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Press Release

Brady Corporation Reports Fiscal 2013 Third Quarter Results

MILWAUKEE--(BUSINESS WIRE)--May. 16, 2013-- Brady Corporation (NYSE: BRC) (“Brady”), a world leader in identification solutions, today reported its financial results for the fiscal 2013 third quarter ended April 30, 2013.

Quarter Ended April 30, 2013 Financial Results:

The company continued its portfolio realignment process by announcing plans to sell its Asia-based Die-Cut business which was outlined in a separate press release on May 16, 2013. Accordingly, the company has recast its financial statements to report the financial results of the Die-Cut business on one line item in the accompanying condensed consolidated statements of income.

Sales from continuing operations for the fiscal 2013 third quarter were up 11.0 percent to $305.7 million compared to $275.4 million in the third quarter of fiscal 2012. Organic sales were down 4.7 percent, acquisitions added 16.8 percent, and the impact of foreign currency translation decreased sales by 1.1 percent. By segment, organic sales decreased 2.9 percent in the Americas, 4.8 percent in EMEA and 11.6 percent in the Asia-Pacific region.

Net earnings from continuing operations in the fiscal 2013 third quarter were $21.8 million compared to $28.0 million in the same quarter last year. Non-GAAP net earnings from continuing operations* were $28.7 million in the third quarter of fiscal 2013, compared to $29.9 million in the third quarter of fiscal 2012.

Earnings from continuing operations per diluted Class A Nonvoting Common Share were $0.42 in the third quarter of fiscal 2013 compared to $0.53 in the same quarter last year. Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* were $0.55 in the third quarter of fiscal 2013, compared to $0.56 in the same quarter of fiscal 2012.

Nine Months Ended April 30, 2013 Financial Results:

Sales for the nine-month period ended April 30, 2013 were up 5.3 percent to $856.4 million compared to $813.6 million in the same period last year. Organic sales were down 2.7 percent, acquisitions added 9.3 percent to sales and the impact of foreign currency translation decreased sales by 1.3 percent. By segment, organic sales decreased 0.7 percent in the Americas, 4.2 percent in EMEA and 6.8 percent in the Asia-Pacific region.

Net earnings from continuing operations for the nine-month period ended April 30, 2013 were $37.7 million compared to $84.3 million in the same period in fiscal 2012. Non-GAAP net earnings from continuing operations* were $75.1 million in the nine-month period ended April 30, 2013 compared to $86.1 million in the same period of fiscal 2012.

Earnings from continuing operations per diluted Class A Nonvoting Common Share were $0.73 for the nine-month period ended April 30, 2013 compared to $1.59 in the same period of fiscal 2012. Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* were $1.45 for the nine-month period ended April 30, 2013, compared to $1.62 in the same period of fiscal 2012.

Commentary and Guidance:

“In the face of a challenging economy, we continue to position Brady for long-term success by optimizing our portfolio of businesses, aligning our organization with growth opportunities and reducing our infrastructure costs. This morning we announced our intention to sell our Die-Cut business which will continue the process of portfolio realignment as we have already divested three businesses and acquired Precision Dynamics Corporation, a business serving the healthcare space. These portfolio adjustments will allow us to focus more on our continuing businesses of Identification Solutions and Workplace Safety,” stated Brady’s President and Chief Executive Officer, Frank M. Jaehnert. “As part of our previously announced strategy to improve organic growth and profitability, effective May 1, 2013, we are changing our organizational structure from geographically-based to an organization structured around global business platforms. We are also targeting expansion in faster-growing geographies such as Central Europe, the Middle East, Africa and selected markets in Asia; and focusing on industries such as food and beverage, chemical, oil, and gas and healthcare.

“In addition to improving organic growth, we believe that our reorganization around global business platforms will yield approximately $25 million to $30 million of annual pre-tax savings, approximately half of which will be reinvested into growth initiatives. We also continue to review our facility footprint and believe that we have further opportunities for rationalization as we move forward with our business reorganization and simplification.”

Brady’s Chief Financial Officer, Thomas J. Felmer said, “Our balance sheet remains strong. Having repaid much of the debt incurred to finance the PDC acquisition, Brady is in a solid financial position to fund future organic and inorganic growth opportunities. We expect earnings from continuing operations per diluted Class A Nonvoting Common Share to range from between $0.45 and $0.55, exclusive of restructuring charges and certain other items during our fiscal 2013 fourth quarter ending July 31, 2013.”

