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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, 2009
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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\n
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     On February 20, 2009, Brady Corporation (the “Corporation”) issued a press release announcing\nits fiscal 2009 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\n
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(d) Exhibits.\n\n
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The following is filed as an Exhibit 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, 2009, relating to the Corporation’s\nfiscal 2009 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 24, 2009 /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 February 20, 2009, relating to the Corporation’s\nfiscal 2009 second 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
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Brady Corporation reports fiscal 2009 second quarter results\n\n
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MILWAUKEE (February 20, 2009)—Brady Corporation (NYSE: BRC), a world leader in identification\nsolutions, reports sales and earnings for its fiscal 2009 second quarter ended January 31, 2009.\n
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     Sales for the quarter were down 26.8 percent to $266.4 million compared to $364.1 million in\nthe second quarter of fiscal 2008. Organic sales were down 20.8 percent, acquisitions contributed\n0.2 percent to sales, and currency exchange had a negative impact of 6.2 percent on sales. By\nsegment, total sales declined 21.5 percent in the Americas, 28.9 percent in Europe, and 33.7\npercent in the Asia/Pacific region.\n
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     Net loss for the quarter was $4.2 million compared to net income of $26.7 million in the\nfiscal 2008 second quarter. Net loss per diluted Class A Common share was $0.08 in the quarter\ncompared to earnings of $0.48 per share in the fiscal 2008 second quarter. 2009 results include\nafter-tax restructuring charges of $14.0 million, or $0.27 per share.\n
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     Sales for the six months ended January 31, 2009 declined 13.4 percent to $644.8 million\ncompared to $744.3 million in the same period last year. Net income for the first six months of\nfiscal 2009 was down 47.7 percent to $33.0 million compared to $63.1 million for the same period in\nfiscal 2008. Six-month earnings per diluted Class A Common share were down 45.6 percent to $0.62\ncompared to $1.14 in fiscal 2008. Results include after-tax restructuring charges of $15.2 million\nor $0.28 per share for the six-month period.\n
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     “The rapidly weakening economy and a strengthening dollar, coupled with many customers taking\nextended shut-downs during the various global holidays, as well as inventory reduction efforts by\nboth our customers and our channel partners, made this a very tough quarter for us,” said Brady\nPresident and CEO Frank M. Jaehnert. “As previously announced, we implemented cost-control\nmeasures in December, including a 10 percent workforce reduction and significant reduction of\ndiscretionary spending. We further reduced costs by eliminating an additional 10 percent of our\nworkforce through a reduction in contract labor. These early and swift actions allowed us to\nsignificantly reduce our cost structure, albeit not at the same rate as the rapid decline in sales.\nWe are closely monitoring business conditions and are ready to take additional action if needed.”\n
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     “We continue to aggressively manage our expenses and working capital, and our financial\nposition remains strong. In the quarter we saw an increase in cash bringing our total\ncash balance to $185 million,” said Brady Chief Financial Officer Thomas J. Felmer. “Based on\ncurrent economic conditions and currency exchange rates, we are reducing our net income guidance to\nbetween $65 and $75 million, from $75 to $85 million, including after-tax restructuring charges of\napproximately $20 million. We are reducing earnings per diluted share guidance to between $1.23\nand $1.42, from $1.40 to $1.59. Excluding restructuring charges, we expect net income of between\n$85 and $95 million, down from $95 to $105 million; and earnings per diluted share of between $1.61\nand $1.80, down from $1.78 to $1.97.”\n
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     A webcast regarding fiscal 2009 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 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 7,000 people at operations in the Americas, Europe and\nAsia/Pacific.\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, 2008. 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
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  (Unaudited) 
  Three Months Ended January 31,  Six Months Ended January 31, 
          Percentage          Percentage 
(Dollars in Thousands) 2009  2008  Change  2009  2008  Change 
Net sales
 $266,449   364,124   -26.8% $644,766   744,258   -13.4%
Cost of products sold
  140,307   189,101   -25.8%  337,478   381,567   -11.6%
 
