Brady Corporation Reports Fiscal 2012 Fourth Quarter Results and Announces Share Buyback Program

Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for the fiscal 2012 fourth quarter ended July 31, 2012. The Company also announced that its Board of Directors authorized a share buyback program for up to two million shares of the Company’s Class A Common Stock.

Quarter Ended July 31, 2012 Financial Results:

Sales for the fiscal 2012 fourth quarter ended July 31, 2012 were down 6.0 percent to $322.5 million compared to $343.1 million in the fourth quarter of fiscal 2011. Organic sales were down 2.6 percent, the impact of foreign currency translation decreased sales by 5.0 percent, and acquisitions added 1.6 percent. By segment, organic sales increased 3.0 percent in the Americas and 0.6 percent in EMEA, and decreased 14.6 percent in the Asia-Pacific region.

Net income in the fiscal 2012 fourth quarter was down 60.6 percent to $11.7 million compared to $29.6 million in the same quarter last year. Excluding $7.1 million of after-tax restructuring charges in the fourth quarter of fiscal 2012 and $1.6 million of after-tax restructuring charges in the same quarter last year, and a $5.6 million non-routine, non-cash tax charge in the fourth quarter of fiscal 2012, net income was down 21.7 percent to $24.4 million compared to $31.1 million in the same quarter last year.

Earnings per diluted Class A Common Share were down 60.0 percent to $0.22 in the fourth quarter of fiscal 2012 compared to $0.55 in the same quarter last year. Excluding the impacts from the after-tax restructuring charges and the non-routine tax charge, earnings per diluted Class A Common Share were down 19.0 percent to $0.47 in the fourth quarter of fiscal 2012, compared to $0.58 per share in the same quarter of fiscal 2011.

Year Ended July 31, 2012 Financial Results:

Sales for the year ended July 31, 2012 were down 1.1 percent to $1.32 billion compared to $1.34 billion for the year ended July 31, 2011. Organic sales were down 0.4 percent; acquisitions, net of divestitures increased sales by 0.3 percent; and the impact of foreign currency translation decreased sales by 1.0 percent. By segment, organic sales increased 3.4 percent in the Americas, and decreased 1.3 percent in EMEA and 5.3 percent in the Asia-Pacific region.

Net loss for the year ended July 31, 2012 was $17.9 million compared to net income of $108.7 million for the year ended July 31, 2011. Excluding the impact of the $115.7 million non-cash goodwill impairment charge incurred in fiscal 2012, after-tax restructuring charges of $9.6 million in fiscal 2012 and $6.5 million in fiscal 2011, and the $5.6 million non-routine tax charge in fiscal 2012, net income was down 1.9 percent to $113.0 million compared to $115.2 million in fiscal 2011.

The Company’s loss per diluted Class A Common Share was $0.35 for the year ended July 31, 2012 compared to earnings per diluted Class A Common Share of $2.04 for the year ended July 31, 2011. Excluding the impacts from the non-cash goodwill impairment charge, the after-tax restructuring charges, and the non-routine tax charge, earnings per diluted Class A Common Share were $2.14 for the year ended July 31, 2012 compared to $2.16 in fiscal 2011. In fiscal 2012, net cash provided by operating activities was $144.7 million.

Share Buyback Program:

On September 6, 2012, Brady’s Board of Directors authorized a share buyback program for up to two million shares of the Company’s common stock. The share buyback plan may be implemented from time to time on the open market or in privately negotiated transactions.

Commentary and Guidance:

“In the fourth quarter of fiscal 2012 we were pleased with our organic sales growth in the Americas and EMEA regions, despite a continued challenging economy. Our performance in Asia-Pacific was weaker than expected due to increased market competitiveness, particularly in the mobile handset industry. Throughout fiscal 2012, our focus has been on shifting resources to our highest growth opportunities. As a result, we have recently sold our medical die-cut business in the U.S. and our paper-label business, Etimark in Germany. We also continued to invest in developing and launching a number of proprietary new products and we made three acquisitions in EMEA that increased our market share and expanded our geographic presence,” said Brady’s President and Chief Executive Officer, Frank M. Jaehnert. “Looking forward, we expect continued moderate organic growth in the Americas, a challenging economic environment in Europe, and improving results in Asia-Pacific due to our restructuring activities and some recent customer wins there.”

“As we look to fiscal 2013, we see limited likelihood that the macro-economy will provide a tailwind,” said Brady’s Chief Financial Officer, Thomas J. Felmer. “As such, we anticipate low single-digit organic growth in fiscal 2013, with all of the growth driven by our initiatives. For fiscal 2013, we expect earnings per diluted Class A Common Share of between $2.20 and $2.40, exclusive of after-tax restructuring charges. This guidance is based on current exchange rates, a share count consistent with that as of July 31, 2012, a full-year income tax rate in the mid-to-upper 20 percent range, capital expenditures of approximately $35 million and depreciation and amortization of approximately $45 million.”

A webcast regarding Brady’s fiscal 2012 fourth quarter financial results will be available at www.bradycorp.com beginning at 9:30 a.m. Central Time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels and signs, safety devices, printing systems and software, and precision die-cut materials. Founded in 1914, the company has millions of customers in electronics, telecommunications, manufacturing, electrical, construction, education, medical and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2012 employed approximately 6,900 people at operations in the Americas, EMEA and Asia-Pacific. Brady’s fiscal 2012 sales were approximately $1.32 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. 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 develop and successfully market new products; changes in the supply of, or price for, parts and components; increased price pressure from suppliers and customers; fluctuations in currency rates versus the US dollar; unforeseen tax consequences; potential write-offs of Brady’s substantial intangible assets; Brady’s ability to retain significant contracts and customers; risks associated with international operations; Brady’s ability to maintain compliance with its debt covenants; technology changes; business interruptions due to implementing business systems; environmental, health and safety compliance costs and liabilities; future competition; interruptions to sources of supply; Brady’s ability to realize cost savings from operating initiatives; difficulties associated with exports; risks associated with restructuring plans; risks associated with obtaining governmental approvals and maintaining regulatory compliance; 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 Form 10-K for the year ended July 31, 2011. 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.