Brady Corporation (NYSE:BRC) reports record sales and earnings for
its fiscal 2007 first quarter ended October 31, 2006. Sales for the
quarter rose 42.8 percent to $332.3 million compared to $232.6
million in the first quarter of fiscal 2006. Base business
contributed 5.7 percent to sales growth, acquisitions added 34.6
percent, and currency exchange added 2.5 percent. Net income
increased 14.1 percent in the fiscal 2007 first quarter to $34.4
million compared to $30.2 million in the same quarter last year.
Earnings per diluted Class A Common share were $0.63 in the first
quarter of fiscal 2007, compared $0.60 per diluted share in the
prior year�s quarter. Fiscal 2007 earnings per share results
include the effect of issuance of an additional 4.6 million shares
through an equity offering in the fourth quarter of fiscal 2006.
�We are very pleased with our first quarter results, especially
given the comparison to last year�s very strong first quarter and a
high level of activity including the integration of recent
acquisitions; business expansions in India, China, Japan, the
Philippines, Slovakia, Turkey and Mexico; continuing global
implementation of SAP; and a continued ramp-up of new product
development,� said Frank M. Jaehnert, Brady�s president and chief
executive officer. �Our business so far in fiscal 2007 is tracking
on plan with solid organic growth, and we are especially pleased
with the growth in operating income from $44.1 million to $51.9
million in the quarter. We are also seeing strong regional sales
growth including acquisitions, with Europe up 25.2 percent,
Americas up 26.6 percent, and Asia/Pacific up 117.1 percent,� said
David Mathieson, Brady�s chief financial officer. �As a result of
our strong first quarter and the acquisition of Precision
Converters, Inc. in the first quarter, we are increasing our
guidance for the fiscal 2007. We now anticipate sales of between
$1.25 and $1.275 billion, up from our previous guidance of $1.225
to $1.25 billion; net income between $122 and $126 million, up from
$120 to $125 million; and earnings per share of $2.22 to $2.29, up
from $2.18 to $2.27.� A webcast regarding fiscal 2007 first quarter
results will be available at www.investor.bradycorp.com beginning
at 7:00 a.m. Central Standard Time Thursday, November 16, followed
by Brady�s annual meeting of shareholders at 9:00 a.m. at Brady�s
Corporate Headquarters in Milwaukee. 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. Brady�s fiscal 2006 sales were approximately $1.018
billion. 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 on-line version of the 2006
Annual Report to Shareholders. Information by regional segment for
the three months ended October 31, 2006 and 2005 is as follows: (in
Thousands) Americas � Europe Asia Subtotals Corporate and
Elimin-ations Total SALES TO EXTERNAL CUSTOMERS Three months ended:
October 31, 2006 $146,943� $92,365� $92,951� $332,259� -� $332,259�
October 31, 2005 116,059� 73,762� 42,814� 232,635� -� 232,635� �
SALES GROWTH INFORMATION Three months endedOctober 31, 2006: Base
2.6% 6.8% 11.9% 5.7% -� 5.7% Currency 0.8% 5.3% 2.5% 2.5% -� 2.5%
Acquisitions 23.2% 13.1% 102.7% 34.6% -� 34.6% Total 26.6% 25.2%
117.1% 42.8% -� 42.8% � SEGMENT PROFIT (LOSS) Three months ended:
October 31, 2006 $36,905� $23,005� $22,137� $82,047� ($2,197)
$79,850� October 31, 2005 32,194� 20,778� 13,010� 65,982� (2,386)
63,596� Percentage increase (decrease) 14.6% 10.7% 70.2% 24.3%
-7.9% 25.6% � � NET INCOME RECONCILIATION (in thousands) Three
months ended: October 31, 2006 October 31, 2005 Total profit for
reportable segments $ 82,047� $ 65,982� Corporate and eliminations
(2,197) (2,386) Unallocated amounts: Administrative costs (27,909)
(19,467) Investment and other income 638� 392� Interest expense
(4,735) (1,989) Income before income taxes 47,844� 42,532� Income
taxes (13,396) (12,334) Net income $ 34,448� $ 30,198� 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-K for the period ended July 31, 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. BRADY
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
INCOME � (Dollars in Thousands) � (Unaudited) � Three Months Ended
October 31, � 2006� 2005� Percentage Change � Net sales $ 332,259�
$ 232,635� 42.8% Cost of products sold 168,131� 108,644� 54.8%
