Brady Corporation Reports Earnings for Fiscal 2009

MILWAUKEE--(BUSINESS WIRE)--Brady Corporation (NYSE:BRC - News) today reported results for its fiscal 2009 fourth quarter and fiscal year ended July 31, 2009.

Sales in the fiscal 2009 fourth quarter were $287.2 million compared to $396.8 million in the fourth quarter of fiscal 2008. Organic sales declined 23 percent, acquisition growth was flat, and foreign currency translation reduced sales by 5 percent. Regionally, organic sales were down 25 percent in Europe, 24 percent in the Americas, and 15 percent in Asia/Pacific.

Net income for the fiscal 2009 fourth quarter was $19.2 million or $0.37 per diluted Class A Common share, compared to $34.8 million or $0.64 per share in the fourth quarter of fiscal 2008. Results included after tax restructuring charges of $3.4 million in the quarter or $0.06 per share.

Brady’s fiscal 2009 net sales were $1.209 billion compared to $1.523 billion in sales in fiscal 2008. Organic sales were down 16 percent, acquisitions added 1 percent to sales results, and foreign currency translation reduced sales by 5 percent. Net income for fiscal 2009, including after-tax restructuring charges of $20.2 million or $0.38 per share, was $70.1 million or $1.33 per share compared to $132.2 million or $2.41 per share in fiscal 2008.

“After a strong first quarter, the global economic downturn caused a 27 percent drop in our sales over the balance of the year. Despite this, we earned $90 million in net income excluding restructuring charges and generated $127 million in cash flow from operations,” said Brady President and CEO Frank M. Jaehnert. “Beginning in the second quarter, we took quick and aggressive actions to adjust our cost structure, including a significant workforce reduction. We also continued to invest in our future and position the company for growth going forward by focusing on new product development, acquisition strategy, e-business opportunities and productivity improvement initiatives like the Brady Business Performance System (BBPS). We believe that these strategic investments along with our reduced cost structure position us well for the current economic climate as well as for future economic recovery.”

“We expect that the challenges of the global recession will continue into the first half of fiscal 2010. As a result, we expect current fiscal year net income to be between $85 and $95 million and earnings per diluted share of between $1.60 and $1.80. This guidance is based on current exchange rates and a constant tax rate. It also assumes that sales will continue at or near current levels through the first half of our fiscal year, followed by modest growth in the second half of the year,” said Brady Chief Financial Officer Thomas J. Felmer. “Our guidance excludes additional expected pretax restructuring charges of approximately $15 million or $0.20 per share, which would result in annualized pretax savings of approximately $15 million, of which $10 million are expected to be realized in fiscal 2010.

“While most of the cost reductions we made in fiscal 2009 are permanent, we expect up to $40 million of fiscal 2009 pretax savings to be non-recurring and will impact fiscal 2010 starting in the first quarter. We also expect capital expenditures in fiscal 2010 of approximately $25 million, with depreciation and amortization consistent with fiscal 2009 levels.”

A Webcast regarding fiscal 2009 results will be available at www.investor.bradycorp.com beginning at 9:30 a.m. Central Daylight Time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Its products include high-performance labels and signs, safety devices, printing systems and software, and precision die-cut materials. Founded in 1914, the company has more than 500,000 customers in electronics, telecommunications, manufacturing, electrical, construction, education, medical and a variety of other industries. Brady is headquartered in Milwaukee and employs approximately 7,000 people at operations in the Americas, Europe and Asia/Pacific. More information is available on the Internet at www.bradycorp.com.

Brady believes that certain statements in this news release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements related to future, not past, events included in this news release, including, without limitation, statements regarding Brady's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations are forward-looking statements. When used in this news release, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions and other factors, some of which are beyond Brady's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from the length or severity of the current worldwide economic downturn or timing or strength of a subsequent recovery; future financial performance of major markets Brady serves, which include, without limitation, telecommunications, manufacturing, electrical, construction, laboratory, education, governmental, public utility, computer, transportation; difficulties in making and integrating acquisitions; risks associated with newly acquired businesses; Brady's ability to retain significant contracts and customers; future competition; Brady's ability to develop and successfully market new products; changes in the supply of, or price for, parts and components; increased price pressure from suppliers and customers; interruptions to sources of supply; environmental, health and safety compliance costs and liabilities; Brady's ability to realize cost savings from operating initiatives; Brady's ability to attract and retain key talent; difficulties associated with exports; risks associated with international operations; fluctuations in currency rates versus the US dollar; technology changes; potential write-offs of Brady's substantial intangible assets;Brady’s ability to maintain its debt covenants; unforeseen tax consequences; risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products; business interruptions due to implementing business systems; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature contained from time to time in Brady's U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the "Risk Factors" section located in Item 1A of Part I of Brady's Annual Report on Form 10-K for the period ended July 31, 2008, as updated by subsequently filed reports. These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements.