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UNITED STATES
\nSECURITIES AND EXCHANGE COMMISSION\n
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Washington, D.C. 20549\n
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FORM 8-K\n
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CURRENT REPORT
\nPursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934\n
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Date of Report (Date of earliest event reported): February 20, 2008
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BRADY CORPORATION\n
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(Exact name of registrant as specified in its charter)
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Commission File Number 1-14959
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Wisconsin\n 39-0971239
(State of Incorporation)\n (IRS Employer Identification No.)
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6555 West Good Hope Road
\nMilwaukee, Wisconsin 53223
\n(Address of Principal Executive Offices and Zip Code)
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(414) 358-6600
\n(Registrant’s Telephone Number)
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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
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act\n(17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act\n(17 CFR 240.13e-4(c))
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Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION\n
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     On February 20, 2008, Brady Corporation (the “Corporation”) issued a press release announcing\nits fiscal 2008 second quarter financial results. A copy of the press release is being furnished\nto the Securities and Exchange Commission as Exhibit 99.1 attached herewith and is incorporated\nherein by reference.\n
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Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.\n
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(d) Exhibits.\n\n
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The following are filed as Exhibits to this Report.\n\n
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Exhibit No. Description of Exhibit
 
  
99.1\n
 Press Release of Brady Corporation, dated February 20, 2008, relating to the Corporation’s\nfiscal 2008 second quarter financial results.
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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: February 22, 2008 /s/ Thomas J. Felmer\n  
 Thomas J. Felmer 
 Senior Vice President &\n\nChief Financial Officer  
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EXHIBIT INDEX\n
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Exhibit No. Description of Exhibit
 
  
99.1\n
 Press Release of Brady Corporation, dated February 20, 2008, relating to the Corporation’s\nfiscal 2008 second quarter financial results.
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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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Brady Corporation reports sales and net income for its fiscal 2008 second quarter\n
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MILWAUKEE (February 20, 2008)—Brady Corporation (NYSE: BRC), a world leader in identification\nsolutions, reports sales and earnings for its second quarter ended January 31, 2008.\n
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     Sales for the quarter were up 13 percent to $364.1 million, compared to $321.3 million in the\nsecond quarter of fiscal 2007. Base business growth was down 1 percent, acquisitions increased\nsales by 8 percent and currency exchange added 6 percent. Total sales increased 18 percent in\nBrady Americas, 3 percent in Direct Marketing & People Identification Americas, 24 percent in\nEurope, and 3 percent in the Asia/Pacific region.\n
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     Net income for the quarter rose 35 percent to $26.7 million compared to $19.7 million in the\nquarter last year. Earnings per diluted Class A Common share increased 33 percent to $0.48 compared\nto $0.36 per share in the fiscal 2007 second quarter.\n
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     Sales for the six months ended January 31, 2008, rose 14 percent to $744.3 million compared to\n$653.5 million in the same period last year. Net income for the first six months of fiscal 2008\nrose 16 percent to $63.1 million compared to $54.2 million for the same period in fiscal 2007.\nSix-month earnings per diluted Class A Common share were up 15 percent to $1.14 compared to $0.99\nin fiscal 2007.\n
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     “We are pleased with our overall results for the quarter including good growth in net income\nand nice improvement in margins. Our profit improvements are a direct result of actions taken over\nthe past year. A number of factors contributed to flat core growth, including a challenging\neconomy in the US,” said Frank M. Jaehnert, Brady’s president and chief executive officer.\n“Recently, we consolidated leadership of our Direct Marketing & People Identification and Brady\nbusinesses in the Americas in order to bring greater consistency to our global management\nstructure. Both businesses will now report to Matt Williamson, president, Brady Americas. This\nwill further streamline and simplify our organization.”\n
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     “I am very pleased to see the impact that our focus on working capital has had on operating\ncash flow generation which increased to $87.8 million from $37.1 million, up 137 percent year to\ndate,” said Brady Chief Financial Officer Thomas J. Felmer. “We are continuing to focus on\nintegrating acquisitions and streamlining our business to assure our cost structure is appropriate\nfor the economic conditions, and rebalancing our business in Asia to focus on more proprietary and\nprofitable segments. We reaffirm our guidance of sales from $1.43 to $1.46 billion and net income\nand diluted earnings per share of between $129 and $135 million, and $2.31 and $2.42 respectively.”\n
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     A webcast regarding fiscal 2008 second quarter results will be available at\nwww.investor.bradycorp.com beginning at 9:30 a.m. Central Standard Time today.\n
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     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\n
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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 electronics, telecommunications, manufacturing,\nelectrical, construction, education, medical and a variety of other industries. Brady is\nheadquartered in Milwaukee and employs more than 9,000 people at operations in the Americas, Europe\nand Asia/Pacific. Brady’s fiscal 2007 sales were approximately $1.363 billion.\n
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     More information is available on the Internet at www.bradycorp.com.\n
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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 II of Brady’s Annual Report on Form 10-K for the period\nended July 31, 2007. These uncertainties may cause Brady’s actual future results to be materially\ndifferent than those expressed in its forward-looking statements. Brady does not undertake to\nupdate its forward-looking statements.\n
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BRADY\nCORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED STATEMENTS OF INCOME\n
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(Dollars\nin Thousands)
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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\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \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 January 31,  Six Months Ended January 31, 
          Percentage          Percentage 
  2008  2007  Change  2008  2007  Change 
Net sales
 $364,124   321,275   13.3% $744,258   653,534   13.9%
Cost of products\nsold
  189,101   171,114   10.5%  381,567   339,245   12.5%
 
