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Brady Corporation
Effective
Quarter Ended
Sales from continuing operations for the fiscal 2013 fourth quarter
ended
During the quarter ended
Net earnings (loss) from continuing operations for the fiscal 2013
fourth quarter ended
Earnings (loss) from continuing operations per diluted Class A Nonvoting
Common Share was
Year Ended
Sales from continuing operations for the year ended
Earnings (loss) from continuing operations for the year ended
Earnings (loss) from continuing operations per diluted Class A Nonvoting
Common Share were
Commentary and Guidance:
“Fiscal 2013 was a year of unprecedented change and transformation for
Brady. In addition to reorganizing our businesses around global business
platforms, we also engaged in a business simplification process that
resulted in a structure that brings us closer to our customers and more
effectively supports our growth,” said Brady’s President and Chief
Executive Officer,
“We are committed to returning to organic sales growth in fiscal 2014.
Our Identification Solutions business will continue to focus on
industries such as healthcare, food and beverage, chemical, oil and gas,
and aerospace and mass transit, as well as expanding into faster-growing
geographies such as
Brady’s Chief Financial Officer,
“As we look ahead to fiscal 2014, we anticipate organic sales to range
from a slight contraction to low single-digit growth, with organic sales
strongest in our Identification Solutions business. We expect organic
sales to be down in the first half of the year and return to positive
organic sales in the second half of fiscal 2014 as our initiatives to
improve our Workplace Safety business begin to produce results. For
fiscal 2014, we expect earnings from continuing operations per diluted
Class A Nonvoting Common Share of between
A webcast regarding Brady’s fiscal 2013 fourth quarter financial results
will be available at www.bradycorp.com
beginning at
* 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
BRADY CORPORATION AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Three months ended July 31, | Twelve Months Ended July 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 309,097 | $ | 269,089 | $ | 1,152,109 | $ | 1,068,688 | ||||||||
Cost of products sold | 152,086 | 121,636 | 546,029 | 479,118 | ||||||||||||
Gross margin | 157,011 | 147,453 | 606,080 | 589,570 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 9,390 | 8,996 | 33,552 | 34,528 | ||||||||||||
Selling, general and administrative | 106,938 | 100,283 | 427,661 | 392,526 | ||||||||||||
Restructuring charges | 15,573 | 4,107 | 26,046 | 6,084 | ||||||||||||
Impairment charges | 204,448 | — | 204,448 | — | ||||||||||||
Total operating expenses | 336,349 | 113,386 | 691,707 | 433,138 | ||||||||||||
Operating (loss) income | (179,338 | ) | 34,067 | (85,627 | ) | 156,432 | ||||||||||
Other income and (expense): | ||||||||||||||||
Investment and other income | 1,095 | 362 | 3,522 | 2,082 | ||||||||||||
Interest expense | (3,886 | ) | (4,375 | ) | (16,641 | ) | (19,090 | ) | ||||||||
(Loss) earnings from continuing operations before income taxes | (182,129 | ) | 30,054 | (98,746 | ) | 139,424 | ||||||||||
Income tax (benefit) expense | (5,895 | ) | 9,185 | 42,070 | 36,953 | |||||||||||
(Loss) earnings from continuing operations | $ | (176,234 | ) | $ | 20,869 | $ | (140,816 | ) | $ | 102,471 | ||||||