                    
Gross margin
  126,142   175,023   -27.9%  307,288   362,691   -15.3%
 
                        
Operating expenses:
                        
Research and development
  8,503   10,071   -15.6%  17,559   19,050   -7.8%
Selling, general and administrative
  93,613   122,508   -23.6%  207,870   242,859   -14.4%
Restructuring charge
  19,408   —   —   21,047   —   — 
 
                    
Total operating expenses
  121,524   132,579   -8.3%  246,476   261,909   -5.9%
 
                        
Operating income
  4,618   42,444   -89.1%  60,812   100,782   -39.7%
 
                        
Other income and (expense):
                        
Investment and other (expense) income
  (1,698)  2,269   -174.8%  154   2,387   -93.5%
Interest expense
  (6,314)  (6,747)  -6.4%  (12,675)  (13,467)  -5.9%
 
                    
 
                        
(Loss) income before income taxes
  (3,394)  37,966   -108.9%  48,291   89,702   -46.2%
 
                        
Income taxes
  756   11,276   -93.3%  15,331   26,642   -42.5%
 
                    
 
                        
Net (loss) income
 $(4,150)  26,690   -115.5% $32,960   63,060   -47.7%
 
                    
 
                        
Per Class A Nonvoting Common Share:
  2009   2008       2009   2008     
Basic net (loss) income
 $(0.08) $0.49   -116.3% $0.62  $1.16   -46.6%
Diluted net (loss) income
 $(0.08) $0.48   -116.7% $0.62  $1.14   -45.6%
Dividends
 $0.17  $0.15   13.3% $0.34  $0.30   13.3%
 
                        
Per Class B Voting Common Share:
                        
Basic net (loss) income
 $(0.08) $0.49   -116.3% $0.61  $1.14   -46.5%
Diluted net (loss) income
 $(0.08) $0.48   -116.7% $0.60  $1.13   -46.9%
Dividends
 $0.17  $0.15   13.3% $0.32  $0.28   14.3%
 
                        
Weighted average common shares\noutstanding (in Thousands):
                        
Basic
  52,350   54,510       52,821   54,430     
Diluted
  52,350   55,228       53,144   55,175     
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BRADY CORPORATION AND SUBSIDIARIES
\nCONDENSED CONSOLIDATED BALANCE SHEETS\n
\n\n
\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n\n\n\n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \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) 
(IN THOUSANDS) January 31, 2009  July 31, 2008 
ASSETS
Current assets:
        
Cash and cash equivalents
 $185,091  $258,355 
Accounts receivable, less allowance for losses ($7,905 and\n$10,059, respectively)
  191,335   262,461 
Inventories:
        
Finished products
  65,646   75,665 
Work-in-process
  18,499   21,187 
Raw materials and supplies
  37,537   37,767 
 
      
Total inventories
  121,682   134,619 
Prepaid expenses and other current assets
  43,577   43,650 
 
      
 
        
Total current assets
  541,685   699,085 
 
        
Other assets:
        
Goodwill
  719,431   789,107 
Other intangible assets, net
  118,532   144,791 
Deferred income taxes
  27,196   25,943 
Other
  15,815   21,381 
 
      
 
        
Total other assets
  880,974   981,222 
 
        
Property, plant and equipment:
        
Cost:
        
Land
  6,183   6,490 
Buildings and improvements
  92,579   98,646 
Machinery and equipment
  271,541   282,232 
Construction in progress
  7,248   6,040 
 
      
 
        
 
  377,551   393,408 
Less accumulated depreciation
  224,455   223,202 
 
      
 
        
Net property, plant and equipment
  153,096   170,206 
 
      
 
        
Total
 $1,575,755  $1,850,513 
 
      
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
        
Accounts payable
 $71,327  $118,209 
Wages and amounts withheld from employees
  50,339   82,354 
Taxes, other than income taxes
  6,487   10,234 
Accrued income taxes
  1,603   21,523 
Other current liabilities
  46,689   54,810 
Current maturities on long-term debt
  21,429   21,431 
 
      
 
        
Total current liabilities
  197,874   308,561 
 
        
Long-term obligations, less current maturities
  457,143   457,143 
 
        
Other liabilities
  55,066   63,001 
 
      
 
        
Total liabilities
  710,083   828,705 
 
        
Stockholders’ investment:
        
Common stock:
        
Class A nonvoting common stock — Issued 51,261,487 and\n51,261,487 shares\nand outstanding 48,745,180 and 50,005,296 shares,\nrespectively
  513   513 
Class B voting common stock — Issued and outstanding,\n3,538,628 shares
  35   35 
Additional paid-in capital
  296,342   292,769 
Earnings retained in the business
  654,034   639,059 
Treasury stock — 2,306,307 and 1,046,191 shares, respectively\nof Class A nonvoting common stock, at cost
  (70,917)  (33,234)
Accumulated other comprehensive income
  (9,427)  128,161 
Other
  (4,908)  (5,495)
 
      
 
        
Total stockholders’ investment
  865,672   1,021,808 
 
      
 
        
Total
 $1,575,755  $1,850,513 
 
      
\n
\n\n\n

 \n

\n\n\n

\n

 

\n\n

\n\n
BRADY CORPORATION AND SUBSIDIARIES
\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n
\n\n
\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \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, 
(Dollars in Thousands) 2009  2008 
Operating activities:
        
Net income
 $32,960  $63,060 
Adjustments to reconcile net income to net cash provided by operating activities:
        
Depreciation and amortization
  27,193   29,669 
Non-cash portion of restructuring charges
  1,916   — 
Non-cash portion of stock-based compensation expense
  4,244   6,382 
Other
  1,274   (517)
Changes in operating assets and liabilities (net of effects of business acquisitions):
        
Accounts receivable
  42,156   7,080 
Inventories
  (548)  7,571 
Prepaid expenses and other assets
  (3,648)  (7,339)
Accounts payable and accrued liabilities
  (64,413)  (17,117)
Income taxes
  (17,428)  (1,266)
Other liabilities
  (1,689)  325 
 
      
Net cash provided by operating activities
  22,017   87,848 
 
        
Investing activities:
        
Acquisition of businesses, net of cash acquired
  —   (24,552)
Purchase price adjustment
  3,514   — 
Payments of contingent consideration
  (1,405)  (5,798)
Purchases of short-term investments
  —   (10,350)
Sales of short-term investments
  —   29,550 
Purchases of property, plant and equipment
  (12,948)  (14,358)
Other
  1,998   (3,259)
 
      
Net cash used in investing activities
  (8,841)  (28,767)
 
        
Financing activities:
        
Payment of dividends
  (17,985)  (16,285)
Proceeds from issuance of common stock
  1,284   7,980 
Principal payments on debt
  (2)  (9)
Purchase of treasury stock
  (40,267)  — 
Proceeds from issuance of debt
  —   — 
Income tax benefit from the exercise of stock options and deferred\ncompensation distribution
  847   4,093 
Net cash (used in) provided by financing activities
  (56,123)  (4,221)
Effect of exchange rate changes on cash
  (30,317)  733 
 
        
Net (decrease) increase in cash and cash equivalents
  (73,264)  55,593 
Cash and cash equivalents, beginning of period
  258,355   142,846 
 
      
 
        
Cash and cash equivalents, end of period
  185,091   198,439 
 
      
 
        
Supplemental disclosures:
        
Cash paid during the period for:
        
Interest, net of capitalized interest
 $12,563  $13,153 
Income taxes, net of refunds
  27,384   26,381 
Acquisitions:
        
Fair value of assets acquired, net of cash
 $—  $17,279 
Liabilities assumed
  —   (6,371)
Goodwill
  —   13,644 
 
