Click here to close now.


Microsoft Cloud Authors: Jayaram Krishnaswamy, Elizabeth White, Andreas Grabner, Jim Kaskade, Pat Romanski

News Feed Item

Brady Corporation Reports Fiscal 2013 First Quarter Results

Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for the fiscal 2013 first quarter ended October 31, 2012.

Quarter Ended October 31, 2012 Financial Results:

Sales for the fiscal 2013 first quarter ended October 31, 2012, were down 3.4 percent to $337.6 million compared to $349.5 million in the first quarter of fiscal 2012. Organic sales were down 1.9 percent, the impact of foreign currency translation decreased sales by 2.1 percent, and acquisitions, net of divestitures added 0.6 percent. By segment, organic sales decreased 0.7 percent in the Americas, 3.2 percent in EMEA and 2.5 percent in the Asia-Pacific region.

Net income in the fiscal 2013 first quarter was down 16.9 percent to $27.2 million compared to $32.7 million in the same quarter last year. Excluding the losses in the first quarter of fiscal 2013 from the sales of Brady Medical, a medical die-cut business headquartered in Texas, and Varitronics, a business headquartered in Minnesota serving the education market, net income was down 7.1 percent to $30.4 million.

Earnings per diluted Class A Common Share were down 14.5 percent to $0.53 in the first quarter of fiscal 2013 compared to $0.62 in the same quarter last year. Diluted Earnings per Class A Common Share excluding losses on the sales of businesses were down 4.8 percent to $0.59 in the first quarter of fiscal 2013.

Commentary and Guidance:

“I am pleased with our performance in the quarter as our business in the Americas and Asia-Pacific showed improved results over last quarter. In Asia in particular we benefited from several new product wins in the mobile handset and tablet computer space,” said Brady’s President and Chief Executive Officer, Frank M. Jaehnert. “Europe continues to be impacted by a difficult economic environment, and we are shifting resources to higher growth opportunities in Central Europe, the Middle East, and Africa. In addition, we are continuing to prune our portfolio of businesses. As we look to the remainder of fiscal 2013, we believe there is limited likelihood that the macro-economy will provide a tailwind. We therefore will continue on the path to create our own growth story by further investing in geographic expansion; expanding globally in certain focus markets, such as aerospace and mass transit, chemical, oil and gas, and food and beverage processing; new product development; customer conversion; and expansion of our digital capabilities to provide the best overall buying experience for our customers.”

“We anticipate approximately flat organic sales growth for the full fiscal year 2013, with sales growth in the second half of the year driven by our initiatives,” said Brady’s Chief Financial Officer Thomas J. Felmer. “We are reiterating our full-year fiscal 2013 earnings per diluted Class A Common Share guidance of between $2.20 and $2.40, exclusive of after-tax restructuring charges and gains or losses on the sales of any businesses. This guidance is based on exchange rates as of October 31, 2012, and a full-year income tax rate in the mid-to-upper 20 percent range.”

A webcast regarding Brady’s fiscal 2013 first quarter financial results will be available at beginning at 9:30 a.m. Central Time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Brady’s 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 millions of customers in electronics, telecommunications, manufacturing, electrical, construction, education, medical and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2012 employed approximately 6,900 people at operations in the Americas, EMEA and Asia-Pacific. Brady’s fiscal 2012 sales were approximately $1.32 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at

In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company’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. The use of 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: the length or severity of the current worldwide economic downturn or timing or strength of a subsequent recovery; increased usage of e-commerce allowing for ease of price transparency; future financial performance of major markets Brady serves, which include, without limitation, telecommunications, hard disk drive, manufacturing, electrical, construction, laboratory, education, governmental, public utility, computer, and transportation; future competition; changes in the supply of, or price for, parts and components; increased price pressure from suppliers and customers; Brady’s ability to retain significant contracts and customers; fluctuations in currency rates versus the U.S. dollar; risks associated with international operations; difficulties associated with exports; risks associated with obtaining governmental approvals and maintaining regulatory compliance; Brady’s ability to develop and successfully market new products; difficulties in making and integrating acquisitions; risks associated with newly acquired businesses; risks associated with restructuring plans; environmental, health and safety compliance costs and liabilities; technology changes and potential security violations to the Company’s information technology systems; Brady’s ability to maintain compliance with its debt covenants; increase in our level of debt; potential write-offs of Brady’s substantial intangible assets; unforeseen tax consequences; 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 within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2012.

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 except as required by law.

(Dollars in Thousands, Except Per Share Amounts)
Three Months Ended October 31,
  2012       2011  
Net sales $ 337,646 $ 349,508
Cost of products sold 173,026   181,677  
Gross margin 164,620 167,831
Operating expenses:
Research and development 8,485 9,809
Selling, general and administrative 108,261 108,932
Loss (gain) on sales of businesses 3,438   -  
Total operating expenses 120,184 118,741
Operating income 44,436 49,090
Other income and (expense):
Investment and other income (expense) 397 (202 )
Interest expense (4,163 ) (5,047 )
Income before income taxes 40,670 43,841
Income taxes 13,482   11,109  
Net income $ 27,188   $ 32,732  
Per Class A Nonvoting Common Share:
Basic net income $ 0.53 $ 0.62
Diluted net income $ 0.53 $ 0.62
Dividends $ 0.19 $ 0.185
Per Class B Voting Common Share:
Basic net income $ 0.52 $ 0.60
Diluted net income $ 0.51 $ 0.60
Dividends $ 0.173 $ 0.168
Weighted average common shares outstanding (in thousands):
Basic 51,039 52,657
Diluted 51,312 52,954
(Dollars in Thousands)
October 31, 2012 July 31, 2012


Current assets:
Cash and cash equivalents $ 321,309 $ 305,900
Accounts receivable - net 218,246 199,006
Finished products 67,992 64,740
Work-in-process 16,280 15,377
Raw materials and supplies 26,255   25,407  
Total inventories 110,527 105,524
Prepaid expenses and other current assets 42,400   40,424  
Total current assets 692,482 650,854
Other assets:
Goodwill 680,595 676,791
Other intangible assets 80,983 84,119
Deferred income taxes 46,627 45,356
Other 21,577 20,584
Property, plant and equipment:
Land 8,892 8,651
Buildings and improvements 102,592 101,962
Machinery and equipment 296,561 292,130
Construction in progress 10,064   10,417  
418,109 413,160
Less accumulated depreciation 288,949   283,145  
Property, plant and equipment - net 129,160   130,015  
Total $ 1,651,424   $ 1,607,719  


Current liabilities:
Accounts payable $ 105,348 $ 86,646
Wages and amounts withheld from employees 40,529 54,629
Taxes, other than income taxes 8,211 9,307
Accrued income taxes 12,153 14,357
Other current liabilities 44,686 40,815
Current maturities on long-term debt 61,264   61,264  
Total current liabilities 272,191 267,018
Long-term obligations, less current maturities 259,729 254,944
Other liabilities 78,538   76,404  
Total liabilities 610,458 598,366
Stockholders' investment:
Common stock:
Class A nonvoting common stock - Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,563,704 and 47,630,926 shares, respectively 513 513
Class B voting common stock - Issued and outstanding, 3,538,628 shares 35 35
Additional paid-in capital 314,896 313,008
Earnings retained in the business 749,773 732,290
Treasury stock - 3,387,783 and 3,245,561 shares, respectively of Class A nonvoting common stock, at cost (93,535 ) (92,600 )
Accumulated other comprehensive income 72,178 59,411
Other (2,894 ) (3,304 )
Total stockholders' investment 1,040,966   1,009,353  
Total $ 1,651,424   $ 1,607,719  
(Dollars in Thousands)
Three Months Ended
October 31,
2012   2011  
Operating activities:
Net income $ 27,188 $ 32,732
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 10,675 11,241
Deferred income taxes (109 ) 4,399
Non-cash portion of stock-based compensation expense 4,399 3,591
Loss (gain) on sales of businesses 3,138 -
Changes in operating assets and liabilities
(net of effects of business acquisitions/divestitures):
Accounts receivable (18,426 ) (7,798 )
Inventories (8,141 ) (7,156 )
Prepaid expenses and other assets (2,710 ) (7,384 )
Accounts payable and accrued liabilities 6,752 (21,814 )
Income taxes (2,548 ) 7,470  
Net cash provided by operating activities 20,218 15,281
Investing activities:
Purchases of property, plant and equipment (6,177 ) (5,817 )
Settlement of net investment hedges - (958 )
Sales of businesses, net of cash retained 10,178 -
Other (70 ) (233 )
Net cash provided by (used in) investing activities 3,931 (7,008 )
Financing activities:
Payment of dividends (9,704 ) (9,690 )
Proceeds from issuance of common stock 1,684 683
Purchase of treasury stock (5,121 ) (12,309 )
Income tax benefit from the exercise of stock options and deferred
compensation distribution, and other 400   456  
Net cash used in financing activities (12,741 ) (20,860 )
Effect of exchange rate changes on cash 4,001 (5,790 )
Net increase (decrease) in cash and cash equivalents 15,409 (18,377 )
Cash and cash equivalents, beginning of period 305,900   389,971  
Cash and cash equivalents, end of period $ 321,309   $ 371,594  
Supplemental disclosures:
Cash paid during the period for:
Interest, net of capitalized interest $ 4,953 $ 6,082
Income taxes, net of refunds 12,199 5,825
Information by regional segment for the three months ended October 31, 2012 and 2011 is as follows:
(in thousands)   Americas   EMEA   Asia-Pacific   Total Region  


