MILWAUKEE, Sept. 13 /PRNewswire-FirstCall/ -- Brady Corporation
(NYSE:BRC) today reported record results for its fiscal 2006 fourth
quarter and fiscal year ended July 31, 2006. Sales in the fiscal
2006 fourth quarter rose 37 percent to $288.3 million compared to
sales in the fourth quarter of fiscal 2005 of $210.0 million. The
increase was comprised of organic growth of 8 percent compared to
the prior year's quarter, with acquisitions adding 27 percent, and
foreign currency translation contributing 2 percent to sales
growth. Net income for the fiscal 2006 fourth quarter was up 40
percent to $22.5 million or $0.43 per diluted Class A Common share,
compared with $16.1 million or $0.32 per diluted Class A Common
Share in the fourth quarter of fiscal 2005. Earnings per share in
fiscal 2006 reflect issuance of an additional 4.6 million shares
through an equity offering in the fourth quarter. Brady's fiscal
2006 net sales rose 25 percent to $1.018 billion compared to $816.4
million in sales in fiscal 2005. Organic growth was 9 percent,
acquisitions added 16 percent and foreign currency had a negligible
impact on total sales results. Net income for fiscal 2006 rose 27
percent to $104.2 million or $2.07 per diluted Class A Common
Share, compared to $81.9 million or $1.64 per diluted Class A
Common in fiscal 2005. "Fiscal 2006 was an outstanding year for
Brady as we hit several important milestones, not the least of
which is for the first time in Brady's history we reached sales in
excess of $1 billion. The year was also marked by a tremendous
amount of activity, including 11 acquisitions; expansions in India,
Slovakia and China; and a successful secondary offering of Brady
stock," said Brady President and Chief Executive Officer Frank M.
Jaehnert. "In fiscal 2006 we were pleased to see solid organic
growth, along with strong cash flow from operating activities of
$115.3 million," said Brady Vice President and Chief Financial
Officer David Mathieson. "With the recent acquisitions of Carroll,
Daewon and CIPI, we now expect annual sales of between $1.225 and
$1.25 billion in fiscal 2007. Earnings-per-share guidance remains
unchanged from our June 5 post-equity-offering guidance of $2.18 to
$2.27 per share which is consistent with net income of between $120
and $125 million." A Webcast regarding fiscal 2006 results will be
available at http://www.investor.bradycorp.com/ beginning at 9:30
a.m. Central Daylight Time today. Brady Corporation is an
international manufacturer and marketer of complete solutions that
identify and protect premises, products and people. Its products
help customers increase safety, security, productivity and
performance and include high-performance labels and signs, safety
devices, printing systems and software, and precision die-cut
materials. Founded in 1914, the company has more than 500,000
customers in electronics, telecommunications, manufacturing,
electrical, construction, education, medical and a variety of other
industries. Brady is headquartered in Milwaukee and employs more
than 8,000 people at operations in the Americas, Europe and
Asia/Pacific. More information is available on the Internet at
http://www.bradycorp.com/ . Information by regional segment for the
three and twelve months ended July 31, 2006 and 2005 is as follows:
(in Corporate and Thousands) Americas Europe Asia Subtotals
Eliminations Total SALES TO EXTERNAL CUSTOMERS Three months ended:
July 31, 2006 $135,470 $88,966 $63,897 $288,333 - $288,333 July 31,
2005 108,019 67,825 34,202 210,046 - 210,046 Twelve months ended:
July 31, 2006 $498,916 $319,432 $200,088 $1,018,436 - $1,018,436
July 31, 2005 417,780 274,691 123,976 816,447 - 816,447 SALES
GROWTH INFORMATION Three months ended July 31, 2006: Base 5.2% 7.7%
20.8% 8.6% - 8.6% Currency 1.4% 2.4% 2.9% 1.9% - 1.9% Acquisitions
18.8% 21.1% 63.1% 26.8% - 26.8% Total 25.4% 31.2% 86.8% 37.3% -
37.3% Twelve months ended July 31, 2006: Base 5.0% 4.2% 34.7% 9.2%
- 9.2% Currency 1.5% -4.3% 1.6% -0.5% - -0.5% Acquisitions 12.9%
16.4% 25.1% 16.0% - 16.0% Total 19.4% 16.3% 61.4% 24.7% - 24.7%
SEGMENT PROFIT (LOSS) Three months ended: July 31, 2006 $30,336
$21,900 $12,192 $64,428 ($2,893) $61,535 July 31, 2005 24,227
18,496 8,830 51,553 (1,929) 49,624 Percentage increase (decrease)
25.2% 18.4% 38.1% 25.0% 50.0% 24.0% Twelve months ended: July 31,
2006 $122,525 $83,970 $49,316 $255,811 ($10,633) $245,178 July 31,
2005 98,193 79,792 34,228 212,213 (4,845) 207,368 Percentage
