EXHIBIT
99 Press Release of Brady Corporation, dated September 12, 2003.
For More Information:
Investor contact: Barbara Bolens 414-438-6940, Director of Investor Relations
Media contact: Carole Herbstreit 414-438-6882, Public Relations Manager
BRADY CORPORATION REPORTS FINANCIAL RESULTS FOR FISCAL 2003 FOURTH QUARTER AND
YEAR ENDED JULY 31, 2003
MILWAUKEE (September 12, 2003)--Brady Corporation (NYSE:BRC), a world leader in
identification solutions, today announced results for its fiscal 2003 fourth
quarter and year ended July 31, 2003.
Sales in the fiscal 2003 fourth quarter were $144.7, up 6.5 percent
from $135.8 million in the fiscal 2002 fourth quarter. Foreign currency
translation added 6.6 percent during the quarter. Annual sales for fiscal 2003
were a record $554.9 million, up 7.3 percent from fiscal 2002 sales of $517.0
million. The foreign currency impact for the full year was a favorable 5.1
percent.
Net income for the fiscal 2003 fourth quarter was $1.8 million or
$0.08 per diluted Class A common share, including a pretax restructuring charge
of $9.6 million ($6.3 million after tax) to reflect a previously announced
workforce reduction and consolidation of certain operations. This compares to
$5.6 million or $0.24 per share including a pretax restructuring charge of $2.7
million ($1.8 million after tax) in the fiscal 2002 fourth quarter. Net income
for fiscal 2003 was $21.4 million or $0.91 per share, compared with $28.3
million or $1.20 per share in fiscal 2002.
"Fiscal 2003 was a challenging year because of a continued weak economy
where manufacturing and other key markets showed little improvement. We have
taken steps to reduce our costs and streamline our organization by moving to a
regional structure and combining operating divisions. In light of the exodus of
electronic manufacturing to overseas, we are continuing to rebalance our
capacity around the globe. Our earlier investments in Asia and Latin America are
already contributing positively to our results," said Frank M. Jaehnert,
president and chief executive officer. "Our restructuring initiative will be
substantially wrapped up in the first half of fiscal 2004. As previously
announced, we expect to take an additional $2 to $3 million in charges to
complete the restructuring. Annual savings from the combined restructuring
efforts are expected to be $10 to $13 million.
"We continue to have a strong cash balance of more than $76 million and
virtually no debt. With our employees strongly focused on our customers, and our
investments in acquisitions and process improvements, we believe we are well
positioned for future growth."
A Webcast regarding fiscal 2003 results will be available at
www.investor.bradycorp.com beginning at 9:30 a.m. Central Daylight Time today.
Brady is an international manufacturer and marketer of identification
and materials solutions, with products including labels, signs, precision
die-cut materials, printing systems, software, and label-application and
data-collection systems for electronics, telecommunications, manufacturing,
electrical, and a variety of other markets. Founded in 1914, Brady is
headquartered in Milwaukee and employs about 3,000 people in operations in the
United States, Europe, Asia/Pacific, Latin America and Canada. More information
is available on the Internet at www.bradycorp.com.
###
This news release contains forward-looking information, as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking information in
this release involves risks and uncertainties, including, but not limited to,
domestic and international economic conditions and growth rates; fluctuations in
currency exchange rates for international currencies versus the U.S. dollar; the
successful implementation of a new enterprise-resource-planning system; the
ability of the company to acquire, integrate and achieve anticipated synergies
from new businesses; the ability of the company to adjust its cost structure to
changes in levels of sales and product mix in a timely manner; variations in the
economic or political conditions in the countries in which the company does
business; technology changes; and the continued availability of sources of
supply. Brady cautions that forward-looking statements are not guarantees, since
there are inherent difficulties in predicting future results, and that actual
results could differ materially from those expressed or implied in
forward-looking statements.
