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EXHIBIT 99
For more information:
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Investor contact: Barbara Bolens 414-438-6940
Media contact: Carole Herbstreit 414-438-6882
FOR IMMEDIATE RELEASE
BRADY CORPORATION REPORTS RECORD SALES AND EARNINGS FOR FISCAL 2005 FIRST
QUARTER
MILWAUKEE (November 16, 2004)--Brady Corporation (NYSE:BRC) today reported
record sales and earnings for its fiscal 2005 first quarter ended October 31,
2004.
Sales for the quarter rose 31.9 percent to $200.4 million compared to
$151.9 million in the first quarter of fiscal 2004. Core business increased 10.2
percent, acquisitions added 18.0 percent to sales, and the positive impact of
currency exchange contributed 3.7 percent to sales results. While the company
saw growth in all regions, growth in Asia continues to be particularly strong
driven by a combination of market share gains, strength in end user markets and
acquisitions.
Net income for the fiscal 2005 first quarter was $20.4 million or $0.83
per diluted Class A Common Share, compared to $10.4 million or $0.44 per share
in the same quarter last year. Prior year net income included a $1.2 million
after tax charge for restructuring.
"We are pleased with the impact that the combination of our strategic
initiatives and a strengthening economy has had on our top and bottom line,"
said Frank M. Jaehnert, Brady's president and chief executive officer. "We are
executing our plan to grow our core business and continue to make strategic
acquisitions that add value to our customer offering and give us greater
capability. In the first quarter we acquired ID Technologies, PTE, Ltd., a
Singapore-based manufacturer and supplier of die-cut components and other
products primarily for the hard-disc-drive market."
"We attribute the significant increase in our net income to our core
business growth, the successful integration of recent acquisitions, continued
cost control and relatively soft comparisons to the first quarter of last year,"
said Brady Vice President and Chief Financial Officer David Mathieson. "As
previously announced, in fiscal 2005 we anticipate sales of between $780 and
$800 million, net income between $66 and $69 million, and earnings per share of
$2.69 to $2.82."
A webcast regarding fiscal 2005 first quarter results will be available
at www.investor.bradycorp.com beginning at 9:30 a.m. Central Standard Time
today. Brady's annual meeting of shareholders will be held on Thursday, November
18 at Brady's Corporate Headquarters in Milwaukee. A live webcast can be
accessed at 9:00 a.m. CST.
Brady is an international manufacturer and marketer of identification
and materials solutions, with products including labels, signs, precision
die-cut materials, printing systems, software, and label-application and
data-collection systems for electronics, telecommunications, manufacturing,
electrical, and a variety of other markets. Founded in 1914, Brady is
headquartered in Milwaukee and employs about 4,000 people in operations in the
United States, Europe, Asia/Pacific, Latin America and Canada. The company had
sales of $671 million in fiscal 2004. Brady stock trades on the New York Stock
Exchange under the symbol BRC. More information is available on the Internet at
www.bradycorp.com, which includes an interactive version of the 2004 Annual
Report to Shareholders.
This news release contains forward-looking information, as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking information in
this release involves risks and uncertainties, including, but not limited to,
domestic and international economic conditions and growth rates; fluctuations in
currency exchange rates for international currencies versus the U.S. dollar; the
successful implementation of a new enterprise-resource-planning system; the
ability of the company to acquire, integrate and achieve anticipated synergies
from new businesses; the ability of the company to adjust its cost structure to
changes in levels of sales and product mix in a timely manner; variations in the
economic or political conditions in the countries in which the company does
business; technology changes; and the continued availability of sources of
supply. Brady cautions that forward-looking statements are not guarantees, since
there are inherent difficulties in predicting future results, and that actual
results could differ materially from those expressed or implied in
forward-looking statements.
