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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\n

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934\n

\n\n

Date of Report (Date of earliest event reported): November 20, 2008

\n\n

BRADY CORPORATION\n

\n\n

(Exact name of registrant as specified in its charter)

\n\n\n

Commission File Number 1-14959

\n\n

\n\n\n\n \n \n \n\n\n\n\n \n \n \n\n\n \n \n \n\n\n


Wisconsin\n		39-0971239
(State of Incorporation)\n		(IRS Employer Identification No.)

\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

\n\n\n\n \n \n \n\n\n\n \n\n \n \n \n\n\n\n \n\n \n \n \n\n\n\n \n\n \n \n \n\n\n

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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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION\n

\n\n\n

On November 20, 2008, Brady Corporation (the “Corporation”) issued a press release announcing\nits fiscal 2009 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

\n\n

Item 5.02(c) DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF\nCERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS\n

\n\n\n

On November 20, 2008, the Corporation appointed Kathleen M. Johnson as its Chief Accounting\nOfficer. Ms. Johnson, age 54, joined the Company in 1989 and has served as Vice President of\nFinance since 2000. Ms. Johnson has no family relationship with any director or executive officer\nof the Corporation, nor is she party to any related party transactions with the Corporation.\nPursuant to the Corporation’s Bylaws, Ms. Johnson will serve in her executive position at the\ndiscretion of the Corporation’s Board of Directors. Prior to Ms. Johnson’s appointment, Thomas J.\nFelmer, Senior Vice President and Chief Financial Officer of the Corporation, performed the duties\nof this function.\n

\n\n\n

Item 8.01 OTHER EVENTS\n

\n\n\n

Workforce Reduction\n

\n\n\n

On November 20, 2008, the Corporation issued a press release announcing a global workforce\nreduction of approximately 10 percent to be implemented in the second quarter of fiscal 2009.\n

\n\n

Director Compensation\n

\n\n\n

On November 20, 2008, the Corporation’s Board of Directors implemented an indefinite delay in\nthe previously announced compensation increases for its directors. Pursuant to the Board action,\nthe annual cash retainer paid to Directors will remain at $35,000 (previously slated to increase to\n$45,000 as of December 1, 2008) and the annual grant of stock options will remain at 6,000\n(previously slated to increase to 6,600 as of December 1, 2008). A copy of the Brady Corporation\n2005 Nonqualified Stock Option Plan for Non-Employee Directors, as amended to reflect these\nactions, is attached hereto as Exhibit 10.1 and is incorporated herein by reference.\n

\n\n\n

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.\n

\n\n\n

(d) Exhibits.\n

The following are filed as Exhibits to this Report.\n

\n\n

\n\n\n\n \n \n \n\n\n \n \n \n\n\n\n \n\n\n\n\n \n \n \n\n\n \n \n \n\n\n \n \n \n\n\n


Exhibit No.		Description of Exhibit

10.1\n		Brady Corporation 2005 Nonqualified Stock Option Plan for Non-Employee\nDirectors, as amended November 20, 2008

99.1\n		Press Release of Brady Corporation, dated November 20, 2008, relating to the Corporation’s\nfiscal 2009 first quarter financial results

\n\n\n

Exhibit 10.1\n

\n\n\n

BRADY CORPORATION
\n2005 NONQUALIFIED STOCK OPTION PLAN
\nFOR NON-EMPLOYEE DIRECTORS \n

\n\n\n

1. Purpose.\n

\n\n\n

The 2005 Stock Option Plan for Non-Employee Directors (the “Plan) is intended to attract and\nretain the services of experienced and knowledgeable non-employee directors of Brady Corporation\n(the “Corporation”) for the benefit of the Corporation and its shareholders and to provide\nadditional incentive for such directors to continue to work for the best interest of the\nCorporation and its shareholders.\n

