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Brady Corporation
Quarter Ended
Sales from continuing operations for the quarter ended
During the fourth quarter ended
Net (loss) from continuing operations for the quarter ended
Net (loss) from continuing operations per Class A Nonvoting Common Share
was
Year Ended
Sales from continuing operations for the year ended
Net (loss) from continuing operations for the year ended
Net (loss) from continuing operations per Class A Nonvoting Common Share
was
Commentary:
“We were encouraged by our revenue growth in the fourth quarter, which
marks the second consecutive quarter of organic sales growth. This marks
the first quarter of growth in our Workplace Safety business since
fiscal 2012 as we continue to add new customers, increase revenues over
the internet and realize returns from increased catalog advertising,”
said Brady President and CEO
“Although we had organic sales growth, we were not pleased with our
profitability performance as we continued to incur costs related to the
consolidation of our facilities and have been experiencing challenges in
terms of sales mix and pricing. Our overall facility consolidation
efforts have been scaled back, and we will continue to execute the
facility consolidation activities in a manner that will allow us to
maintain the highest service levels and least disruptions to our
customers while still achieving efficiency gains over the long run. We
are focused on executing business fundamentals to drive organic sales
growth while deemphasizing acquisitions at this time. We are increasing
our investments in R&D to create sustainable processes for developing
new innovative products that generate significant value for our
customers. We will also focus on penetrating specific vertical markets
in our Identification Solutions business in order to drive sales growth
within our current industries including healthcare; food and beverage;
chemical, oil and gas; and aerospace and mass transit, as well as expand
our presence and product offering in selected markets in
“Although our fourth quarter profitability and cash flow did not meet
our expectations, we continue to have a strong balance sheet which
strengthened during the quarter as we repaid an additional
Fiscal 2015 Guidance:
The Company anticipates low single-digit organic sales growth in fiscal
2015, with organic sales growth in both the Identification Solutions and
Workplace Safety businesses. Brady also expects earnings from continuing
operations per diluted Class A Nonvoting Common Share of between
Executive Appointments:
Brady’s Board of Directors has appointed
With Mr. Felmer’s appointment as President – Workplace Safety, the Board
has appointed
“Tom Felmer is a talented executive who has been with Brady for more
than 25 years and I am pleased that he has accepted the role of
President of Workplace Safety and that he will continue his excellent
work leading the turnaround of this business unit,” said Brady President
and CEO
A webcast regarding Brady’s fiscal 2014 fourth quarter financial results
will be available at www.bradycorp.com
beginning at
* See accompanying notes for Non-GAAP measures.
In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company'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.
The use of 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: Implementation of the Workplace Safety
strategy; 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, hard disk drive, manufacturing,
electrical, construction, laboratory, education, governmental, public
utility, computer, healthcare and transportation; future competition;
changes in the supply of, or price for, parts and components; increased
price pressure from suppliers and customers; Brady's ability to retain
significant contracts and customers; fluctuations in currency rates
versus the U.S. dollar; risks associated with international operations;
difficulties associated with exports; risks associated with obtaining
governmental approvals and maintaining regulatory compliance; Brady's
ability to develop and successfully market new products; risks
associated with identifying, completing, and integrating acquisitions;
risks associated with divestitures and businesses held for sale; risks
associated with restructuring plans; environmental, health and safety
compliance costs and liabilities; risk associated with loss of key
talent; risk associated with product liability claims; technology
changes and potential security violations to the Company's information
technology systems; Brady's ability to maintain compliance with its debt
covenants; increase in our level of debt; potential write-offs of
Brady's substantial intangible assets; unforeseen tax consequences;
risk, associated with our ownership structure; 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
These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.