Gross margin 164,128� 123,991� 32.4% � Operating expenses: Research
and development 8,532� 6,534� 30.6% Selling, general and
administrative 103,655� 73,328� 41.4% Total operating expenses
112,187� 79,862� 40.5% � Operating income 51,941� 44,129� 17.7% �
Other income and (expense): Investment and other income 638� 392�
62.8% Interest expense (4,735) (1,989) 138.1% � Income before
income taxes 47,844� 42,532� 12.5% � Income taxes 13,396� 12,334�
8.6% � Net income $ 34,448� $ 30,198� 14.1% � � Per Class A
Nonvoting Common Share: Basic net income $ 0.64� $ 0.61� 4.9%
Diluted net income $ 0.63� $ 0.60� 5.0% Dividends $ 0.14� $ 0.13�
7.7% � Per Class B Voting Common Share: Basic net income $ 0.63� $
0.60� 5.0% Diluted net income $ 0.62� $ 0.59� 5.1% Dividends $
0.12� $ 0.11� 9.1% � Weighted average common shares outstanding (in
thousands): Basic 53,734� 49,250� Diluted 54,605� 50,206� BRADY
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
� (IN THOUSANDS) (Unaudited) October 31, 2006 July 31, 2006 �
ASSETS � Current assets: Cash and cash equivalents $ 87,509� $
113,008� Short term investments -� 11,500� Accounts receivable,
less allowance for losses ($6,934 and 217,021� 187,907� $6,390,
respectively) Inventories: Finished products 67,321� 59,365�
Work-in-process 14,241� 12,850� Raw materials and supplies 42,177�
37,702� Total inventories 123,739� 109,917� Prepaid expenses and
other current assets 38,368� 36,825� � Total current assets
466,637� 459,157� � Other assets: Goodwill 615,527� 587,642� Other
intangible assets, net 138,669� 134,111� Deferred income taxes
34,455� 34,135� Other 11,281� 10,235� � Total other assets 799,932�
766,123� � Property, plant and equipment: Cost: Land 6,554� 6,548�
Buildings and improvements 80,096� 78,418� Machinery and equipment
210,703� 198,426� Construction in progress 17,850� 12,098� �
315,203� 295,490� Less accumulated depreciation 162,513� 155,584� �
Net property, plant and equipment 152,690� 139,906� � Total $
1,419,259� $ 1,365,186� � LIABILITIES AND STOCKHOLDERS' INVESTMENT
� Current liabilities: Accounts payable $ 94,301� $ 78,585� Wages
and amounts withheld from employees 39,098� 61,778� Taxes, other
than income taxes 6,636� 6,231� Accrued income taxes 29,296�
25,243� Other current liabilities 43,266� 46,763� Short-term
borrowings and current maturities on long-term debt 16� 20� � Total
current liabilities 212,613� 218,620� � Long-term obligations, less
current maturities 375,017� 350,018� � Other liabilities 52,178�
50,502� � Total liabilities 639,808� 619,140� � Stockholders'
investment: Common stock: Class A nonvoting common stock - Issued
50,481,743 and 50,481,743 shares, 505� 505� respectively and
outstanding 50,216,742 and 50,188,842 shares, respectively Class B
voting common stock - Issued and outstanding, 3,538,628 shares 35�
35� Additional paid-in capital 260,150� 258,922� Income retained in
the business 487,975� 460,991� Treasury stock - 265,001 and 292,901
shares, respectively of Class A nonvoting common stock, at cost
(9,841) (10,865) Accumulated other comprehensive income 39,869�
35,696� Other 758� 762� � Total stockholders' investment 779,451�
746,046� � Total $ 1,419,259� $ 1,365,186� BRADY CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in
Thousands) (Unaudited) Three Months Ended October 31 2006� 2005�
Operating activities: Net income $ 34,448� $ 30,198� Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 12,927� 7,360� Deferred income taxes
(542) 187� Loss on disposal of property, plant & equipment 204�
33� Provision for losses on accounts receivable 692� 366� Non-cash
portion of stock-based compensation expense 1,559� 924� Changes in
operating assets and liabilities (net of effects of business
acquisitions): Accounts receivable (21,811) (10,391) Inventories
(6,539) (8,613) Prepaid expenses and other assets (4,818) 468�
Accounts payable and accrued liabilities (17,138) (20,465) Income
taxes 4,437� 5,999� Other liabilities 1,443� 1,990� Net cash
provided by operating activities 4,862� 8,056� � Investing
activities: Acquisition of businesses, net of cash acquired
(45,173) (20,217) Purchases of short-term investments -� (3,800)
Sales of short-term investments 11,500� 10,900� Purchases of
property, plant and equipment (14,544) (8,537) Proceeds from sale