\n\n

2. Shares Subject to the Plan.\n

\n\n\n

There are reserved for issuance upon the exercise of options granted under the Plan 300,000\nClass A Non-Voting Common Shares $.01 par value, of the Corporation (the “Stock”). Such Stock may\nbe authorized and unissued Stock or previously outstanding Stock then held in the Corporation’s\ntreasury. If any option granted under the Plan shall expire or terminate for any reason without\nhaving been exercised in full, the Stock subject to the unexercised portion thereof shall again be\navailable for the purposes of issuance upon the exercise of options granted under the Plan.\n

\n\n

3. Administration.\n

\n\n\n

The Plan shall be administered by the Board of Directors of the Corporation (the “Board”),\nwhich may delegate any or all of its authority to a Committee of the Board. Subject to the express\nprovisions of the Plan, the Board shall have authority to interpret the Plan, to prescribe, amend\nand rescind rules and regulations relating to it, to determine the terms and provisions of the\noption grants and agreements (which shall comply with and be subject to the terms and conditions of\nthe Plan) and to make all other determinations necessary or advisable for the administration of the\nPlan. The Board’s determination of the matters referred to in this Paragraph 3 shall be conclusive.\n

\n\n

4. Eligibility.\n

\n\n\n

For purposes of the Plan, “Non-Employee Director” means a member of the Board who is not an\nemployee of the Corporation or a subsidiary of the Corporation. After the effective date of the\nPlan, each Non-Employee Director who first becomes a Director on an annual meeting date after July\n26, 2005 shall automatically be granted an option to purchase 10,000 shares of Stock on a date that\nis 14 days after the annual meeting date, or if such person first becomes a Director on a date\nother than the annual meeting date, the option shall automatically be granted on a date that is 14\ndays after first becoming a Director. On a date that is 14 days after each subsequent annual\nmeeting of the shareholders of the Corporation on or subsequent to the effective date of the Plan,\neach Non-Employee Director who will continue to serve as an Non-Employee Director after such annual\nmeeting shall automatically be granted an option to purchase 6,000 shares of Stock.\n

\n\n

Only non-statutory stock options shall be granted under the Plan.\n

\n\n

5. Option Grants.\n

\n\n\n

(a) The purchase price of the Stock under each option granted under the Plan shall be 100% of\nthe Fair Market Value of the Stock on the date such option is granted. For purposes of the Plan\n“Fair Market Value” on any date shall mean, with respect to Stock, if the stock is then listed and\ntraded on a registered national securities exchange, or is quoted in the NASDAQ National Market\nSystem, the average of the high and low sale prices recorded in composite transactions for such\ndate or, if such date is not a business day or if no sales of the Stock shall have been reported\nwith respect to such date, the next preceding business date with respect to which sales were\nreported. In the absence of reported sales or if the stock is not so listed or quoted, but is\ntraded in the over-the-counter market, Fair Market Value shall be the average of the closing bid\nand asked prices for such Stock on the relevant date.\n

\n\n

(b) All options shall be exercisable in accordance with the following schedule:\n

\n\n\n\n \n \n \n \n \n\n\n \n \n \n\n\n \n \n \n\n\n\n\n\n \n \n \n \n \n\n\n \n \n \n \n \n\n\n \n \n \n \n \n\n\n \n \n \n \n \n\n\n


Years After
Date of Grant	Percentage of Shares
Less than 1		0	%
1 but less than 2		33-1/3	%
2 but less than 3		66-2/3	%
3 or more		100	%

\n\n\n

The term of each option shall be ten years from the date of grant, or such shorter period as\nis prescribed in Paragraphs 5(c) and 5(d). Except as provided in Paragraphs 5(c) and 5(d), no\noption may be exercised at any time unless the holder is then a director of the Corporation.\n

