EX-99 3 c81128exv99.txt PRESS RELEASE EXHIBIT 99 Press Release of Brady Corporation, dated November 18, 2003. For more information: -------------------- Investor contact: Barbara Bolens 414-438-6940 Media contact: Carole Herbstreit 414-438-6882 BRADY CORPORATION REPORTS FISCAL 2004 FIRST QUARTER RESULTS MILWAUKEE (November 18, 2003)--Brady Corporation (NYSE:BRC) today reported sales and earnings for its fiscal 2004 first quarter ended October 31, 2003. Sales for the quarter rose 9.6 percent to $151.9 million, compared to fiscal 2003 first quarter sales of $138.7 million. Strong sales in Asia, positive foreign currency translation and acquisitions contributed to sales growth, while base business outside of Asia continued to be weak. Net income for the fiscal 2004 first quarter rose 26.3 percent to $10.4 million, or $0.44 per diluted Class A Common Share, compared to $8.2 million or $0.35 per share in the same quarter last year. Reported net income results include charges of $1.2 million aftertax taken for previously announced restructuring activity. "While core business growth remains challenging, we are pleased that the actions we have taken in restructuring and reorganizing our business are now benefiting our bottom line," said Frank M. Jaehnert, Brady's president and chief executive officer. "Our strong focus on acquisitions is also bringing positive results. In the first quarter we acquired Brandon International, a market leader in die-cut products with manufacturing operations in the U.S., Mexico and Singapore. We also added Prinzing Enterprises, a U.S. manufacturer of lockout/tagout safety products. And we have started the second quarter with the acquisition of B.I.G, a manufacturer of identification and security badges in the U.K." "Due to increased acquisition activity, the continuing positive impact of foreign currency, and the on-going benefits from our restructuring initiatives, we are increasing our guidance to $600 to $630 million in sales and net income of $36 to $40 million after restructuring changes in fiscal 2004," said Brady Senior Vice President and Chief Financial Officer David Schroeder. "We are optimistic about the future prospects for Brady's Business and we are committed to achieving improved sales growth and quality of earnings going forward." A webcast regarding fiscal 2004 first quarter results will be available at www.investor.bradycorp.com beginning at 9:30 a.m. Central Standard Time today. Brady is an international manufacturer and marketer of identification and materials solutions, with products including labels, signs, precision die-cut materials, printing systems, software, and label-application and data-collection systems for electronics, telecommunications, manufacturing, electrical, and a variety of other markets. Founded in 1914, Brady is headquartered in Milwaukee and employs about 3,400 people in operations in the United States, Europe, Asia/Pacific, Latin America and Canada. The company had sales of $555 million in fiscal 2003. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradycorp.com, which includes an interactive version of the 2003 Annual Report to Shareholders. Information by regional segment for the three months ended October 31, 2003 and 2002 is as follows:
(Dollars in thousands) Americas Europe Asia Corporate Total ---------------------- -------- ------ ---- --------- ----- SALES TO EXTERNAL CUSTOMERS Three months ended: October 31, 2003 $80,092 $53,265 $18,549 $151,906 October 31, 2002 79,931 45,083 13,648 138,662 SALES GROWTH INFORMATION Base (6.3)% (4.7)% 26.0% (2.6)% Currency 1.4 % 13.2 % 9.9% 6.1% Acquisitions 5.1 % 9.7 % 0.0% 6.1% Total 0.2 % 18.2 % 35.9% 9.6% PROFIT (LOSS) Three months ended: October 31, 2003 15,116 13,449 5,424 (770) 33,219 October 31, 2002 13,981 10,418 3,687 (529) 27,557 Percentage increase (decrease) 8.1% 29.1% 47.1% 45.6% 20.5%
This news release contains forward-looking information, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking information in this release involves risks and uncertainties, including, but not limited to, domestic and international economic conditions and growth rates; fluctuations in currency exchange rates for international currencies versus the U.S. dollar; the successful implementation of a new enterprise-resource-planning system; the ability of the company to acquire, integrate and achieve anticipated synergies from new businesses; the ability of the company to adjust its cost structure to changes in levels of sales and product mix in a timely manner; variations in the economic or political conditions in the countries in which the company does business; technology changes; and the continued availability of sources of supply. Brady 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. ### 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 October 31, 2003 2002 --------------- --------------- NET SALES $ 151,906 $ 138,662 Operating expenses: Cost of products sold 73,143 68,445 Research and development 4,864 4,071 Selling, general and administrative 56,388 53,772 Restructuring charge - net 1,753 - --------------- --------------- Total operating expenses 136,148 126,288 Operating income 15,758 12,374 Other income and (expense): Investment and other income - net (159) 86 Interest expense (30) (35) --------------- --------------- Income before income taxes 15,569 12,425 Income taxes 5,216 4,226 --------------- --------------- Net income 10,353 8,199 Earnings retained in business at beginning of period 290,805 287,674 Less: Redemption premium on preferred stock - (171) Common stock dividends (4,770) (4,471) Earnings retained in business at end of period $ 296,388 $ 291,231 =============== =============== Net income per Class A Nonvoting Common Share Basic $ 0.44 $ 0.35 =============== =============== Diluted $ 0.44 $ 0.35 =============== =============== Net income per Class B Voting Common Share Basic $ 0.41 $ 0.32 =============== =============== Diluted $ 0.41 $ 0.32 =============== ===============
BRADY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
OCTOBER 31, 2003 JULY 31, 2003 ---------------- --------------- (UNAUDITED) ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $ 60,105 $ 76,088 Accounts receivable, less allowance for losses ($3,414 and 92,492 80,162 $3,166, respectively) Inventories 41,608 36,564 Prepaid expenses and other current assets 21,727 22,343 -------------- -------------- TOTAL CURRENT ASSETS 215,932 215,157 OTHER ASSETS: Goodwill 150,360 130,667 Other 22,206 24,455 -------------- -------------- 172,566 155,122 PROPERTY, PLANT AND EQUIPMENT: Cost: Land 5,242 5,172 Buildings and improvements 52,759 51,471 Machinery and equipment 142,225 139,007 Construction in progress 5,211 3,245 -------------- -------------- 205,437 198,895 Less accumulated depreciation 124,878 119,655 -------------- -------------- NET PROPERTY, PLANT AND EQUIPMENT 80,559 79,240 -------------- -------------- TOTAL $ 469,057 $ 449,519 ============== ============== LIABILITIES AND STOCKHOLDERS' INVESTMENT ---------------------------------------- CURRENT LIABILITIES: Accounts payable $ 29,974 $ 28,470 Wages and amounts withheld from employees 26,929 30,619 Taxes, other than income taxes 4,126 2,492 Accrued income taxes 15,116 11,449 Other current liabilities 18,928 17,320 Short-term borrowings and current maturities on long-term debt 175 929 -------------- -------------- TOTAL CURRENT LIABILITIES 95,248 91,279 LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES 581 568 OTHER LIABILITIES 20,159 18,711 -------------- -------------- TOTAL LIABILITIES 115,988 110,558 STOCKHOLDERS' INVESTMENT: Common Stock: Class A nonvoting common stock - Issued and outstanding, 21,700,853 217 216 and 21,558,265 shares, respectively Class B voting common stock - Issued and outstanding 1,769,314 shares 18 18 Additional paid-in capital 52,222 47,464 Earnings retained in the business 296,388 290,805 Treasury Stock - 34,657 and 18,262 shares, at cost (1,074) (509) Cumulative other comprehensive income 5,839 1,595 Other (541) (628) -------------- -------------- TOTAL STOCKHOLDERS' INVESTMENT 353,069 338,961 -------------- -------------- TOTAL $ 469,057 $ 449,519 ============== ==============
BRADY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
Three Months Ended October 31, 2003 2002 --------------- --------------- Operating activities: Net income $ 10,353 $ 8,199 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,697 4,295 Loss on sale or disposal of property, plant & equipment 37 107 Provision for losses on accounts receivable 360 415 Amortization of restricted stock 86 62 Net restructuring charge 1,676 Changes in operating assets and liabilities (net of effects of business acquisitions): Accounts receivable (6,478) (1,869) Inventory (1,796) (1,103) Prepaid expenses and other assets 1,408 (812) Accounts payable and accrued liabilities (4,151) 2,605 Income taxes 3,899 2,420 --------------- --------------- Net cash provided by operating activities 10,091 14,319 Investing activities: Acquisitions of businesses, net of cash acquired (21,830) - Purchases of property, plant and equipment (3,605) (3,862) Proceeds from sale of property, plant and equipment 194 1 Other (61) - --------------- --------------- Net cash (used in) investing activities (25,302) (3,861) Financing activities: Payment of dividends (5,124) (4,642) Proceeds from issuance of Common Stock 4,732 74 Principal payments on debt (816) (86) Payment for redemption of preferred stock - (2,855) Purchase of Treasury Stock (564) (377) --------------- --------------- Net cash (used in) financing activities (1,772) (7,886) Effect of exchange rate changes on cash 1,000 744 --------------- --------------- Net increase in cash and cash equivalents (15,983) 3,316 Cash and cash equivalents, beginning of period 76,088 75,969 --------------- --------------- Cash and cash equivalents, end of period $ 60,105 $ 79,285 =============== =============== Supplemental disclosures: Cash paid during the period for: Interest $ 55 $ 30 Income taxes, net of refunds 1,294 2,363 Acquisitions: Fair value of asset acquired, net of cash $ 8,242 Liabilities Assumed (3,025) Goodwill 16,613 --------------- Net cash paid for acquisitions $ 21,830 ===============