of property, plant and equipment 124� 21� Other (663) (1,126) Net
cash used in investing activities (48,756) (22,759) � Financing
activities: Payment of dividends (7,463) (5,938) Proceeds from
issuance of common stock 531� 374� Principal payments on debt
(23,226) (121,515) Proceeds from issuance of debt 48,220� 131,630�
Purchase of treasury stock -� (9,416) Income tax benefit from the
exercise of stock options 162� -� Net cash provided by (used in)
financing activities 18,224� (4,865) Effect of exchange rate
changes on cash 171� (274) � Net increase in cash and cash
equivalents (25,499) (19,842) Cash and cash equivalents, beginning
of period 113,008� 72,970� � Cash and cash equivalents, end of
period 87,509� 53,128� � Supplemental disclosures: Cash paid during
the period for: Interest, net of capitalized interest $ 5,368� $
(43) Income taxes, net of refunds 9,393� 4,956� Acquisitions: Fair
value of assets acquired, net of cash $ 27,589� $ 12,300�
Liabilities assumed (6,610) (6,390) Goodwill 24,194� 14,307� Net
cash paid for acquisitions $ 45,173� $ 20,217� RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES (in thousands) � Fiscal 2006 �
Q1 Q2 Q3 Q4 Total EBITDA (1) Net income $ 30,198� $ 30,198�
Interest expense 1,989� 1,989� Income taxes 12,334� 12,334�
Depreciation and amortization 7,360� � � � 7,360� � EBITDA
(non-GAAP measure) $ 51,881� $ -� $ -� $ -� $ 51,881� � Fiscal 2007
� Q1 Q2 Q3 Q4 Total EBITDA (1) Net income $ 34,448� $ 34,448�
Interest expense 4,735� 4,735� Income taxes 13,396� 13,396�
Depreciation and amortization 12,927� � � � 12,927� � EBITDA
(non-GAAP measure) $ 65,506� $ -� $ -� $ -� $ 65,506� � � (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 (NYSE:BRC) reports record sales and earnings for
its fiscal 2007 first quarter ended October 31, 2006. Sales for the
quarter rose 42.8 percent to $332.3 million compared to $232.6
million in the first quarter of fiscal 2006. Base business
contributed 5.7 percent to sales growth, acquisitions added 34.6
percent, and currency exchange added 2.5 percent. Net income
increased 14.1 percent in the fiscal 2007 first quarter to $34.4
million compared to $30.2 million in the same quarter last year.
Earnings per diluted Class A Common share were $0.63 in the first
quarter of fiscal 2007, compared $0.60 per diluted share in the
prior year's quarter. Fiscal 2007 earnings per share results
include the effect of issuance of an additional 4.6 million shares
through an equity offering in the fourth quarter of fiscal 2006.
"We are very pleased with our first quarter results, especially
given the comparison to last year's very strong first quarter and a
high level of activity including the integration of recent
acquisitions; business expansions in India, China, Japan, the
Philippines, Slovakia, Turkey and Mexico; continuing global
implementation of SAP; and a continued ramp-up of new product
development," said Frank M. Jaehnert, Brady's president and chief
executive officer. "Our business so far in fiscal 2007 is tracking
on plan with solid organic growth, and we are especially pleased
with the growth in operating income from $44.1 million to $51.9
million in the quarter. We are also seeing strong regional sales
growth including acquisitions, with Europe up 25.2 percent,
Americas up 26.6 percent, and Asia/Pacific up 117.1 percent," said
David Mathieson, Brady's chief financial officer. "As a result of
our strong first quarter and the acquisition of Precision
Converters, Inc. in the first quarter, we are increasing our
guidance for the fiscal 2007. We now anticipate sales of between
$1.25 and $1.275 billion, up from our previous guidance of $1.225
to $1.25 billion; net income between $122 and $126 million, up from
$120 to $125 million; and earnings per share of $2.22 to $2.29, up
from $2.18 to $2.27." A webcast regarding fiscal 2007 first quarter
results will be available at www.investor.bradycorp.com beginning
at 7:00 a.m. Central Standard Time Thursday, November 16, followed
by Brady's annual meeting of shareholders at 9:00 a.m. at Brady's
Corporate Headquarters in Milwaukee. 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. Brady's fiscal 2006 sales were approximately $1.018
billion. 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 on-line version of the 2006