BRADY CORPORATION AND SUBSIDIARIES | |||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||
(Unaudited; Dollars in thousands, except per share data) | |||||||||||||||||
Three months ended July 31, | Twelve Months Ended July 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net sales | $ | 316,733 | $ | 310,592 | $ | 1,225,034 | $ | 1,157,792 | |||||||||
Cost of products sold | 162,672 | 152,722 | 615,470 | 548,444 | |||||||||||||
Gross margin | 154,061 | 157,870 | 609,564 | 609,348 | |||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 9,373 | 9,390 | 35,048 | 33,552 | |||||||||||||
Selling, general and administrative | 111,340 | 106,983 | 452,164 | 427,858 | |||||||||||||
Restructuring charges | 810 | 15,573 | 15,012 | 26,046 | |||||||||||||
Impairment charges | 148,551 | 204,448 | 148,551 | 204,448 | |||||||||||||
Total operating expenses | 270,074 | 336,394 | 650,775 | 691,904 | |||||||||||||
Operating loss: | (116,013 | ) | (178,524 | ) | (41,211 | ) | (82,556 | ) | |||||||||
Other income and (expense): | |||||||||||||||||
Investment and other income | 515 | 1,097 | 2,402 | 3,523 | |||||||||||||
Interest expense | (3,523 | ) | (3,887 | ) | (14,300 | ) | (16,641 | ) | |||||||||
Loss from continuing operations before income taxes | (119,021 | ) | (181,314 | ) | (53,109 | ) | (95,674 | ) | |||||||||
Income tax (benefit) expense | (22,040 | ) | (5,757 | ) | (4,963 | ) | 42,583 | ||||||||||
Loss from continuing operations | $ | (96,981 | ) | $ | (175,557 | ) | $ | (48,146 | ) | $ | (138,257 | ) | |||||
(Loss) earnings from discontinued operations, net of income taxes | (13,428 | ) | (1,714 | ) | 2,178 | (16,278 | ) | ||||||||||
Net loss | $ | (110,409 | ) | $ | (177,271 | ) | $ | (45,968 | ) | $ | (154,535 | ) | |||||
Loss from continuing operations per Class A Nonvoting Common Share: | |||||||||||||||||
Basic | $ | (1.89 | ) | $ | (3.40 | ) | $ | (0.93 | ) | $ | (2.70 | ) | |||||
Diluted | $ | (1.89 | ) | $ | (3.40 | ) | $ | (0.93 | ) | $ | (2.70 | ) | |||||
Loss from continuing operations per Class B Nonvoting Common Share: | |||||||||||||||||
Basic | $ | (1.89 | ) | $ | (3.40 | ) | $ | (0.95 | ) | $ | (2.71 | ) | |||||
Diluted | $ | (1.89 | ) | $ | (3.40 | ) | $ | (0.95 | ) | $ | (2.71 | ) | |||||
(Loss) earnings from discontinued operations per Class A Nonvoting Common Share: | |||||||||||||||||
Basic | $ | (0.26 | ) | $ | (0.03 | ) | $ | 0.04 | $ | (0.32 | ) | ||||||
Diluted | $ | (0.26 | ) | $ | (0.03 | ) | $ | 0.04 | $ | (0.32 | ) | ||||||
(Loss) earnings from discontinued operations per Class B Voting Common Share: | |||||||||||||||||
Basic | $ | (0.26 | ) | $ | (0.03 | ) | $ | 0.05 | $ | (0.32 | ) | ||||||
Diluted | $ | (0.26 | ) | $ | (0.03 | ) | $ | 0.05 | $ | (0.32 | ) | ||||||
Loss per Class A Nonvoting Common Share: | |||||||||||||||||
Basic | $ | (2.15 | ) | $ | (3.43 | ) | $ | (0.89 | ) | $ | (3.02 | ) | |||||
Diluted | $ | (2.15 | ) | $ | (3.43 | ) | $ | (0.89 | ) | $ | (3.02 | ) | |||||
Dividends | $ | 0.195 | $ | 0.19 | $ | 0.78 | $ | 0.76 | |||||||||
Loss per Class B Voting Common Share: | |||||||||||||||||
Basic | $ | (2.15 | ) | $ | (3.43 | ) | $ | (0.90 | ) | $ | (3.03 | ) | |||||
Diluted | $ | (2.15 | ) | $ | (3.43 | ) | $ | (0.90 | ) | $ | (3.03 | ) | |||||