\n\n

Each option may be exercised in whole or in part from time to time as specified in the\nagreements provided, however, that each holder may exercise an option in whole or in part by giving\nwritten notice of the exercise to the Corporation, specifying the number of shares to be purchased\nby payment in full of the purchase price therefor. The purchase price may be paid (a) in cash, (b)\nby check, (c) with the approval of the Board, or if the applicable agreement so provides, by\ndelivering shares of Stock (“Delivered Stock”), (d) by surrendering to the Corporation shares of\nStock otherwise receivable upon exercise of the option (a “Net Exercise”), or (e) any combination\nof the foregoing. For purposes of the foregoing, Delivered Stock shall be valued at its Fair\nMarket Value determined as of the business day immediately preceding the date of exercise of the\noption and shares of Stock used in a Net Exercise shall be valued at their Fair Market Value\ndetermined as of the date of exercise of the option. No holder shall be under any obligation to\nexercise any option hereunder.\n

\n\n

Upon exercise, the option price is to be paid in full in cash or, at the discretion of the\nBoard, in Stock owned by the optionee having a Fair Market Value on the date of exercise equal to\nthe aggregate option price or, at the discretion of the Board, in a combination of cash and Stock.\n

\n\n

-2-\n

\n\n

(c) All rights under any option shall terminate on the date such Participant ceases to be a\nDirector of the Corporation, except that (a) if the Directorship is terminated by the death of the\nDirector, any unexercised, unexpired Stock Options granted hereunder to the Director shall be 100%\nvested and fully exercisable, in whole or in part, at any time within one year after the date of\ndeath, by the Director’s personal representative or by the person to whom the options are\ntransferred under the Director’s last will and testament or the applicable laws of descent and\ndistribution; (b) if the Directorship is terminated as a result of the disability of the Director\n(a disability means that the Director is disabled as a result of sickness or injury, such that he\nor she is unable satisfactorily to perform the Director duties, as determined by the Board of\nDirectors, on the basis of medical evidence satisfactory to it), any unexercised, unexpired options\ngranted hereunder to the Director shall become 100% vested and fully exercisable, in whole or in\npart, at any time within one year after the date of disability; (c) if the Directorship is\nterminated and the Director has been a member of the Board of Directors for at least three years,\nany unexercised, unexpired options granted hereunder to the Director shall continue to vest as\nprovided in Paragraph 5(b) and any option that is or becomes vested may be exercised within the\nterm of such option; and (d) if the Directorship is terminated for any reason other than (a), (b)\nor (c) above, any unexercised, unexpired options granted hereunder and exercisable as of the date\nof such termination shall be exercisable in whole or in part at any time within 90 days after such\ndate of termination.\n

\n\n

(d) In the event of (a) a merger, consolidation, or reorganization with another corporation in\nwhich the Corporation is not the surviving corporation or a merger, consolidation or reorganization\nwith another corporation in which the Corporation is the surviving corporation, but the Stock\nceases to be publicly traded, (b) the adoption of any plan for the dissolution of the Corporation,\nor (c) the sale or exchange of all or substantially all the assets of the Corporation for cash or\nfor shares of stock or other securities of another corporation, all then-unexercised options shall\nbecome fully exercisable immediately prior to any such event.\n

\n\n

(e) Nothing in the Plan or in any option granted pursuant to the Plan shall confer on any\nindividual any right to continue as a director of the Corporation.\n

\n\n

6. Transferability and Shareholder Rights of Holders of Options.\n

\n\n\n

No options granted under the Plan shall be transferable otherwise than by will or by the laws\nof descent and distribution, and an option may be exercised, during the lifetime of an optionee,\nonly by the optionee or optionee’s guardian or legal representative. An optionee shall have none of\nthe rights of a shareholder of the Corporation until the option has been exercised and the Stock\nsubject to the option has been registered in the name of the optionee on the transfer books of the\nCorporation.\n

