Corporate Profile
W.H. Brady Co. manufactures and markets coated films and
industrial identification products.
Headquartered in Milwaukee, Wisconsin, the
81-year-old Company has operations worldwide.
Driving the Company is its focus on quality,
innovation and performance in all it does. Using
total-quality-assurance methods, extensive research and
development resources and people committed to doing their best
and improving
their best, Brady is a leader in its markets.
Financial Highlights 1
President's Letter 2
Customer Focus 6
Financial Review, 1994 17
Corporate Data 36
Shareholder Services 37
Financial Highlights
Percent
(Dollars in Thousands, Increase
Except Per Share Amounts) 1994 1993 (Decrease)
Net sales $255,841 $242,970 5.3%
Income before income taxes $29,902 $25,829 15.8%
Pre-tax profit margin 11.7% 10.6%
Net income $18,540 $16,856 10.0%
After-tax profit margin 7.2% 6.9%
Return on average
stockholders'
investment 13.6% 13.6%
Net income per Common Share
Class A Nonvoting $2.55 $2.33
Class B Voting $2.45 $2.23
Working capital $100,023 $77,943 28.3%
Stockholders' investment $145,129 $128,068 13.3%
Research and development $10,318 $12,132 (15.0%)
Capital expenditures $6,466 $12,280 (47.3%)
Depreciation and amortization $9,435 $10,173 (7.3%)
President's Letter
Since joining W.H. Brady Co. in January 1994, I've gotten to know
our Company very well-from our people and processes to our
products and customers. I'm pleased to report that Brady is in a
strong competitive position.
Fiscal 1994 was a record year for us financially. And our efforts
in process improvement, cost reduction, increased teamwork and
new product development should help us continue to improve.
Record Financial Results. Sales for the year ended July 31, 1994,
increased to $255,841,000 from the prior year's sales of
$242,970,000, a 5.3-percent increase. On a more comparable basis,
sales increased 11.5 percent, as last year's sales included
revenues of $13.5 million from three divested units.
Net income for fiscal 1994 was $18,540,000 or $2.55 per share, up
10 percent from $16,856,000 or $2.33 per share in 1993. Excluding
the financial impact of divested units in 1993, net income rose
15.9 percent. Net income for 1994 was affected by a higher net
effective tax rate of 38.0 percent. The prior year's 34.7-percent
rate was lower due to the reversal of previously accrued income
taxes for potential tax liabilities settled in favor
of the Company.
Sales for the fourth quarter were $66,209,000, an 8.6-percent
increase over sales of $60,963,000 for the previous year.
Net income for the fourth quarter was $4,936,000 or $0.67 per
share, compared to $5,901,000 or $0.81 per share for the previous
year. The prior year's net income included $1,472,000 or $0.20
per share of onetime gains related to divestitures and
tax-related issues. Excluding these effects, net income was up
11.4 percent in the fourth quarter over the previous year's
fourth quarter.
All three operating groups posted sales increases for the year,
with our international subsidiaries showing excellent growth.
International sales now account for 37.1 percent of total sales,
up from 32.0 percent last year.
Operations Review. Our European operations showed great
improvement in 1994. Despite the effects of foreign exchange
rates and sluggish European economies, Brady's European sales
increased about 20 percent. Sales were especially strong in
Belgium, Germany and England.
Keys to the revenue growth for our traditional Brady-European
operations were new portable printing systems and
customer-printable label products developed within a cohesive
European marketing plan. Also we made strides in improving our
service to local markets, including cutting lead times and
bolstering research and development support through our European
Research and Innovation Center in Belgium. Our Seton Direct
Marketing Group was strong in Europe due to the addition of new
products and expansion of its catalogs. Through its operation in
France, Seton began marketing to companies in the Netherlands
this year.
Seton's operation in Canada also fared well in fiscal 1994, due
to the addition of new products, including an expanded catalog
and service improvements. Based in Toronto, Canada, Revere-Seton
has begun providing same-day delivery of products to companies in
Toronto-a service which has been well received.
Our performance in the U.S. improved, driven by new products. Key
contributors were new portable printing systems, tapes, aluminum
and plastic signs and regulatory compliance products. Seton is
revising its mailing plan and adding more products to its catalog
to bolster its U.S. results next year. We expect increased
interdivisional cooperation and sharing of resources in the
traditional Brady U.S. operations will speed new product
development and strengthen our marketing efforts in 1995. The
I.D. Pro labeling system, one of the key new products developed
in 1994, is expected to do well in 1995 as interest in the
electrical market has been high since the product was introduced
in the spring of 1994.