A webcast regarding Brady’s fiscal 2013 third 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, 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 January 31, 2013 employed approximately 8,200 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.

* See accompanying notes for Non-GAAP measures.

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, 2012. 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.

 
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Data)
 
  (Unaudited)   (Unaudited)
Three Months Ended April 30, Nine Months Ended April 30,
  2013       2012     2013       2012  
Net sales $ 305,737 $ 275,388 $ 856,408 $ 813,573
Cost of products sold   146,031     123,641     403,888     367,330  
Gross margin 159,706 151,747 452,520 446,243
Operating expenses:
Research and development 8,062 8,200 24,162 25,657
Selling, general and administrative 112,148 98,614 321,909 293,518
Restructuring charges   8,540     1,977     10,487     1,977  
Total operating expenses 128,750 108,791 356,558 321,152
 
Operating income 30,956 42,956 95,962 125,091
 
Other income and (expense):
Investment and other income 1,131 1,108 2,427 1,719
Interest expense   (4,185 )   (4,735 )   (12,755 )   (14,715 )
 
Earnings from continuing operations before income taxes 27,902 39,329 85,634 112,095
 
Income taxes   6,064     11,290     47,965     27,767  
 
Net earnings from continuing operations $ 21,838 $ 28,039 $ 37,669 $ 84,328
 
(Loss) from discontinued operations, net of income taxes   (17,605 )   (387 )   (14,933 )   (113,898 )
 
Net earnings (loss) $ 4,233   $ 27,652   $ 22,736   $ (29,570 )
 
Earnings from continuing operations per Class A Nonvoting Common Share:
Basic $ 0.42 $ 0.53 $ 0.73 $ 1.60
Diluted $ 0.42 $ 0.53 $ 0.73 $ 1.59
 
Earnings from continuing operations per Class B Voting Common Share:
Basic $ 0.42 $ 0.53 $ 0.72 $ 1.59
Diluted $ 0.42 $ 0.53 $ 0.71 $ 1.57
 
(Loss) from discontinued operations per Class A Nonvoting Common Share:
Basic $ (0.34 ) $ $ (0.29 ) $ (2.17 )
Diluted $ (0.34 ) $ (0.01 ) $ (0.29 ) $ (2.16 )
 
(Loss) from discontinued operations per Class B Voting Common Share:
Basic $ (0.34 ) $ $

(0.30

) $ (2.17 )
Diluted $ (0.34 ) $ (0.01 ) $ (0.29 ) $ (2.15 )
 
Earnings per Class A Nonvoting Common Share:
Basic $ 0.08 $ 0.53 $ 0.44 $ (0.57 )
Diluted $ 0.08 $ 0.52 $ 0.44 $ (0.57 )
Dividends $ 0.19 $ 0.185 $ 0.57 $ 0.555
 
Earnings per Class B Voting Common Share:
Basic $ 0.08 $ 0.53 $ 0.42 $ (0.58 )
Diluted $ 0.08 $ 0.52 $ 0.42 $ (0.58 )
Dividends $ 0.19 $ 0.185 $ 0.553 $ 0.538
 
Weighted average common shares outstanding (in thousands):
Basic 51,415 52,513 51,210 52,539
Diluted 52,041 53,003 51,685 52,946
 
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
     
(Unaudited)
April 30, 2013 July 31, 2012

ASSETS

Current assets:
Cash and cash equivalents $ 77,034 $ 305,900
Accounts receivable—net 177,343 199,006
Inventories:

Finished products

62,995 64,740
Work-in-process 14,908 15,377
Raw materials and supplies   21,703     25,407  
Total inventories 99,606 105,524
Assets held for sale 108,623
Prepaid expenses and other current assets   41,461     40,424  
Total current assets 504,067 650,854
Other assets:
Goodwill 841,449 676,791
Other intangible assets 174,583 84,119
Deferred income taxes 6,305 45,356
Other 20,915 20,584
Property, plant and equipment:
Cost:
Land 9,081 8,651
Buildings and improvements 100,504 101,962
Machinery and equipment 278,233 292,130
Construction in progress   9,358     10,417  
397,176 413,160
Less accumulated depreciation   263,527     283,145  
Property, plant and equipment—net   133,649     130,015  
Total $ 1,680,968   $ 1,607,719  