Annual Report to Shareholders. -0- *T Information by regional
segment for the three months ended October 31, 2006 and 2005 is as
follows: Corporate and Elimin- (in Thousands) Americas Europe Asia
Subtotals ations Total
----------------------------------------------------------------------
SALES TO EXTERNAL CUSTOMERS Three months ended: October 31, 2006
$146,943 $92,365 $92,951 $332,259 - $332,259 October 31, 2005
116,059 73,762 42,814 232,635 - 232,635 SALES GROWTH INFORMATION
Three months ended October 31, 2006: Base 2.6% 6.8% 11.9% 5.7% -
5.7% Currency 0.8% 5.3% 2.5% 2.5% - 2.5% Acquisitions 23.2% 13.1%
102.7% 34.6% - 34.6% Total 26.6% 25.2% 117.1% 42.8% - 42.8% SEGMENT
PROFIT (LOSS) Three months ended: October 31, 2006 $36,905 $23,005
$22,137 $82,047 ($2,197) $79,850 October 31, 2005 32,194 20,778
13,010 65,982 (2,386) 63,596 Percentage increase (decrease) 14.6%
10.7% 70.2% 24.3% -7.9% 25.6% NET INCOME RECONCILIATION (in
thousands) Three months ended: October 31, October 31, 2006 2005
Total profit for reportable segments $82,047 $65,982 Corporate and
eliminations (2,197) (2,386) Unallocated amounts: Administrative
costs (27,909) (19,467) Investment and other income 638 392
Interest expense (4,735) (1,989) ------------ ------------- Income
before income taxes 47,844 42,532 Income taxes (13,396) (12,334)
------------ ------------- Net income $34,448 $30,198 ============
============= *T 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-K for the period ended July 31, 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. -0- *T BRADY
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (Dollars in Thousands) (Unaudited)
-------------------------------- Three Months Ended October 31,
-------------------------------- Percentage 2006 2005 Change
--------- --------- ----------- Net sales $ 332,259 $ 232,635 42.8%
Cost of products sold 168,131 108,644 54.8% --------- ---------
Gross margin 164,128 123,991 32.4% Operating expenses: Research and
development 8,532 6,534 30.6% Selling, general and administrative
103,655 73,328 41.4% --------- --------- Total operating expenses
112,187 79,862 40.5% Operating income 51,941 44,129 17.7% Other
income and (expense): Investment and other income 638 392 62.8%
Interest expense (4,735) (1,989) 138.1% --------- --------- Income
before income taxes 47,844 42,532 12.5% Income taxes 13,396 12,334
8.6% --------- --------- Net income $ 34,448 $ 30,198 14.1%
========= ========= Per Class A Nonvoting Common Share: Basic net
income $ 0.64 $ 0.61 4.9% Diluted net income $ 0.63 $ 0.60 5.0%
Dividends $ 0.14 $ 0.13 7.7% Per Class B Voting Common Share: Basic
net income $ 0.63 $ 0.60 5.0% Diluted net income $ 0.62 $ 0.59 5.1%
Dividends $ 0.12 $ 0.11 9.1% Weighted average common shares
outstanding (in thousands): Basic 53,734 49,250 Diluted 54,605
50,206 *T -0- *T BRADY CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (Unaudited)
------------------------- October 31, July 31, 2006 2006
------------ ------------ ASSETS
-------------------------------------------- Current assets: Cash
and cash equivalents $ 87,509 $ 113,008 Short term investments -
11,500 Accounts receivable, less allowance for losses ($6,934 and
217,021 187,907 $6,390, respectively) Inventories: Finished
products 67,321 59,365 Work-in-process 14,241 12,850 Raw materials
and supplies 42,177 37,702 ------------ ------------ Total
inventories 123,739 109,917 Prepaid expenses and other current
assets 38,368 36,825 ------------ ------------ Total current assets
466,637 459,157 Other assets: Goodwill 615,527 587,642 Other
intangible assets, net 138,669 134,111 Deferred income taxes 34,455
34,135 Other 11,281 10,235 ------------ ------------ Total other
assets 799,932 766,123 Property, plant and equipment: Cost: Land
6,554 6,548 Buildings and improvements 80,096 78,418 Machinery and
equipment 210,703 198,426 Construction in progress 17,850 12,098
------------ ------------ 315,203 295,490 Less accumulated
depreciation 162,513 155,584 ------------ ------------ Net
property, plant and equipment 152,690 139,906 ------------
------------ Total $ 1,419,259 $ 1,365,186 ============
============ LIABILITIES AND STOCKHOLDERS' INVESTMENT
-------------------------------------------- Current liabilities:
Accounts payable $ 94,301 $ 78,585 Wages and amounts withheld from