\n\n

7. Adjustments upon Changes in Capitalization.\n

\n\n\n

Notwithstanding any other provisions of the Plan, the number and class of shares subject to\nthe options and the option prices of options covered thereby shall be proportionately adjusted in\nthe event of changes in the outstanding Stock by reason of stock dividends, stock splits,\nrecapitalizations, mergers, consolidations, combinations or exchanges of shares, split-ups,\nsplit-offs, spin-offs, liquidations or other similar changes in capitalization, or any distribution\nto\n

\n\n

-3-\n

\n\n\n\n

common shareholders other than cash dividends and, in the event of any such change in the\noutstanding Stock, the aggregate number and class of shares available under the Plan and the number\nof shares as to which options may be granted shall be appropriately adjusted by the Board.\n

\n\n

8. Amendment and Termination.\n

\n\n\n

Unless the Plan shall theretofore have been terminated as hereinafter provided, the Plan shall\nterminate on, and no awards of options shall be made after, the tenth anniversary of the effective\ndate of the Plan; provided, however, that such termination shall have no effect on options granted\nprior thereto. The Plan may be terminated, modified or amended by the shareholders of the\nCorporation. The Board may also terminate the Plan or modify or amend the Plan in such respects as\nit shall deem advisable in order to conform to any change in any law or regulation applicable\nthereto, or in other respects which shall not change (i) the total number of shares of Stock as to\nwhich options may be granted, (ii) the class of persons eligible to receive options under the Plan,\n(iii) the manner of determining the option prices, (iv) the period during which options may be\ngranted or exercised or (v) the provisions relating to the administration of the Plan by the Board.\n

\n\n

9. Withholding.\n

\n\n\n

Upon the issuance of Stock as a result of the exercise of an option, the Corporation shall\nhave the right to retain or sell without notice sufficient Stock to cover the amount of any tax\nrequired by any government to be withheld or otherwise deducted and paid with respect to such Stock\nbeing issued, remitting any balance to the optionee; provided, however, that the optionee shall\nhave the right to provide the Corporation with the funds to enable it to pay such tax.\n

\n\n

10. Effectiveness of the Plan.\n

\n\n\n

The Plan shall become effective on the day following the date the Plan is approved by the vote\nof the holders of a majority of the outstanding shares of the Corporation’s Class B Voting Common\nStock. The Board may in its discretion authorize the granting of options which shall be expressly\nsubject to the conditions that (i) the Stock reserved for issue under the Plan shall have been duly\nlisted, upon official notice of issuance, upon each stock exchange in the United States upon which\nthe Stock is traded and (ii) a registration statement under the Securities Act of 1933 with respect\nto such shares shall have become effective.\n

\n\n

-4-\n

\n\n

Exhibit 99.1\n

\n\n\n

For more information:
\nInvestor contact: Barbara Bolens 414-438-6940
\nMedia contact: Carole Herbstreit 414-438-6882\n\n

\n\n

Brady Corporation reports sales and earnings for fiscal 2009 first quarter and announces global\nworkforce reduction\n

\n\n

MILWAUKEE (November 20, 2008)—Brady Corporation (NYSE:BRC) reports sales and earnings for its\nfiscal 2009 first quarter ended October 31, 2008.\n

\n\n\n

Sales for the quarter declined 0.5 percent to $378.3 million compared to $380.1 million in the\nfirst quarter of fiscal 2008. Organic sales declined 2.5 percent in the quarter, acquisitions\ncontributed 2.1 percent to sales growth and currency exchange had a negative 0.1 percent impact on\nsales growth. By segment, sales were down 7.9 percent in the Americas and 0.6 percent in Europe;\nsales increased 13.2 percent in Asia/Pacific.\n

\n\n

Net income increased 2.0 percent in the fiscal 2009 first quarter to $37.1 million compared to\n$36.4 million in the same quarter last year. Earnings per diluted Class A Common share were $0.69\nin the first quarter of fiscal 2009, up 4.5 percent compared to $0.66 per diluted share in the\nprior year’s quarter. Earnings per share results reflect the repurchase of approximately 1.15\nmillion shares in the quarter.\n

\n\n

“Our proactive measures to control costs helped to mitigate the effects of a deteriorating\neconomy, and combined with other factors including a lower effective tax rate, resulted in slight\nnet income growth in the first quarter. This was despite a decline in organic sales caused by a\nmarked slowdown in our markets in the later part of the quarter. We expect a continuation of the\nchallenging global economy and are taking additional steps to reduce our costs. These steps\ninclude a global workforce reduction of approximately 10 percent to be implemented in the second\nquarter, a company-wide salary freeze, the continued reduction of discretionary spending and\ncontingency plans for further reductions in the event of more severe business contraction,” said\nFrank M. Jaehnert, Brady’s president and chief executive officer.\n

\n\n

“We expect restructuring charges of approximately $30 million pretax during fiscal 2009.\nSavings from our cost reduction actions should be approximately $30 million in fiscal 2009,” said\nBrady Chief Financial Officer Thomas J. Felmer. “Based on current exchange rates and as a result\nof these unprecedented economic conditions, we expect high single-digit declines in organic sales\nfor the remainder of the fiscal year. We are revising our net income guidance for fiscal 2009 and\nnow expect net income of between $75 and $85 million after restructuring charges of $20 million after tax\n(previously $140 to $145 million), and earnings per diluted share including restructuring charges\nof between $1.40 and $1.59 (previously $2.54 to $2.63).\n

\n\n

Excluding restructuring charges, we expect\nnet income of $95 to $105 million and earnings per diluted share of between $1.78 and $1.97.”\n

\n\n\n

“Brady is a financially strong company, with a solid balance sheet and good cash flow, and we\nare committed to taking all steps necessary to protect the long-term health of the company in these\nchallenging times. To ensure our competitiveness when the current economic crisis subsides, we\nwill continue to invest in growth strategies including new product development, acquisitions,\ne-business and the Brady Business Performance System, which focuses on ‘lean’ thinking and\ncontinuous improvement,” added Jaehnert.\n

\n\n

A web cast regarding fiscal 2009 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 include high-performance labels\nand signs, safety devices, printing systems and software, and precision die-cut materials. Founded\nin 1914, the company has more than 500,000 customers in electronics, telecommunications,\nmanufacturing, electrical, construction, education, medical and a variety of other industries.\nBrady is headquartered in Milwaukee and employs nearly 8,000 people at operations in the Americas,\nEurope and Asia/Pacific. Brady’s fiscal 2008 sales were approximately $1.523 billion. More\ninformation is available on the Internet at www.bradycorp.com.\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,\n2008. These uncertainties may cause\nBrady’s actual future results to be materially different than those expressed in its\nforward-looking statements. Brady does not undertake to update its forward-looking statements.\n

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BRADY CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED STATEMENTS OF INCOME\n\n

\n\n

(Dollars in Thousands)\n

\n\n

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	(Unaudited)
	Three Months Ended October 31,
	2008			2007			Percentage Change
Net sales	$	378,317			$	380,134		-0.5	%
Cost of products sold		197,171				192,467		2.4	%

Gross margin		181,146				187,667		-3.5	%

Operating expenses:
Research and development		9,056				8,978		0.9	%
Selling, general and administrative		115,896				120,351		-3.7	%

Total operating expenses		124,952				129,329		-3.4	%

Operating income		56,194				58,338		-3.7	%

Other income and (expense):
Investment and other income		1,852				118		1469.5	%
Interest expense		(6,361	)			(6,720	)	-5.3	%


Income before income taxes		51,685				51,736		-0.1	%

Income taxes		14,575				15,366		-5.1	%


Net income	$	37,110			$	36,370		2.0	%


Per Class A Nonvoting Common Share:
Basic net income	$	0.70			$	0.67		4.5	%
Diluted net income	$	0.69			$	0.66		4.5	%
Dividends	$	0.17			$	0.15		13.3	%