Dividends | $ | 0.195 | $ | 0.19 | $ | 0.76 | $ | 0.74 | |||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||
Basic | 51,250 | 51,689 | 51,866 | 51,330 | |||||||||||||
Diluted | 51,250 | 51,689 | 51,866 | 51,330 |
BRADY CORPORATION AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited; Dollars in thousands) | |||||||||
July 31, 2014 | July 31, 2013 | ||||||||
ASSETS |
|||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 81,834 | $ | 91,058 | |||||
Accounts receivable—net | 177,648 | 169,261 | |||||||
Inventories: | |||||||||
Finished products | 73,096 | 64,544 | |||||||
Work-in-process | 17,689 | 14,776 | |||||||
Raw materials and supplies | 22,490 | 15,387 | |||||||
Total inventories | 113,275 | 94,707 | |||||||
Assets held for sale | 49,542 | 119,864 | |||||||
Prepaid expenses and other current assets | 41,543 | 37,600 | |||||||
Total current assets | 463,842 | 512,490 | |||||||
Other assets: | |||||||||
Goodwill | 515,004 | 617,236 | |||||||
Other intangible assets | 91,014 | 156,851 | |||||||
Deferred income taxes | 27,320 | 8,623 | |||||||
Other | 22,314 | 21,325 | |||||||
Property, plant and equipment: | |||||||||
Cost: | |||||||||
Land | 7,875 | 7,861 | |||||||
Buildings and improvements | 101,866 | 91,471 | |||||||
Machinery and equipment | 288,409 | 266,787 | |||||||
Construction in progress | 12,500 | 11,842 | |||||||
410,650 | 377,961 | ||||||||
Less accumulated depreciation | 276,479 | 255,803 | |||||||
Property, plant and equipment—net | 134,171 | 122,158 | |||||||
Total | $ | 1,253,665 | $ | 1,438,683 | |||||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT |
|||||||||
Current liabilities: | |||||||||
Notes payable | $ | 61,422 | 50,613 | ||||||
Accounts payable | 88,099 | 82,519 | |||||||
Wages and amounts withheld from employees | 38,064 | 42,413 | |||||||
Liabilities held for sale | 10,640 | 34,583 | |||||||
Taxes, other than income taxes | 7,994 | 8,243 | |||||||
Accrued income taxes | 7,893 | 7,056 | |||||||
Other current liabilities | 35,319 | 36,806 | |||||||
Current maturities on long-term debt | 42,514 | 61,264 | |||||||
Total current liabilities |
291,945 | 323,497 | |||||||
Long-term obligations, less current maturities | 159,296 | 201,150 | |||||||
Other liabilities | 69,348 | 83,239 | |||||||
Total liabilities | 520,589 | 607,886 | |||||||
Stockholders’ investment: | |||||||||
Common stock: | |||||||||
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,704,196 and 48,408,544 shares, respectively | 513 | 513 | |||||||
Class B voting common stock—Issued and outstanding, 3,538,628 shares | 35 | 35 | |||||||
Additional paid-in capital | 311,811 | 306,191 | |||||||
Earnings retained in the business | 452,057 | 538,512 | |||||||
Treasury stock—3,477,291 and 2,626,276 shares, respectively of Class A nonvoting common stock, at cost |
(93,337 | ) | (69,797 | ) | |||||
Accumulated other comprehensive income | 64,156 | 56,063 | |||||||
Other | (2,159 | ) | (720 | ) | |||||
Total stockholders’ investment | 733,076 | 830,797 | |||||||
Total | $ | 1,253,665 | $ | 1,438,683 |
BRADY CORPORATION AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(Unaudited; Dollars in Thousands) | |||||||||
July 31, 2014 | July 31, 2013 | ||||||||
Operating activities: | |||||||||