Brady Corporation Fiscal 2003 Segment Information (in thousands, unaudited)
QUARTER ENDED OCTOBER 31, 2002 AMERICAS EUROPE ASIA CORPORATE TOTAL -------------------------------- --------- ------ ---- --------- ----- Revenue from external customers $ 79,931 $ 45,083 $ 13,648 $ 138,662 Intersegment revenues 8,528 625 12 $ (9,165) - Profit (loss) 13,981 10,418 3,687 (529) 27,557 QUARTER ENDED JANUARY 31, 2003 -------------------------------- Revenue from external customers $ 68,432 $ 47,880 $ 13,253 $ 129,565 Intersegment revenues 8,515 500 1 $ (9,016) - Profit (loss) 5,879 10,876 3,093 (1,127) 18,721 QUARTER ENDED APRIL 30, 2003 -------------------------------- Revenue from external customers $ 76,536 $ 50,838 $ 14,581 $ 141,955 Intersegment revenues 8,082 489 265 $ (8,836) - Profit (loss) 12,670 11,729 3,298 (847) 26,850 QUARTER ENDED JULY 31, 2003 -------------------------------- Revenue from external customers $ 73,945 $ 54,552 $ 16,187 $ 144,684 Intersegment revenues 8,455 381 417 $ (9,253) - Profit (loss) 10,673 14,446 4,064 (309) 28,874 YEAR ENDED JULY 31, 2003 -------------------------------- Revenue from external customers $ 298,844 $ 198,353 $ 57,669 $ 554,866 Intersegment revenues 33,580 1,995 695 $ (36,270) - Profit (loss) 43,203 47,469 14,142 (2,812) 102,002 Assets 200,169 112,870 26,627 109,853 449,519 Expenditures for property, plant and equipment 3,188 2,017 2,663 6,570 14,438 Depreciation and amortization expense 10,398 3,280 740 3,353 17,771
QUARTERS ENDED, YEAR ENDED PROFIT RECONCILIATION OCTOBER 31, 2002 JANUARY 31, 2003 APRIL 30, 2003 JULY 31, 2003 JULY 31, 2003 ---------------- ---------------- -------------- ------------- ------------- Total profit or loss for reportable segments $ 28,086 $ 19,848 $ 27,697 $ 29,183 $ 104,814 Corporate and eliminations (529) (1,127) (847) (309) (2,812) Administrative costs (14,335) (13,292) (14,055) (14,485) (56,167) Unallocated amounts: Interest-net 127 253 148 189 717 Foreign exchange (76) (536) 806 (605) (411) Restructuring charge, net (9,589) (9,589) Other (848) (880) (720) (1,649) (4,097) -------------- -------------- -------------- -------------- -------------- Income before income taxes $ 12,425 $ 4,266 $ 13,029 $ 2,735 $ 32,455 ============== ============== ============== ============== ==============
Brady Corporation Fiscal 2002 Segment Information (in thousands, unaudited)
QUARTER ENDED OCTOBER 31, 2001 AMERICAS EUROPE ASIA CORPORATE TOTAL -------- ------ ---- --------- ----- Revenue from external customers $ 77,735 $ 39,115 $ 13,151 $ 130,001 Intersegment revenues 8,034 230 7 $ (8,271) - Profit (loss) 15,156 8,639 3,895 (560) 27,130 QUARTER ENDED JANUARY 31, 2002 Revenue from external customers $ 67,679 $ 39,977 $ 12,933 $ 120,589 Intersegment revenues 7,886 109 22 $ (8,017) - Profit (loss) 9,256 8,588 3,731 (534) 21,041 QUARTER ENDED APRIL 30, 2002 Revenue from external customers $ 76,208 $ 41,304 $ 13,021 $ 130,533 Intersegment revenues 7,958 231 3 $ (8,192) - Profit (loss) 13,353 9,836 3,817 (549) 26,457 QUARTER ENDED JULY 31, 2002 Revenue from external customers $ 78,305 $ 43,680 $ 13,854 $ 135,839 Intersegment revenues 6,487 375 - $ (6,862) - Profit (loss) 13,780 9,919 2,993 (497) 26,195 YEAR ENDED JULY 31, 2002 Revenue from external customers $ 299,927 $ 164,076 $ 52,959 $ 516,962 Intersegment revenues 30,365 945 32 $ (31,342) - Profit (loss) 51,545 36,982 14,436 (2,140) 100,823 Assets 190,302 95,609 18,523 116,091 420,525 Expenditures for property, plant and equipment 6,056 3,753 399 2,887 13,095 Depreciation and amortization expense 9,461 3,579 644 2,946 16,630
QUARTERS ENDED, YEAR ENDED PROFIT RECONCILIATION OCTOBER 31, 2002 JANUARY 31, 2003 APRIL 30, 2003 JULY 31, 2003 JULY 31, 2003 ---------------- ---------------- -------------- ------------- ------------- Total profit or loss for reportable segments $ 27,690 $ 21,575 $ 27,006 $ 26,692 $ 102,963 Corporate and eliminations (560) (534) (549) (497) (2,140) Administrative costs (14,303) (11,460) (13,342) (14,727) (53,832) Unallocated amounts: Interest-net 159 234 111 160 665 Foreign exchange 406 (232) 111 678 963 Restructuring charge, net (2,720) (2,720) Other (1,158) (195) (398) (1,013) (2,763) --------- --------- --------- --------- --------- Income before income taxes $ 12,234 $ 9,389 $ 12,939 $ 8,573 $ 43,135 ========= ========= ========= ========= =========