Our Asian-Pacific sales, while still relatively small, rose by
almost 60 percent due to our efforts in Australia, Japan and
Singapore. Brady-Australia's increase was due in large part to
our strengthened commitment to the distributor network which we
established in fiscal 1993. Our Singapore operation, which was
started in fiscal 1992, drove sales increases in all product
areas through our investments in increased sales staff and our
efforts to market across the region. During the year we
introduced new semiconductor tape and reel products to capitalize
on the continued rapid growth of the semiconductor market.
Our profitability has also improved. Cost of goods sold as a
percent of sales declined as the result of cost-reduction efforts
throughout the Company, including process improvements, improved
purchasing efforts and teamwork. As an example, in our Industrial
Products Division alone there was $1.3 million in cost reduction
from process improvement, yield improvement and supplier programs
during the year.
We are also pleased to report three more Brady operations have
been registered to the standards of the International
Organization for Standardization, Switzerland, this year. This
summer W.H. Brady N.V., Belgium, was certified in ISO 9002, the
Signmark Division of Brady USA, Inc., was certified in ISO 9001,
and the Industrial Products Division of Brady USA, Inc., was
certified in ISO 9001. This brings to seven the number of
ISO-certified Brady operations. The benefits of the ISO process
and certification include improved documentation of procedures in
all areas, greater quality awareness and a competitive advantage.
While the Company started the year with three fewer operations,
the Brady team was successful in moving the Company well beyond
prior- year levels. Looking forward in fiscal 1995, we are
focusing on building bridges across divisional lines to better
leverage our assets, speed new product introductions and further
enhance our service to our customers.
Focus on the Future. We are focusing on three themes at Brady,
all of which support long-term value creation for our
shareholders:
1) strategic initiatives to create growth, 2) improved asset
utilization, and 3) teamwork.
We are measuring our performance based on value creation in
excess of our cost of capital. Starting in fiscal 1995, our
Company's management incentive compensation program will be tied
to the shareholder value created, thus aligning the interests of
management and shareholders. We will make decisions which
maximize our Company's long-term success.
In fiscal 1995 we are working to do more where we are and to
extend our reach globally. Seton will increase its number of
mailings to Holland and will also begin selling to companies in
Belgium, Switzerland, Austria, Denmark and Italy. Teamwork
throughout the Company will play a key part in these efforts.
Traditional Brady divisions and Seton together are expanding
efforts in Italy and Australia and looking at opportunities in
Latin America and the Far East.
It's been a great year for W.H. Brady Co. and a great one for me,
too. The Company is in excellent financial shape. We have a great
line of high-performance identification, safety and specialty
tape products serving thousands of companies worldwide. And we
have a truly outstanding team of people at Brady who will take
the Company forward with new products, improved service and
processes and new markets with an ever-present focus on
shareholder value creation.
Katherine M. Hudson
President and Chief Executive Officer
October 1994
INNOVATION
Since it was founded in 1914, W.H. Brady Co. has been serving an
ever-widening customer base. Innovation plays a large part in that growth
and success. As customers' needs for identification or tape products or
printing systems change, Brady is there with products and services to meet
those needs.
BOEING
Sticking Together
Chemistry
Boeing Company, U.S.A. Boeing, the leading manufacturer of aircraft, has
been a Brady customer for more than 15 years. Boeing has depended on
Brady's custom-engineered wire-identification products to label the wiring
throughout its airplanes-from the cockpit's electrical controls to the engines'
wiring. Brady's products withstand tremendous heat, crystallizing cold, and
the deteriorating effects of grease, hydraulic fluid and aircraft fuel to
maintain legible identification.
As Boeing has grown, so has its industrial identification needs. W.H. Brady
Co. has been there working hand in hand with Boeing engineers developing
innovative products to meet those changing needs.
Brady's printable fluid-line tape was created specifically to satisfy Boeing's
needs for labeling aircraft hydraulic lines and fuel lines. The tape withstands
a variety of oils and chemicals including Skydrol, a harsh chemical used in
hydraulic fluid.
The newest of Boeing's family, the 777 jet, has also benefited from the
teamwork of Boeing engineering and Brady's innovation. The 777
development utilized the most advanced design technology available. And it
incorporated Brady's state-of-the-art printing and adhesive chemistry
products, helping Boeing cut production time and cost and improve
manufacturing flexibility.
(Photo cutline: Boeing uses Brady identification products to label thousands
of wiring, hydraulic and fuel lines throughout its airplanes.)
IBM
Meeting the Challenge
Specifications
IBM, Toronto, Canada. When IBM needed the world's thinnest label for
PCMCIA (Personal Computer Memory Card International Association) card
identification, it called on Brady_and Brady responded.