                    
Gross margin
  175,023   150,161   16.6%  362,691   314,289   15.4%
 
                        
Operating expenses:
                        
Research and development
  10,071   9,082   10.9%  19,050   17,614   8.2%
Selling,\ngeneral and\nadministrative
  122,508   108,355   13.1%  242,859   212,010   14.6%
 
                    
Total\noperating expenses
  132,579   117,437   12.9%  261,909   229,624   14.1%
 
                        
Operating income
  42,444   32,724   29.7%  100,782   84,665   19.0%
 
                        
Other income and\n(expense):
                        
Investment and\nother income\n(expense)
  2,269   (106)  -2240.6%  2,387   532   348.7%
Interest expense
  (6,747)  (5,244)  28.7%  (13,467)  (9,979)  35.0%
 
                    
 
                        
Income\nbefore income taxes
  37,966   27,374   38.7%  89,702   75,218   19.3%
 
                        
Income taxes
  11,276   7,665   47.1%  26,642   21,061   26.5%
 
                    
 
                        
Net income
 $26,690   19,709   35.4% $63,060   54,157   16.4%
 
                    
 
                        
 
  2008   2007       2008   2007     
Per Class A\nNonvoting Common\nShare:
                        
Basic net income
 $0.49  $0.37   32.4% $1.16  $1.01   14.9%
Diluted net\nincome
 $0.48  $0.36   33.3% $1.14  $0.99   15.2%
Dividends
 $0.15  $0.14   7.1% $0.30  $0.28   7.1%
 
                        
Per Class B Voting Common Share:
                        
Basic net income
 $0.49  $0.37   32.4% $1.14  $0.99   15.2%
Diluted net income
 $0.48  $0.36   33.3% $1.13  $0.97   16.5%
Dividends
 $0.15  $0.14   7.1% $0.28  $0.26   7.7%
 
                        
Weighted average common shares\noutstanding (in Thousands):
                        
Basic
  54,510   53,894       54,430   53,814     
Diluted
  55,228   54,789       55,175   54,697     
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BRADY CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED BALANCE SHEETS\n
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(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
         
  (Unaudited) 
  January 31, 2008  July 31, 2007 
ASSETS
        
Current assets:
        
Cash and cash equivalents
 $198,439  $142,846 
Short term investments
  —   19,200 
Accounts receivable, less allowance for losses ($8,960 and\n$9,109, respectively)
  242,394   239,569 
Inventories:
        
Finished products
  82,783   80,486 
Work-in-process
  21,164   21,309 
Raw materials and supplies
  35,867   37,983 
 
      
Total inventories
  139,814   139,778 
Prepaid expenses and other current assets
  45,946   42,020 
 
      
 
        
Total current assets
  626,593   583,413 
 
        
Other assets:
        
Goodwill
  768,850   737,450 
Other intangible assets, net
  148,468   149,761 
Deferred income taxes
  31,070   32,508 
Other
  24,697   21,111 
 
      
 
Total other assets
  973,085   940,830 
 
        
Property, plant and equipment:
        
Cost:
        
Land
  6,394   6,332 
Buildings and improvements
  93,938   90,688 
Machinery and equipment
  264,611   248,356 
Construction in progress
  14,531   18,107 
 
      
 
        
 
  379,474   363,483 
Less accumulated depreciation
  205,240   188,869 
 
      
 
Net property, plant and equipment
  174,234   174,614 
 
      
 
Total
 $1,773,912  $1,698,857 
 
      
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
        
Current liabilities:
        
Accounts payable
 $96,220  $91,596 
Wages and amounts withheld from employees
  62,065   73,622 
Taxes, other than income taxes
  7,789   8,461 
Accrued income taxes
  12,804   24,677 
Other current liabilities
  53,129   60,254 
Short-term borrowings and current maturities on long-term debt
  21,436   21,444 
 
      
 
        
Total current liabilities
  253,443   280,054 
 
        
Long-term obligations, less current maturities
  478,572   478,575 
 
        
Other liabilities
  62,899   49,216 
 
      
 
Total liabilities
  794,914   807,845 
 
        
Stockholders’ investment:
        
Common stock:
        
Class A nonvoting common stock — Issued 51,032,887 and\n50,586,524 shares
  510   506 
Class B voting common stock — Issued and outstanding,\n3,538,628 shares
  35   35 
Additional paid-in capital
  284,761   266,203 
Income retained in the business
  586,111   540,238 
Accumulated other comprehensive income
  107,035   83,376 
Other
  546   654 
 
      
 
        
Total stockholders’ investment
  978,998   891,012 
 
      
 
        
Total
 $1,773,912  $1,698,857 
 
      
\n
\n\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n\n
BRADY CORPORATION AND SUBSIDIARIES
\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n
\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 \n \n \n\n\n
         
  (Unaudited) 
  Six Months Ended 
  January 31, 
  2008  2007 
Operating activities:
        
Net income
 $63,060  $54,157 
Adjustments to reconcile net income to net cash provided by\noperating activities:
        
Depreciation and amortization
  29,669   26,096 
Deferred income taxes
  (1,527)  (542)
Loss on disposal of property, plant & equipment
  1,010   305 
Non-cash portion of stock-based compensation expense
  6,382   3,669 
Changes in operating assets and liabilities (net of effects of business acquisitions):
        
Accounts receivable
  7,080   (14,036)
Inventories
  7,571   (14,787)
Prepaid expenses and other assets
  (7,339)  (8,590)
Accounts payable and accrued liabilities
  (17,117)  (8,316)
Income taxes
  (1,266)  (3,411)
Other liabilities
  325   2,514 
 
      
Net cash provided by operating activities
  87,848   37,059 
 
        
Investing activities:
        
Acquisition of businesses, net of cash acquired
  (24,552)  (90,418)
Payments of contingent consideration
  (5,798)  (9,329)
Purchases of short-term investments
  (10,350)  — 
Sales of short-term investments
  29,550   11,500 
Purchases of property, plant and equipment
  (14,358)  (31,901)
Other
  (3,259)  (5,831)
 
      
Net cash used in investing activities
  (28,767)  (125,979)
 
        
Financing activities:
        
Payment of dividends
  (16,285)  (15,014)
Proceeds from issuance of common stock
  7,980   3,837 
Principal payments on debt
  (9)  (26,231)
Proceeds from issuance of debt
  —   97,020 
Income tax benefit from the exercise of stock options and deferred\ncompensation distribution
  4,093   763 
 
      
Net cash (used in) provided by financing activities
  (4,221)  60,375 
Effect of exchange rate changes on cash
  733   1,945 
 
        
Net increase (decrease) in cash and cash equivalents
  55,593   (26,600)
Cash and cash equivalents, beginning of period
  142,846   113,008 
 
      
 
        
Cash and cash equivalents, end of period
  198,439   86,408 
 
      
 
        
Supplemental disclosures:
        
Cash paid during the period for:
        
Interest, net of capitalized interest
 $13,153  $9,754 
Income taxes, net of refunds
  26,381   23,983 
Acquisitions:
        
Fair value of assets acquired, net of cash
 $17,279  $50,042 
Liabilities assumed
  (6,371)  (15,617)
Goodwill
  13,644   55,993 
 
      
Net cash paid for acquisitions
 $24,552  $90,418 
 
      
\n
\n\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n
Information by regional segment for the three and six months ended January 31, 2008 and 2007 is as\nfollows:\n
\n\n
\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \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 &                   
  Brady  People ID              Corporate and    
      \n        (in thousands) Americas  Americas  Europe  Asia Pacific  Subtotals  Eliminations  Total 
SALES TO EXTERNAL\nCUSTOMERS
                            
Three months ended:
                            
January 31, 2008
 $95,303  $61,318  $122,615  $84,888  $364,124   —  $364,124 
January 31, 2007
  80,510   59,478   98,846   82,441   321,275   —   321,275 
 