Net loss | $ | (45,968 | ) | $ | (154,535 | ) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 44,598 | 48,725 | |||||||
Non-cash portion of restructuring charges | 566 | 3,699 | |||||||
Non-cash portion of stock-based compensation expense | 5,214 | 1,736 | |||||||
Impairment charges | 148,551 | 204,448 | |||||||
Loss on write-down of assets held for sale | — | 15,658 | |||||||
Loss on sales of businesses | 1,238 | 3,138 | |||||||
Deferred income taxes | (27,516 | ) | 21,630 | ||||||
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures): | |||||||||
Accounts receivable | (3,600 | ) | 1,535 | ||||||
Inventories | (12,608 | ) | 2,440 | ||||||
Prepaid expenses and other assets | (278 | ) | 5,036 | ||||||
Accounts payable and accrued liabilities | (20,508 | ) | (2,285 | ) | |||||
Income taxes | 3,731 | (7,722 | ) | ||||||
Net cash provided by operating activities | 93,420 | 143,503 | |||||||
Investing activities: | |||||||||
Purchases of property, plant and equipment | (43,398 | ) | (35,687 | ) | |||||
Acquisition of business, net of cash acquired | — | (301,157 | ) | ||||||
Sales of businesses, net of cash retained | 54,242 | 10,178 | |||||||
Other | (637 | ) | 900 | ||||||
Net cash provided by (used in) investing activities | 10,207 | (325,766 | ) | ||||||
Financing activities: | |||||||||
Payment of dividends | (40,487 | ) | (39,243 | ) | |||||
Proceeds from issuance of common stock | 12,113 | 20,324 | |||||||
Purchase of treasury stock | (30,581 | ) | (5,121 | ) | |||||
Proceeds from borrowings on notes payable | 63,000 | 220,000 | |||||||
Repayment of borrowings on notes payable | (60,000 | ) | (181,000 | ) | |||||
Proceeds from borrowings on line of credit | 10,334 | 11,613 | |||||||
Repayment of borrowings on line of credit | (2,398 | ) | |||||||
Principal payments on debt | (61,264 | ) | (61,264 | ) | |||||
Income tax benefit from the exercise of stock options and deferred compensation distribution, and other | (6,104 | ) | 1,631 | ||||||
Net cash used in financing activities | (115,387 | ) | (33,060 | ) | |||||
Effect of exchange rate changes on cash | 2,536 | 481 | |||||||
Net decrease in cash and cash equivalents | (9,224 | ) | (214,842 | ) | |||||
Cash and cash equivalents, beginning of period | 91,058 | 305,900 | |||||||
Cash and cash equivalents, end of period | $ | 81,834 | $ | 91,058 | |||||
Supplemental disclosures: | |||||||||
Cash paid during the period for: | |||||||||
Interest, net of capitalized interest | $ | 14,594 | $ | 17,162 | |||||
Income taxes, net of refunds | 33,043 | 34,030 | |||||||
Acquisitions: | |||||||||
Fair value of assets acquired, net of cash | $ | — | $ | 168,724 | |||||
Liabilities assumed | — | (37,747 | ) | ||||||
Goodwill | — | 170,180 | |||||||
Net cash paid for acquisitions | $ | — | $ | 301,157 |
BRADY CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||||||||||||||||||||||||||
(Unaudited; Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||
Fiscal 2014 | Fiscal 2013 | ||||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||||||||||||||
SALES TO EXTERNAL CUSTOMERS | |||||||||||||||||||||||||||||||||||||||||
ID Solutions | $ | 209,546 | $ | 194,732 | $ | 206,448 | $ | 214,397 | $ | 825,123 | $ | 162,393 | $ | 168,234 | $ | 197,417 | $ | 211,071 | $ | 739,115 | |||||||||||||||||||||