PCMCIA cards are each the size of a credit card and provide additional
features and capabilities for portable and personal computers. The cards
were developed by IBM Canada Ltd. in Toronto and are manufactured at its
wholly-owned subsidiary, Celestica Inc., Toronto.
While standard labels in the industry are between 3.5 mils and 20 mils in
thickness, IBM needed a label with a total thickness of 2 mils
(two-thousandths of an inch) or less to identify the cards.
Brady representatives from Canada and Milwaukee worked together to
address processing, printing, adhesion, materials and other IBM
specifications in the project. The solution: a subsurface-printable system
including an adhesive that would bind permanently at 0.5 mils thickness and
a compatible ink and ultra-thin base material.
"We had to make several enhancements and modifications to our print line
and finishing line to ensure a high-quality printed product for our customer,"
said Ed Wright, general manager of Brady-Canada. "The end result was a
success."
In fiscal 1994 Brady-Canada began reaching beyond its region into other
possible markets for the ultra-thin label. "We originally developed the
product as a one-color ultra-thin label for IBM in Canada. We have since
expanded the line in addition to expanding sales worldwide," Wright said.
In July 1994, W.H. Brady Co. introduced a compact, automatic applicator to
be used in conjunction with the ultra-thin labels. The applicator allows
customers to cleanly and precisely apply labels to their memory cards on the
assembly line. "We merely coupled one outstanding product with another,"
Wright said.
(Photo cutline: "It was a real team effort between IBM and W.H. Brady to
develop this ultra-thin label. Everyone at Brady was extremely responsive to
our special labeling requirements," said Al Kerklaan, IBM Development
Design Services.)
(Photo cutline: Brady team members from Canada and the U.S. worked
together to create an ultra-thin label for IBM PCMCIA cards.)
THOMSON
Taking the Heat
High-Performance
Thomson Consumer Electronics, Marion, Indiana.
Thomson Consumer Electronics, a world leader in television manufacturing,
produces televisions under the General Electric, RCA and ProScan labels.
Searching for a low-cost supplier who could meet its labeling needs for
cathode-ray- tube manufacturing, Thomson contacted Brady's Industrial
Products Division.
Thomson needed a product that could survive the CRT manufacturing
process including exposure to harsh chemicals and temperatures of more
than 400 degrees Celsius. The product had to be flexible, maintain a color or
whiteness, perform with low particle emission and be absent of
contaminants harmful to CRT functionality. Brady technical service
representatives worked closely with Thomson's imaging technology and
engineering team to develop a line of products to meet these needs. Brady's
high-temperature labels are pressure sensitive, adhere to glass and a variety
of metal surfaces and withstand acidic and alkaline substances and
extremely high temperatures.
At Thomson's small-television manufacturing plant, Brady's XB-521
high-temperature labels are used as position markers to help in manual
operations. The labels, in various colors and shapes, are used to identify the
top of the glass panel. By using the markers, Thomson reduces chances of
panel rotation and other mistakes that wouldn't show up until the final half
of the manufacturing process.
In Thomson's highly automated large-set manufacturing plant, Thomson
uses Brady's XB-520 high-temperature barcode labels. These machine-read
labels identify the top of the glass panels for the 31-inch and 35-inch
televisions and contain information about the date, time and shift every CRT
is produced. The labels allow managers to track product quality and to
identify when and where problems occur.
(Photo cutline: "Basically, we had a reverse engineering situation. We
simply told Brady what the labels had to do," said Barry Snitzer, Thomson
Consumer Electronics, Senior Member, Technical Staff.)
(Photo cutline: Brady-engineered barcode labels withstand exposure to the
chemicals and extreme heat inherent in Thomson's CRT manufacturing
process.)
SEMCO
Friendly Foil
Research
Semco, Incorporated, U.S.A. When SEMCO, a leading manufacturer of
cooling systems, embarked on developing next- generation air-conditioning
technology, it looked to W.H. Brady Co.'s Coated Products Division as its
coating expert.
In 1990, SEMCO set out to expand its desiccant-based technologies and
convert from solvent-based to environmentally friendly water-based
coatings. "Brady not only produced pressure-sensitive materials, but also
offered custom coating services, including water-based coating," said Gary
Mills, SEMCO purchasing manager. "Brady's extensive coating experience
along with its strengths in research and development and reputation for
high-quality coating made Brady the perfect partner in this project."
Brady development chemists and process engineers worked closely with
SEMCO personnel to develop a desiccant and water- based formulation
which could be coated onto aluminum foil at Brady to provide increased
absorbency, consistency and high durability as part of temperature- and
moisture-stabilizing air-handling units. SEMCO forms the desiccant-coated
aluminum foil into a wheel, up to 14 feet in diameter. This wheel is integral
to the air-control system, as it extracts moisture from the air, reducing
relative humidity and air temperature.
