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UNITED STATES
\nSECURITIES AND EXCHANGE COMMISSION\n
\n\n
Washington, D.C. 20549\n
\n\n
FORM 8-K\n
\n\n\n
CURRENT REPORT\n
\n\n
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
\n\n
Date of Report (Date of earliest event reported): November 16, 2007
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BRADY CORPORATION\n
\n\n
(Exact name of registrant as specified in its charter)
\n\n\n
Commission File Number 1-14959
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Wisconsin
\n(State of Incorporation)\n		 39-0971239
\n(IRS Employer Identification No.)
\n
\n\n
6555 West Good Hope Road
\nMilwaukee, Wisconsin 53223
\n(Address of Principal Executive Offices and Zip Code)
\n\n
(414) 358-6600
\n(Registrant’s Telephone Number)
\n\n
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the\nfiling obligation of the registrant under any of the following provisions:\n
\n\n\n
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)\n
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o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)\n
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o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act\n(17 CFR 240.14d-2(b))\n
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o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act\n(17 CFR 240.13e-4(c))\n
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TABLE OF CONTENTS
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Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Item 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
SIGNATURE
EXHIBIT INDEX
Press Release
Press Release
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Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION\n
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          On November 20, 2007, Brady Corporation (the “Corporation”) issued a press release announcing\nits fiscal 2008 first quarter financial results. A copy of the press release is being furnished to\nthe Securities and Exchange Commission as Exhibit 99.1 attached herewith and is incorporated herein\nby reference.\n
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\n\n
Item 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN\nOFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS\n
\n\n
(b) Effective November 16, 2007, Directors Mary K. Bush, Peter J. Lettenberger, and Roger D. Peirce\nretired from the Corporation’s Board of Directors.\n
\n\n
(d) On November 16, 2007, at the Corporation’s Annual Shareholders’ Meeting, the holders of the\nCorporation’s Class B Common Stock elected Bradley C. Richardson to the Corporation’s Board of\nDirectors. There was no arrangement or understanding pursuant to which Mr. Richardson was elected\ndirector, and no related party transactions exist between the Corporation and Mr. Richardson. Mr.\nRichardson has been appointed to the Audit and Finance Committees of the Corporation’s Board of\nDirectors. He is eligible to participate in the Corporation’s equity incentive and other benefit\nplans on a basis similar to other non-employee directors and, as such, will receive an award of\n10,000 stock options on December 4, 2007. A copy of the press release relating to the election of\nMr. Richardson to the Board of Directors is being provided to the Securities and Exchange\nCommission as Exhibit 99.2 attached herewith and is incorporated herein by reference.\n
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Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.\n
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(d) Exhibits.\n
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The following are filed as Exhibits to this Report.\n
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Exhibit No. Description of Exhibit
    
 
99.1   
Press Release of Brady Corporation, dated November 20, 2007, relating to the Corporation’s\nfiscal 2008 first quarter financial results.
    
 
99.2   
Press Release of Brady Corporation, dated November 16, 2007, relating to the election of\nBradley C. Richardson to the Corporation’s Board of Directors.
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SIGNATURE\n
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused\nthis report to be signed on its behalf by the undersigned hereunto duly authorized.\n
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 BRADY CORPORATION
\n 		 
Date: November 21, 2007 /s/ David Mathieson\n  
 David Mathieson  
 Senior Vice President &
\nChief Financial Officer 		 
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EXHIBIT INDEX\n
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Exhibit No. Description of Exhibit
    
 
99.1   
Press Release of Brady Corporation, dated November 20, 2007, relating to the Corporation’s\nfiscal 2008 first quarter financial results.
    