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND EARNINGS RETAINED IN THE
BUSINESS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited) (Unaudited)
Three Months Ended July 31, Year Ended July 31,
2003 2002 2003 2002
--------- --------- --------- ---------
NET SALES $ 144,684 $ 135,839 $ 554,866 $ 516,962
Operating expenses:
Cost of products sold 71,413 68,595 274,593 256,186
Research and development 5,065 4,131 18,873 17,271
Selling, general and administrative 55,465 52,660 219,662 199,282
Restructuring charges, net 9,589 2,720 9,589 2,720
--------- --------- --------- ---------
Total operating expenses 141,532 128,106 522,717 475,459
Operating income 3,152 7,733 32,149 41,503
Other income and (expense):
Investment and other income - net (361) 888 427 1,714
Interest expense (56) (48) (121) (82)
--------- --------- --------- ---------
Income before income taxes 2,735 8,573 32,455 43,135
Income taxes 928 2,928 11,035 14,882
--------- --------- --------- ---------
Net Income 1,807 5,645 21,420 28,253
Earnings retained in business at beginning of period 293,562 286,469 287,674 276,779
Less:
Redemption premium on preferred stock (171)
Preferred stock dividends - (64) (259)
Common stock dividends (4,564) (4,376) (18,118) (17,099)
Earnings retained in business at end of period $ 290,805 $ 287,674 $ 290,805 $ 287,674
========= ========= ========= =========
Net income per Class A Nonvoting Common Share
Basic $ 0.08 $ 0.24 $ 0.92 $ 1.22
========= ========= ========= =========
Diluted $ 0.08 $ 0.24 $ 0.91 $ 1.20
========= ========= ========= =========
Net income per Class B Voting Common Share
Basic $ 0.08 $ 0.24 $ 0.89 $ 1.19
========= ========= ========= =========
Diluted $ 0.08 $ 0.24 $ 0.88 $ 1.17
========= ========= ========= =========
BRADY CORPORATION AND SUBSIDIARIES
COMPARATIVE BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS JULY 31, 2003 JULY 31, 2002
------ ------------- -------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $ 76,088 $ 75,969
Accounts receivable, less allowance for losses ($3,166 and 80,162 76,246
$3,206, respectively)
Inventories 36,564 36,718
Prepaid expenses and other current assets 22,343 21,093
--------- ---------
TOTAL CURRENT ASSETS 215,157 210,026
OTHER ASSETS:
Goodwill - net 130,667 108,053
Other 24,455 21,555
--------- ---------
155,122 129,608
PROPERTY, PLANT AND EQUIPMENT:
Cost:
Land 5,172 5,612
Buildings and improvements 51,471 50,122
Machinery and equipment 139,007 127,955
Construction in progress 3,245 3,062
--------- ---------
198,895 186,751
Less accumulated depreciation 119,655 105,860
--------- ---------
NET PROPERTY, PLANT AND EQUIPMENT 79,240 80,891
--------- ---------
TOTAL $ 449,519 $ 420,525
========= =========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 28,470 $ 26,294
Wages and amounts withheld from employees 30,619 26,251
Taxes, other than income taxes 2,492 2,396
Accrued income taxes 11,449 6,312
Other current liabilities 17,320 12,847
Short-term borrowings and current maturities on long-term debt 929 162
--------- ---------
TOTAL CURRENT LIABILITIES 91,279 74,262
LONG-TERM DEBT, LESS CURRENT MATURITIES 568 3,751
OTHER LIABILITIES 18,711 18,270
--------- ---------
TOTAL LIABILITIES 110,558 96,283
STOCKHOLDERS' INVESTMENT:
Preferred stock 2,855
Class A nonvoting common stock - Issued and outstanding, 21,558,265 216 214
and 21,356,605 shares, respectively
Class B voting common stock - Issued and outstanding 1,769,314 shares 18 18
Treasury Stock - 18,262 and 4,548 shares, at cost (509) (132)
Additional paid-in capital 47,464 41,526
Earnings retained in the business 290,805 287,674
Cumulative other comprehensive income 1,595 (7,665)
Other (628) (248)
--------- ---------
TOTAL STOCKHOLDERS' INVESTMENT 338,961 324,242
--------- ---------
TOTAL $ 449,519 $ 420,525
========= =========
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
Year Ended July 31,
2003 2002
-------- --------
Operating activities:
Net income $ 21,420 $ 28,253
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 17,771 16,630
Loss on sale or disposal of property, plant & equipment 55 1,166
Provision for losses on accounts receivable 1,523 2,467
Amortization of restricted stock 289 694
Net restructuring charge 6,926 2,239
Changes in operating assets and liabilities (net of effects of business acquisitions):
Accounts receivable 4,334 (3,057)
Inventory 4,140 4,895
Prepaid expenses and other assets (1,179) (1,538)
Accounts payable and accrued liabilities (4,007) 923
Income taxes 5,244 453
Deferred income taxes (1,915) 449
Other liabilities 648 677
-------- --------
Net cash provided by operating activities 55,249 54,251
Investing activities:
Acquisitions of businesses, net of cash acquired (23,912) (12,749)
Termination of capital lease (791) -
Purchases of property, plant and equipment (14,438) (13,095)
Proceeds from sale of property, plant and equipment 257 776
Other 68 534
-------- --------
Net cash (used in) investing activities (38,816) (24,534)
Financing activities:
Payment of dividends (17,936) (17,358)
Proceeds from issuance of Common Stock 4,662 5,720
Principal payments on debt (327) (1,747)
Payment for redemption of preferred stock (2,855) -
Purchase of Treasury Stock (377) -
-------- --------
Net cash (used in) financing activities (16,833) (13,385)
Effect of exchange rate changes on cash 519 (3,174)
-------- --------
Net increase in cash and cash equivalents 119 13,158
Cash and cash equivalents, beginning of period 75,969 62,811
-------- --------
Cash and cash equivalents, end of period $ 76,088 $ 75,969
======== ========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 43 $ 175
Income taxes, net of refunds 12,789 15,176
Acquisitions:
Fair value of asset acquired, net of cash $ 14,430 $ 5,667
Liabilities Assumed (8,146) (1,789)
Goodwill 17,628 8,871
-------- --------
Net cash paid for acquisitions $ 23,912 $ 12,749
======== ========
Termination of Capital Lease:
Disposition of capital assets $ (2,574) $ -
Settlement of capital lease liability 3,365 -
-------- --------
Net cash paid for termination of capital lease $ 791 $ -
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