EXHIBIT 99
For More Information:
Investor contact: Barbara Bolens 414-438-6940, Director of Investor Relations
Media contact: Carole Herbstreit 414-438-6882, Director of Corporate
Communications.
BRADY CORPORATION REPORTS RECORD SALES AND EARNINGS FOR FISCAL 2005
MILWAUKEE (September 14, 2005)----Brady Corporation (NYSE: BRC) today reported
results for its fiscal 2005 fourth quarter, and record sales and net income for
the fiscal year ended July 31, 2005.
Sales in the fiscal 2005 fourth quarter rose 13 percent to $210.0
million compared to sales of $185.5 million in the fourth quarter of fiscal
2004. The increase was comprised of base business growth of 3 percent compared
to the prior year's quarter, with acquisitions adding 8 percent, and foreign
currency translation contributing 2 percent to sales.
Net income for the fiscal 2005 fourth quarter was $16.1 million or
$0.32 per diluted Class A Common Share, compared with $16.1 million or $0.33 per
share in the fourth quarter of fiscal 2004. Net income in the prior year fourth
quarter included a $3 million tax benefit from resolution of a tax audit.
Brady's fiscal 2005 net sales rose 22 percent to $816.4 million
compared to fiscal 2004 sales of $671.2 million. Base sales grew 6 percent,
acquisitions added 13 percent and foreign currency added 3 percent to total
sales results.
Net income for fiscal 2005 rose 61 percent to $81.9 million or $1.64
per diluted Class A Common Share compared to $50.9 million or $1.07 per diluted
share in fiscal 2004. Prior year net income included the previously mentioned $3
million tax benefit, partially offset by restructuring charges of $2.2 million
after tax.
Fiscal 2005 cash flow from operating activities was a record $119.1
million, up 36 percent from the prior year.
"Fiscal 2005 was another great year for Brady Corporation," Brady
President and Chief Executive Officer Frank M. Jaehnert said. "Disciplined
execution of our business plans, cost control, and some of the most synergistic
acquisitions in the company's history, along with a good economy in the Americas
and Asia and favorable foreign exchange rates, resulted in record sales and have
moved the company to a new level of profitability."
"For fiscal 2006, we expect annual sales to be in the range of $870 to
$880 million with net income of $89 to $91 million and earnings per diluted
share of $1.78 to $1.82," said Brady Vice President and Chief Financial Officer
David Mathieson. "Our long-term sales goals remain unchanged, targeting 10
percent top-line growth, with half from base business growth and half from
acquisitions. Over the next five years we will continue to work to gradually
improve net income as a percentage of sales from the previously disclosed target
of 10 percent to 12 percent."
A Webcast regarding fiscal 2005 results will be available at
www.investor.bradycorp.com beginning at 9:30 a.m. Central Daylight Time today.
Brady Corporation is an international manufacturer and marketer of
complete identification solutions and specialty materials that help customers
increase safety, security, productivity and performance. Its products include
high-performance labels and signs, printing systems and software,
label-application and data-collection systems, safety devices and precision
die-cut materials. Founded in 1914, the company is the provider of choice to
more than 300,000 customers in electronics, telecommunications, manufacturing,
electrical, construction, education and a variety of other industries. Brady is
headquartered in Milwaukee and employs more than 4,500 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.
###
Information by regional segment for the three and twelve months ended July 31,
2005 and 2004 is as follows:
(in Thousands) Americas Europe Asia Corporate and Total
Eliminations
SALES TO EXTERNAL CUSTOMERS
Three months ended:
July 31, 2005 $ 108,019 $ 67,825 $ 34,202 $ 210,046
July 31, 2004 98,436 64,947 22,128 185,511
Twelve months ended:
July 31, 2005 $ 417,780 $ 274,691 $ 123,976 $ 816,447
July 31, 2004 341,975 248,255 80,989 671,219
SALES GROWTH INFORMATION
Three months ended July 31, 2005:
Base 0.4% (0.5)% 25.7% 3.1%
Currency 1.9% 0.9 % 3.7% 1.7%
Acquisitions 7.4% 4.0 % 25.2% 8.4%
Total 9.7% 4.4 % 54.6% 13.2%
Twelve months ended July 31, 2005:
Base 4.4% 2.5 % 21.4% 5.7%
Currency 1.2% 6.0 % 3.0% 3.2%
Acquisitions 16.6% 2.2 % 28.7% 12.7%
Total 22.2% 10.7 % 53.1% 21.6%
SEGMENT PROFIT (LOSS)
Three months ended:
July 31, 2005 $ 24,227 $ 18,496 $ 8,830 $ (1,929) $ 49,624
July 31, 2004 18,219 18,148 5,919 (1,659) 40,627