(Loss) from discontinued operations, net of income taxes | (1,037 | ) | (9,210 | ) | (13,719 | ) | (120,382 | ) | ||||||||
Net (loss) earnings | $ | (177,271 | ) | $ | 11,659 | $ | (154,535 | ) | $ | (17,911 | ) | |||||
(Loss) earnings from continuing operations per Class A Nonvoting Common Share: | ||||||||||||||||
Basic | $ | (3.41 | ) | $ | 0.40 | $ | (2.75 | ) | $ | 1.95 | ||||||
Diluted | $ | (3.41 | ) | $ | 0.40 | $ | (2.75 | ) | $ | 1.94 | ||||||
(Loss) earnings from continuing operations per Class B Voting Common Share: | ||||||||||||||||
Basic | $ | (3.41 | ) | $ | 0.40 | $ | (2.76 | ) | $ | 1.93 | ||||||
Diluted | $ | (3.41 | ) | $ | 0.40 | $ | (2.76 | ) | $ | 1.92 | ||||||
(Loss) from discontinued operations per Class A Nonvoting Common Share: | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.27 | ) | $ | (2.30 | ) | ||||
Diluted | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.27 | ) | $ | (2.29 | ) | ||||
(Loss) from discontinued operations per Class B Voting Common Share: | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.27 | ) | $ | (2.29 | ) | ||||
Diluted | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.27 | ) | $ | (2.28 | ) | ||||
(Loss) earnings per Class A Nonvoting Common Share: | ||||||||||||||||
Basic | $ | (3.43 | ) | $ | 0.22 | $ | (3.02 | ) | $ | (0.35 | ) | |||||
Diluted | $ | (3.43 | ) | $ | 0.22 | $ | (3.02 | ) | $ | (0.35 | ) | |||||
Dividends | $ | 0.19 | $ | 0.185 | $ | 0.76 | $ | 0.74 | ||||||||
(Loss) earnings per Class B Voting Common Share: | ||||||||||||||||
Basic | $ | (3.43 | ) | $ | 0.22 | $ | (3.03 | ) | $ | (0.36 | ) | |||||
Diluted | $ | (3.43 | ) | $ | 0.22 | $ | (3.03 | ) | $ | (0.36 | ) | |||||
Dividends | $ | 0.19 | $ | 0.185 | $ | 0.74 | $ | 0.72 | ||||||||
Weighted average common shares outstanding (in thousands): | ||||||||||||||||
Basic | 51,689 | 52,196 | 51,330 | 52,453 | ||||||||||||
Diluted | 51,689 | 52,448 | 51,330 | 52,821 |
BRADY CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Dollars in thousands) | ||||||||
July 31, 2013 | July 31, 2012 | |||||||
ASSETS |
||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 91,058 | $ | 305,900 | ||||
Accounts receivable—net | 169,261 | 199,006 | ||||||
Inventories: | ||||||||
Finished products | 64,544 | 64,740 | ||||||
Work-in-process | 14,776 | 15,377 | ||||||
Raw materials and supplies | 15,387 | 25,407 | ||||||
Total inventories | 94,707 | 105,524 | ||||||
Assets held for sale | 119,864 | — | ||||||
Prepaid expenses and other current assets | 37,600 | 40,424 | ||||||
Total current assets | 512,490 | 650,854 | ||||||
Other assets: | ||||||||
Goodwill | 617,236 | 676,791 | ||||||
Other intangible assets | 156,851 | 84,119 | ||||||
Deferred income taxes | 8,623 | 45,356 | ||||||
Other | 21,325 | 20,584 | ||||||
Property, plant and equipment: | ||||||||
Cost: | ||||||||
Land | 7,861 | 8,651 | ||||||
Buildings and improvements | 91,471 | 101,962 | ||||||
Machinery and equipment | 266,787 | 292,130 | ||||||
Construction in progress | 11,842 | 10,417 | ||||||
377,961 | 413,160 | |||||||
Less accumulated depreciation | 255,803 | 283,145 | ||||||
Property, plant and equipment—net | 122,158 | 130,015 | ||||||
Total | $ | 1,438,683 | $ | 1,607,719 | ||||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT |
||||||||
Current liabilities: | ||||||||
Notes payable | $ | 50,613 | — | |||||
Accounts payable | 82,519 | 86,646 | ||||||
Wages and amounts withheld from employees | 42,413 | 54,629 | ||||||
Liabilities held for sale | 34,583 | — | ||||||
Taxes, other than income taxes | 8,243 | 9,307 | ||||||
Accrued income taxes | 7,056 | 14,357 | ||||||
Other current liabilities | 36,806 | 40,815 | ||||||
Current maturities on long-term debt | 61,264 | 61,264 | ||||||
Total current liabilities | 323,497 | 267,018 | ||||||
Long-term obligations, less current maturities | 201,150 | 254,944 | ||||||
Other liabilities | 83,239 | 76,404 | ||||||
Total liabilities | 607,886 | 598,366 | ||||||
Stockholders’ investment: | ||||||||
Common stock: | ||||||||
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 48,408,544 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 | 306,191 | 313,008 | ||||||
Earnings retained in the business | 538,512 | 732,290 | ||||||
Treasury stock—2,626,276 and 3,245,561 shares, respectively of Class
A nonvoting
common stock, at cost |
(69,797 | ) | (92,600 | ) | ||||
Accumulated other comprehensive income | 56,063 | 59,411 | ||||||
Other | (720 | ) | (3,304 | ) | ||||
Total stockholders’ investment | 830,797 | 1,009,353 | ||||||
Total | $ | 1,438,683 | $ | 1,607,719 |
BRADY CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Dollars in Thousands) | ||||||||
July 31, 2013 | July 31, 2012 | |||||||
Operating activities: | ||||||||
Net loss | $ | (154,535 | ) | $ | (17,911 | ) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 48,725 | 43,987 | ||||||
Non-cash portion of restructuring charges | 3,699 | 458 | ||||||
Non-cash portion of stock-based compensation expense | 1,736 | 9,735 | ||||||
Impairment charge | 204,448 | 115,688 | ||||||
Loss on write-down of assets held for sale | 15,658 | — | ||||||
Loss (gain) on sales of businesses | 3,138 | 204 | ||||||
Deferred income taxes | 21,630 | (9,679 | ) | |||||
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures): | ||||||||
Accounts receivable | 1,535 | 18,089 | ||||||
Inventories | 2,440 | (7,674 | ) | |||||
Prepaid expenses and other assets | 5,036 | (2,744 | ) | |||||
Accounts payable and accrued liabilities | (2,285 | ) | (29,370 | ) | ||||
Income taxes | (7,722 | ) | 23,922 | |||||
Net cash provided by operating activities | 143,503 | 144,705 | ||||||
Investing activities: | ||||||||
Purchases of property, plant and equipment | (35,687 | ) | (24,147 | ) | ||||
Payments of contingent consideration | — | (2,580 | ) | |||||
Settlement of net investment hedges | — | (797 | ) | |||||
Acquisition of business, net of cash acquired | (301,157 | ) | (37,649 | ) | ||||
Sales of businesses, net of cash retained | 10,178 | 856 | ||||||
Other | 900 | (287 | ) | |||||
Net cash used in investing activities |
(325,766 | ) | (64,604 | ) | ||||
Financing activities: | ||||||||
Payment of dividends | (39,243 | ) | (38,899 | ) | ||||
Proceeds from issuance of common stock | 20,324 | 3,864 | ||||||
Purchase of treasury stock | (5,121 | ) | (49,933 | ) | ||||
Proceeds from borrowings on notes payable | 220,000 | — | ||||||
Repayment of borrowings on notes payable | (181,000 | ) | — | |||||
Proceeds from borrowings on line of credit | 11,613 | — | ||||||
Principal payments on debt | (61,264 | ) | (62,687 | ) | ||||
Debt issuance costs | — | (961 | ) | |||||
Income tax benefit from the exercise of stock options and deferred compensation distribution, and other | 1,631 | 792 | ||||||
Net cash used in financing activities | (33,060 | ) | (147,824 | ) | ||||
Effect of exchange rate changes on cash | 481 | (16,348 | ) | |||||
Net decrease in cash and cash equivalents | (214,842 | ) | (84,071 | ) | ||||
Cash and cash equivalents, beginning of period | 305,900 | 389,971 | ||||||
Cash and cash equivalents, end of period | $ | 91,058 | $ | 305,900 | ||||
Supplemental disclosures: | ||||||||
Cash paid during the period for: | ||||||||
Interest, net of capitalized interest | $ | 16,708 | $ | 19,194 | ||||
Income taxes, net of refunds | 34,030 | 35,292 | ||||||
Acquisitions: | ||||||||
Fair value of assets acquired, net of cash | $ | 168,724 | $ | 23,792 | ||||
Liabilities assumed | (37,747 | ) | (8,987 | ) | ||||
Goodwill | 170,180 | 22,844 | ||||||
Net cash paid for acquisitions | $ | 301,157 | $ | 37,649 |
EBITDA from Continuing Operations | |||||||||||||||||||
Brady is presenting EBITDA from Continuing Operations because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA from Continuing Operations represents earnings from continuing operations before interest expense, income taxes, depreciation, amortization and impairment charges. EBITDA from Continuing Operations is not a calculation based on generally accepted accounting principles ("GAAP"). The amounts included in the EBITDA from Continuing Operations calculation, however, are derived from amounts included in the Consolidated Statements of Earnings data. EBITDA from Continuing Operations should not be considered as an alternative to net earnings 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 from Continuing Operations 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 from Continuing Operations: | |||||||||||||||||||
Earnings (loss) from continuing operations | $ | 25,785 | $ | (11,365 | ) | $ | 20,998 | $ | (176,234 | ) | $ | (140,816 | ) | ||||||
Interest expense | 4,163 | 4,406 | 4,186 | 3,886 | 16,641 | ||||||||||||||
Income taxes | 13,077 | 28,823 | 6,065 | (5,895 | ) | 42,070 | |||||||||||||
Depreciation and amortization | 7,684 | 8,490 | 11,065 | 12,688 | 39,927 | ||||||||||||||
Intangible asset write-down in restructuring charges | — | — | 3,207 | — | 3,207 | ||||||||||||||
Impairment charges | — | — | — | 204,448 | 204,448 | ||||||||||||||
EBITDA from Continuing Operations (non-GAAP measure) | |||||||||||||||||||
$ | 50,709 | $ | 30,354 | $ | 45,521 | $ | 38,893 | $ | 165,477 | ||||||||||
Fiscal 2012 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
EBITDA from Continuing Operations: | |||||||||||||||||||
Earnings from continuing operations | $ | 27,856 | $ | 26,436 | $ | 27,310 | $ | 20,869 | $ | 102,471 | |||||||||
Interest expense | 5,047 | 4,933 | 4,735 | 4,375 | 19,090 | ||||||||||||||
Income taxes | 9,640 | 6,838 | 11,290 | 9,185 | 36,953 | ||||||||||||||
Depreciation and amortization | 7,825 | 7,548 | 8,051 | 7,657 | 31,081 | ||||||||||||||
EBITDA from Continuing Operations (non-GAAP measure) | |||||||||||||||||||
$ | 50,368 | $ | 45,755 | $ | 51,386 | $ | 42,086 | $ | 189,595 | ||||||||||
EBITDA from Discontinued Operations | |||||||||||||||||||
Brady is presenting EBITDA from Discontinued Operations because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA from Discontinued Operations represents earnings (loss) from discontinued operations before interest expense, income taxes, depreciation, amortization, and impairment charges. EBITDA from Discontinued Operations is not a calculation based on generally accepted accounting principles ("GAAP"). The amounts included in the EBITDA from Discontinued Operations calculation, however, are derived from amounts included in the Consolidated Statements of Earnings data. EBITDA from Discontinued Operations should not be considered as an alternative to net earnings 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 from Discontinued Operations 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 from Discontinued Operations: | |||||||||||||||||||