 
99.2   
Press Release of Brady Corporation, dated November 16, 2007, relating to the election of\nBradley C. Richardson to the Corporation’s Board of Directors.
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For more information:
\nInvestor contact: Barbara Bolens 414-438-6940
\nMedia contact: Carole Herbstreit 414-438-6882\n\n
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For Immediate Release\n
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Brady Corporation reports sales and earnings for fiscal 2008 first quarter\n\n
\n
MILWAUKEE (November 20, 2007)—Brady Corporation (NYSE:BRC) reports record sales and earnings for\nits fiscal 2008 first quarter ended October 31, 2007.\n
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     Sales for the quarter rose 14.4 percent to $380.1 million compared to $332.3 million in the\nfirst quarter of fiscal 2007. Sales growth was comprised of 1.7 percent organic growth, 7.5\npercent from acquisitions and 5.2 percent from currency exchange. By segment, sales were up 27.2\npercent in Brady Americas, 8.3 percent in Direct Marketing & People Identification Americas, 17.9\npercent in Europe, and 3.7 percent in Asia/Pacific.\n
\n\n
     Net income increased 5.6 percent in the fiscal 2008 first quarter to $36.4 million compared to\n$34.4 million in the same quarter last year. Earnings per diluted Class A Common share were $0.66\nin the first quarter of fiscal 2008, up 4.8 percent compared to $0.63 per diluted share in the\nprior year’s quarter.\n
\n\n
     “We are encouraged that the significant global cost-reduction activities taken in fiscal 2007\nare now showing positive results. In addition, we have strengthened our position with the major\nplayers in the mobile-handset market as well as in the smaller hard-disk-drive and\nconsumer-electronics markets,” said Frank M. Jaehnert, Brady’s president and chief executive\nofficer. “While we are pleased with our first quarter results, we are cautious about the economy\ngoing forward. We also announced the acquisition of Transposafe last week with annual sales of $26\nmillion.\n
\n\n
     “Our guidance remains unchanged for the year, with sales from $1.430 to $1.460 billion, and\nnet income and diluted earnings per share at between $129 and $135 million, and $2.31 and $2.42,\nrespectively.”\n
\n\n
     “Beginning with this quarter, we are changing our segment reporting from three to four\nsegments to better reflect our current operational structure in the Americas by splitting results\ninto Brady Americas and Direct Marketing & People Identification Americas. Reporting for Europe\nand Asia Pacific remains unchanged,” said David Mathieson, Brady’s senior vice president and chief\nfinancial officer.\n
\n\n
     A web cast regarding fiscal 2008 first quarter results will be available at\nwww.investor.bradycorp.com.\n
\n\n
     Brady Corporation is an international manufacturer and marketer of complete solutions that\nidentify and protect premises, products and people. Its products help customers increase safety,\nsecurity, productivity and performance and include high-performance labels and signs, safety\ndevices, printing systems and software, and precision die-cut materials. Founded in 1914, the\ncompany has more than 500,000 customers in\n
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electronics, telecommunications, manufacturing, electrical, construction, education, medical and a\nvariety of other industries. Brady is headquartered in Milwaukee and employs more than 8,600 people\nat operations in the Americas, Europe and Asia/Pacific. Brady’s fiscal 2007 sales were\napproximately $1.363 billion.\n
\n\n
Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is\navailable on the Internet at www.bradycorp.com, which includes an on-line version of the 2007\nAnnual Report to Shareholders.\n
\n\n
Brady believes that certain statements in this news release are “forward-looking statements” within\nthe meaning of the Private Securities Litigation Reform Act of 1995. All statements related to\nfuture, not past, events included in this news release, including, without limitation, statements\nregarding Brady’s future financial position, business strategy, targets, projected sales, costs,\nearnings, capital expenditures, debt levels and cash flows, and plans and objectives of management\nfor future operations are forward-looking statements. When used in this news release, words such as\n“may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or\n“plan” or similar terminology are generally intended to identify forward-looking statements. These\nforward-looking statements by their nature address matters that are, to different degrees,\nuncertain and are subject to risks, assumptions and other factors, some of which are beyond Brady’s\ncontrol, that could cause actual results to differ materially from those expressed or implied by\nsuch forward-looking statements. For Brady, uncertainties arise from future financial performance\nof major markets Brady serves, which include, without limitation, telecommunications,\nmanufacturing, electrical, construction, laboratory, education, governmental, public utility,\ncomputer, transportation; difficulties in making and integrating acquisitions; risks associated\nwith newly acquired businesses; Brady’s ability to retain significant contracts and customers;\nfuture competition; Brady’s ability to develop and successfully market new products; changes in the\nsupply of, or price for, parts and components; increased price pressure from suppliers and\ncustomers; interruptions to sources of supply; environmental, health and safety compliance costs\nand liabilities; Brady’s ability to realize cost savings from operating initiatives; Brady’s\nability to attract and retain key talent; difficulties associated with exports; risks associated\nwith international operations; fluctuations in currency rates versus the US dollar; technology\nchanges; potential write-offs of Brady’s substantial intangible assets; risks associated with\nobtaining governmental approvals and maintaining regulatory compliance for new and existing\nproducts; business interruptions due to implementing business systems; and numerous other matters\nof national, regional and global scale, including those of a political, economic, business,\ncompetitive and regulatory nature contained from time to time in Brady’s U.S. Securities and\nExchange Commission filings, including, but not limited to, those factors listed in the “Risk\nFactors” section located in Item 1A of Part I of Brady’s Form 10-K for the year ended July 31,\n2007. These uncertainties may cause Brady’s actual future results to be materially different than\nthose expressed in its forward-looking statements. Brady does not undertake to update its\nforward-looking statements.\n
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Information by regional segment for the three months ended October 31, 2007 and 2006 is as follows:\n
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\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n
                             
      Direct                   
      Marketing &              Corporate    
      People ID              and    
(in thousands) Brady Americas  Americas  Europe  Asia  Subtotals  Eliminations  Total
SALES TO EXTERNAL\nCUSTOMERS
                            
Three months ended:
                            
October 31, 2007
 $105,235  $69,540  $108,914  $96,445  $380,134   —  $380,134 
October 31, 2006
  82,759   64,184   92,365   92,951   332,259   —   332,259 
 
                            
SALES GROWTH\nINFORMATION
                            
Three months ended October 31, 2007:
                            
Base
  8.2%  2.4%  0.3%  -3.3%  1.7%  —   1.7%
Currency
  1.8%  1.2%  9.6%  6.7%  5.2%  —   5.2%
Acquisitions
  17.2%  4.7%  8.0%  0.3%  7.5%  —   7.5%
 
                     
Total
  27.2%  8.3%  17.9%  3.7%  14.4%  —   14.4%
 
                            
SEGMENT PROFIT (LOSS)
                            
Three months ended:
                            
October 31, 2007
 $24,459  $19,648  $29,900  $19,390  $93,397   ($2,237) $91,160 
October 31, 2006
  20,715   16,803   23,005   22,137   82,660   (2,810)  79,850 
Percentage increase (decrease)
  18.1%  16.9%  30.0%  -12.4%  13.0%  -20.4%  14.2%
 
                            
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NET INCOME RECONCILIATION (in thousands)\n
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  Three months ended: 
  October 31,  October 31, 
  2007  2006 
Total profit for reportable segments
 $93,397  $82,660 
Corporate and eliminations
  (2,237)  (2,810)
Unallocated amounts:
        
Administrative costs
  (32,822)  (27,909)
Investment and other income
  118   638 
Interest expense
  (6,720)  (4,735)
Income before income taxes
  51,736   47,844 
Income taxes
  (15,366)  (13,396)
 
      
Net income
 $36,370  $34,448 
 
      
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BRADY CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED STATEMENTS OF INCOME\n
\n\n\n
(Dollars in Thousands)\n\n
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  (Unaudited)
  Three Months Ended October 31,  Percentage
  2007  2006  Change
Net sales
 $380,134  $332,259   14.4%
Cost of products sold
  192,467   168,131   14.5%
 
          
Gross margin
  187,667   164,128   14.3%
 
            
Operating expenses:
            
Research and development
  8,978   8,532   5.2%
Selling, general and administrative
  120,351   103,655   16.1%
 
          
Total operating expenses
  129,329   112,187   15.3%
 
            
Operating income
  58,338   51,941   12.3%
 
            
Other income and (expense):
            
Investment and other income
  118   638   -81.5%
Interest expense
  (6,720)  (4,735)  41.9%
 
          
 
            
Income before income taxes
  51,736   47,844   8.1%
 
            
Income taxes
  15,366   13,396   14.7%
 
          
 
            
Net income
 $36,370  $34,448   5.6%
 
          
 
            
Per Class A Nonvoting Common Share:
            
Basic net income
 $0.67  $0.64   4.7%
Diluted net income
 $0.66  $0.63   4.8%
Dividends
 $0.15  $0.14   7.1%
 
            
Per Class B Voting Common Share:
            
Basic net income
 $0.65  $0.63   3.2%
Diluted net income
 $0.64  $0.62   3.2%
Dividends
 $0.13  $0.12   8.3%
 
            
Weighted average common shares\noutstanding (in thousands):
            
Basic
  54,350   53,734     
Diluted
  55,121   54,605     
\n
\n\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n\n
BRADY CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED BALANCE SHEETS\n
\n\n\n
(IN THOUSANDS)\n\n
\n
\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n
         
  (Unaudited) 
  October 31, 2007  July 31, 2007 
ASSETS
        
Current assets:
        
Cash and cash equivalents
 $170,599  $142,846 
Short term investments
  16,490   19,200 
Accounts receivable, less allowance for losses ($9,583 and\n$9,109, respectively)
  256,558   239,569 
Inventories:
        
Finished products
  78,793   80,486 
Work-in-process
  22,710   21,309 
Raw materials and supplies
  39,853   37,983 
 
      
Total inventories
  141,356   139,778 
Prepaid expenses and other current assets
  44,289   42,020 
 
      
 
        
Total current assets
  629,292   583,413 
 
        
Other assets:
        
Goodwill
  753,908   737,450 
Other intangible assets, net
  146,439   149,761 
Deferred income taxes
  30,379   32,508 
Other
  23,156   21,111 
 
      
 
Total other assets
  953,882   940,830 
 
        
Property, plant and equipment:
        
Cost:
        
Land
  6,388   6,332 
Buildings and improvements
  92,735   90,688 
Machinery and equipment
  254,703   248,356 
Construction in progress
  18,585   18,107 
 
      
 
        
 
  372,411   363,483 
Less accumulated depreciation
  197,073   188,869 
 
      
 
        
Net property, plant and equipment
  175,338   174,614 
 
      
 
        
Total
 $1,758,512  $1,698,857 
 
      
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
        
 
        
Current liabilities:
        
Accounts payable
 $97,171  $91,596 
Wages and amounts withheld from employees
  55,073   73,622 
Taxes, other than income taxes
  9,592   8,461 
Accrued income taxes
  18,513   24,677 
Other current liabilities
  62,156   60,254 
Short-term borrowings and current maturities on long-term debt
  21,440   21,444 
 
      
 
        
Total current liabilities
  263,945   280,054 
 
        
Long-term obligations, less current maturities
  478,573   478,575 
 
        
Other liabilities
  62,850   49,216 
 
      
 
        
Total liabilities
  805,368   807,845 
 
        
Stockholders’ investment:
        
Common stock:
        
 
        
Class A Nonvoting common stock — Issued and outstanding 50,847,654 and
  508   506 
50,586,524 shares, respectively
        
 
        
Class B Voting common stock — Issued and outstanding, 3,538,628 shares
  35   35 
Additional paid-in capital
  276,304   266,203 
Earnings retained in the business
  567,605   540,238 
Accumulated other comprehensive income
  108,050   83,376 
Other
  642   654 
 