LIABILITIES AND STOCKHOLDERS’ INVESTMENT

Current liabilities:
Notes payable $ 58,658 $
Accounts payable 75,204 86,646
Wages and amounts withheld from employees 36,840 54,629
Liabilities held for sale 34,684
Taxes, other than income taxes 7,603 9,307
Accrued income taxes 10,650 14,357
Other current liabilities 34,396 40,815
Current maturities on long-term debt   61,265     61,264  
Total current liabilities 319,300 267,018
Long-term obligations, less current maturities 218,378 254,944
Other liabilities   109,635     76,404  
Total liabilities 647,313 598,366
Stockholders’ investment:
Common stock:
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,972,270 and 47,630,926 shares, respectively 513 513
Class B voting common stock—Issued and outstanding, 3,538,628 shares 35 35
Additional paid-in capital 312,905 313,008
Earnings retained in the business 725,682 732,290
Treasury stock—2,974,218 and 3,245,561 shares, respectively of Class A nonvoting common stock, at cost (79,996 ) (92,600 )
Accumulated other comprehensive income 76,439 59,411
Other   (1,923 )   (3,304 )
Total stockholders’ investment   1,033,655     1,009,353  
Total $ 1,680,968   $ 1,607,719  
 
BRADY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
 
(Unaudited)

Nine Months Ended April 30,

2013     2012
Operating activities:
Net income (loss) $ 22,736 $ (29,570 )
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 36,037 32,921
Non-cash portion of restructuring charges 3,701 458
Non-cash portion of stock-based compensation expense 6,964 7,592
Impairment charge 115,688
Loss on write-down of assets held for sale 15,658
Loss (gain) on sales of businesses 3,138
Deferred income taxes 33,780 (3,192 )
 
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures):
Accounts receivable (6,410 ) 11,050
Inventories (91 ) (5,595 )
Prepaid expenses and other assets 541 (4,386 )
Accounts payable and accrued liabilities (22,226 ) (39,472 )
Income taxes   (4,198 )   15,101  
Net cash provided by operating activities 89,630 100,595
 
Investing activities:
Purchases of property, plant and equipment (26,082 ) (14,498 )
Payments of contingent consideration (2,580 )
Settlement of net investment hedges (797 )
Acquisition of business, net of cash acquired (301,157 ) (3,039 )
Sales of businesses, net of cash retained 10,178
Other   (1,245 )   (1,536 )
Net cash used in investing activities (318,306 ) (22,450 )
 
Financing activities:
Payment of dividends (29,344 ) (29,235 )
Proceeds from issuance of common stock 10,246 3,624
Purchase of treasury stock (5,121 ) (12,309 )
Proceeds from borrowings on notes payable 220,000
Repayment of borrowings on notes payable (173,000 )
Proceeds from borrowings on line of credit 11,491
Principal payments on debt (42,514 ) (42,514 )
Debt issuance costs (961 )
Income tax benefit from the exercise of stock options and deferred compensation distribution, and other   1,794     754  
Net cash provided by (used in) financing activities (6,448 ) (80,641 )
 
Effect of exchange rate changes on cash 6,258 (13,050 )
 
Net decrease in cash and cash equivalents (228,866 ) (15,546 )
Cash and cash equivalents, beginning of period   305,900     389,971  
 
Cash and cash equivalents, end of period $ 77,034   $ 374,425  
 
Supplemental disclosures:
Cash paid during the period for:
Interest, net of capitalized interest $ 13,194 $ 15,746
Income taxes, net of refunds 26,786 19,959
Acquisitions:
Fair value of assets acquired, net of cash $ 168,675 $ 2,395
Liabilities assumed (57,860 ) (583 )
Goodwill   190,342     1,227  
Net cash paid for acquisitions $ 301,157   $ 3,039  
 
Information by regional segment for the three and nine months ended April 30, 2013 and 2012 is as follows:
                         
(Dollars in Thousands) Americas EMEA Asia-Pacific Total Region

Corporate and
Eliminations

Total
SALES TO EXTERNAL CUSTOMERS            
Three months ended:            
April 30, 2013 $ 178,559   $ 94,044   $ 33,134   $ 305,737       $ 305,737  
April 30, 2012 $ 143,083   $ 94,136   $ 38,169   $ 275,388       $ 275,388  
 
