Brady Reports F’09 Third-Quarter Sales and Earnings

Brady Corporation (NYSE: BRC), a world leader in identification solutions, today announced third quarter sales and earnings for its fiscal quarter ended April 30, 2009.

Sales for the quarter were $276.7 million compared to sales of $381.9 million in the fiscal 2008 third quarter, down 27.5 percent. Organic sales were down 19.9 percent compared to the prior year, and currency exchange had a negative impact of 7.7 percent on sales results in the quarter. Regionally, organic sales declined 22.2 percent in the Americas, 22.8 percent in Europe and 10.8 percent in Asia/Pacific.

Net income for the quarter was $18.0 million compared to $34.4 million in the same quarter last year, down 47.7 percent. Earnings per diluted Class A Common Share were $0.34 compared to $0.63 in the prior year. 2009 results include after-tax restructuring charges of $1.6 million or $0.03 per share in the quarter.

Sales for the nine months ended April 30, 2009 were $921.5 million compared to $1.126 billion in the same period last year, down 18.2 percent. Net income for the nine-month period was $50.9 million compared to $97.4 million in the prior year, down 47.7 percent. Nine-month earnings per share were $0.96 compared to $1.77 per share in the period last year. Results include after-tax restructuring charges of $16.8 million or $0.32 per share year-to-date.

“Business in the quarter continued to be weak across all geographies and all product lines. Our business seems to be stabilizing for now, however global economic conditions remain uncertain and our visibility is limited,” said Brady President and Chief Executive Officer Frank M. Jaehnert. “We continue to take actions to reduce cost while investing in key initiatives that will drive growth when the economy improves.”

“Brady continues to maneuver through this challenging economy by aggressively managing costs and improving on our already strong financial position. Cash flow from operations was $55 million in the quarter and we increased our cash position to $233 million. This cash, along with our untapped bank revolver, allows us to maintain flexibility for future opportunities,” said Brady Chief Financial Officer Thomas J. Felmer. “Based on current economic conditions and currency exchange rates, our guidance remains unchanged at net income of between $65 and $75 million, including after-tax restructuring charges of approximately $20 million; and earnings per diluted share guidance of between $1.23 and $1.42. Excluding restructuring charges, we expect net income of between $85 and $95 million and earnings per diluted share of between $1.61 and $1.80.”

A Web cast of a conference call regarding the company's fiscal 2009 third quarter results will be available at www.investor.bradycorp.com beginning at 7:00 a.m. Central Time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Its 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 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 about 7,000 people at operations in the Americas, Europe and Asia/Pacific.

More information is available on the Internet at www.bradycorp.com.

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Brady believes that certain statements in this Form 10-Q 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 Form 10-Q, 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 Form 10-Q, 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 Form 10-K for the year ended July 31, 2008. 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.