      
 
        
Total stockholders’ investment
  953,144   891,012 
 
      
 
        
Total
 $1,758,512  $1,698,857 
 
      
\n
\n\n\n\n

 \n

\n\n\n\n\n

\n

 

\n

\n\n\n
BRADY CORPORATION AND SUBSIDIARIES
\nCONSOLIDATED STATEMENTS OF CASH FLOWS
\n(Dollars in Thousands)\n\n
\n
\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n
         
  (Unaudited) 
  Three Months Ended 
  October 31 
  2007  2006 
Operating activities:
        
Net income
 $36,370  $34,448 
Adjustments to reconcile net income to net cash provided by operating activities:
        
Depreciation and amortization
  14,168   12,927 
Deferred income taxes
  (666)  (542)
Loss on disposal of property, plant & equipment
  712   204 
Non-cash portion of stock-based compensation expense
  3,257   1,559 
Changes in operating assets and liabilities (net of effects of business acquisitions):
        
Accounts receivable
  (10,880)  (21,119)
Inventories
  1,337   (6,539)
Prepaid expenses and other assets
  (4,417)  (4,818)
Accounts payable and accrued liabilities
  (13,278)  (9,638)
Income taxes
  6,086   4,437 
Other liabilities
  1,201   1,443 
 
      
Net cash provided by operating activities
  33,890   12,362 
 
        
Investing activities:
        
Acquisition of businesses, net of cash acquired
  —   (45,173)
Payments of contingent consideration
  (1,200)  (7,500)
Purchases of short-term investments
  (5,150)  — 
Sales of short-term investments
  7,860   11,500 
Purchases of property, plant and equipment
  (7,395)  (14,420)
Other
  (1,375)  (663)
 
      
Net cash used in investing activities
  (7,260)  (56,256)
 
        
Financing activities:
        
Payment of dividends
  (8,100)  (7,463)
Proceeds from issuance of common stock
  4,134   531 
Principal payments on debt
  (5)  (23,226)
Proceeds from issuance of debt
  —   48,220 
Income tax benefit from the exercise of stock options and deferred\ncompensation distributions
  2,712   162 
 
      
Net cash (used in) provided by financing activities
  (1,259)  18,224 
Effect of exchange rate changes on cash
  2,382   171 
 
        
Net increase (decrease) in cash and cash equivalents
  27,753   (25,499)
Cash and cash equivalents, beginning of period
  142,846   113,008 
 
      
 
        
Cash and cash equivalents, end of period
  170,599   87,509 
 
      
 
        
Supplemental disclosures:
        
Cash paid during the period for:
        
Interest, net of capitalized interest
 $9,298  $5,368 
Income taxes, net of refunds
  3,275   9,393 
Acquisitions:
        
Fair value of asset acquired, net of cash
 $—  $27,589 
Liabilities assumed
  —   (6,610)
Goodwill
  —   24,194 
 
      
Net cash paid for acquisitions
 $—  $45,173 
 
      
\n
\n\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n\n
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
\n(in thousands)\n\n
\n
\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n
                     
  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 
\n
\n\n
\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n
                     
  Fiscal 2008
  Q1 Q2 Q3 Q4 Total
EBITDA (1)
                    
Net income
 $36,370              $36,370 
Interest expense
  6,720               6,720 
Income taxes
  15,366               15,366 
Depreciation and amortization
  14,168               14,168 
   
 
                    
