Consolidated Financial Statements. 3 4 BRADY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND EARNINGS RETAINED IN THE BUSINESS (Dollars in Thousands, Except Per Share Amounts)
(Unaudited) Three Months Ended Nine Months Ended April 30 April 30 2000 1999 2000 1999 --------- -------- -------- -------- Net sales $ 142,484 $121,455 $397,255 $350,566 Operating expenses: Cost of products sold 59,740 50,501 167,388 151,780 Research and development 6,119 4,044 15,942 13,052 Selling, general and administrative 57,523 46,182 159,666 137,367 --------- -------- -------- -------- Total operating expenses 123,382 100,727 342,996 302,199 Operating income 19,102 20,728 54,259 48,367 Other income and (expense): Investment and other income - net (119) 360 939 546 Interest expense (135) (104) (254) (352) --------- -------- -------- -------- Income before income taxes 18,848 20,984 54,944 48,561 Income taxes 7,119 8,047 21,016 18,939 --------- -------- -------- -------- Net income 11,729 12,937 33,928 29,622 Earnings retained in business at beginning of period 248,126 217,817 233,521 208,254 Less dividends: Preferred Stock (65) (65) (194) (194) Common Stock (3,766) (3,529) (11,231) (10,522) --------- -------- -------- -------- Earnings retained in business at end of period $ 256,024 $227,160 $256,024 $227,160 ========= ======== ======== ======== Net income per Class A Nonvoting Common Share Basic $ 0.51 $ 0.57 $ 1.49 $ 1.31 ========= ======== ======== ======== Diluted $ 0.51 $ 0.57 $ 1.47 $ 1.30 ========= ======== ======== ======== Net income per Class B Voting Common Share Basic $ 0.51 $ 0.57 $ 1.46 $ 1.28 ========= ======== ======== ======== Diluted $ 0.51 $ 0.57 $ 1.44 $ 1.27 ========= ======== ======== ========
See Notes to Condensed Consolidated Financial Statements. 4 5 BRADY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
(Unaudited) Nine Months Ended April 30 2000 1999 -------- -------- Operating activities: Net income $ 33,928 $ 29,622 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 9,059 8,418 Amortization 3,949 2,902 Loss on sale of property, plant and equipment 45 23 Provision for losses on accounts receivable 1,295 916 Other 521 521 Changes in operating assets and liabilities (net of effects of business acquisitions): Accounts receivable (15,155) (6,869) Inventory (1,494) 2,316 Prepaid expenses and other assets (29,339) 1,671 Accounts payable, accrued expenses and other liabilities 3,619 2,378 Income taxes (2,099) 3,152 -------- -------- Net cash provided by operating activities 4,329 45,050 Investing activities: Acquisitions of businesses, net of cash acquired (38,371) (9,672) Purchases of property, plant and equipment (14,757) (8,508) Proceeds from sale of property, plant and equipment 198 189 Other 16 (161) -------- -------- Net cash (used in) investing activities (52,914) (18,152) Financing activities: Payment of dividends (11,425) (10,716) Proceeds from issuance of Common Stock 1,630 814 Principal payments on debt (9,431) (676) Proceeds from short-term borrowings 25,161 288 -------- -------- Net cash provided by (used in) financing activities 5,935 (10,290) Effect of exchange rate changes on cash 1,348 1,646 -------- -------- Net (decrease) increase in cash and cash equivalents (41,302) 18,254 Cash and cash equivalents, beginning of period 75,466 65,609 -------- -------- Cash and cash equivalents, end of period $ 34,164 $ 83,863 ======== ======== Supplemental disclosures: Cash paid during the period for: Interest $ 364 $ 246 Income taxes, net of refunds 21,946 12,958
See Notes to Condensed Consolidated Financial Statements. 5 6 BRADY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Nine Months Ended April 30, 2000 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, 2000, and July 3l, 1999, and its results of operations for the three months and nine months ended April 30, 2000, and 1999 and its cash flows for the nine months ended April 30, 2000, and 1999. The consolidated balance sheet at July 31, l999, has been taken from the audited consolidated financial statements of that date and condensed. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America 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 - Net Income Per Common Share Reconciliations of the numerator and denominator of the basic and diluted per share computations for the Company's Class A and Class B common stock are summarized as follows:
Fiscal 2000 Fiscal 1999 ----------- ----------- 3rd Quarter 9-Month 3rd Quarter 9-Month ----------- ------- ----------- ------- Numerator: Net income $11,729,000 $33,928,000 $12,937,000 $29,622,000 Less: Preferred stock dividends (64,784) (194,351) (64,784) (194,351) ----------- ----------- ----------- ----------- Numerator for basic and diluted Class A earnings per share 11,664,216 33,733,649 12,872,216 29,427,649 Less: Preferential dividends -- (694,492) -- (690,541) Less: Preferential dividends on dilutive stock options -- (10,410) -- (2,739) -- -------- -- ------- Numerator for basic and diluted Class B earnings per share $11,664,216 $33,028,747 $12,872,216 $29,734,369 =========== =========== =========== ===========
6 7
Fiscal 2000 Fiscal 1999 ----------- ----------- 3rd Quarter 9-Month 3rd Quarter 9-Month ----------- ------- ----------- ------- Denominator: Denominator for basic earnings per share for both Class A and Class B 22,690,631 22,665,331 22,546,554 22,524,995 Plus: Effect of dilutive stock options 236,481 271,350 146,927 117,105 ------- ------- ------- ------- Denominator for diluted earnings per share for both Class A and Class B 22,927,112 22,936,681 22,693,481 22,642,100 ========== ========== ========== ========== Class A common stock earnings per share: Basic $0.51 $1.49 $0.57 $1.31 Diluted $0.51 $1.47 $0.57 $1.30 Class B common stock earnings per share: Basic $0.51 $1.46 $0.57 $1.28 Diluted $0.51 $1.44 $0.57 $1.27
Options to purchase 526,000 and 466,918 shares of Class A common stock were not included in the computations of diluted earnings per share for the quarters ending April 30, 2000, and 1999, respectively, because the option exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. Options to purchase 260,167 and 1,005,418 shares of Class A common stock were not included in the computations of diluted earnings per share for the nine months ending April 30, 2000, and 1999, respectively, because the option exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. NOTE C - Comprehensive Income Total comprehensive income, which was comprised of net income, foreign currency adjustments and an unrealized gain on investment, amounted to approximately $9,408,000 and $10,872,000 for the three months ended April 30, 2000, and 1999, respectively, and $30,248,000 and $28,834,000 for the nine months ended April 30, 2000, and 1999, respectively. NOTE D - Acquisition Effective September 3, 1999, the Company acquired the brand name, customer list and catalog artwork of Champion America, Inc., located in Chagrin Falls, Ohio, a direct marketer of signs, labels and identification products for cash of approximately $5,600,000. The purchase price of this acquisition is subject to change based on post-closing adjustments. Effective March 3, 2000, the Company acquired Data Recognition, Inc., located in Austin, Texas, a systems integrator providing automatic identification and data collection (AIDC) solutions. Effective March 22, 2000, the Company acquired Imtec, Inc., located in Bellows Falls, Vermont, a manufacturer of high-performance bar-code labels and labeling systems used in automatic identification applications. 7 8 The Company acquired Data Recognition, Inc. and Imtec, Inc. for cash of approximately $34,900,000. The purchase price of the Data Recognition acquisition is subject to change based on post-closing adjustments. These acquisitions have been accounted for using the purchase method of accounting and accordingly the results of operations have been included since the date of acquisition in the accompanying financial statements. The pro-forma results assuming the acquisition had been consummated as of the beginning of the periods presented are not significant. NOTE E - Segment Information The Company's reportable segments are business units that are each managed separately because they manufacture and/or distribute distinct products using different processes. The Company has three reportable segments: the Identification Solutions & Specialty Tapes Group, the Graphics Group and the Direct Marketing Group. Following is a summary of segment information for the three months ended April 30, 2000, and 1999:
(Dollars in Thousands) Identification Solutions & Corporate Specialty Direct and Tapes Graphics Marketing Eliminations Totals ----- -------- --------- ------------ ------ Three months ended April 30, 2000: Revenues from external customers $65,220 $33,732 $43,532 $142,484 Intersegment revenues 834 1,474 252 ($2,560) -- Profit (loss) 12,859 6,045 7,680 (5,656) 20,928 Three months ended April 30, 1999: Revenues from external customers $49,150 $31,140 $41,165 $121,455 Intersegment revenues 935 417 238 ($1,590) -- Profit (loss) 9,205 5,812 8,665 (1,882) 21,800
Following is a summary of segment information for the nine months ended April 30, 2000, and 1999:
(Dollars in Thousands) Identification Solutions & Corporate Specialty Direct and Tapes Graphics Marketing Eliminations Totals ----- -------- --------- ------------ ------ Nine months ended April 30, 2000: Revenues from external customers $177,901 $95,414 $123,940 $397,255 Intersegment revenues 2,234 3,041 746 ($6,021) -- Profit (loss) 34,701 14,824 21,002 (11,720) 58,807 Nine months ended April 30, 1999: Revenues from external customers $138,418 $93,513 $118,635 $350,566 Intersegment revenues 2,362 1,459 685 ($4,506) -- Profit (loss) 21,966 12,720 21,425 (4,522) 51,589
8 9 Following is a reconciliation of profit for the three and nine months ended April 30, 2000, and 1999:
(Dollars in Thousands) Fiscal 2000 Fiscal 1999 ----------- ----------- 3rd Quarter 9-Month 3rd Quarter 9-Month ----------- ------- ----------- ------- Total profit from reportable segments $26,584 $70,527 $23,682 $56,111 Corporate and eliminations (5,656) (11,720) (1,882) (4,522) Unallocated amounts: Goodwill (1,524) (3,773) (912) (2,580) Interest-net 287 1,389 309 1,026 Foreign exchange (624) (824) (104) (874) Other (219) (655) (109) (600) ----- ----- ----- ----- Income before income taxes $18,848 $54,944 $20,984 $48,561 ======= ======= ======= =======
9 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations For the three months ended April 30, 2000, revenues of $142,484,000 were 17.3% higher than the same quarter of the previous year. For the nine months ended April 30, 2000, revenues of $397,255,000 were 13.3% higher than the same period last year. Sales of the Company's international operations increased 18.9% for the quarter and 12.9% for the nine months ended April 30, 2000. Of that increase, continued market penetration of existing base products in Brady's operations outside the United States increased international sales by 15.4% for the quarter and 9.8% for the nine month period. The acquisitions of VisiSign Pty. Ltd., Holman Groupe S.A. and Soft S.A. increased international sales by 8.8% for the quarter and 8.6% for the nine month period. These increases were somewhat offset by the negative effect of fluctuations in the exchange rates used to translate financial results into U.S. currency, which reduced international sales growth by 5.3 percentage points in the quarter and 5.4 percentage points in the nine month period. Sales of the Company's U.S. operations increased 16.0% in the quarter and 13.6% for the nine months ended April 30, 2000. Of that increase, base business increased 5.8% in the quarter and 6.5% for the nine month period. The acquisitions of Barcodes West, Inc., the Champion America, Inc. brand name, Data Recognition, Inc. and Imtec, Inc. increased U.S. sales by 10.3% in the quarter and 7.1% for the nine month period. The cost of products sold as a percentage of sales increased slightly from 41.6% to 41.9% for the quarter, but decreased from 43.3% to 42.1% for the nine months ended April 30, 2000. The year to date decrease is due to reduced costs from changes in product mix towards products with higher margins and reduced expenses as a result of manufacturing efficiencies from the Company's continuous improvement efforts. Selling, general and administrative expenses as a percentage of sales were 40.4% for the quarter compared to 38.0% for the same quarter of the previous year. For the nine months ended April 30, 2000, this percentage was 40.2% compared to 39.2% for the same period last year. These increases were due primarily to the Company's investment in process improvements discussed in the Financial Condition section below. Research and development expenditures increased 51.3% for the quarter and 22.1% for the nine months ended April 30, 2000, over the same periods last year reflecting the Company's commitment to new product development. As a percentage of sales, research and development expenses increased from 3.3% to 4.3% for the quarter and from 3.7% to 4.0% for the nine month period. Operating income was $19,102,000 for the quarter and $54,259,000 for the nine months ended April 30, 2000, compared to $20,728,000 and $48,367,000 for the same periods last year because of the factors cited above. Investment and other income decreased $479,000 for the quarter and increased $393,000 for the nine months ended April 30, 2000, from the same periods last year. The decrease in the quarter was the result of higher foreign exchange transaction losses and lower investment income due to lower cash balances resulting from acquisitions made during the quarter. The year to date increase is the result of slightly lower foreign exchange transaction losses and higher investment income because of higher interest rates. Income before income taxes decreased 10.2% for the quarter and increased 13.1% for the nine months ended April 30, 2000, compared to the prior year results. The Company's effective tax rate was 37.8% for the quarter compared to 38.3% for the same quarter of the previous year. For the nine months ended April 30, 2000, this percentage was 38.2% compared to 39.0% for the same period last year. These decreases were the result of profitability changes in the Company's international operations. 