Workplace Safety | 97,984 | 96,462 | 103,129 | 102,336 | 399,911 | 109,622 | 104,468 | 105,066 | 99,521 | 418,677 | |||||||||||||||||||||||||||||||
Total | $ | 307,530 | $ | 291,194 | $ | 309,577 | $ | 316,733 | $ | 1,225,034 | $ | 272,015 | $ | 272,702 | $ | 302,483 | $ | 310,592 | $ | 1,157,792 | |||||||||||||||||||||
SALES INFORMATION | |||||||||||||||||||||||||||||||||||||||||
ID Solutions | |||||||||||||||||||||||||||||||||||||||||
Organic | 3.3 | % | 2.5 | % | 4.8 | % | 1.2 | % | 2.9 | % | 0.9 | % | 1.8 | % | (1.9 | )% | 2.3 | % | 0.8 | % | |||||||||||||||||||||
Currency | (0.3 | )% | (0.5 | )% | (0.2 | )% | 0.4 | % | (0.2 | )% | (2.4 | )% | (0.5 | )% | (1.0 | )% | 0.2 | % | (1.0 | )% | |||||||||||||||||||||
Acquisitions | 26.0 | % | 13.8 | % | — | % | — | % | 8.9 | % | 0.4 | % | 11.1 | % | 25.3 | % | 28.2 | % | 16.3 | % | |||||||||||||||||||||
Total | 29.0 | % | 15.8 | % | 4.6 | % | 1.6 | % | 11.6 | % | (1.1 | )% | 12.4 | % | 22.4 | % | 30.7 | % | 16.1 | % | |||||||||||||||||||||
Workplace Safety | |||||||||||||||||||||||||||||||||||||||||
Organic | (10.0 | )% | (6.8 | )% | (1.9 | )% | 0.9 | % | (4.6 | )% | (3.3 | )% | (7.0 | )% | (9.0 | )% | (8.6 | )% | (7.0 | )% | |||||||||||||||||||||
Currency | (0.6 | )% | (0.9 | )% | 0.1 | % | 1.9 | % | 0.1 | % | (2.3 | )% | 0.4 | % | (1.1 | )% | 0.1 | % | (0.7 | )% | |||||||||||||||||||||
Acquisitions | — | % | — | % | — | % | — | % | — | % | 5.8 | % | 5.1 | % | 5.0 | % | — | % | 4.0 | % | |||||||||||||||||||||
Total | (10.6 | )% | (7.7 | )% | (1.8 | )% | 2.8 | % | (4.5 | )% | 0.2 | % | (1.5 | )% | (5.1 | )% | (8.5 | )% | (3.7 | )% | |||||||||||||||||||||
Total Company | |||||||||||||||||||||||||||||||||||||||||
Organic | (2.1 | )% | (1.1 | )% | 2.5 | % | 1.1 | % | 0.2 | % | (0.8 | )% | (1.8 | )% | (4.8 | )% | (2.1 | )% | (2.4 | )% | |||||||||||||||||||||
Currency | (0.4 | )% | (0.6 | )% | (0.2 | )% | 0.9 | % | (0.1 | )% | (2.4 | )% | (0.1 | )% | (1.0 | )% | 0.1 | % | (0.8 | )% | |||||||||||||||||||||
Acquisitions | 15.6 | % | 8.5 | % | — | % | — | % | 5.7 | % | 2.6 | % | 8.6 | % | 17.0 | % | 16.9 | % | 11.3 | % | |||||||||||||||||||||
Total | 13.1 | % | 6.8 | % | 2.3 | % | 2.0 | % | 5.8 | % | (0.6 | )% | 6.7 | % | 11.2 | % | 14.9 | % | 8.1 | % | |||||||||||||||||||||
SEGMENT PROFIT | |||||||||||||||||||||||||||||||||||||||||
ID Solutions | $ | 50,967 | $ | 37,526 | $ | 44,302 | $ | 43,334 | $ | 176,129 | $ | 44,580 | $ | 34,643 | $ | 46,787 | $ | 48,379 | $ | 174,389 | |||||||||||||||||||||
Workplace Safety | 18,374 | 14,668 | 14,771 | 18,425 | 66,238 | 27,829 | 23,600 | 23,453 | 20,360 | 95,242 | |||||||||||||||||||||||||||||||
Total | $ | 69,341 | $ | 52,194 | $ | 59,073 | $ | 61,759 | $ | 242,367 | $ | 72,409 | $ | 58,243 | $ | 70,240 | $ | 68,739 | $ | 269,631 | |||||||||||||||||||||
SEGMENT PROFIT AS A PERCENT OF SALES | |||||||||||||||||||||||||||||||||||||||||
ID Solutions | 24.3 | % | 19.3 | % | 21.5 | % | 20.2 | % | 21.3 | % | 27.5 | % | 20.6 | % | 23.7 | % | 22.9 | % | 23.6 | % | |||||||||||||||||||||
Workplace Safety | 18.8 | % | 15.2 | % | 14.3 | % | 18.0 | % | 16.6 | % | 25.4 | % | 22.6 | % | 22.3 | % | 20.5 | % | 22.7 | % | |||||||||||||||||||||
Total | 22.5 | % | 17.9 | % | 19.1 | % | 19.5 | % | 19.8 | % | 26.6 | % | 21.4 | % | 23.2 | % | 22.1 | % | 23.3 | % | |||||||||||||||||||||
Fiscal 2014 | Fiscal 2013 | ||||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||||||||||||||
Total segment profit | $ | 69,341 | $ | 52,194 | $ | 59,073 | $ | 61,759 | $ | 242,367 | $ | 72,409 | $ | 58,243 | $ | 70,240 | $ | 68,739 | $ | 269,631 | |||||||||||||||||||||
Unallocated amounts: | |||||||||||||||||||||||||||||||||||||||||
Administrative costs | (32,813 | ) | (29,524 | ) | (29,267 | ) | (28,411 | ) | (120,015 | ) | (29,174 | ) | (34,513 | ) | (30,765 | ) | (27,242 | ) | (121,693 | ) | |||||||||||||||||||||
Restructuring charges | (6,839 | ) | (4,324 | ) | (3,039 | ) | (810 | ) | (15,012 | ) | - | (1,933 | ) | (8,540 | ) | (15,573 | ) | (26,046 | ) | ||||||||||||||||||||||
Impairment charges | - | - | - | (148,551 | ) | (148,551 | ) | - | - | (204,448 | ) | (204,448 | ) | ||||||||||||||||||||||||||||
Investment and other income | 761 | 255 | 872 | 514 | 2,402 | 396 | 898 | 1,133 | 1,097 | 3,523 | |||||||||||||||||||||||||||||||
Interest expense | (3,721 | ) | (3,676 | ) | (3,381 | ) | (3,522 | ) | (14,300 | ) | (4,163 | ) | (4,406 | ) | (4,186 | ) | (3,887 | ) | (16,641 | ) | |||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 26,729 | $ | 14,925 | $ | 24,258 | $ | (119,021 | ) | $ | (53,109 | ) | $ | 39,468 | $ | 18,289 | $ | 27,882 | $ | (181,314 | ) | $ | (95,674 | ) |
GAAP to NON-GAAP MEASURES | ||||||||||||||||||
(Unaudited; Dollars in Thousands, Except Per Share Amounts) | ||||||||||||||||||
In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure. | ||||||||||||||||||
Earnings from Continuing Operations Before Income Taxes Excluding Certain Items: | ||||||||||||||||||
Brady is presenting the Non-GAAP measure "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 from Continuing Operations Before Income Taxes to Earnings from Continuing Operations Before Income Taxes Excluding Certain Items: | ||||||||||||||||||
Three Months Ended July 31, | Year Ended July 31, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Loss from Continuing Operations Before Income Taxes | ||||||||||||||||||
(GAAP measure) | $ | (119,021 | ) | $ | (181,314 | ) | $ | (53,109 | ) | $ | (95,674 | ) | ||||||
Cost of goods sold: | ||||||||||||||||||
Purchase accounting expense related to inventory | — | — | — | 1,530 | ||||||||||||||
Selling, general and administrative: | ||||||||||||||||||
Reversal of restricted stock grant expense | — | (4,232 | ) | — | (4,232 | ) | ||||||||||||
PDC acquisition-related expenses | — | — | — | 3,600 | ||||||||||||||
Non-cash income tax charges | — | — | — | — | ||||||||||||||
Restructuring charges | 810 | 15,573 | 15,012 | 26,046 | ||||||||||||||
Impairment charges | 148,551 | 204,448 | 148,551 | 204,448 | ||||||||||||||
Earnings from Continuing Operations Before Income Taxes | ||||||||||||||||||
Excluding Certain Items (non-GAAP measure) | $ | 30,340 | $ | 34,475 | $ | 110,454 | $ | 135,718 | ||||||||||
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, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Income Taxes on Continuing Operations (GAAP measure) | $ | (22,040 | ) | $ | (5,757 | ) | $ | (4,963 | ) | $ | 42,583 | |||||||
Cost of goods sold: | ||||||||||||||||||
Purchase accounting expense related to inventory | — | — | — | 581 | ||||||||||||||
Selling, general and administrative: | ||||||||||||||||||
Reversal of restricted stock grant expense | — | (1,608 | ) | — | (1,608 | ) | ||||||||||||
PDC acquisition-related expenses | — | — | — | 641 | ||||||||||||||
Non-cash income tax charges | — | (3,976 | ) | — | (28,976 | ) | ||||||||||||
Restructuring charges | 230 | 4,337 | 4,751 | 7,157 | ||||||||||||||
Impairment charges | 31,157 | 12,892 | 31,157 | 12,892 | ||||||||||||||
Income Taxes on Continuing Operations Excluding Certain Items | ||||||||||||||||||
(non-GAAP measure) | $ | 9,347 | $ | 5,888 | $ | 30,945 | $ | 33,270 | ||||||||||
Net Earnings from Continuing Operations Excluding Certain Items: | ||||||||||||||||||
Brady is presenting the Non-GAAP measure "Net 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 from Continuing Operations to Net Earnings from Continuing Operations Excluding Certain Items: | ||||||||||||||||||
Three Months Ended July 31, | Year Ended July 31, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Net Loss from Continuing Operations (GAAP measure) | $ | (96,981 | ) | $ | (175,557 | ) | $ | (48,146 | ) | $ | (138,257 | ) | ||||||
Cost of goods sold: | ||||||||||||||||||
Purchase accounting expense related to inventory | — | — | — | 949 | ||||||||||||||
Selling, general and administrative: | ||||||||||||||||||
Reversal of restricted stock grant expense | — | (2,624 | ) | — | (2,624 | ) | ||||||||||||
PDC acquisition-related expenses | — | — | — | 2,959 | ||||||||||||||
Non-cash income tax charges | — | 3,976 | — | 28,976 | ||||||||||||||
Restructuring charges | 580 | 11,236 | 10,261 | 18,889 | ||||||||||||||
Impairment charges | 117,394 | 191,556 | 117,394 | 191,556 | ||||||||||||||
Net Earnings from Continuing Operations Excluding Certain Items | ||||||||||||||||||
(non-GAAP measure) | $ | 20,993 | $ | 28,587 | $ | 79,509 | $ | 102,448 | ||||||||||
Net Earnings from Continuing Operations Per Diluted Class A 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 Financial Statements and supporting footnote disclosures. 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 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, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Net Loss from Continuing Operations Per Diluted Class A | ||||||||||||||||||
Nonvoting Share (GAAP measure) | $ | (1.89 | ) | $ | (3.40 | ) | $ | (0.93 | ) | $ | (2.70 | ) | ||||||
Cost of goods sold: | ||||||||||||||||||
Purchase accounting expense related to inventory | — | — | — | 0.02 | ||||||||||||||
Selling, general and administrative: | ||||||||||||||||||
Reversal of restricted stock grant expense | — | (0.05 | ) | — | (0.05 | ) | ||||||||||||
PDC acquisition-related expenses | — | — | — | 0.06 | ||||||||||||||
Non-cash income tax charges | — | 0.08 | — | 0.56 | ||||||||||||||
Restructuring charges | 0.01 | 0.22 | 0.20 | 0.37 | ||||||||||||||
Impairment charges | 2.29 | 3.71 | 2.29 | 3.71 | ||||||||||||||
Net Earnings from Continuing Operations Per Diluted Class A Nonvoting | ||||||||||||||||||
Share Excluding Certain Items (non-GAAP measure) | $ | 0.41 | $ | 0.55 | $ | 1.53 | $ | 1.98 |
Source:
Brady Corporation
Investor contact: Aaron Pearce 414-438-6895
Media
contact: Carole Herbstreit 414-438-6882