Percentage increase 33.0% 1.9 % 49.2% 16.3% 22.1%
Twelve months ended:
July 31, 2005 $ 98,193 $ 79,792 $ 34,228 $ (4,845) $ 207,368
July 31, 2004 60,132 66,404 22,768 (4,696) 144,608
Percentage increase 63.3% 20.2 % 50.3% 3.2% 43.4%
SEGMENT PROFIT RECONCILIATION (in Thousands)
Three months ended: Twelve months ended:
July 31, 2005 July 31, 2004 July 31, 2005 July 31, 2004
Total profit for reportable segments $ 51,553 $ 42,286 $ 212,213 $ 149,304
Corporate and eliminations (1,929) (1,659) (4,845) (4,696)
Unallocated amounts:
Administrative costs: (22,309) (18,041) (77,836) (66,114)
Interest - net (1,631) (915) (7,103) (552)
Foreign exchange 103 (87) 136 (100)
Restructuring charge, net -- (907) -- (3,181)
Other (3,174) (1,425) (7,147) (4,334)
Income before income taxes 22,613 19,252 115,418 70,327
Income taxes (6,558) (3,166) (33,471) (19,456)
Net income $ 16,055 $ 16,086 $ 81,947 $ 50,871
This news release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 - that is, statements
related to future, not past events. In this context forward-looking statements
often address our expected future business and financial performance, and often
contain certain words such as "expect", "anticipate", "intend", "plan",
"believe", "seek", "will", or "may". Forward-looking statements by their nature
address matters that are, to different degrees uncertain. For us, uncertainties
arise from future financial performance of major markets we serve which include,
without limitation, telecommunications, manufacturing, electrical, construction,
laboratory, education, governmental, public utility, computer, transportation;
future integration of and performance of acquired businesses; fluctuations in
currency rates versus the US dollar; technology changes; interruptions to
sources of supply; business interruptions due to implementing business systems;
and numerous other matters of national, regional and global scale, including
those of a political, economic, business, competitive and regulatory nature and
those identified in reports we file with the SEC. These uncertainties may cause
our actual future results to be materially different than those expressed in our
forward-looking statements. We do not undertake to update our forward-looking
statements.
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in Thousands)
<Table>
<Caption>
(Unaudited)
------------------------------------------------------------------------------
Three Months Ended July 31, Twelve Months Ended July 31,
----------------------------------- ---------------------------------------
Percentage Percentage
2005 2004 Change 2005 2004 Change
--------- --------- ---------- --------- --------- ----------
Net sales $ 210,046 $ 185,511 13.2% $ 816,447 $ 671,219 21.6%
Cost of products sold 101,119 91,326 10.7% 383,171 325,858 17.6%
--------- --------- --------- ---------
Gross margin 108,927 94,185 15.7% 433,276 345,361 25.5%
Operating expenses:
Research and development 7,334 6,348 15.5% 25,078 23,028 8.9%
Selling, general and administrative 77,411 66,676 16.1% 285,746 248,171 15.1%
Restructuring charge - net -- 907 -100.0% -- 3,181 -100.0%
--------- --------- --------- ---------
Total operating expenses 84,745 73,931 14.6% 310,824 274,380 13.3%
Operating income 24,182 20,254 19.4% 122,452 70,981 72.5%
Other income and (expense):
Investment and other income 557 193 188.6% 1,369 577 137.3%
Interest expense (2,126) (1,195) 77.9% (8,403) (1,231) 582.6%
--------- --------- --------- ---------
Income before income taxes 22,613 19,252 17.5% 115,418 70,327 64.1%
Income taxes 6,558 3,166 107.1% 33,471 19,456 72.0%
--------- --------- --------- ---------
Net income $ 16,055 $ 16,086 -0.2% $ 81,947 $ 50,871 61.1%
========= ========= ========= =========
Per Class A Nonvoting Common Share (1):
Basic net income $ 0.33 $ 0.34 -2.9% $ 1.67 $ 1.08 54.6%
Diluted net income $ 0.32 $ 0.33 -3.0% $ 1.64 $ 1.07 53.3%
Dividends $ 0.11 $ 0.11 0.0% $ 0.44 $ 0.42 4.8%
Per Class B Voting Common Share (1):
Basic net income $ 0.33 $ 0.34 -2.9% $ 1.66 $ 1.06 56.6%
Diluted net income $ 0.32 $ 0.33 -3.0% $ 1.63 $ 1.05 55.2%
Dividends $ 0.11 $ 0.11 0.0% $ 0.42 $ 0.40 5.0%
Weighted average common shares outstanding
(in Thousands) (1):
Basic 49,240 47,886 48,967 47,298
Diluted 50,232 48,578 49,859 47,813
</Table>
(1) Adjusted for 100% stock dividend, effective December 31, 2004
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(Unaudited)
-------------------------------
JULY 31, 2005 JULY 31, 2004
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 72,970 $ 68,788