SALES TO EXTERNAL CUSTOMERS                        
Three months ended:                        
October 31, 2012   $ 148,692     $ 93,233     $ 95,721     $ 337,646       -     $ 337,646  
October 31, 2011   $ 153,863     $ 97,356     $ 98,289     $ 349,508       -     $ 349,508  
SALES GROWTH INFORMATION                        
Three months ended October 31, 2012:                        
Base     -0.7 %     -3.2 %     -2.5 %     -1.9 %     -       -1.9 %
Currency     -1.1 %     -5.7 %     -0.1 %     -2.1 %     -       -2.1 %
Acquisitions/Divestitures     -1.6 %     4.7 %     0.0 %     0.6 %     -       0.6 %
Total     -3.4 %     -4.2 %     -2.6 %     -3.4 %     -       -3.4 %
Three months ended October 31, 2011:                        
Base     5.7 %     3.7 %     -0.2 %     3.5 %     -       3.5 %
Currency     0.4 %     3.7 %     5.5 %     2.7 %     -       2.7 %
Acquisitions/Divestitures     -0.7 %     -1.6 %     2.1 %     -0.2 %     -       -0.2 %
Total     5.4 %     5.8 %     7.4 %     6.0 %     -       6.0 %
SEGMENT PROFIT (LOSS)                        
Three months ended:                        
October 31, 2012   $ 44,633     $ 23,567     $ 12,055     $ 80,255     $ (1,973 )   $ 78,282  
October 31, 2011   $ 43,230     $ 26,299     $ 13,304     $ 82,833     $ (3,263 )   $ 79,570  
Percentage increase (decrease)     3.2 %     -10.4 %     -9.4 %     -3.1 %         -1.6 %
    Three months ended:
  October 31,   October 31,
    2012   2011
Total profit for reportable segments   $ 80,255     $ 82,833  
Corporate and eliminations     (1,973 )     (3,263 )
Unallocated amounts:        
Administrative costs     (30,408 )     (30,480 )
Loss (gain) on sales of businesses     (3,438 )     -  
Investment and other income (expense)     397       (202 )
Interest expense     (4,163 )     (5,047 )
Income before income taxes     40,670       43,841  
Income taxes     (13,482 )     (11,109 )
Net income   $ 27,188     $ 32,732  
(Dollars in Thousands, Except Per Share Amounts)
In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure.
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, 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.
Fiscal 2013






Net income $ 27,188 $ - $ - $ - $ 27,188
Interest expense 4,163 - - - 4,163
Income taxes 13,482 - - - 13,482
Depreciation and amortization   10,675     -       -     -     10,675  
EBITDA (non-GAAP measure) $ 55,508   $ -     $ -   $ -   $ 55,508  
Fiscal 2012