      
Net cash paid for acquisitions
 $—  $24,552 
 
      
\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, 2009 and 2008 is as follows:
\n\n\n\n
\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n
                         
                  Corporate and  
(in thousands) Americas Europe Asia-Pacific Subtotals Eliminations Total
SALES TO EXTERNAL CUSTOMERS                    
Three months ended:
                        
January 31, 2009
 $122,970  $87,201  $56,278  $266,449   —  $266,449 
January 31, 2008
 $156,621  $122,615  $84,888  $364,124   —  $364,124 
 
                        
Six months ended:
                        
January 31, 2009
 $283,886  $195,416  $165,464  $644,766   —  $644,766 
January 31, 2008
 $331,396  $231,529  $181,333  $744,258   —  $744,258 
 
                        
SALES GROWTH INFORMATION                    
Three months ended January 31, 2009:                    
Base
  -19.5%   -16.9%  -28.9%  -20.8%  —   -20.8%
Currency
  -2.6%  -12.0%  -4.8%  -6.2%  —   -6.2%
Acquisitions
  0.6%  0.0%  0.0%  0.2%  —   0.2%
Total
  -21.5%  -28.9%  -33.7%  -26.8%  —   -26.8%
 
                        
Six months ended January 31, 2009:                    
Base
  -13.5%  -11.5%  -7.7%  -11.5%  —   -11.5%
Currency
  -1.4%  -7.1%  -1.1%  -3.1%  —   -3.1%
Acquisitions
  0.6%  3.0%  0.0%  1.2%  —   1.2%
Total
  -14.3%  -15.6%  -8.8%  -13.4%  —   -13.4%
   
                        
SEGMENT PROFIT                    
Three months ended:                    
January 31, 2009
 $22,041  $22,945  $4,122  $49,108   ($2,607) $46,501 
January 31, 2008
 $32,036  $31,067  $12,660  $75,763   ($2,347) $73,416 
Percentage\nincrease\n(decrease)
  -31.2%  -26.1%  -67.4%  -35.2%  11.1%  -36.7%
 
                        
Six months ended:                    
January 31, 2009
 $57,564  $54,084  $26,523  $138,171   ($4,914) $133,257 
January 31, 2008
 $76,142  $60,967  $32,050  $169,159   ($4,583) $164,576 
Percentage\nincrease\n(decrease)
  -24.4%  -11.3%  -17.2%  -18.3%  7.2%  -19.0%
\n
\n\n\n
NET (LOSS) INCOME RECONCILIATION (in thousands)\n
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  Three months ended: Six months ended:
   January 31, January 31, January 31, January 31,
  2009 2008 2009 2008
Total profit for reportable segments
 $49,108  $75,763  $138,171  $169,159 
Corporate and eliminations
  (2,607)  (2,347)  ($4,914)  (4,583)
Unallocated amounts:
                
Administrative costs
  (22,475)  (30,972)  (51,398)  (63,794)
Restructuring charge
  (19,408)      (21,047)  — 
Investment and other (expense)\nincome
  (1,698)  2,269   154   2,387 
Interest expense
  (6,314)  (6,747)  (12,675)  (13,467)
         
(Loss) income before income taxes
  (3,394)  37,966   48,291   89,702 
Income taxes
  (756)  (11,276)  (15,331)  (26,642)
         
Net (loss) income
 $(4,150) $26,690  $32,960  $63,060 
                 
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RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES\n\n
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  Fiscal\n2008
(in thousands) 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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  Fiscal 2009
  Q1 Q2 Q3 Q4 Total
EBITDA (1)
                    
Net income (loss)
 $37,110  $(4,150)         $32,960 
Interest expense
  6,361   6,314           12,675 
Income taxes
  14,575   756           15,331 
Depreciation and amortization
  13,712   13,481           27,193 
   
 
                    
EBITDA (non-GAAP measure)
 $71,758  $16,401  $—  $—  $88,159 
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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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