Nine months ended:            
April 30, 2013 $ 470,418   $ 279,420   $ 106,570   $ 856,408       $ 856,408  
April 30, 2012 $ 419,862   $ 279,506   $ 114,205   $ 813,573       $ 813,573  
 
SALES INFORMATION            
Three months ended April 30, 2013:            
Organic   (2.9 )%   (4.8 )%   (11.6 )%   (4.7 )%   %   (4.7 )%
Currency   (0.7 )%   (1.3 )%   (1.6 )%   (1.1 )%   %   (1.1 )%
Acquisitions   28.4 %   6.0 %   %   16.8 %   %   16.8 %
Total   24.8 %   (0.1 )%   (13.2 )%   11.0 %   %   11.0 %
             
Nine months ended April 30, 2013:            
Organic   (0.7 )%   (4.2 )%   (6.8 )%   (2.7 )%   %   (2.7 )%
Currency   (0.8 )%   (2.5 )%   0.1 %   (1.3 )%   %   (1.3 )%
Acquisitions   13.5 %   6.7 %   %   9.3 %   %   9.3 %
Total   12.0 %   %   (6.7 )%   5.3 %   %   5.3 %
             
SEGMENT PROFIT            
Three months ended:            
April 30, 2013 $ 42,942   $ 22,993   $ 5,485   $ 71,420   $ (1,282 ) $ 70,138  
April 30, 2012 $ 39,181   $ 25,566   $ 6,080   $ 70,827   $ (388 ) $ 70,439  
Percentage change   9.6 %   (10.1 )%   (9.8 )%   0.8 %     (0.4 )%
             
Nine months ended:            
April 30, 2013 $ 119,179   $ 70,568   $ 15,793   $ 205,540   $ (5,049 ) $ 200,491  
April 30, 2012 $ 118,871   $ 78,432   $ 18,411   $ 215,714   $ (6,010 ) $ 209,704  
Percentage change   0.3 %   (10.0 )%   (14.2 )%   (4.7 )%     (4.4 )%
 
NET INCOME RECONCILIATION (in thousands)
   
Three Months Ended April 30, Nine Months Ended April 30,
2013     2012 2013     2012
Total profit for reportable segments $ 71,420 $ 70,827 $ 205,540 $ 215,714
Corporate and eliminations (1,282 ) (388 ) (5,049 ) (6,010 )
Unallocated amounts:
Administrative costs (30,642 ) (25,506 ) (94,042 ) (82,636 )
Restructuring charges (8,540 ) (1,977 ) (10,487 ) (1,977 )
Investment and other income 1,131 1,108 2,427 1,719
Interest expense   (4,185 )   (4,735 )   (12,755 )   (14,715 )
Earnings from continuing operations before income taxes 27,902 39,329 85,634 112,095
Income taxes   6,064     11,290     47,965     27,767  
Net earnings from continuing operations 21,838 28,039 37,669 84,328
(Loss) from discontinued operations, net of tax   (17,605 )   (387 )   (14,933 )   (113,898 )
Net earnings (loss) $ 4,233   $ 27,652   $ 22,736   $ (29,570 )
 
EBITDA:
       
Brady is presenting EBITDA because it is used by many of our investors and lenders, and is presented as a convenience to them. EBITDA represents net income before interest expense, income taxes, depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles ("GAAP"). The amounts included in the EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Income data. EBITDA should not be considered as an alternative to net income or operating income as an indicator of the Company's operating performance, or as an alternative to net cash provided by operating activities as a measure of liquidity. The EBITDA measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.
 
 
Fiscal 2013
 
Q1 Q2 Q3 Q4 Total
EBITDA:
Net income (loss) $ 27,188 $ (8,684 ) $ 4,233 $ 22,737
Interest expense 4,163 4,406 4,185 12,754
Income taxes 13,482 30,625 7,595 51,702
Depreciation and amortization 10,675 11,371 13,991 36,037
Intangible asset write-down in restructuring charges 3,207 3,207
Loss on write-down of assets held for sale         15,658     15,658  
 