Net income (loss) $ 32,732 $ (89,954 ) $ 27,652 $ 11,659 $ (17,911 )
Interest expense 5,047 4,933 4,735 4,375 19,090
Income taxes 11,109 8,635 9,676 11,241 40,661
Depreciation and amortization 11,241 10,935 10,745 11,066 43,987
Impairment charge   -     115,688       -     -     115,688  
EBITDA (non-GAAP measure) $ 60,129   $ 50,237     $ 52,808   $ 38,341   $ 201,515  
Diluted Earnings Per Share Excluding Losses on the Sales of Businesses:
This is a measure of the Company’s diluted net earnings per share excluding current year losses on the sales of businesses. We do not view these items to be part of our sustainable results. We believe this earnings per share measure provides an important perspective of underlying business trends and results and provides a more comparable measure of year-on-year earnings per share growth. The table below provides a reconciliation of diluted earnings per share to diluted earnings per share excluding losses on the sales of businesses:
Three Months Ended
October 31,
  2012     2011
Diluted Earnings per Share $ 0.53 $ 0.62
Loss on the sale of Brady Medical 0.05 -
Loss on the sale of Varitronics 0.01 -
Diluted Earnings per Share Excluding      
Losses on the Sales of Businesses $ 0.59   $ 0.62
All reconciling items are presented net of tax. Tax effects are calculated consistent with the nature of the underlying transaction.
Net Income Excluding Losses on the Sales of Businesses:
This is a measure of the Company’s net income excluding current year losses on the sales of businesses. We do not view these items to be part of our sustainable results. We believe this net income measure provides an important perspective of underlying business trends and results and provides a more comparable measure of year-on-year net income growth. The table below provides a reconciliation of net income to net income excluding the losses on the sales of businesses:
Three Months Ended
October 31,
  2012     2011
Net Income $ 27,188 $ 32,732
Loss on the sale of Brady Medical 2,577 -
Loss on the sale of Varitronics 638 -
Net Income Excluding      
Losses on the Sales of Businesses $ 30,403   $ 32,732
All reconciling items are presented net of tax. Tax effects are calculated consistent with the nature of the underlying transaction.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi's VP Business Development and Engineering, will explore the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context w...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
The IoT is upon us, but today’s databases, built on 30-year-old math, require multiple platforms to create a single solution. Data demands of the IoT require Big Data systems that can handle ingest, transactions and analytics concurrently adapting to varied situations as they occur, with speed at scale. In his session at @ThingsExpo, Chad Jones, chief strategy officer at Deep Information Sciences, will look differently at IoT data so enterprises can fully leverage their IoT potential. He’ll share tips on how to speed up business initiatives, harness Big Data and remain one step ahead by apply...
There will be 20 billion IoT devices connected to the Internet soon. What if we could control these devices with our voice, mind, or gestures? What if we could teach these devices how to talk to each other? What if these devices could learn how to interact with us (and each other) to make our lives better? What if Jarvis was real? How can I gain these super powers? In his session at 17th Cloud Expo, Chris Matthieu, co-founder and CTO of Octoblu, will show you!
The IoT market is on track to hit $7.1 trillion in 2020. The reality is that only a handful of companies are ready for this massive demand. There are a lot of barriers, paint points, traps, and hidden roadblocks. How can we deal with these issues and challenges? The paradigm has changed. Old-style ad-hoc trial-and-error ways will certainly lead you to the dead end. What is mandatory is an overarching and adaptive approach to effectively handle the rapid changes and exponential growth.
SYS-CON Events announced today that ProfitBricks, the provider of painless cloud infrastructure, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. ProfitBricks is the IaaS provider that offers a painless cloud experience for all IT users, with no learning curve. ProfitBricks boasts flexible cloud servers and networking, an integrated Data Center Designer tool for visual control over the cloud and the best price/performance value available. ProfitBricks was named one of the coolest Clo...
As a company adopts a DevOps approach to software development, what are key things that both the Dev and Ops side of the business must keep in mind to ensure effective continuous delivery? In his session at DevOps Summit, Mark Hydar, Head of DevOps, Ericsson TV Platforms, will share best practices and provide helpful tips for Ops teams to adopt an open line of communication with the development side of the house to ensure success between the two sides.
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, along with new ways to engage with users.
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new data-driven world, marketplaces reign supreme while interoperability, APIs and applications deliver un...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
SYS-CON Events announced today that Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, will keynote at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of at least three separate application components: the software embedded in the device, the backend big-data service, and the mobile application for the end user's controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target - this makes the integration of these separate pipelines and the coordination of software upd...
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text message to Betty – mobile messaging now offers tremendous value to businesses for customer and empl...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
The broad selection of hardware, the rapid evolution of operating systems and the time-to-market for mobile apps has been so rapid that new challenges for developers and engineers arise every day. Security, testing, hosting, and other metrics have to be considered through the process. In his session at Big Data Expo, Walter Maguire, Chief Field Technologist, HP Big Data Group, at Hewlett-Packard, will discuss the challenges faced by developers and a composite Big Data applications builder, focusing on how to help solve the problems that developers are continuously battling.
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing these ideas and some early experiments performed in the Kurento open source software community in areas ...
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete end-to-end walkthrough of the analysis from start to finish. Participants will also be given the pract...