Earnings (loss) from discontinued operations | $ | 1,403 | $ | 2,680 | $ | (16,765 | ) | $ | (1,037 | ) | $ | (13,719 | ) | ||||||
Interest expense | — | — | — | — | — | ||||||||||||||
Income taxes | 404 | 1,802 | 1,530 | 1,478 | 5,214 | ||||||||||||||
Depreciation and amortization | 2,991 | 2,881 | 2,926 | — | 8,798 | ||||||||||||||
Loss on write-down of assets held for sale | — | — | 15,658 | — | 15,658 | ||||||||||||||
Impairment charges | — | — | — | — | — | ||||||||||||||
EBITDA from Discontinued Operations (non-GAAP measure) |
$ | 4,798 | $ | 7,363 | $ | 3,349 | $ | 441 | $ | 15,951 | |||||||||
Fiscal 2012 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
EBITDA from Discontinued Operations: | |||||||||||||||||||
Earnings (loss) from discontinued operations | $ | 4,876 | $ | (116,390 | ) | $ | 342 | $ | (9,210 | ) | $ | (120,382 | ) | ||||||
Interest expense | — | — | — | — | — | ||||||||||||||
Income taxes | 1,469 | 1,798 | (1,615 | ) | 2,056 | 3,708 | |||||||||||||
Depreciation and amortization | 3,417 | 3,387 | 2,693 | 3,409 | 12,906 | ||||||||||||||
Impairment charges | — | 115,688 | — | — | 115,688 | ||||||||||||||
EBITDA from Discontinued Operations (non-GAAP measure) |
$ | 9,762 | $ | 4,483 | $ | 1,420 | $ | (3,745 | ) | $ | 11,920 | ||||||||
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 earnings before interest expense, income taxes, depreciation, amortization and impairment charges. 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 Consolidated Statements of Earnings data. EBITDA should not be considered as an alternative to net earnings 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 earnings (loss) | $ | 27,188 | $ | (8,685 | ) | $ | 4,233 | $ | (177,271 | ) | $ | (154,535 | ) | ||||||
Interest expense | 4,163 | 4,406 | 4,186 | 3,886 | 16,641 | ||||||||||||||
Income taxes | 13,481 | 30,625 | 7,595 | (4,417 | ) | 47,284 | |||||||||||||
Depreciation and amortization | 10,675 | 11,371 | 13,991 | 12,688 | 48,725 | ||||||||||||||
Intangible asset write-down in restructuring charges | — | — | 3,207 | — | 3,207 | ||||||||||||||
Loss on write-down of assets held for sale | — | — | 15,658 | — | 15,658 | ||||||||||||||
Impairment charges | — | — | — | 204,448 | 204,448 | ||||||||||||||
EBITDA (non-GAAP measure) | $ | 55,507 | $ | 37,717 | $ | 48,870 | $ | 39,334 | $ | 181,428 | |||||||||
Fiscal 2012 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | |||||||||||||||
EBITDA: | |||||||||||||||||||
Net earnings (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 | 8,636 | 9,675 | 11,241 | 40,661 | ||||||||||||||
Depreciation and amortization | 11,242 | 10,935 | 10,744 | 11,066 | 43,987 | ||||||||||||||
Impairment charge | — | 115,688 | — | — | 115,688 | ||||||||||||||
EBITDA (non-GAAP measure) | $ | 60,130 | $ | 50,238 | $ | 52,806 | $ | 38,341 | $ | 201,515 | |||||||||
(Loss) Earnings from Continuing Operations Before Income Taxes Excluding Certain Items: | |||||||||||||||||||
Brady is presenting the Non-GAAP measure "(Loss) 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 Consolidated Statements of Earnings 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 (Loss) Earnings from Continuing Operations Before Income Taxes to (Loss) Earnings from Continuing Operations Before Income Taxes Excluding Certain Items": | |||||||||||||||||||
