|
|
|
|
|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
|
Wisconsin
|
|
39-0178960
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
6555 West Good Hope Road, Milwaukee, Wisconsin
|
|
53223
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
Large accelerated filer
|
|
þ
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
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Page
|
|
January 31, 2014
|
|
July 31, 2013
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
79,116
|
|
|
$
|
91,058
|
|
Accounts receivable—net
|
168,037
|
|
|
169,261
|
|
||
Inventories:
|
|
|
|
||||
Finished products
|
68,170
|
|
|
64,544
|
|
||
Work-in-process
|
16,077
|
|
|
14,776
|
|
||
Raw materials and supplies
|
19,869
|
|
|
15,387
|
|
||
Total inventories
|
104,116
|
|
|
94,707
|
|
||
Assets held for sale
|
124,508
|
|
|
119,864
|
|
||
Prepaid expenses and other current assets
|
44,120
|
|
|
37,600
|
|
||
Total current assets
|
519,897
|
|
|
512,490
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
615,404
|
|
|
617,236
|
|
||
Other intangible assets
|
146,859
|
|
|
156,851
|
|
||
Deferred income taxes
|
9,449
|
|
|
8,623
|
|
||
Other
|
21,915
|
|
|
21,325
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Cost:
|
|
|
|
||||
Land
|
7,738
|
|
|
7,861
|
|
||
Buildings and improvements
|
92,886
|
|
|
91,471
|
|
||
Machinery and equipment
|
272,128
|
|
|
266,787
|
|
||
Construction in progress
|
15,931
|
|
|
11,842
|
|
||
|
388,683
|
|
|
377,961
|
|
||
Less accumulated depreciation
|
264,167
|
|
|
255,803
|
|
||
Property, plant and equipment—net
|
124,516
|
|
|
122,158
|
|
||
Total
|
$
|
1,438,040
|
|
|
$
|
1,438,683
|
|
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Notes payable
|
$
|
23,946
|
|
|
$
|
50,613
|
|
Accounts payable
|
86,918
|
|
|
82,519
|
|
||
Wages and amounts withheld from employees
|
36,386
|
|
|
42,413
|
|
||
Liabilities held for sale
|
31,755
|
|
|
34,583
|
|
||
Taxes, other than income taxes
|
7,028
|
|
|
8,243
|
|
||
Accrued income taxes
|
5,383
|
|
|
7,056
|
|
||
Other current liabilities
|
36,971
|
|
|
36,806
|
|
||
Current maturities on long-term debt
|
61,264
|
|
|
61,264
|
|
||
Total current liabilities
|
289,651
|
|
|
323,497
|
|
||
Long-term obligations, less current maturities
|
203,063
|
|
|
201,150
|
|
||
Other liabilities
|
81,896
|
|
|
83,239
|
|
||
Total liabilities
|
574,610
|
|
|
607,886
|
|
||
Stockholders’ investment:
|
|
|
|
||||
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 48,828,416 and 48,408,544 shares, respectively
|
513
|
|
|
513
|
|
||
Class B voting common stock—Issued and outstanding, 3,538,628 shares
|
35
|
|
|
35
|
|
||
Additional paid-in capital
|
313,963
|
|
|
306,191
|
|
||
Earnings retained in the business
|
558,494
|
|
|
538,512
|
|
||
Treasury stock—2,353,071 and 2,626,276 shares, respectively of Class A nonvoting
common stock, at cost |
(64,346
|
)
|
|
(69,797
|
)
|
||
Accumulated other comprehensive income
|
54,427
|
|
|
56,063
|
|
||
Other
|
344
|
|
|
(720
|
)
|
||
Total stockholders’ investment
|
863,430
|
|
|
830,797
|
|
||
Total
|
$
|
1,438,040
|
|
|
$
|
1,438,683
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net sales
|
$
|
291,194
|
|
|
$
|
272,702
|
|
|
$
|
598,724
|
|
|
$
|
544,717
|
|
Cost of products sold
|
148,658
|
|
|
130,811
|
|
|
298,341
|
|
|
252,641
|
|
||||
Gross margin
|
142,536
|
|
|
141,891
|
|
|
300,383
|
|
|
292,076
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
8,440
|
|
|
8,213
|
|
|
17,027
|
|
|
16,100
|
|
||||
Selling, general and administrative
|
111,426
|
|
|
109,948
|
|
|
224,159
|
|
|
209,010
|
|
||||
Restructuring charges
|
4,324
|
|
|
1,933
|
|
|
11,163
|
|
|
1,933
|
|
||||
Total operating expenses
|
124,190
|
|
|
120,094
|
|
|
252,349
|
|
|
227,043
|
|
||||
Operating income
|
18,346
|
|
|
21,797
|
|
|
48,034
|
|
|
65,033
|
|
||||
Other income and (expense):
|
|
|
|
|
|
|
|
||||||||
Investment and other income
|