increase 24.8% 5.2% 44.1% 20.5% 119.5% 18.2% NET INCOME
RECONCILIATION (in thousands) Three months ended: Twelve months
ended: July 31, July 31, July 31, July 31, 2006 2005 2006 2005
Total profit for reportable segments $64,428 $51,553 $255,811
$212,213 Corporate and eliminations (2,893) (1,929) (10,633)
(4,845) Unallocated amounts: Administrative costs (24,650) (25,442)
(88,662) (84,916) Investment and other income (356) 557 2,403 1,369
Interest expense (5,311) (2,126) (14,231) (8,403)
------------------------------------------ Income before income
taxes 31,218 22,613 144,688 115,418 Income taxes (8,741) (6,558)
(40,513) (33,471) ------------------------------------------ Net
income $22,477 $16,055 $104,175 $81,947
========================================== Brady believes that
certain statements in this news release are "forward- looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements related to future, not past,
events included in this news release, including, without
limitation, statements regarding Brady'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 are forward-looking
statements. When used in this news release, 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 future financial performance of
major markets Brady serves, which include, without limitation,
telecommunications, manufacturing, electrical, construction,
laboratory, education, governmental, public utility, computer,
transportation; difficulties in making and integrating
acquisitions; risks associated with newly acquired businesses;
Brady's ability to retain significant contracts and customers;
future competition; Brady's ability to develop and successfully
market new products; changes in the supply of, or price for, parts
and components; increased price pressure from suppliers and
customers; interruptions to sources of supply; environmental,
health and safety compliance costs and liabilities; Brady's ability
to realize cost savings from operating initiatives; Brady's ability
to attract and retain key talent; difficulties associated with
exports; risks associated with international operations;
fluctuations in currency rates versus the US dollar; technology
changes; potential write-offs of Brady's substantial intangible
assets; risks associated with obtaining governmental approvals and
maintaining regulatory compliance for new and existing products;
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 contained from time to time in Brady's U.S.
Securities and Exchange Commission filings, including, but not
limited to, those factors listed in the "Risk Factors" section
located in Item 1A of Part II of Brady's Quarterly Report on Form
10-Q for the period ended April 30, 2006. 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. RECONCILIATION
OF GAAP MEASURES TO NON-GAAP MEASURES (in thousands) Fiscal 2005
--------------------------------------------- Q1 Q2 Q3 Q4 Total --
-- -- -- ----- EBITDA (1) Net income $20,357 $20,579 $24,956
$16,055 $81,947 Interest expense 2,139 2,037 2,101 2,126 8,403
Income taxes 9,580 8,811 8,522 6,558 33,471 Depreciation and
amortization 6,775 6,478 6,738 6,831 26,822
--------------------------------------------- EBITDA (non-GAAP
measure) $38,851 $37,905 $42,317 $31,570 $150,643 Fiscal 2006
--------------------------------------------- Q1 Q2 Q3 Q4 Total --
-- -- -- ----- EBITDA (1) Net income $30,198 $21,254 $30,246
$22,477 $104,175 Interest expense 1,989 2,435 4,496 5,311 14,231
Income taxes 12,334 7,675 11,763 8,741 40,513 Depreciation and
amortization 7,360 7,194 9,419 11,171 35,144
--------------------------------------------- EBITDA (non-GAAP
measure) $51,881 $38,558 $55,924 $47,700 $194,063 (1) Brady is
presenting EBITDA because it is used by many of our investors and
lenders, and is presented as a convenience to them. EBITDA
represents net income before interest expense, income taxes and
depreciation and amortization. EBITDA is not a calculation based on
generally accepted accounting principles (GAAP). The amounts
included in the EBITDA calculation, however, are derived from
amounts included in the Condensed Consolidated Statements of Income
data. EBITDA should not be considered as an alternative to net
income or operating income as an indicator of the company's
operating performance, or as an alternative to operating cash flows
as a measure of liquidity. The EBITDA measure presented may not
always be comparable to similarly titled measures reported by other
companies due to differences in the components of the calculation.