"The development has been a success," Mills said. "This new water-based
coating is not only better for the environment, but it is also proving to
outperform solvent coating formulations, from the standpoint of efficiency
as well as overall quality."
Expanding on this success, SEMCO began pilot installations in 1994
introducing desiccant-based cooling systems. This new product is capable of
augmenting and even replacing freon-based methods of cooling.
SEMCO and Brady continue with their search for better materials and their
applications in the heating, ventilating and air conditioning industry. Through
the research capability of Brady and the marketing strength of SEMCO, more
safe, effective and environmentally responsible products find their way to
market.
(Photo cutline: Brady applies a water-based desiccant coating to aluminum
foil for SEMCO's environmentally friendly cooling systems.)
(Photo cutline: "Tapping Brady's coating expertise, we have developed
high-performance cooling systems using wheels as small as 12 inches in
diameter, expanding desiccant's cooling availability to the residential as well
as commercial and industrial markets," commented Gary Mills, SEMCO, Inc.)
DYNA-CRAFT
The Leading Edge
Precision
Dyna-Craft, Inc., U.S.A. When Dyna-Craft needed an improved tape system
for its leadframe manufacturing, Brady applied its expertise in coating and
converting to develop the solution.
Dyna-Craft leadframes are used by semiconductor companies to connect the
leads from a silicon chip to an external circuit. A leadframe's leads must be
precisely and accurately positioned to make the needed connection with the
silicon chip. To ensure that correct positioning is maintained even through
handling and processing, Dyna-Craft needed a high- performance tape which
it could apply to the leads during manufacturing to stabilize and reinforce
them.
Tape requirements included high bond strength, extremely high purity and
resistance to the effects of humidity and heat. It also had to be easily
integrated into Dyna-Craft's manufacturing line, be compatible with many
leadframe styles and be economical.
Chemists and materials scientists at Brady developed a tape meeting
Dyna-Craft's needs. And Brady Coated Products Co.'s clean-room slitting
operations ensure the tape's high quality is protected through finishing.
"Because the tape becomes encapsulated in an integrated circuit, the tape's
purity, chemical, electronic and mechanical properties are essential," said
Cyndie Arretche, Dyna-Craft purchasing manager.
(Photo cutline: Researchers at Brady developed a high-performance tape
used by DCI in the manufacture of its leadframes--specialized frameworks
used by the semiconductor industry to connect the leads from a silicon chip
to an external circuit.)
(Photo cutline: "Brady's leadframe tape has proven to be an excellent
product in helping us ensure total quality of our leadframes," said Cyndie
Arretche, Dyna-Craft.)
SERVICE
W.H. Brady Co. realizes that meeting our customers' needs requires more
than high-quality products; it also requires exceptional service.
PCA
Paper Chase
Coordination
Packaging Corporation of America, U.S.A. To help companies keep up with
changing governmental regulations and provide a safe workplace, Brady
offers a full safety identification product line including signs, labels, tags,
lockout/tagout devices and other products.
But Brady takes its customer focus even further, Brady's Signmark Division
offers turnkey labeling through its Safety Identification Services group.
In fiscal 1994, Packaging Corporation of America's paper mill in Counce,
Tenn., looked to Brady for engineering, production and installation of safety
products for its plant. Brady's Pulp and Paper industry Specialist Herb
Raschka came up with a workable solution resulting in a cost-effective and
professionally identified facility. Brady SIS Coordinator Ray Simonson spent
nine weeks at the site, collecting data, ordering products, smoothing out any
project problems that arose and keeping the project on schedule. The Brady
Customer Service Department and Signmark Manufacturing Cell 140 worked
closely to ship product quickly.
For the installation, Brady employees teamed up with six PCA mill
employees from the various production departments and 12 college student
employees to install 20,000 pipemarkers and 800 tank signs at the plant.
Near the end of the project, Brady sponsored a picnic to thank the PCA
employees for their hard work.
(Photo cutline: "Line and tank identification is a very important element of
the safety program at Counce. Proper knowledge of the tank or line content
assures the correct safety precautions are taken prior to working on the mill
systems," remarked Joe Milligan, PCA Maintenance Department.)
(Photo cutline: Brady and PCA employees joined forces to install
pipemarkers and signs at a PCA paper mill.)