employees 39,098 61,778 Taxes, other than income taxes 6,636 6,231
Accrued income taxes 29,296 25,243 Other current liabilities 43,266
46,763 Short-term borrowings and current maturities on long-term
debt 16 20 ------------ ------------ Total current liabilities
212,613 218,620 Long-term obligations, less current maturities
375,017 350,018 Other liabilities 52,178 50,502 ------------
------------ Total liabilities 639,808 619,140 Stockholders'
investment: Common stock: Class A nonvoting common stock - Issued
50,481,743 and 50,481,743 shares, 505 505 respectively and
outstanding 50,216,742 and 50,188,842 shares, respectively Class B
voting common stock - Issued and outstanding, 3,538,628 shares 35
35 Additional paid-in capital 260,150 258,922 Income retained in
the business 487,975 460,991 Treasury stock - 265,001 and 292,901
shares, respectively of Class A nonvoting common stock, at cost
(9,841) (10,865) Accumulated other comprehensive income 39,869
35,696 Other 758 762 ------------ ------------ Total stockholders'
investment 779,451 746,046 ------------ ------------ Total $
1,419,259 $ 1,365,186 ============ ============ *T -0- *T BRADY
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands) (Unaudited) Three Months Ended October 31
2006 2005 ---------- ---------- Operating activities: Net income $
34,448 $ 30,198 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
12,927 7,360 Deferred income taxes (542) 187 Loss on disposal of
property, plant & equipment 204 33 Provision for losses on
accounts receivable 692 366 Non-cash portion of stock-based
compensation expense 1,559 924 Changes in operating assets and
liabilities (net of effects of business acquisitions): Accounts
receivable (21,811) (10,391) Inventories (6,539) (8,613) Prepaid
expenses and other assets (4,818) 468 Accounts payable and accrued
liabilities (17,138) (20,465) Income taxes 4,437 5,999 Other
liabilities 1,443 1,990 ---------- ---------- Net cash provided by
operating activities 4,862 8,056 Investing activities: Acquisition
of businesses, net of cash acquired (45,173) (20,217) Purchases of
short-term investments - (3,800) Sales of short-term investments
11,500 10,900 Purchases of property, plant and equipment (14,544)
(8,537) Proceeds from sale of property, plant and equipment 124 21
Other (663) (1,126) ---------- ---------- Net cash used in
investing activities (48,756) (22,759) Financing activities:
Payment of dividends (7,463) (5,938) Proceeds from issuance of
common stock 531 374 Principal payments on debt (23,226) (121,515)
Proceeds from issuance of debt 48,220 131,630 Purchase of treasury
stock - (9,416) Income tax benefit from the exercise of stock
options 162 - ---------- ---------- Net cash provided by (used in)
financing activities 18,224 (4,865) Effect of exchange rate changes
on cash 171 (274) Net increase in cash and cash equivalents
(25,499) (19,842) Cash and cash equivalents, beginning of period
113,008 72,970 ---------- ---------- Cash and cash equivalents, end
of period 87,509 53,128 ========== ========== Supplemental
disclosures: Cash paid during the period for: Interest, net of
capitalized interest $ 5,368 $ (43) Income taxes, net of refunds
9,393 4,956 Acquisitions: Fair value of assets acquired, net of
cash $ 27,589 $ 12,300 Liabilities assumed (6,610) (6,390) Goodwill
24,194 14,307 ---------- ---------- Net cash paid for acquisitions
$ 45,173 $ 20,217 ========== ========== *T -0- *T RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES (in thousands) Fiscal 2006
------------------------------------- Q1 Q2 Q3 Q4 Total --------
------ ------ ----- -------- EBITDA (1) Net income $30,198 $30,198
Interest expense 1,989 1,989 Income taxes 12,334 12,334
Depreciation and amortization 7,360 7,360 -------- ------ ------
----- -------- EBITDA (non-GAAP measure) $51,881 $- $- $- $51,881
Fiscal 2007 ------------------------------------- Q1 Q2 Q3 Q4 Total
-------- ------ ------ ----- -------- EBITDA (1) Net income $34,448
$34,448 Interest expense 4,735 4,735 Income taxes 13,396 13,396
Depreciation and amortization 12,927 12,927 -------- ------ ------
----- -------- EBITDA (non-GAAP measure) $65,506 $- $- $- $65,506
(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.
*T
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