BRADY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Dollars in Thousands) (Unaudited)
--------------------------------------------------------- Three
Months Ended July 31 Twelve Months Ended July 31
--------------------------- ---------------------------- Percentage
Percentage 2006 2005 Change 2006 2005 Change --------- --------
------- ---------- -------- -------- Net sales $288,333 $210,046
37.3% $1,018,436 $816,447 24.7% Cost of products sold 144,429
101,119 42.8% 492,681 383,171 28.6% --------- -------- -------
---------- -------- -------- Gross margin 143,904 108,927 32.1%
525,755 433,276 21.3% Operating expenses: Research and development
9,766 7,334 33.2% 30,443 25,078 21.4% Selling, general and admini-
strative 97,253 77,411 25.6% 338,796 285,746 18.6% ---------
-------- ------- ---------- -------- -------- Total operating
expenses 107,019 84,745 26.3% 369,239 310,824 18.8% Operating
income 36,885 24,182 52.5% 156,516 122,452 27.8% Other income and
(expense): Investment and other income (356) 557 -163.9% 2,403
1,369 75.5% Interest expense (5,311) (2,126) 149.8% (14,231)
(8,403) 69.4% --------- -------- ------- ---------- --------
-------- Income before income taxes 31,218 22,613 38.1% 144,688
115,418 25.4% Income taxes 8,741 6,558 33.3% 40,513 33,471 21.0%
--------- -------- ------- ---------- -------- -------- Net income
$22,477 $16,055 40.0% $104,175 $81,947 27.1% ========= ========
======= ========== ======== ======== Per Class A Nonvoting Common
Share: Basic net income $0.44 $0.33 33.3% $2.10 $1.67 25.7% Diluted
net income $0.43 $0.32 34.4% $2.07 $1.64 26.2% Dividends $0.13
$0.11 18.2% $0.52 $0.44 18.2% Per Class B Voting Common Share:
Basic net income $0.44 $0.33 33.3% $2.09 $1.66 25.9% Diluted net
income $0.43 $0.32 34.4% $2.05 $1.63 25.8% Dividends $0.13 $0.11
18.2% $0.50 $0.42 19.0% Weighted average common shares outstanding
(in Thousands): Basic 50,791 49,240 49,494 48,967 Diluted 51,672
50,232 50,385 49,859 BRADY CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (Unaudited)
------------------------------ July 31, 2006 July 31, 2005
------------- ------------- ASSETS ------ Current assets: Cash and
cash equivalents $113,008 $72,970 Short term investments 11,500
7,100 Accounts receivable, less allowance for losses ($6,390 and
$3,726, respectively) 187,907 123,453 Inventories: Finished
Products 59,365 38,827 Work-in-process 12,850 9,681 Raw materials
and supplies 37,702 22,227 ------------- ------------ Total
inventories 109,917 70,735 Prepaid expenses and other current
assets 36,825 28,114 ------------- ------------ Total current
assets 459,157 302,372 Other assets: Goodwill 587,642 332,369 Other
Intangible assets, net 134,111 71,647 Deferred Income Taxes 34,135
39,043 Other 10,235 6,305 ------------- ------------ Total other
assets 766,123 449,364 Property, plant and equipment: Cost: Land
6,548 6,388 Buildings and improvements 78,418 65,007 Machinery and
equipment 198,426 157,093 Construction in progress 12,098 6,510
------------- ------------ 295,490 234,998 Less accumulated
depreciation 155,584 136,587 ------------- ------------ Net
property, plant and equipment 139,906 98,411 -------------
------------ Total $1,365,186 $850,147 ============= ============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
---------------------------------------- Current liabilities:
Accounts payable $78,585 $52,696 Wages and amounts withheld from
employees 61,778 49,620 Taxes, other than income taxes 6,231 4,815
Accrued income taxes 25,675 24,028 Other current liabilities 46,763
29,649 Short-term borrowings and current maturities on long-term
debt 20 4 ------------- ------------ Total current liabilities
219,052 160,812 Long-term obligations, less current maturities
350,018 150,026 Other liabilities 50,502 42,035 -------------
------------ Total liabilities 619,572 352,873 Stockholders'