PEPSICO
Shaping Up, Shipping Out
Integration
PepsiCo Food Systems Worldwide, Milwaukee, Wisconsin. Meeting
customers' needs requires more than high-quality products; it also requires
exceptional service. For PepsiCo Food Systems Worldwide's Milwaukee
distribution center, Brady helped integrate its barcode labels, software and
printing systems with the PFS information system to support their
warehouse- automation efforts.
"By barcode-labeling boxes in the warehouse, we direct an item to go to a
particular Taco Bell, Pizza Hut, KFC or Hot'n Now restaurant in our
seven-state Midwestern region," said Ellen Moodie, senior operations
manager in Milwaukee for PFS, a division of PepsiCo, Inc. "We use about
8,000 barcode labels a day."
Warehouse specialists pick a box (containing hot sauce, oil, cups, napkins or
other dry goods), label it and place it on a multi-tiered conveyor system.
Further down the line, an automatic barcode scanner reads the box's label
and diverts the box-based on the information contained in the barcode-to the
correct semitrailer. The automated system has added flexibility, increased
efficiency and improved accuracy.
"Brady was very supportive of our efforts," Moodie said. "An applications
engineer from Brady's Auto ID Group dissected our label information on our
computer system and customized a software program for us which enabled
us to print barcodes. Brady also designed a custom label format for our
process and provided us with printers that met our needs of durability and
high-quality printing."
Brady is working with a second PFS distribution center to set up a similar
program.
(Photo cutline: "Our Brady contacts served as partners with us in this
project. They helped us come up with a solution that would work and then
stayed on to implement and maintain it. Throughout the whole process
Brady has been there to provide us with the service we need," said Ellen
Moodie, PepsiCo Food Systems.)
(Photo cutline: PepsiCo Food Systems Worldwide's Milwaukee distribution
center found the support it needed for its warehouse-automation efforts:
Brady integrated barcode labels, software and printing systems to enable
more efficient order routing.
AMG
Rapid Response
Just-in-Time
AMG Industries, Inc., Queensbury, N.Y. Seton Name Plate Co., Branford,
Conn., the direct-marketing subsidiary of W.H. Brady Co., recently began
using "just-in-time" manufacturing techniques as part of its continuous
improvement process. The results have been reduced inventory and shorter
lead times.
AMG Industries, Inc. was one of Seton's first customers to benefit from
improved lead times. AMG, a nationwide original equipment manufacturer
and general contractor, purchases pipemarkers, engraved plates and valve
tags to use at construction sites.
When AMG Project Coordinator Brian Walker placed a rush order for Opti-
Code Pressure sensitive pipemarkers in May 1994, he was quoted Seton's
then-standard rush lead time of four working days. However, the Seton
screen printing team that was to produce the product was operating at a
new level.
The team, made up of production art, screen-marking, screen-printing,
finishing and machine maintenance employees, had redesigned their areas to
optimize work flow, staggered work schedules to ensure job coverage and
implemented the use of kanbans to switch from a "push-through" to a "pull-
through" manufacturing strategy. As a result, AMG's order was completed
in just two days, with no need for special "rush" handling.
The just-in-time philosophy is one of ongoing continuous improvement. The
screen-printing team's current goal is to ship every order within 24 hours.
(Photo cutline: Brady's direct-marketing subsidiary, Seton, uses just-in-time
manufacturing techniques to continuously improve its service. The screen
printing team, pictured, has cut its lead time in half.)
(Photo cutline: "The turnaround of the order was exceptional. Getting the
pipemarkers so quickly helped me do my job, keeping our construction
project moving ahead," commented Brian Walker, AMG Project Coordinator.)
GLOBAL REACH
W.H. Brady Co. is committed to global leadership in its markets. With
operations in the United States, Canada, Singapore, Japan, Australia,
Belgium, England, Germany, France, Sweden, Italy, New Zealand and Hong
Kong, Brady continues to strive for optimum effectiveness as a worldwide
provider of identification, safety and specialty tape products.
VIDEO AKTUELL
Astonishing Response
Attitude
Video Aktuell GmbH, Limburg, Germany. The Seton-Germany team is
justifiably proud of the unsolicited praise they recently received from a
valued customer.
Video Aktuell GmbH, along with its German and Austrian partner, Video
Ring, is Europe's largest video leasing and sales company. Together these
partners supply more than 660 video shops in Germany and about 50 in
Austria with video films and equipment as well as compact discs and CD
players.
Tommy Neis, general manager of Video Aktuell (and the Baron of Fordyce,
Scotland), felt compelled to write a letter to Seton-Germany's sales
manager, Susan Joslin, following receipt of some post and chain and sign
samples they had ordered.
"We were astonished to receive the goods the following day," Neis wrote.
Their next order, placed two weeks later, also received 24-hour turnaround.
