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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\n
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Pursuant to Section 13 or 15(d) of the
\nSecurities Exchange Act of 1934\n
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Date of Report (Date of earliest event reported): May 21, 2008
\n\n
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.)
\n
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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 May 21, 2008, Brady Corporation (the “Corporation”) issued a press release announcing its\nfiscal 2008 third quarter financial results. A copy of the press release is being furnished to the\nSecurities and Exchange Commission as Exhibit 99.1 attached herewith and is incorporated herein by\nreference.\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 is filed as an Exhibit to this Report.\n
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Exhibit No. Description of Exhibit
 
99.1\n
 Press Release of Brady Corporation, dated May 21, 2008, relating to the Corporation’s\nfiscal 2008 third 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: May 23, 2008 /s/ Thomas J. Felmer\n  
 Thomas J. Felmer  
 Senior Vice President &\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 May 21, 2008, relating to the Corporation’s\nfiscal 2008 third quarter financial results.
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\n\nexv99w1\n\n\n\n
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Exhibit 99.1\n
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For More Information:
\nInvestor contact: Barbara Bolens 414-438-6940
\nMedia contact: Carole Herbstreit 414-438-6882\n\n
\n\n
For Immediate Release\n
\n\n\n
Brady reports F’08 third-quarter sales and earnings\n
\n\n
MILWAUKEE (May 21, 2008)—Brady Corporation (NYSE: BRC), a world leader in identification\nsolutions, today announced record third quarter sales and earnings for its fiscal quarter ended\nApril 30, 2008. Sales for the quarter were $381.9 million, up 10.3 percent compared to sales of\n$346.3 million in the fiscal 2007 third quarter. Organic sales were down 1 percent compared to the\nprior year, acquisitions contributed 5 percent to sales growth, and currency exchange added 6\npercent to sales results in the quarter. Regionally, sales increased 14 percent in Brady Americas,\n20 percent in Europe, 1 percent in Asia/Pacific and remained flat in Direct Marketing & People\nIdentification Americas.\n
\n\n\n
     Net income for the quarter was up 18.5 percent to $34.4 million compared to $29.0 million in\nthe same quarter last year. Earnings per diluted Class A Common Share were up 18.9 percent to\n$0.63 compared to $0.53 in the prior year. Fiscal 2008 earnings per share calculations reflect the\ncompleted repurchase of approximately 944,000 shares in the quarter.\n
\n\n
     Sales for the nine months ended April 30, 2008, rose 12.6 percent to $1.126 billion compared\nto $999.9 million in the same period last year. Net income for the nine-month period was $97.4\nmillion, up 17.2 percent compared to $83.1 million in the prior year. Nine-month earnings per\nshare were $1.77, up 16.4 percent compared to $1.52 per share in the period last year.\n
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     “This has been a strong quarter for us with good improvement in both gross margin and earnings\nper share. Our year-to-date operating cash flow is up 91 percent to $152 million from $80 million\nlast year. Our pro-active efforts to adjust our cost structure and control working capital to cope\nwith a slowing economy have clearly paid off,” said Brady President and Chief Executive Officer\nFrank M. Jaehnert.\n
\n\n
     “Based on current trends and including the two acquisitions made earlier this year, we are\nincreasing sales guidance from $1.43-$1.46 billion to $1.50-$1.52 billion. While we continue to be\nconcerned about economic softness in some of our key markets, we believe that our operational\nimprovements allow us to reconfirm our net income guidance of $129-$135 million. We are, however,\nincreasing our earnings per share guidance by $0.02 to $2.33-$2.44 to account for shares\nrepurchased in the quarter,” said Brady Chief Financial Officer Thomas J. Felmer.\n
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-more-\n
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Brady Corporation
\nPage 2\n
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     A Web cast of a conference call regarding the company’s fiscal 2008 third quarter results will\nbe available at www.investor.bradycorp.com beginning at 9:30 a.m. Central 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 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 about 8,000 people at operations in the Americas, Europe and\nAsia/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 CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED STATEMENTS OF INCOME\n\n
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(Dollars in Thousands)\n\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \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 April 30,  Nine Months Ended April 30, 
  2008  2007  Percentage Change  2008  2007  Percentage Change 
Net sales
 $381,909  $346,332   10.3% $1,126,167  $999,866   12.6%
Cost of products sold
  192,333   177,181   8.6%  573,901   516,426   11.1%
 
                    
Gross margin
  189,576   169,151   12.1%  552,266   483,440   14.2%
 
                        
Operating expenses:
                        
Research and development
  10,274   8,739   17.6%  29,323   26,353   11.3%
Selling, general and administrative
  126,720   114,109   11.1%  369,579   326,119   13.3%
 
                    
Total operating expenses
  136,994   122,848   11.5%  398,902   352,472   13.2%
 
                        
Operating income
  52,582   46,303   13.6%  153,364   130,968   17.1%
 
                        
Other income and (expense):
                        
Investment and other income
  920   385   139.0%  3,307   917   260.6%
Interest expense
  (6,962)  (6,428)  8.3%  (20,429)  (16,407)  24.5%
 
                    
 
                        
Income before income taxes
  46,540   40,260   15.6%  136,242   115,478   18.0%
 
                        
Income taxes
  12,187   11,273   8.1%  38,829   32,334   20.1%
 
                    
 
                        
Net income
 $34,353  $28,987   18.5% $97,413  $83,144   17.2%
 
                    
 
                        
Per Class A Nonvoting Common Share:
                        
Basic net income
 $0.64  $0.54   18.5% $1.79  $1.54   16.2%
Diluted net income
 $0.63  $0.53   18.9% $1.77  $1.52   16.4%
Dividends
 $0.15  $0.14   7.1% $0.45  $0.42   7.1%
 
                        
Per Class B Voting Common Share:
                        
Basic net income
 $0.64  $0.54   18.5% $1.78  $1.53   16.3%
Diluted net income
 $0.63  $0.53   18.9% $1.76  $1.50   17.3%
Dividends
 $0.15  $0.14   7.1% $0.43  $0.40   7.5%
 
                        
Weighted average common shares\noutstanding (in Thousands):
                        
Basic
  54,021   53,953       54,294   53,860     
Diluted
  54,627   54,717       54,992   54,704     
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BRADY CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED BALANCE SHEETS\n\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 \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \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) 
  April 30, 2008  July 31, 2007 
ASSETS
        
Current assets:
        
Cash and cash equivalents
 $227,359  $142,846 
Short term investments
  —   19,200 
Accounts\nreceivable, less allowance for losses ($9,863 and $9,109, respectively)
  252,982   239,569 
Inventories:
        
Finished products
  75,492   80,486 
Work-in-process
  21,351   21,309 
Raw materials and supplies
  38,714   37,983 
 
      
Total inventories
  135,557   139,778 
Prepaid expenses and other current assets
  43,731   42,020 
 
      
 
        
Total current assets
  659,629   583,413 
 
        
Other assets:
        
Goodwill
  786,480   737,450 
Other intangible assets, net
  145,563   149,761 
Deferred income taxes
  32,194   32,508 
Other
  21,037   21,111 
 
      
 
        
Total other assets
  985,274   940,830 
 
        
Property, plant and equipment:
        
Cost:
        
Land
  6,482   6,332 
Buildings and improvements
  96,009   90,688 
Machinery and equipment
  272,461   248,356 
Construction in progress
  12,392   18,107 
 
      
 
        
 
  387,344   363,483 
Less accumulated depreciation
  214,116   188,869 
 
      
 
        
Net property, plant and equipment
  173,228   174,614 
 
      
 
        
Total
 $1,818,131  $1,698,857 
 
      
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
        
Current liabilities:
        
Accounts payable
 $104,123  $91,596 
Wages and amounts withheld from employees
  70,190   73,622 
Taxes, other than income taxes
  9,720   8,461 
Accrued income taxes
  13,914   24,677 
Other current liabilities
  51,897   60,254 
Current maturities on long-term debt
  21,432   21,444 
 
      
 
        
Total current liabilities
  271,276   280,054 
 
        
Long-term obligations, less current maturities
  478,572   478,575 
 
        
Other liabilities
  60,517   49,216 
 
      
 
        
Total liabilities
  810,365   807,845 
 
        
Stockholders’ investment:
        
Common stock:
        