investment: Common stock: Class A nonvoting common stock - Issued
50,481,743 and 45,877,543 shares, respectively and outstanding
50,188,842 and 45,792,199 shares, respectively 505 458 Class B
voting common stock - Issued and outstanding, 3,538,628 shares 35
35 Additional paid-in capital 258,922 99,029 Income retained in the
business 460,991 382,880 Treasury Stock - 292,901 and 85,344
shares, respectively of Class A nonvoting common stock, at cost
(10,865) (1,575) Accumulated other comprehensive income 35,264
17,497 Other 762 (1,050) ------------- ------------ Total
stockholders' investment 745,614 497,274 ------------- ------------
Total $1,365,186 $850,147 ============= ============ BRADY
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands) (Unaudited) Twelve Months Ended 31-Jul 2006
2005 2004 -------- ------- ------- Operating activities: Net income
$104,175 $81,947 $50,871 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 35,144 26,822 20,190 Gain on Foreign Currency Contract
(1,516) - - Income tax benefit from the exercise of stock options -
5,385 4,406 Deferred Income taxes (1,843) (2,653) 5,172 Loss on
sale or disposal of property, plant & equipment 124 743 321
Provision for losses on accounts receivable 1,152 1,216 1,450
Non-cash portion of stock-based compensation expense 5,568 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 (13,620) (7,132) (11,979)
Inventories (16,961) (11,847) (6,791) Prepaid expenses and other
assets (2,163) (3,572) 2,168 Accounts payable and accrued
liabilities 10,421 8,827 15,210 Income taxes 492 9,662 (393) Other
liabilities (5,643) 4,126 1,873 -------- ------- ------- Net cash
provided by operating activities 115,330 119,103 87,646 Investing
activities: Acquisition of businesses, net of cash acquired
(347,681) (79,926) (228,928) Purchases of short-term investments
(150,900) (50,025) (38,450) Sales of short-term investments 146,500
48,075 42,850 Purchases of property, plant and equipment (39,410)
(21,920) (14,892) Purchase of Foreign Currency Contract (2,134) - -
Proceeds from sale of property, plant and equipment 546 390 448
Other (2,203) (1,686) (1,533) -------- ------- ------- Net cash
used in investing activities (395,282) (105,092) (240,505)
Financing activities: Payment of dividends (26,064) (21,291)
(19,805) Proceeds from issuance of common stock 166,664 15,734
19,422 Principal payments on debt (417,601) (85,604) (161,578)
Proceeds from issuance of debt 615,730 83,000 310,000 Purchase of
treasury stock (24,683) (1,551) (564) Income tax benefit from the
exercise of stock options 4,912 - - Debt issue costs - - (1,372)
-------- ------- ------- Net cash provided by (used in) financing
activities 318,958 (9,712) 146,103 Effect of exchange rate changes
on cash 1,032 (117) 6,939 Net increase in cash and cash equivalents
40,038 4,182 183 Cash and cash equivalents, beginning of period
72,970 68,788 68,605 -------- ------- ------- Cash and cash
equivalents, end of period 113,008 72,970 68,788 ======== =======
======= Supplemental disclosures: Cash paid during the period for:
Interest, net of capitalized interest $8,991 7,836 506 Income
taxes, net of refunds 37,661 19,358 10,977 Acquisitions: Fair value
of asset acquired, net of cash $167,900 60,193 96,656 Liabilities
assumed (63,667) (35,113) (8,674) Goodwill 247,098 54,846 140,946
Effect of foreign currency contract (3,650) - - -------- -------
------- Net cash paid for acquisitions $347,681 79,926 228,928
======== ======= ======= DATASOURCE: Brady Corporation CONTACT:
Investor contact, Barbara Bolens, +1-414-438-6940, or Media
contact, Carole Herbstreit, +1-414-438-6882, both of Brady
Corporation Web site: http://www.bradycorp.com/
http://www.investor.bradycorp.com/ Company News On-Call:
http://www.prnewswire.com/comp/952350.html
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