Neis explained that Seton's service was in marked contrast to the two-week
delay that is customary with mail order companies.
In a follow-up phone call, Neis stated that he felt a need to confirm Seton's
"positive attitude toward the customer."
(Photo cutline: Supplying video stores in Germany and Austria, Video
Aktuell GmbH contacted Seton to order posts and chains (typically used to
direct customer traffic). Video Aktuell has no idea that Seton would be so
quick to respond and fill its order.)
(Photo cutline: "For such customer service we admire you and thank you
very much. Of course we will remain your customer," said Tommy Neis,
Video Aktuell GmbH.)
VERBATIM
Worldwide Support
Partnership
Verbatim Corporation, Limerick, Ireland. In fiscal 1994, Brady continued its
effort to be the leading supplier to microfloppy disk manufacturers. Verbatim
Corporation in Limerick, Ireland, a producer of media-storage products (such
as diskettes, tapes and optical disks) for the computer industry, is one of
Brady-Europe's largest customers.
"Brady and Verbatim have been doing business since it first made diskettes,
15 years ago," said Terry Mockler, European sales manager for Brady's
specialty tape products.
Verbatim purchases Brady's A-rings, double-sided adhesive polyester rings
that are used in 3.5-inch microfloppy disks. All the products that Brady
produces for Verbatim are custom-made for their specific automated
manufacturing equipment.
"Because the diskette-production process runs high volumes at very high
speeds and cannot tolerate down time, it is essential that we provide
extremely reliable, consistent product," Mockler said.
Brady is the preferred supplier of media-storage component products for
Verbatim Corporation worldwide, which includes meeting the needs of its
United States, Europe and Mexico manufacturing locations. A Brady support
team-including employees in research and development, engineering,
customer service and manufacturing-is working in conjunction with Verbatim
worldwide on cost reduction and product improvement.
"Brady is a progressive company who through design change and other
innovative ideas has maintained a competitive edge in support of the floppy
disk industry," said the senior corporate buyer of Verbatim, Charlotte, N.C.
(Photo cutline: Brady and Verbatim have worked together for more than 15
years--with Brady supplying custom-made adhesive-coated polyester rings,
critical to Verbatim's worldwide diskette manufacturing operations.)
(Photo cutline: "We have met Verbatim-Ireland's stringent demands for
just-in-time deliveries by setting up dedicated warehousing and distribution
from our Belgian facility," said Terry Mockler, Brady Europe.)
Brady USA, Inc.
Coated Products Division produces specialized adhesive and top-coated
materials.
Industrial Products Division manufactures identification products, industrial
labeling and printing systems for customers primarily in electrical and
electronic markets.
Signmark Division manufactures products for facility and safety
identification-including signs, pipemarkers and lockout devices.
Nameplate Division produces custom-printed faceplates and nameplates for a
variety of original equipment manufacturers.
Brady Coated Products Co. produces specialized adhesive products for
audio/video, data-storage and semiconductor industries.
Brady Medical Products Co. produces medical dressings for healthcare
markets.
Brady International Co. directs Brady's international sales and manufacturing
operations located throughout the world.
Seton direct-marketing companies market identification products through
operations in the United States, Canada, Germany, France and England. In
fiscal 1995, Seton is expanding operations to include Australia and Italy.
Table of Contents
Selected Financial Information 18
Management's Discussion and Analysis of
Results of Operations and Financial Condition 20
Consolidated Balance Sheets 23
Consolidated Statements of Income 24
Consolidated Statements of
Stockholders' Investment 25
Consolidated Statements of Cash Flows 26
Notes to Consolidated Financial Statements 27
Independent Auditors' Report 35
Corporate Data 36
Shareholder Services 37
W. H. Brady Co. and Subsidiaries
Selected Financial Information
Years Ended July 31, 1984 through 1994
(Dollars in Thousands, Except Per Share Amounts)
Operating Data
1994 1993 1992 1991
Net Sales $255,841 $242,970 $235,965 $211,063
Operating Expenses:
Cost of products sold 118,116 114,301 110,130 96,797
Research and development 10,318 12,132 10,001 9,176
Selling, general and