EBITDA (non-GAAP measure) $ 55,508 $ 37,718   $ 48,869   $ 142,095  
 
 
Fiscal 2012
 
Q1 Q2 Q3 Q4 Total
EBITDA:
Net income (loss) $ 32,732 $ (89,954 ) $ 27,652 $ 11,659 $ (17,911 )
Interest expense 5,047 4,933 4,735 4,375 19,090
Income taxes 11,109 8,635 9,676 11,241 40,661
Depreciation and amortization 11,241 10,935 10,745 11,066 43,987
Impairment charge     115,688           115,688  
 
EBITDA (non-GAAP measure) $ 60,129 $ 50,237   $ 52,808 $ 38,341   $ 201,515  
 
 
Earnings from Continuing Operations Before Income Taxes Excluding Certain Items:
Brady is presenting the Non-GAAP measure "Earnings from Continuing Operations Before Income Taxes Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this profit measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Earnings from Continuing Operations Before Income Taxes to Earnings from Continuing Operations Before Income Taxes Excluding Certain Items":
 
Three Months Ended April 30, Nine Months Ended April 30,
2013 2012 2013 2012
Earnings from Continuing Operations Before Income Taxes (GAAP measure) $ 27,902 $ 39,329 $ 85,634 $ 112,095
Cost of goods sold
Purchase accounting expense related to inventory 1,530
Selling, general and administrative
PDC acquisition-related expenses 3,600
Restructuring charges 8,540 1,977 10,487 1,977
Non-cash income tax charge              
 
Earnings from Continuing Operations Before Income Taxes Excluding Certain
Certain Items (non-GAAP measure) $ 36,442   $ 41,306 $ 101,251   $ 114,072  
 
 
Income Taxes on Continuing Operations Excluding Certain Items:
Brady is presenting the Non-GAAP measure "Income Taxes on Continuing Operations Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Income Taxes on Continuing Operations to Income Taxes on Continuing Operations Excluding Certain Items:
 
Three Months Ended April 30, Nine Months Ended April 30,
2013 2012 2013 2012
Income Taxes on Continuing Operations (GAAP measure) $ 6,064 $ 11,290 $ 47,965 $ 27,767
Cost of goods sold
Purchase accounting expense related to inventory 581
Selling, general and administrative
PDC acquisition-related expenses 641
Restructuring charges 1,691 162 2,003 162
Non-cash income tax charge         (25,000 )    
 
Income Taxes on Continuing Operations Excluding Certain Items
(non-GAAP measure) $ 7,755   $ 11,452 $ 26,190   $ 27,929  
 
 
Net Earnings from Continuing Operations Excluding Certain Items:
Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Net Earnings from Continuing Operations to Net Earnings from Continuing Operations Excluding Certain Items:
 
Three Months Ended April 30, Nine Months Ended April 30,
2013 2012 2013 2012
Net Earnings from Continuing Operations (GAAP measure) $ 21,838 $ 28,039 $ 37,669 $ 84,328
Cost of goods sold
Purchase accounting expense related to inventory 949
Selling, general and administrative
PDC acquisition-related expenses 2,959
Restructuring charges 6,849 1,815 8,484 1,815
Non-cash income tax charge         25,000      
 
Net Earnings from Continuing Operations Excluding Certain Items
(non-GAAP measure) $ 28,687   $ 29,854 $ 75,061   $ 86,143  
 
 
Net Earnings from Continuing Operations Per Diluted Class A Diluted Nonvoting Common Share Excluding Certain Items:
Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this Non-GAAP measure are derived from amounts included in the Condensed Consolidated Statements of Income data. We do not view these items to be part of our sustainable results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share to Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Common Share Excluding Certain Items:
 
Three Months Ended April 30, Nine Months Ended April 30,
2013 2012 2013 2012
Net Earnings from Continuing Operations Per Class A Diluted Nonvoting Share $ 0.42 $ 0.53 $ 0.73 $ 1.59
(GAAP measure)
Cost of goods sold
Purchase accounting expense related to inventory 0.02
Selling, general and administrative
PDC acquisition-related expenses 0.06
Restructuring charges 0.13 0.03 0.16 0.03
Non-cash income tax charge         0.49      
 
Net Earnings from Continuing Operations Per Class A Diluted Nonvoting
Share Excluding Certain Items (non-GAAP measure) $ 0.55   $ 0.56 $ 1.45   $ 1.62  

Source: Brady Corporation

Brady Corporation
Aaron Pearce, 414-438-6895 (Investors)
Carole Herbstreit, 414-438-6882 (Media)