                            
Six months ended:
                            
January 31, 2008
 $200,538  $130,858  $231,529  $181,333  $744,258   —  $744,258 
January 31, 2007
  163,269   123,662   191,211   175,392   653,534   —   653,534 
 
                            
SALES GROWTH\nINFORMATION
                            
Three months ended January 31, 2008:
                            
Base
  2.0%  -4.1%  1.6%  -4.6%  -1.0%  —   -1.0%
Currency
  2.7%  1.9%  10.4%  7.2%  6.1%  —   6.1%
Acquisitions
  13.7%  5.3%  12.1%  0.4%  8.2%  —   8.2%
Total
  18.4%  3.1%  24.1%  3.0%  13.3%  —   13.3%
 
                            
Six months ended\nJanuary 31, 2008:
                            
Base
  5.1%  -0.8%  0.9%  -3.9%  0.3%  —   0.3%
Currency
  2.2%  1.6%  10.1%  6.9%  5.7%  —   5.7%
Acquisitions
  15.5%  5.0%  10.1%  0.4%  7.9%  —   7.9%
Total
  22.8%  5.8%  21.1%  3.4%  13.9%  —   13.9%
 
                            
SEGMENT PROFIT\n(LOSS)
                            
Three months ended:
                            
January 31, 2008
 $19,517  $12,519  $31,067  $12,660  $75,763  $(2,347) $73,416 
January 31, 2007
  14,473   14,920   22,604   12,394   64,391   (2,828)  61,563 
Percentage\nincrease\n(decrease)
  34.9%  -16.1%  37.4%  2.1%  17.7%  -17.0%  19.3%
Six months ended:
                            
January 31, 2008
 $43,975  $32,167  $60,967  $32,050  $169,159  $(4,583) $164,576 
January 31, 2007
  35,188   31,723   45,609   34,531   147,051   (5,638)  141,413 
Percentage\nincrease\n(decrease)
  25.0%  1.4%  33.7%  -7.2%  15.0%  -18.7%  16.4%
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NET INCOME RECONCILIATION\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
                 
  Three months ended:  Six months ended: 
  January 31,  January  January 31,  January 31, 
              \n       (in thousands) 2008  31, 2007  2008  2007 
Total profit for reportable segments
 $75,763  $64,391  $169,159  $147,051 
Corporate and eliminations
  (2,347)  (2,828) $(4,583)  (5,638)
Unallocated amounts:
                
Administrative costs
  (30,972)  (28,839)  (63,794)  (56,748)
Investment\nand other income
  2,269   (106)  2,387   532 
Interest expense
  (6,747)  (5,244)  (13,467)  (9,979)
 
            
Income before income taxes
  37,966   27,374   89,702   75,218 
Income taxes
  (11,276)  (7,665)  (26,642)  (21,061)
 
            
Net income
 $26,690  $19,709  $63,060  $54,157 
 
            
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RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES\n
\n\n
(in\nthousands)
\n\n
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  Fiscal 2007 
  Q1  Q2  Q3  Q4  Total 
EBITDA (1)
                    
Net income
 $34,448  $19,709          $54,157 
Interest expense
  4,735   5,244           9,979 
Income taxes
  13,396   7,665           21,061 
Depreciation and amortization
  12,927   13,169           26,096 
   
 
EBITDA (non-GAAP measure)
 $65,506  $45,787  $—  $—  $111,293 
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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
                     
  Fiscal 2008 
  Q1  Q2  Q3  Q4  Total 
EBITDA (1)
                    
Net income
 $36,370  $26,690          $63,060 
Interest expense
  6,720   6,747           13,467 
Income taxes
  15,366   11,276           26,642 
Depreciation and amortization
  14,168   15,501           29,669 
   
 
EBITDA (non-GAAP measure)
 $72,624  $60,214  $—  $—  $132,838 
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(1) Brady is presenting EBITDA because it is used by many of our investors\nand lenders, and is presented as a convenience to them. EBITDA\nrepresents net income before interest expense, income taxes and\ndepreciation and amortization. EBITDA is not a calculation based on\ngenerally accepted accounting principles (GAAP). The amounts included\nin the EBITDA calculation, however, are derived from amounts included\nin the Condensed Consolidated Statements of Income data. EBITDA\nshould not be considered as an alternative to net income or operating\nincome as an indicator of the company’s operating performance, or as\nan alternative to operating cash flows as a measure of liquidity. The\nEBITDA measure presented may not always be comparable to similarly\ntitled measures reported by other companies due to differences in the\ncomponents of the calculation.
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