Information by regional segment for the three ended October 31, 2004 and 2003 is
as follows:
<Table>
<Caption>
(Dollars in thousands) Americas Europe Asia Corporate Total
---------------------- ----------- ---------- ---------- ------------ -----------
SALES TO EXTERNAL CUSTOMERS
Three months ended:
October 31, 2004 $105,449 $64,527 $30,443 $200,419
October 31, 2003 80,092 53,265 18,549 151,906
SALES GROWTH INFORMATION
Three months ended October 31, 2004:
Base 8.5% 6.6% 28.2% 10.3%
Currency (0.1)% 9.3% 3.8% 3.7%
Acquisitions 23.3% 5.2% 32.1% 18.0%
----------- ---------- ---------- -----------
Total 31.7% 21.1% 64.1% 31.9%
=========== ========== ========== ===========
SEGMENT PROFIT (LOSS)
Three months ended:
October 31, 2004 $ 25,380 $18,132 $ 8,910 $(1,425) $ 50,997
October 31, 2003 15,116 13,449 5,424 (770) 33,219
Percentage increase (decrease) 67.9% 34.8% 64.3% 85.1% 53.5%
</Table>
PROFIT RECONCILIATION (Dollars in thousands)
<Table>
<Caption>
Three months ended:
-----------------------------
October 31, October 31,
2004 2003
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Total profit for reportable segments $52,422 $33,989
Corporate and eliminations (1,425) (770)
Unallocated amounts:
Administrative costs: (17,601) (15,172)
Interest - net (1,825) 91
Foreign exchange (30) (280)
Restructuring charge, net - (1,753)
Other (1,604) (536)
Income before income taxes $29,937 $15,569
</Table>
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND INCOME RETAINED IN THE BUSINESS
(Dollars in Thousands, Except Per Share Amounts)
<Table>
<Caption>
(Unaudited)
------------------------------------------------
Three Months Ended October 31,
------------------------------------------------
Percentage
2004 2003 Change
------------ -------------- ---------------
Net sales $ 200,419 $ 151,906 31.9%
Cost of products sold 94,894 73,143 29.7%
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Gross margin 105,525 78,763 34.0%
Operating expenses:
Research and development 5,704 4,864 17.3%
Selling, general and administrative 68,028 56,388 20.6%
Restructuring charge - net - 1,753 -100.0%
------------ --------------
Total operating expenses 73,732 63,005 17.0%
Operating income 31,793 15,758 101.8%
Other income and (expense):
Investment and other (expense) income 283 (159) -278.0%
Interest expense (2,139) (30) 7030.0%
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Income before income taxes 29,937 15,569 92.3%
Income taxes 9,580 5,216 83.7%
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Net income 20,357 10,353 96.6%
Income retained in business at beginning of period 322,224 290,805 10.8%
Less:
Common stock dividends (5,178) (4,770) 8.6%
Income retained in business at end of period $ 337,403 $ 296,388 13.8%
============ ==============
Net income per Class A Nonvoting Common Share
Basic $ 0.84 $ 0.44 90.9%
============ ==============
Diluted $ 0.83 $ 0.44 88.6%
============ ==============
Net income per Class B Voting Common Share
Basic $ 0.84 $ 0.41 104.9%
============ ==============
Diluted $ 0.83 $ 0.41 102.4%
============ ==============
</Table>
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<Table>
<Caption>
OCTOBER 31, 2004 JULY 31, 2004
--------------------- ---------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 52,370 $ 70,368
Accounts receivable, less allowance for losses ($4,298 and 116,276 105,322
$3,869, respectively)
Inventories:
Finished Products 29,450 29,616
Work-in-process 7,939 6,550
Raw materials and supplies 22,030 16,765
--------------------- ---------------------
Total inventories 59,419 52,931
Prepaid expenses and other current asset 20,837 23,302
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TOTAL CURRENT ASSETS 248,902 251,923
OTHER ASSETS:
Goodwill 300,460 275,897
Other Intangibles 64,665 45,879
Other 32,263 34,526
--------------------- ---------------------
397,388 356,302
PROPERTY, PLANT AND EQUIPMENT:
Cost:
Land 6,290 6,242
Buildings and improvements 60,092 58,850
Machinery and equipment 158,593 153,467
Construction in progress 3,885 1,468
--------------------- ---------------------
228,860 220,027
Less accumulated depreciation 140,001 133,922
--------------------- ---------------------
NET PROPERTY, PLANT AND EQUIPMENT 88,859 86,105
--------------------- ---------------------
TOTAL $ 735,149 $ 694,330
===================== =====================
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 36,290 $ 38,533
Wages and amounts withheld from employees 26,163 41,872
Taxes, other than income taxes 5,645 3,852
Accrued income taxes 20,990 12,399
Other current liabilities 31,130 23,529
Short-term borrowings and current maturities on long-term debt 23 32
--------------------- ---------------------
TOTAL CURRENT LIABILITIES 120,241 120,217
LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES 150,000 150,019
OTHER LIABILITIES 33,306 20,779
--------------------- ---------------------
TOTAL LIABILITIES 303,547 291,015
STOCKHOLDERS' INVESTMENT:
Common stock:
Class A nonvoting common stock - Issued and outstanding, 22,556,266 226 224
and 22,345,399 shares, respectively
Class B voting common stock - Issued and outstanding 1,769,314 shares 18 18
Additional paid-in capital 81,803 72,865
Income retained in the business 337,403 322,224
Treasury Stock - 34,657 shares, at cost (1,074) (1,074)
Cumulative other comprehensive income 13,428 9,340
Other (202) (282)
--------------------- ---------------------
TOTAL STOCKHOLDERS' INVESTMENT 431,602 403,315
--------------------- ---------------------
TOTAL $ 735,149 $ 694,330
===================== =====================
</Table>
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<Table>
<Caption>
(Unaudited)
Three Months Ended
October 31
--------------------------------
2004 2003
--------------- ------------
Operating activities:
Net income $ 20,357 $ 10,353
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 6,775 4,697
Income tax benefit from the exercise of stock options 2,184 415
Loss on sale or disposal of property, plant & equipment 158 37
Provision for losses on accounts receivable 329 360
Non-cash portion of stock-based compensation expense 1,193 86
Net restructuring charge accrued liability - 1,676
Changes in operating assets and liabilities (net of effects of business acquisitions):
Accounts receivable (5,099) (6,478)
Inventory (3,536) (1,796)
Prepaid expenses and other assets 2,644 1,408
Accounts payable, accrued expenses and other liabilities (14,301) (4,566)
Income taxes 7,043 3,558
Other liabilities 1,001 341
--------------- ------------
Net cash provided by operating activities 18,748 10,091
Investing activities:
Acquisition of businesses, net of cash acquired (34,394) (21,830)
Purchases of property, plant and equipment (2,819) (3,605)
Proceeds from sale of property, plant and equipment 298 194
Other (407) (61)
--------------- ------------
Net cash used in investing activities (37,322) (25,302)
Financing activities:
Payment of dividends (5,178) (5,124)
Proceeds from issuance of common stock 5,643 4,732
Principal payments on debt (30) (816)
Purchase of treasury stock - (564)
--------------- ------------
Net cash used in financing activities 435 (1,772)
Effect of exchange rate changes on cash 141 1,000
Net (decrease) in cash and cash equivalents (17,998) (15,983)
Cash and cash equivalents, beginning of period 70,368 76,088
Cash and cash equivalents, end of period $ 52,370 $ 60,105
=============== ============
Supplemental disclosures:
Cash paid during the period for:
Interest $ 78 $ 55
Income taxes, net of refunds 489 1,294
Acquisitions:
Fair value of asset acquired, net of cash $ 30,337 $ 8,242
Liabilities assumed (17,019) (3,025)
Goodwill 21,076 16,613
--------------- ------------
Net cash paid for acquisitions $ 34,394 $ 21,830
=============== ============
</Table>