Class A nonvoting common stock — Issued 51,051,487 and 50,586,524\nshares, respectively and outstanding 50,170,581 and 50,586,524\nshares, respsectively
  511   506 
 
        
Class B voting common stock — Issued and outstanding, 3,538,628 shares
  35   35 
Additional paid-in capital
  286,452   266,203 
Income retained in the business
  612,407   540,238 
Treasury stock - 880,906 and 0 shares, respectively of Class A nonvoting\ncommon stock, at cost
  (26,743)  0 
Accumulated other comprehensive income
  134,417   83,376 
Other
  687   654 
 
      
 
        
Total stockholders’ investment
  1,007,766   891,012 
 
      
 
        
Total
 $1,818,131  $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\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n
         
  (Unaudited) 
  Nine Months Ended 
  April 30, 
  2008  2007 
Operating activities:
        
Net income
 $97,413  $83,144 
Adjustments to reconcile net income to net cash provided by operating activities:
        
Depreciation and amortization
  45,682   40,403 
Deferred income taxes
  (1,288)  (2,129)
Loss (gain) on disposal of property, plant & equipment
  1,054   (182)
Non-cash portion of stock-based compensation expense
  7,797   5,022 
Changes in operating assets and liabilities (net of effects of business acquisitions):
        
Accounts receivable
  4,014   (20,146)
Inventories
  15,012   (17,544)
Prepaid expenses and other assets
  (6,193)  (14,634)
Accounts payable and accrued liabilities
  (6,175)  (2,454)
Income taxes
  (6,358)  4,008 
Other liabilities
  1,157   4,169 
 
      
Net cash provided by operating activities
  152,115   79,657 
 
        
Investing activities:
        
Acquisition of businesses, net of cash acquired
  (28,871)  (157,943)
Payments of contingent consideration
  (5,798)  (10,906)
Purchases of short-term investments
  (10,350)  (47,100)
Sales of short-term investments
  29,550   57,400 
Purchases of property, plant and equipment
  (19,678)  (42,107)
Proceeds from sale of property, plant and equipment
  649   1,703 
Other
  1,808   (8,978)
 
      
Net cash used in investing activities
  (32,690)  (207,931)
 
        
Financing activities:
        
Payment of dividends
  (24,341)  (22,073)
Proceeds from issuance of common stock
  9,517   4,144 
Principal payments on debt
  (14)  (110,674)
Proceeds from issuance of debt
  —   259,300 
Purchase of treasury stock
  (28,531)  — 
Income tax benefit from the exercise of stock options
  4,620   902 
 
      
Net cash provided by financing activities
  (38,749)  131,599 
Effect of exchange rate changes on cash
  3,837   3,005 
 
        
Net increase (decrease) in cash and cash equivalents
  84,513   6,330 
Cash and cash equivalents, beginning of period
  142,846   113,008 
 
      
 
        
Cash and cash equivalents, end of period
  227,359   119,338 
 
      
 
        
Supplemental disclosures:
        
Cash paid during the period for:
        
Interest, net of capitalized interest
 $22,450  $16,003 
Income taxes, net of refunds
  39,505   33,268 
Acquisitions:
        
Fair value of assets acquired, net of cash
 $18,547  $87,224 
Liabilities assumed
  (6,566)  (33,037)
Goodwill
  16,890   103,756 
 
      
Net cash paid for acquisitions
 $28,871  $157,943 
 
      
\n
\n\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n
Information by regional segment for the three and six months ended April 30, 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 \n \n \n \n \n \n \n \n \n \n \n\n\n
                             
      Direct                
      Marketing &                
  Brady People ID             Corporate and  
(in thousands) Americas Americas Europe Asia-Pacific Subtotals Eliminations Total
SALES TO EXTERNAL CUSTOMERS
                            
Three months ended:
                            
April 30, 2008
 $100,425  $65,982  $133,422  $82,080  $381,909   —  $381,909 
April 30, 2007
  88,077   65,784   111,266   81,205   346,332   —   346,332 
 
                            
Nine months ended:
                            
April 30, 2008
 $300,963  $196,840  $364,951  $263,413  $1,126,167   —  $1,126,167 
April 30, 2007
  251,346   189,446   302,477   256,597   999,866   —   999,866 
 