10 11 Net income for the three months ended April 30, 2000, decreased 9.3% to $11,729,000 compared to $12,937,000 for the same quarter of the previous year. For the nine months ended April 30, 2000, net income increased 14.5% to $33,928,000 from $29,622,000 for the same period last year. On a per share basis, diluted net income for the three months ended April 30, 2000, was $0.51 compared to $0.57 for the same quarter of the previous year. For the nine months ended April 30, 2000, diluted net income per share was $1.47 compared to $1.30 for the same period last year. The increase for the nine month period was due primarily to higher sales, while the decrease in the current quarter resulted primarily from increased spending during the quarter for process improvements and research and development and unusually strong margins in the prior year's third quarter. Business Segment Operating Results Identification Solutions & Specialty Tapes (ISST) Group: ISST sales increased 32.7% for the three months ended April 30, 2000. For the nine months ended April 30, 2000, ISST sales were 28.5% higher than the same period last year. The increases were primarily the result of a growth of base business, an increase of 20.4% and 20.6% for the quarter and nine month period, respectively. The acquisitions of Barcodes West, Inc. Holman Groupe, S.A., Data Recognition, Inc. and Imtec, Inc. also contributed, increasing sales over prior year 14.1% for the quarter and 10.4% for the nine month period. These increases were partially offset by the negative effect of fluctuations in the exchange rates used to translate financial results into U.S. currency, which reduced international sales growth within the group by 1.8% in the quarter and 2.5% in the nine month period. Sales were up significantly in Latin America and Asia. Profit as a percentage of sales increased from 18.7% to 19.7% for the quarter and from 15.9% to 19.5% for the nine months ended April 30, 2000. The increases were primarily the result of product mix, operating leverage from the increased volume and manufacturing efficiencies. Graphics Group: Graphics sales increased 8.3% for the three months ended April 30, 2000. For the nine months ended April 30, 2000, Graphics sales were 2.0% higher than the same period last year. Sales generated by the acquisitions of VisiSign Pty. Ltd. and Soft S.A. offset weakness in the industrial and safety markets in the United States and Europe and the decrease in sales of Colorpix wide-format color inkjet printers and related materials. Sales were up in Asia, Australia and Canada and down in Europe and the United States. Profit as a percentage of sales decreased from 18.7% to 17.9% for the quarter and increased from 13.6% to 15.5% for the nine months ended April 30, 2000. The decrease in the quarter was a result of the effect of the strong yen on the Graphics group purchases and increases in new product development expenditures. The year to date increase was primarily the result of the group's refocusing resources on products with higher profit margins, which has more than offset the increased investment in new product development and the negative effect of the strong yen as mentioned above. Direct Marketing Group: Direct Marketing sales increased 5.8% for the three months ended April 30, 2000. For the nine months ended April 30, 2000, Direct Marketing sales were 4.5% higher than the same period last year. The Direct Marketing Group was particularly impacted by the negative effect of fluctuations in the exchange rates used to translate financial results into U.S. currency, which reduced international sales growth within the group by 4.2% in the quarter and 4.0% in the nine month period. For the quarter, sales in each international unit were up significantly in local currency. On a dollar basis, the international business was flat for the nine month period. In local currencies, these businesses are up nearly 8%. Profit as a percentage of sales decreased from 21.0% to 17.6% for the quarter and from 18.1% to 16.9% for the nine months ended April 30, 2000. These decreases were primarily due to the impact of currency fluctuations. 