EBITDA (non-GAAP measure)
 $72,624  $—  $—  $—  $72,624 
\n
\n\n\n\n
\n
 
\n
\n\n\n\n \n \n \n\n\n\n \n \n \n\n\n
(1) Brady is presenting EBITDA because it is used by many of our investors and lenders, and is presented as a convenience to\nthem. EBITDA represents net income before interest expense, income taxes and depreciation and amortization. EBITDA is not\na calculation based on generally accepted accounting principles (GAAP). The amounts included in the EBITDA calculation,\nhowever, are derived from amounts included in the Condensed Consolidated Statements of Income data. EBITDA should not be\nconsidered as an alternative to net income or operating income as an indicator of the company’s operating performance, or\nas an alternative to operating cash flows as a measure of liquidity. The EBITDA measure presented may not always be\ncomparable to similarly titled measures reported by other companies due to differences in the components of the\ncalculation.
\n\n\n\n\n

 \n

\n\n\n\n\n\n\n
\n\nexv99w2\n\n\n\n
 

\n

\n\n\n
Exhibit 99.2\n
\n\n\n
For More Information Contact:
\nCarole Herbstreit (414) 438-6882\n\n
\n\n
For Immediate Release\n
\n\n\n
Brady Corporation announces the election of Bradley C. Richardson to its Board of\nDirectors.\n
\n\n
MILWAUKEE (November 16, 2007) — Bradley C. Richardson, Executive Vice President and Chief\nFinancial Officer of Modine Manufacturing Company (NYSE:MOD) in Racine, Wis. was elected today to\nthe Brady Corporation (NYSE:BRC) Board of Directors at its annual shareholders’ meeting.\n
\n\n\n
     Richardson, 49, joined Modine as Vice President, Finance and CFO in 2003. Prior to Modine, he\nspent more than twenty years in a variety of financial and operational positions at BP Amoco\nincluding chief financial officer and vice president of performance management and control for\ntheir Worldwide Exploration and Production division based in London, president of their businesses\nin Venezuela, and chief financial officer for Amoco Energy Group North America. A graduate of\nMiami University in Oxford, Ohio (undergraduate) and Indiana University in Bloomington, Indiana\n(MBA), Richardson also serves on the board of Tronox, Inc.\n
\n\n
     “We are very pleased to welcome Bradley Richardson to our board,” said Robert Buchanan, chair\nof Brady’s corporate governance committee. “As a current CFO of an international, publicly traded\nmanufacturing company, he brings a strong understanding of the complexities of both the\nopportunities and challenges that Brady will face as it grows to the next level. In addition, his\nleadership experience in global business performance will be an asset to our board.”\n
\n\n
     Richardson joins Brady Board of Directors members Richard Bemis, co-chairman of the board of\ndirectors of Bemis Manufacturing; Robert Buchanan, retired chairman of Fox Valley Corporation;\nFrank Harris, distinguished professor and director of the Maurice Morton Institute of Polymer\nScience and Biomedical Engineering at the University of Akron; consultant Frank Jarc; Gary Nei,\nchairman of Nei-Turner Media; Elizabeth Pungello, developmental psychologist at the Frank Porter\nGraham Child Development Institute at the University of North Carolina at Chapel Hill; Chan\nGalbato, former president of the controls division of Invensys plc; Patrick Allender, retired\nexecutive vice president and chief financial officer of Danaher Corporation; Conrad Goodkind,\npartner in the law firm of Quarles and Brady, LLP; and Brady President and Chief Executive Officer\nFrank Jaehnert; who were re-elected to a one-year term at today’s meeting.\n
\n\n
     Brady Corporation is an international manufacturer and marketer of complete solutions that\nidentify and protect premises, products and people. Its products help customers increase safety,\nsecurity, productivity and performance and include high-performance labels and signs, safety\ndevices, printing systems and software, and precision die-cut materials. Founded in 1914, the\ncompany has more than 500,000 customers in\n
\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n\n\n
electronics, telecommunications, manufacturing, electrical, construction, education, medical\nand a variety of other industries. Brady is headquartered in Milwaukee and employs more than 8,600\npeople at operations in the Americas, Europe and Asia/Pacific. Brady’s fiscal 2007 sales were\napproximately $1.363 billion.\n
\n\n
     More information is available on the Internet at www.bradycorp.com.\n
\n\n
###\n
\n\n\n\n

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