                            
SALES GROWTH INFORMATION
                            
Three months ended April 30, 2008:
                            
Base
  3.6%  -2.4%  0.1%  -7.4%  -1.2%  —   -1.2%
Currency
  2.8%  1.7%  11.3%  7.9%  6.5%  —   6.5%
Acquisitions
  7.6%  1.0%  8.5%  0.6%  5.0%  —   5.0%
Total
  14.0%  0.3%  19.9%  1.1%  10.3%  —   10.3%
 
                            
Nine months ended April 30, 2008:
                            
Base
  4.6%  -1.3%  0.6%  -5.0%  -0.2%  —   -0.2%
Currency
  2.4%  1.6%  10.5%  7.3%  6.0%  —   6.0%
Acquisitions
  12.7%  3.6%  9.5%  0.4%  6.8%  —   6.8%
Total
  19.7%  3.9%  20.6%  2.7%  12.6%  —   12.6%
 
                            
SEGMENT PROFIT (LOSS)
                            
Three months ended:
                            
April 30, 2008
 $22,692  $17,477  $36,245  $11,055  $87,469   ($1,816) $85,653 
April 30, 2007
  20,245   17,768   29,370   11,861   79,244   (1,858)  77,386 
Percentage increase (decrease)
  12.1%  -1.6%  23.4%  -6.8%  10.4%  -2.3%  10.7%
 
                            
Nine months ended:
                            
April 30, 2008
 $66,667  $49,645  $97,212  $43,105  $256,629   ($6,400) $250,229 
April 30, 2007
  55,433   49,491   74,979   46,392   226,295   (7,496)  218,799 
Percentage increase (decrease)
  20.3%  0.3%  29.7%  -7.1%  13.4%  -14.6%  14.4%
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NET INCOME RECONCILIATION (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
                 
  Three months ended:  Nine months ended: 
  April 30,  April 30,  April 30,  April 30, 
  2008  2007  2008  2007 
Total profit for reportable\nsegments
 $87,469  $79,244  $256,629  $226,295 
Corporate and eliminations
  (1,816)  (1,858)  ($6,400)  (7,496)
Unallocated amounts:
                
Administrative costs
  (33,071)  (31,083)  (96,865)  (87,831)
Investment and other income
  920   385   3,307   917 
Interest expense
  (6,962)  (6,428)  (20,429)  (16,407)
 
            
Income before income taxes
  46,540   40,260   136,242   115,478 
Income taxes
  (12,187)  (11,273)  (38,829)  (32,334)
 
            
Net income
 $34,353  $28,987  $97,413  $83,144 
 
            
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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
                     
  Fiscal 2007
  Q1 Q2 Q3 Q4 Total
EBITDA (1)
                    
Net income
 $34,448  $19,709  $28,987      $83,144 
Interest expense
  4,735   5,244   6,428       16,407 
Income taxes
  13,396   7,665   11,273       32,334 
Depreciation and\namortization
  12,927   13,169   14,307       40,403 
   
EBITDA (non-GAAP measure)
 $65,506  $45,787  $60,995  $—  $172,288 
\n
\n\n
\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n\n\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  $34,353      $97,413 
Interest expense
  6,720   6,747   6,962       20,429 
Income taxes
  15,366   11,276   12,187       38,829 
Depreciation and\namortization
  14,168   15,501   16,013       45,682 
   
EBITDA (non-GAAP measure)
 $72,624  $60,214  $69,515  $—  $202,353 
\n
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(1) Brady is presenting EBITDA because it is used by many of our investors and lenders, and is\npresented as a convenience to them. EBITDA represents net income before interest expense, income\ntaxes and depreciation and amortization. EBITDA is not a calculation based on generally accepted\naccounting principles (GAAP). The amounts included in the EBITDA calculation, however, are\nderived from amounts included in the Condensed Consolidated Statements of Income data. EBITDA\nshould not be considered as an alternative to net income or operating income as an indicator of\nthe company’s operating performance, or as an alternative to operating cash flows as a measure of\nliquidity. The EBITDA measure presented may not always be comparable to similarly titled measures\nreported by other companies due to differences in the components of the calculation.
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