11 12 Financial Condition The Company's liquidity remains strong. The current ratio as of April 30, 2000, was 2.2 to 1. Cash and cash equivalents were $34,164,000 at April 30, 2000, compared to $75,466,000 at July 31, 1999. The decrease was primarily due to the purchase of certain assets of Champion America, Inc., the paydown of Korean bank debt and the acquisitions of Data Recognition, Inc. and Imtec, Inc. Working capital decreased $14,006,000 during the nine months and equaled $115,878,000 as of April 30, 2000. Cash flow from operations totaled $4,329,000 for the nine months ended April 30, 2000, compared to $45,050,000 for the same period last year. The decrease was primarily the result of cash paid to purchase shares of Critchley Group plc, and an increase in accounts receivable and prepaid expenses. These changes more than offset the Company's increased profitability. Capital expenditures were $14,757,000 in the nine months ended April 30, 2000, compared to $8,508,00 in the first nine months last year. The increase over prior year was primarily a result of investments in new technology to support our process improvement initiative. Cash provided by financing activities was $5,935,000 for the nine month period ended April 30, 2000, resulting from proceeds from short-term borrowings, offset by the payment of dividends to the Company's stockholders and payments of Korean bank debt. Financing activities for the same period last year consumed $10,290,000. The current year change is primarily a result of the short-term borrowings. Long-term debt as a percentage of long-term debt plus stockholder's investment was 1.3% at April 30, 2000, compared to 0.5% at July 31, 1999. In September 1999, the Company entered into a $150,000,000 revolving loan agreement with six banks. In January 2000, the agreement was amended to increase the available amount to $200,000,000. On January 27, 2000, the Company commenced an unsolicited cash tender offer for Critchley Group plc, a British company, at 575 pence per Critchley share. Purchase of all of Critchley's shares at this price would have required approximately $155,000,000 of cash plus expenses of the transaction. On February 15, 2000, the Company announced that it would not match a competing offer of 750 pence per Critchley share made by a competing offeror. Subsequent to April 30, 2000, the Company received cash of approximately $27,000,000 for their 14.9% interest in Critchley, which resulted in a pretax gain, net of expenses, of approximately $4,000,000. During the second quarter of fiscal 2000 a Company-wide process improvement initiative was begun. This initiative will improve and standardize processes throughout the Company and install new technology to support those processes. The Company estimates this initiative will take approximately three years to complete with total cash outlay of approximately $30,000,000. The Company estimates that about 60% of that cash outlay will be capital expenditures. The Company believes that its cash and cash equivalents, the cash flow from operating activities and available line of bank credit are adequate to meet the Company's current and anticipated investing and financing needs. 12 13 Forward-Looking Statements Matters in this Quarterly Report may contain forward-looking information, as defined in the Private Securities Litigation Reform Act of 1995. All such forward-looking information in this report involves risks and uncertainties, including, but not limited to, variations in the economic or political conditions in the countries with which the Company does business; fluctuations in currency exchange rates for international currencies versus the U.S. dollar; technology changes; the continued availability of sources of supply; domestic and international economic conditions and growth rates; the ability of the Company to timely adjust its cost structure to changes in levels of sales, product mix and low levels of order backlog; unknown information with respect to non-negotiated acquisitions; and the ability of the Company to acquire new businesses. The Company cautions that forward-looking statements are not guarantees, since there are inherent difficulties in predicting future results, and that actual results could differ materially from those expressed or implied in forward-looking statements. 13 14 PART II. OTHER INFORMATION 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, 2000, other than a report previously noted in the prior quarter's Form 10-Q. 14 15 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 BRADY CORPORATION Date: June 1, 2000 /s/ K. M. Hudson ------------ ---------------- K. M. Hudson President Date: June 1, 2000 /s/ F. M. Jaehnert ------------ ------------------ F. M. Jaehnert Vice President & Chief Financial Officer (Principal Accounting Officer) 15