Short term investments 7,100 5,150
Accounts receivable, less allowance for losses ($3,726 and 123,453 105,322
$3,869, respectively)
Inventories:
Finished Products 38,827 32,448
Work-in-process 9,681 6,550
Raw materials and supplies 22,227 13,933
--------- ---------
Total inventories 70,735 52,931
Prepaid expenses and other current assets 28,114 23,302
--------- ---------
TOTAL CURRENT ASSETS 302,372 255,493
OTHER ASSETS:
Goodwill 332,369 275,897
Other Intangible assets 71,647 45,879
Other 45,348 34,526
--------- ---------
TOTAL OTHER ASSETS 449,364 356,302
PROPERTY, PLANT AND EQUIPMENT:
Cost:
Land 6,388 6,242
Buildings and improvements 65,007 58,850
Machinery and equipment 157,093 153,467
Construction in progress 6,510 1,468
--------- ---------
234,998 220,027
Less accumulated depreciation 136,587 133,922
--------- ---------
NET PROPERTY, PLANT AND EQUIPMENT 98,411 86,105
--------- ---------
TOTAL $ 850,147 $ 697,900
========= =========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 52,696 $ 42,103
Wages and amounts withheld from employees 49,620 41,872
Taxes, other than income taxes 4,815 3,852
Accrued income taxes 24,028 12,399
Other current liabilities 29,649 23,529
Short-term borrowings and current maturities on long-term debt 4 32
--------- ---------
TOTAL CURRENT LIABILITIES 160,812 123,787
LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES 150,026 150,019
OTHER LIABILITIES 42,035 20,779
--------- ---------
TOTAL LIABILITIES 352,873 294,585
STOCKHOLDERS' INVESTMENT:
Common stock:
Class A nonvoting common stock - Issued and outstanding, 45,792,199 458 447
and 44,690,798 shares, respectively
Class B voting common stock - Issued and outstanding 3,538,628 shares 35 35
Additional paid-in capital 99,029 72,625
Income retained in the business 382,880 322,224
Treasury Stock - 85,344 and 69,314 shares, respectively of Class A
nonvoting common stock, at cost (1,575) (1,074)
Accumulated other comprehensive income 17,497 9,340
Other (1,050) (282)
--------- ---------
TOTAL STOCKHOLDERS' INVESTMENT 497,274 403,315
--------- ---------
TOTAL $ 850,147 $ 697,900
========= =========
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(Unaudited)
Twelve Months Ended
July 31
2005 2004
--------- ---------
Operating activities:
Net income $ 81,947 $ 50,871
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 26,822 20,190
Income tax benefit from the exercise of stock options 5,385 4,406
Deferred Income taxes (2,653) 5,172
Loss on sale or disposal of property, plant & equipment 743 321
Provision for losses on accounts receivable 1,216 1,450
Non-cash portion of stock-based compensation expense 5,579 1,927
Net restructuring charge accrued liability -- 3,221
Changes in operating assets and liabilities (net of effects of business acquisitions):
Accounts receivable (7,132) (11,979)
Inventory (11,847) (6,791)
Prepaid expenses and other assets (3,572) 2,168
Accounts payable and accrued expenses 8,827 15,210
Income taxes 9,662 (393)
Other liabilities 4,126 1,873
--------- ---------
Net cash provided by operating activities 119,103 87,646
Investing activities:
Acquisition of businesses, net of cash acquired (79,926) (228,928)
Purchases of short-term investments (47,025) (38,450)
Sales of short-term investments 45,075 42,850
Purchases of property, plant and equipment (21,920) (14,892)
Proceeds from sale of property, plant and equipment 390 448
Termination of capital lease -- --
Other (1,686) (1,533)
--------- ---------
Net cash used in investing activities (105,092) (240,505)
Financing activities:
Payment of dividends (21,291) (19,805)
Proceeds from issuance of common stock 15,734 19,422
Principal payments on debt (85,604) (161,578)
Proceeds from debt 83,000 310,000
Redemption of preferred stock -- --
Purchase of treasury stock (1,551) (564)
Debt issue costs -- (1,372)
--------- ---------
Net cash (used in) provided by financing activities (9,712) 146,103
Effect of exchange rate changes on cash (117) 6,939
Net increase in cash and cash equivalents 4,182 183
Cash and cash equivalents, beginning of period 68,788 68,605
--------- ---------
Cash and cash equivalents, end of period $ 72,970 $ 68,788
========= =========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 7,836 $ 506
Income taxes, net of refunds 19,358 10,977
Acquisitions:
Fair value of asset acquired, net of cash $ 60,193 $ 96,656
Liabilities assumed (35,113) (8,674)
Goodwill 54,846 140,946
--------- ---------
Net cash paid for acquisitions $ 79,926 $ 228,928
========= =========