administrative 97,932 92,449 93,931 84,936
Nonrecurring charges (1,236) 6,562
Total operating
expenses 226,366 217,646 220,624 190,909
Operating income 29,475 25,324 15,341 20,154
Other income and (expense):
Investment and other
income, net 837 559 239 2,845
Interest expense (410) (54) (219) (548)
Net other income 427 505 20 2,297
Income before income taxes,
extraordinary items and
cumulative effect of changes
in accounting principles 29,902 25,829 15,361 22,451
Income taxes 11,362 8,973 6,972 7,054
Income before extraordinary
item and cumulative effect
of changes in accounting
principles 18,540 16,856 8,389 15,397
Extraordinary item:
Gain on proceeds of
officer's life insurance
policies, net
Income before cumuilative
effect of changes in
accounting pricinples 18,540 16,856 8,389 15,397
Cumulative effect of
changes in accounting
principles for:
Postretirement benefits (3,995)
Income taxes 661
Catalog costs
Net income $18,540 $16,856 $5,055 $15,397
Net income per Common Share:
Class A Nonvoting $2.55 $2.33 $0.69 $2.14
Class B Voting $2.45 $2.23 $0.59 $2.04
Cash Dividends on:
Class A Common Stock $0.68 $0.60 $0.56 $0.48
Class B Common Stock $0.58 $0.50 $0.46 $0.38
Working capital $100,023 $77,636 $66,093 $70,883
Total assets 202,509 178,656 173,054 156,812
Long-term debt, less
current maturities 1,855 1,978 2,524 1,982
Stockholders' investment 145,129 128,068 119,771 115,260
Operating Data
Net Sales 1990 1989 1988 1987
Operating Expenses: $191,161 $174,174 $153,016 $126,420
Cost of products sold
Research and development 84,952 75,620 67,302 56,284
Selling, general and 7,355 6,168 5,879 5,383
administrative
Nonrecurring charges 76,596 71,292 63,986 50,108
Total operating 6,465
expenses
168,903 159,545 137,167 111,775
Operating income
Other income and (expense): 22,258 14,629 15,849 14,645
Investment and other
income, net
Interest expense 4,004 2,380 1,901 2,082
Net other income (646) (356) (477) (348)
3,358 2,024 1,424 1,734
Income before income taxes,
extraordinary items and
cumulative effect of changes
in accounting principles
25,616 16,653 17,273 16,379
Income taxes
10,606 6,778 6,968 7,535
Income before extraordinary
item and cumulative effect
of changes in accounting
principles
Extraordinary item: 15,010 9,875 10,305 8,844
Gain on proceeds of
officer's life insurance
policies, net
4,625
Income before cumuilative
effect of changes in
accounting pricinples
Cumulative effect of 15,010 14,500 10,305 8,844
changes in accounting
principles for:
Postretirement benefits
Income taxes
Catalog costs
Net income 1,233
$15,010 $15,733 $10,305 $8,844
Net income per Common Share:
Class A Nonvoting
Class B Voting $2.09 $2.10 $1.36 $1.17
Cash Dividends on: $1.99 $2.00 $1.26 $1.07
Class A Common Stock
Class B Common Stock $0.40 $0.28 $0.24 $0.20
$0.30 $0.18 $0.14 $0.10
Working capital
Total assets $67,797 $53,056 $42,492 $44,176
Long-term debt, less 147,197 129,890 117,201 104,398
current maturities
Stockholders' investment 3,298 3,637 3,086 3,851
103,784 89,443 84,987 76,044
Operating Data
1986 1985
Net Sales $108,364 $100,099
Operating Expenses:
Cost of products sold 49,385 47,808
Research and development 5,004 4,154
Selling, general and
administrative 38,019 30,007
Nonrecurring charges
Total operating
expenses 92,408 81,969
Operating income 15,956 18,130
Other income and (expense):
Investment and other
income, net 1,764 1,956
Interest expense (400) (445)
Net other income 1,364 1,511
Income before income taxes,
extraordinary items and
cumulative effect of changes
in accounting principles 17,320 19,641
Income taxes 7,873 8,865
Income before extraordinary
item and cumulative effect
of changes in accounting
principles 9,447 10,776
Extraordinary item:
Gain on proceeds of
officer's life insurance
policies, net
Income before cumuilative
effect of changes in
accounting pricinples 9,447 10,776
Cumulative effect of
changes in accounting
principles for:
Postretirement benefits
Income taxes
Catalog costs
Net income $9,447 $10,776
Net income per Common Share:
Class A Nonvoting $1.26 $1.43
Class B Voting $1.16 $1.33
Cash Dividends on:
Class A Common Stock $0.10 $0.10
Class B Common Stock -- --
Working capital $40,701 $38,167
Total assets 94,477 82,758
Long-term debt, less
current maturities 4,548 5,013
Stockholders' investment 66,791 57,074
CORPORATE DATA
Domestic Locations
Milwaukee, Wisconsin
W.H. Brady Co.
Brady Coated Products Co.
Brady Financial Co.
Brady Medical Products Co.
Brady Service Co.
Brady USA, Inc.
Coated Products Division
Industrial Products Division
Signmark Division
Hillsborough, North Carolina
Brady USA, Inc.