Per Class B Voting Common Share:
Basic net income	$	0.68			$	0.65		4.6	%
Diluted net income	$	0.67			$	0.64		4.7	%
Dividends	$	0.15			$	0.13		15.4	%

Weighted average common shares\noutstanding (in thousands):
Basic		53,291				54,350
Diluted		53,938				55,121

\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


	(Unaudited)
	October 31, 2008			July 31, 2008
ASSETS

Current assets:
Cash and cash equivalents	$	178,792			$	258,355
Accounts receivable, less allowance for losses ($9,066 and\n$10,059, respectively)		243,219				262,461
Inventories:
Finished products		68,267				75,665
Work-in-process		21,586				21,187
Raw materials and supplies		40,852				37,767

Total inventories		130,705				134,619
Prepaid expenses and other current assets		46,669				43,650


Total current assets		599,385				699,085

Other assets:
Goodwill		724,072				789,107
Other intangible assets, net		124,593				144,791
Deferred income taxes		25,576				25,943
Other		17,820				21,381


Total other assets		892,061				981,222

Property, plant and equipment:
Cost:
Land		6,169				6,490
Buildings and improvements		92,509				98,646
Machinery and equipment		265,097				282,232
Construction in progress		9,453				6,040


		373,228				393,408
Less accumulated depreciation		216,891				223,202


Net property, plant and equipment		156,337				170,206


Total	$	1,647,783			$	1,850,513


LIABILITIES AND STOCKHOLDERS’ INVESTMENT

Current liabilities:
Accounts payable	$	109,083			$	118,209
Wages and amounts withheld from employees		52,396				82,354
Taxes, other than income taxes		8,033				10,234
Accrued income taxes		13,764				21,523
Other current liabilities		49,365				54,810
Short-term borrowings and current maturities on long-term debt		21,430				21,431


Total current liabilities		254,071				308,561

Long-term obligations, less current maturities		457,143				457,143

Other liabilities		56,298				63,001


Total liabilities		767,512				828,705

Stockholders’ investment:
Common stock:
Class A Nonvoting common stock — Issued 51,261,487 and 51,261,487 shares, respectively\nand outstanding 48,926,466 and 50,005,296 shares, respectively		513				513
Class B Voting common stock — Issued and outstanding, 3,538,628 shares		35				35
Additional paid-in capital		294,181				292,769
Earnings retained in the business		667,108				639,059
Treasury stock — 2,125,021 and 1,046,191 shares, respectively\nof Class A nonvoting common stock, at cost		(67,539	)			(33,234	)
Accumulated other comprehensive income		(8,839	)			128,161
Other		(5,188	)			(5,495	)


Total stockholders’ investment		880,271				1,021,808


Total	$	1,647,783			$	1,850,513

\n\n\n

BRADY CORPORATION AND SUBSIDIARIES
\nCONSOLIDATED STATEMENTS OF CASH FLOWS
\n(Dollars in Thousands)\n\n


	(Unaudited)
	Three Months Ended
	October 31
	2008			2007
Operating activities:
Net income	$	37,110			$	36,370
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,712				14,168
Non-cash portion of stock-based compensation expense		2,092				3,257
Other		(198	)			46
Changes in operating assets and liabilities (net of effects of business acquisitions):
Accounts receivable		(12,571	)			(10,880	)
Inventories		(10,360	)			1,337
Prepaid expenses and other assets		(8,147	)			(4,417	)
Accounts payable and accrued liabilities		(21,679	)			(13,278	)
Income taxes		(3,513	)			6,086
Other liabilities		(1,167	)			1,201

Net cash (used in) provided by operating activities		(4,721	)			33,890

Investing activities:
Payments of contingent consideration		—				(1,200	)
Purchases of short-term investments		—				(5,150	)
Sales of short-term investments		—				7,860
Purchases of property, plant and equipment		(6,429	)			(7,395	)
Other		1,300				(1,375	)