Three Months Ended July 31, | Year Ended July 31, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
(Loss) Earnings from Continuing Operations Before Income Taxes | |||||||||||||||||||
(GAAP measure) | $ | (182,129 | ) | $ | 30,054 | $ | (98,746 | ) | $ | 139,424 | |||||||||
Cost of goods sold: | |||||||||||||||||||
Purchase accounting expense related to inventory |
— | — | 1,530 | — | |||||||||||||||
Selling, general and administrative: | |||||||||||||||||||
PDC acquisition-related expenses | — | — | 3,600 | — | |||||||||||||||
Reversal of restricted stock grant expense | (4,232 | ) | — | (4,232 | ) | — | |||||||||||||
Restructuring charges | 15,573 | 4,107 | 26,046 | 6,084 | |||||||||||||||
Impairment charges | 204,448 | — | 204,448 | — | |||||||||||||||
Non-cash income tax charges related to PDC funding | |||||||||||||||||||
and certain valuation allowances | — | — | — | — | |||||||||||||||
(Loss) Earnings from Continuing Operations Before Income Taxes Excluding Certain | |||||||||||||||||||
Excluding Certain Items (non-GAAP measure) | $ | 33,660 | $ | 34,161 | $ | 132,646 | $ | 145,508 | |||||||||||
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 Consolidated Statements of Earnings 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 July 31, | Year Ended July 31, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Income Taxes on Continuing Operations (GAAP measure) | $ | (5,895 | ) | $ | 9,185 | $ | 42,070 | $ | 36,953 | ||||||||||
Cost of goods sold: | |||||||||||||||||||
Purchase accounting expense related to inventory | — | — | 581 | — | |||||||||||||||
Selling, general and administrative: | |||||||||||||||||||
PDC acquisition-related expenses | — | — | 641 | — | |||||||||||||||
Reversal of restricted stock grant expense | (1,608 | ) | — | (1,608 | ) | — | |||||||||||||
Restructuring charges | 4,337 | 1,314 | 7,157 | 2,014 | |||||||||||||||
Impairment charges | 12,892 | — | 12,892 | — | |||||||||||||||
Non-cash income tax charges related to PDC funding | |||||||||||||||||||
and certain valuation allowances | (3,976 | ) | (5,616 | ) | (28,976 | ) | (5,616 | ) | |||||||||||
Income Taxes on Continuing Operations Excluding Certain Items | |||||||||||||||||||
(non-GAAP measure) |
$ | 5,750 | $ | 4,883 | $ | 32,757 | $ | 33,351 | |||||||||||
Net (Loss) Earnings from Continuing Operations Excluding Certain Items: | |||||||||||||||||||
Brady is presenting the Non-GAAP measure "Net (Loss) 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 Consolidated Statements of Earnings 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 (Loss) Earnings from Continuing Operations to Net (Loss) Earnings from Continuing Operations Excluding Certain Items: | |||||||||||||||||||
Three Months Ended July 31, | Year Ended July 31, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Net (Loss) Earnings from Continuing Operations (GAAP measure) | $ | (176,234 | ) | $ | 20,869 | $ | (140,816 | ) | $ | 102,471 | |||||||||
Cost of goods sold: | |||||||||||||||||||
Purchase accounting expense related to inventory | — | — | 949 | — | |||||||||||||||
Selling, general and administrative: | |||||||||||||||||||
PDC acquisition-related expenses | — | — | 2,959 | — | |||||||||||||||
Reversal of restricted stock grant expense | (2,624 | ) | — | (2,624 | ) | — | |||||||||||||