Nameplate Division
International Locations
Chipping Norton, Australia
W.H. Brady Pty. Ltd.
Zele, Belgium
W.H. Brady N.V.
Rexdale, Ontario, Canada
W.H. Brady Inc.
Banbury, Oxon, England
W.H. Brady Co., Ltd.
Paris, France
W.H. Brady S.A.R.L.
Rodermark, Germany
W.H. Brady GmbH
Kowloon, Hong Kong
W.H. Brady Co.
Milano, Italy
W.H. Brady N.V.
Yokohama, Japan
Nippon Brady K.K.
Auckland, New Zealand
W.H. Brady Pty. Ltd.
Singapore
W.H. Brady Pte. Ltd.
Upplands-Vasby, Sweden
Brady AB
DIRECT MARKETING LOCATIONS
Branford, Connecticut
Seton Name Plate Co.
Markham, Ontario, Canada
Revere-Seton, Inc.
Banbury, Oxon, England
Seton, Ltd.
Langen, Germany
Seton, GmbH
Roubaix, France
Seton S.A.
OFFICERS
Katherine M. Hudson
President, Chief Financial Officer
Donald P. DeLuca
Senior Vice President
Treasurer and Chief Financial Officer
Richard L. Fisk
Vice President - Direct Marketing
James M. Sweet
Vice President - Human Resources
Donald E. Rearic
President, Brady Financial Co.
Thomas E. Scherer
Controller
Peter J. Lettenberger
Secretary
Partner - Quarles & Brady
DIRECTORS
Richard A. Bemis
Director
President - Bemis Manufacturing Company
William H. Brady, III
Director
President - Brady Audio Consulting
Robert C. Buchanan
Director
President and CEO - Fox Valley Corporation
Frank W. Harris
Director
Professor of Polymer Science -
University of Akron
Katherine M. Hudson
President and CEO-W.H. Brady Co.
Michael S. Joyce
Director
President and CEO-
The Lynde & Harry Bradley Foundation
Peter J. Lettenberger
Director
Partner-Quarles & Brady
Elizabeth Brady Lurie
Director
President and Administrator-
W.H. Brady Foundation
Gary E. Nei
Director
Chief Executive Officer-Eon Laboratories, Inc.
Roger D. Peirce
Director
Vice Chairman and CEO (retired) - Super Steel
Products Corporation
SHAREHOLDER SERVICES
Common Stock Listing
As of September 30, 1994, there were 304 Class A Nonvoting Common Stock
shareholders of record and two Class B Voting Common Stock shareholders.
W.H. Brady Co. Class A Nonvoting Common Stock trades on the over-the-counter
market under the symbol BRCOA. Trading information is carried by the National
Association of Securities Dealers' Automated Quotation System (NASDAQ).
Shareholder Account Records
Shareholder account records are maintained in the corporate general office.
Shareholder inquiries should be directed to: Donald P. DeLuca, Senior Vice
President, W.H. Brady Co., 727 West Glendale Avenue, P.O. Box 571, Milwaukee,
Wisconsin 53201-0571, (414) 332-8100.
Quarterly Stock Data
1994 1993 1992
High Low High Low High Low
4th Quarter 49 44 3/4 36 1/2 34 3/4 34 3/4 32
3rd Quarter 48 43 1/2 37 1/4 34 36 31 1/2
2nd Quarter 46 1/2 36 37 3/4 35 1/2 34 3/4 29
1st Quarter 37 34 1/2 37 1/4 33 1/4 42 30 7/8
Dividend Policy
W.H. Brady Co. has paid consecutive quarterly dividends since it went public in
1984. Dividends are normally paid on the last day of October, January, April
and July. The Board of Directors voted a quarterly dividend of 20 cents per
share of Class A Nonvoting Common Stock to shareholders of record on October
10, 1994.
Shareholders may have their dividends reinvested in Brady stock. Brochures
about this program are available through the Investor Services Unit of the
stock transfer agent, Firstar Trust Company, by calling (800) 637-7549.
Stock Transfer Agent
Firstar Trust Company
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Additional Information Available
If your stock is held in a street name and you wish to receive information
directly from the Company, please contact Donald P. DeLuca at the above
address. Your name will be added to the mailing list.
Form 10-K
A copy of the W.H. Brady Co. 1994 Annual Report on Form 10-K, to be filed with
the Securities and Exchange Commission, is also available without charge upon
written request.
Annual Meeting
The annual meeting of W.H. Brady Co. will be held at 9:00 a.m. on Friday,
November 18, 1994, at the University Club, 924 East Wells Street, Milwaukee,
Wisconsin 53202.