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
======== ======= =======
SOURCE Brady Corporation
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Related links:
http://www.bradycorp.com
http://www.investor.bradycorp.com
http://www.prnewswire.com/comp/952350.html/
CONTACT:
Investor contact, Barbara Bolens,
+1-414-438-6940, or Media contact, Carole Herbstreit,
+1-414-438-6882, both of Brady Corporation
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