Restructuring charges | 11,236 | 2,793 | 18,889 | 4,070 | |||||||||||||||
Impairment charges | 191,556 | — | 191,556 | — | |||||||||||||||
Non-cash income tax charges related to PDC funding | |||||||||||||||||||
and certain valuation allowances | 3,976 | 5,616 | 28,976 | 5,616 | |||||||||||||||
Net Earnings from Continuing Operations Excluding Certain Items | |||||||||||||||||||
(non-GAAP measure) | $ | 27,910 | $ | 29,278 | $ | 99,889 | $ | 112,157 | |||||||||||
Net Earnings from Continuing Operations Per Diluted Class A Diluted 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 Consolidated Statements of Earnings 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 (Loss) 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 July 31, | Year Ended July 31, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Net (Loss) Earnings from Continuing Operations Per Class A Diluted | |||||||||||||||||||
Nonvoting Share (GAAP measure) | $ | (3.41 | ) | $ | 0.40 | $ | (2.75 | ) | $ | 1.94 | |||||||||
Cost of goods sold: | |||||||||||||||||||
Purchase accounting expense related to inventory | — | — | 0.02 | — | |||||||||||||||
Selling, general and administrative: | — | — | — | — | |||||||||||||||
PDC acquisition-related expenses | — | — | 0.06 | — | |||||||||||||||
Reversal of restricted stock grant expense | (0.05 | ) | — | (0.05 | ) | — | |||||||||||||
Restructuring charges | 0.22 | 0.05 | 0.37 | 0.08 | |||||||||||||||
Impairment charges | 3.71 | — | 3.71 | — | |||||||||||||||
Non-cash income tax charges related to PDC funding | |||||||||||||||||||
and certain valuation allowances | 0.08 | 0.11 | 0.56 | 0.11 | |||||||||||||||
Net Earnings from Continuing Operations Per Class A Diluted Nonvoting | |||||||||||||||||||
Share Excluding Certain Items (non-GAAP measure) | $ | 0.53 | $ | 0.56 | $ | 1.93 | $ | 2.12 |
BRADY CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||||||||||||||||||||||
Fiscal 2012 | Fiscal 2013 | |||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||||||||||||
SALES TO EXTERNAL CUSTOMERS |
||||||||||||||||||||||||||||||||||||||||
Identification Solutions | $ | 163,968 | $ | 149,012 | $ | 160,481 | $ | 160,312 | $ | 633,774 | $ | 161,244 | $ | 166,707 | $ | 195,905 | $ | 209,576 | $ | 733,433 | ||||||||||||||||||||
Workplace Safety | $ | 109,428 | $ | 106,040 | $ | 110,669 | $ | 108,777 | $ | 434,914 | $ | 109,622 | $ | 104,468 | $ | 105,066 | $ | 99,521 | $ | 418,676 | ||||||||||||||||||||
Total Company | $ | 273,396 | $ | 255,052 | $ | 271,150 | $ | 269,089 | $ | 1,068,688 | $ | 270,866 | $ | 271,175 | $ | 300,971 | $ | 309,097 | $ | 1,152,109 | ||||||||||||||||||||
SALES INFORMATION |
||||||||||||||||||||||||||||||||||||||||
Identification Solutions | ||||||||||||||||||||||||||||||||||||||||
Organic | 5.5 | % | (0.8 | )% | 2.1 | % | 3.8 | % | 2.7 | % | 0.4 | % | 1.3 | % | (2.3 | )% | 2.1 | % | 0.3 | % | ||||||||||||||||||||
Currency | 1.7 | % | (0.8 | )% | (1.8 | )% | (5.0 | )% | (1.6 | )% | (2.5 | )% | (0.5 | )% | (1.0 | )% | 0.2 | % | (0.9 | )% | ||||||||||||||||||||
Acquisitions | — | % | — | % | 0.3 | % | 0.4 | % | 0.2 | % | 0.4 | % | 11.1 | % | 25.4 | % | 28.4 | % | 16.3 | % | ||||||||||||||||||||
Total | 7.2 | % | (1.6 | )% | 0.6 | % | (0.8 | )% | 1.3 | % | (1.7 | )% | 11.9 | % | 22.1 | % | 30.7 | % | 15.7 | % | ||||||||||||||||||||
Workplace Safety | ||||||||||||||||||||||||||||||||||||||||
Organic | 4.4 | % | (1.1 | )% | (1.6 | )% | (1.8 | )% | (0.2 | )% | (3.3 | )% | (7.0 | )% | (9.0 | )% | (8.6 | )% | (7.0 | )% | ||||||||||||||||||||
Currency | 3.7 | % | (0.3 | )% | (1.6 | )% | (6.1 | )% | (1.2 | )% | (2.3 | )% | 0.4 | % | (1.1 | )% | 0.1 | % | (0.7 | )% | ||||||||||||||||||||
Acquisitions | 1.9 | % | — | % | — | % | 4.5 | % | 1.6 | % | 5.8 | % | 5.1 | % | 5.0 | % | — | % | 4.0 | % | ||||||||||||||||||||
Total | 10.0 | % | (1.4 | )% | (3.2 | )% | (3.4 | )% | 0.2 | % | 0.2 | % | (1.5 | )% | (5.1 | )% | (8.5 | )% | (3.7 | )% | ||||||||||||||||||||
Total Company | ||||||||||||||||||||||||||||||||||||||||
Organic | 5.1 | % | (0.9 | )% | 0.6 | % | 1.5 | % | 1.5 | % | (1.1 | )% | (2.2 | )% | (5.0 | )% | (2.3 | )% | (2.6 | )% | ||||||||||||||||||||
Currency | 2.4 | % | (0.6 | )% | (1.8 | )% | (5.5 | )% | (1.4 | )% | (2.4 | )% | (0.1 | )% | (1.1 | )% | 0.3 | % | (0.9 | )% | ||||||||||||||||||||
Acquisitions | 0.8 | % | — | % | 0.2 | % | 2.1 | % | 0.8 | % | 2.6 | % | 8.6 | % | 17.1 | % | 16.9 | % | 11.3 | % | ||||||||||||||||||||
Total | 8.3 | % | (1.5 | )% | (1.0 | )% | (1.9 | )% | 0.9 | % | (0.9 | )% | 6.3 | % | 11.0 | % | 14.9 | % | 7.8 | % | ||||||||||||||||||||
SEGMENT PROFIT |
||||||||||||||||||||||||||||||||||||||||
Identification Solutions | $ | 41,839 | $ | 36,844 | $ | 40,711 | $ | 40,034 | $ | 159,427 | $ | 43,973 | $ | 33,813 | $ | 45,967 | $ | 47,565 | $ | 171,319 | ||||||||||||||||||||
Workplace Safety | $ | 30,321 | $ | 28,545 | $ | 29,141 | $ | 29,179 | $ | 117,187 | $ | 27,829 | $ | 23,600 | $ | 23,453 | $ | 20,360 | $ | 95,241 | ||||||||||||||||||||
Total Company | $ | 72,160 | $ | 65,389 | $ | 69,852 | $ | 69,213 | $ | 276,614 | $ | 71,802 | $ | 57,413 | $ | 69,420 | $ | 67,925 | $ | 266,560 | ||||||||||||||||||||
SEGMENT PROFIT AS PERCENT OF SALES |
||||||||||||||||||||||||||||||||||||||||
Identification Solutions | 25.5 | % | 24.7 | % | 25.4 | % | 25.0 | % | 25.2 | % | 27.3 | % | 20.3 | % | 23.5 | % | 22.7 | % | 23.4 | % | ||||||||||||||||||||
Workplace Safety | 27.7 | % | 26.9 | % | 26.3 | % | 26.8 | % | 26.9 | % | 25.4 | % | 22.6 | % | 22.3 | % | 20.5 | % | 22.7 | % | ||||||||||||||||||||
Total Company | 26.4 | % | 25.6 | % | 25.8 | % | 25.7 | % | 25.9 | % | 26.5 | % | 21.2 | % | 23.1 | % | 22.0 | % | 23.1 | % | ||||||||||||||||||||
Net Earnings Reconciliation |
||||||||||||||||||||||||||||||||||||||||
Total segment profit | $ | 72,160 | $ | 65,389 | $ | 69,852 | $ | 69,213 | $ | 276,614 | $ | 71,802 | $ | 57,413 | $ | 69,420 | $ | 67,925 | $ | 266,560 | ||||||||||||||||||||
Unallocated Amounts: | ||||||||||||||||||||||||||||||||||||||||
Administrative costs | 29,415 | 27,996 | 25,648 | 31,039 | 114,098 | 29,173 | 34,513 | 30,765 | 27,242 | 121,693 | ||||||||||||||||||||||||||||||
Restructuring charges | — | — | 1,977 | 4,107 | 6,084 | — | 1,933 | 8,540 | 15,573 | 26,046 | ||||||||||||||||||||||||||||||
Impairment charges | — | — | — | — | — | — | — | — | 204,448 | 204,448 | ||||||||||||||||||||||||||||||
Investment and other expense (income) | 203 | (813 | ) | (1,109 | ) | (362 | ) | (2,082 | ) | (396 | ) | (898 | ) | (1,132 | ) | (1,095 | ) | (3,522 | ) | |||||||||||||||||||||
Interest expense | 5,047 | 4,933 | 4,735 | 4,375 | 19,090 | 4,163 | 4,406 | 4,186 | 3,886 | 16,641 | ||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 37,495 | $ | 33,273 | $ | 38,601 | $ | 30,054 | $ | 139,424 | $ | 38,862 | $ | 17,459 | $ | 27,061 | $ | (182,129 | ) | $ | (98,746 | ) |
Source:
Brady Corporation
Investor contact:
Aaron Pearce, 414-438-6895
or
Media
contact:
Carole Herbstreit, 414-438-6882