Net cash used in investing activities		(5,129	)			(7,260	)

Financing activities:
Payment of dividends		(9,061	)			(8,100	)
Proceeds from issuance of common stock		1,162				4,134
Principal payments on debt		(1	)			(5	)
Purchase of treasury stock		(36,508	)			—
Income tax benefit from the exercise of stock options and deferred\ncompensation distributions		667				2,712

Net cash (used in) financing activities		(43,741	)			(1,259	)
Effect of exchange rate changes on cash		(25,972	)			2,382

Net (decrease) increase in cash and cash equivalents		(79,563	)			27,753
Cash and cash equivalents, beginning of period		258,355				142,846


Cash and cash equivalents, end of period		178,792				170,599


Supplemental disclosures:
Cash paid during the period for:
Interest, net of capitalized interest	$	9,298			$	9,298
Income taxes, net of refunds		15,605				1,782

\n\n\n

Information by regional segment for the three months ended October 31, 2008 and 2007 is as follows:\n


													Corporate
													and
(in thousands)	Americas		Europe	Asia-Pacific		Subtotals	Eliminations		Total
SALES TO EXTERNAL CUSTOMERS
Three months ended:
October 31, 2008	$	160,916		$	108,215		$	109,186		$	378,317			—		$	378,317
October 31, 2007		174,775			108,914			96,445			380,134			—			380,134

SALES GROWTH INFORMATION
Three months ended October 31, 2008:
Base		-8.2	%		-5.3	%		11.0	%		-2.5	%		—			-2.5	%
Currency		-0.3	%		-1.6	%		2.2	%		-0.1	%		—			-0.1	%
Acquisitions		0.6	%		6.3	%		0.0	%		2.1	%		—			2.1	%
Total		-7.9	%		-0.6	%		13.2	%		-0.5	%		—			-0.5	%

SEGMENT PROFIT (LOSS)
Three months ended:
October 31, 2008	$	35,524		$	31,138		$	22,401		$	89,063			($2,307	)	$	86,756
October 31, 2007		44,107		$	29,900		$	19,390			93,397			($2,237	)		91,160
Percentage increase (decrease)		-19.5	%		4.1	%		15.5	%		-4.6	%		3.1	%		-4.8	%

\n\n\n

NET INCOME RECONCILIATION (in thousands)\n

\n\n


	Three months ended:
	October 31,			October 31,
	2008			2007
Total profit for reportable segments	$	89,063			$	93,397
Corporate and eliminations		(2,307	)			(2,237	)
Unallocated amounts:
Administrative costs		(30,562	)			(32,822	)
Investment and other income		1,852				118
Interest expense		(6,361	)			(6,720	)

Income before income taxes		51,685				51,736
Income taxes		(14,575	)			(15,366	)

Net income	$	37,110			$	36,370

\n\n\n

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
\n(in thousands)\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


	Fiscal 2009
	Q1		Q2			Q3		Q4	Total
EBITDA (1)
\nNet income	$	37,110									$	37,110
Interest expense		6,361										6,361
Income taxes		14,575										14,575
Depreciation and amortization		13,712										13,712


EBITDA (non-GAAP measure)	$	71,758		$	—		$	—	$	—	$	71,758

\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\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 derived\nfrom amounts included in the Condensed Consolidated Statements of Income data. EBITDA should not\nbe considered as an alternative to net income or operating income as an indicator of the company’s\noperating performance, or as an alternative to operating cash flows as a measure of liquidity. The\nEBITDA measure presented may not always be comparable to similarly titled measures reported by\nother companies due to differences in the components of the calculation.

\n\n\n\n\n


	BRADY CORPORATION \n
Date: November 25, 2008	/s/ Thomas J. Felmer\n
	Thomas J. Felmer
	Senior Vice President & \nChief Financial Officer