255
|
|
|
898
|
|
|
1,017
|
|
|
1,294
|
|
||||
Interest expense
|
(3,676
|
)
|
|
(4,406
|
)
|
|
(7,397
|
)
|
|
(8,569
|
)
|
||||
Earnings from continuing operations before income taxes
|
14,925
|
|
|
18,289
|
|
|
41,654
|
|
|
57,758
|
|
||||
Income tax expense
|
4,408
|
|
|
28,960
|
|
|
13,002
|
|
|
42,138
|
|
||||
Earnings (loss) from continuing operations
|
$
|
10,517
|
|
|
$
|
(10,671
|
)
|
|
$
|
28,652
|
|
|
$
|
15,620
|
|
Earnings from discontinued operations, net of income taxes
|
5,907
|
|
|
1,987
|
|
|
11,701
|
|
|
2,884
|
|
||||
Net earnings (loss)
|
$
|
16,424
|
|
|
$
|
(8,684
|
)
|
|
$
|
40,353
|
|
|
$
|
18,504
|
|
Earnings (loss) from continuing operations per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
Earnings (loss) from continuing operations per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.53
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.53
|
|
|
$
|
0.29
|
|
Earnings from discontinued operations per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.22
|
|
|
$
|
0.06
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.22
|
|
|
$
|
0.06
|
|
Earnings from discontinued operations per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.23
|
|
|
$
|
0.05
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.22
|
|
|
$
|
0.05
|
|
Net earnings (loss) per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.77
|
|
|
$
|
0.36
|
|
Diluted
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.77
|
|
|
$
|
0.36
|
|
Dividends
|
$
|
0.195
|
|
|
$
|
0.19
|
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
Net earnings (loss) per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.76
|
|
|
$
|
0.34
|
|
Diluted
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.75
|
|
|
$
|
0.34
|
|
Dividends
|
$
|
0.195
|
|
|
$
|
0.19
|
|
|
$
|
0.373
|
|
|
$
|
0.36
|
|
Weighted average common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic
|
52,208
|
|
|
51,177
|
|
|
52,140
|
|
|
51,108
|
|
||||
Diluted
|
52,494
|
|
|
51,177
|
|
|
52,457
|
|
|
51,507
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net earnings (loss)
|
$
|
16,424
|
|
|
$
|
(8,684
|
)
|
|
$
|
40,353
|
|
|
$
|
18,504
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(16,805
|
)
|
|
9,578
|
|
|
(270
|
)
|
|
28,071
|
|
||||
Net investment hedge translation adjustments
|
348
|
|
|
(4,431
|
)
|
|
(4,365
|
)
|
|
(9,732
|
)
|
||||
Long-term intercompany loan translation adjustments
|
796
|
|
|
3,184
|
|
|
623
|
|
|
1,590
|
|
||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Net gain (loss) recognized in other comprehensive income
|
246
|
|
|
(441
|
)
|
|
231
|
|
|
(998
|
)
|
||||
Reclassification adjustment for gains included in net earnings
|
(2
|
)
|
|
(90
|
)
|
|
(92
|
)
|
|
(557
|
)
|
||||
|
244
|
|
|
(531
|
)
|
|
139
|
|
|
(1,555
|
)
|
||||
Pension and other post-retirement benefits:
|
|
|
|
|
|
|
|
||||||||
Actuarial gain amortization
|
(66
|
)
|
|
(12
|
)
|
|
(132
|
)
|
|
(24
|
)
|
||||
Prior service credit amortization
|
(51
|
)
|
|
(50
|
)
|
|
(102
|
)
|
|
(101
|
)
|
||||
|
(117
|
)
|
|
(62
|
)
|
|
(234
|
)
|
|
(125
|
)
|
||||
Other comprehensive (loss) income, before tax
|
(15,534
|
)
|
|
7,738
|
|
|
(4,107
|
)
|
|
18,249
|
|
||||
Income tax (expense) benefit related to items of other comprehensive income
|
(171
|
)
|
|
1,560
|
|
|
2,471
|
|
|
3,815
|
|
||||
Other comprehensive (loss) income, net of tax
|
(15,705
|
)
|
|
9,298
|
|
|
(1,636
|
)
|
|
22,064
|
|
||||
Comprehensive income
|
$
|
719
|
|
|
$
|
614
|
|
|
$
|
38,717
|
|
|
$
|
40,568
|
|
|
Six months ended January 31,
|
||||||
|
(Unaudited)
|
||||||
|
2014
|
|
2013
|
||||
Operating activities:
|
|
|
|
||||
Net earnings
|
$
|
40,353
|
|
|
$
|
18,504
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
22,342
|
|
|
22,046
|
|
||
Non-cash portion of stock-based compensation expense
|
4,377
|
|
|
6,868
|
|
||
Non-cash portion of restructuring charges
|
97
|
|
|
200
|
|
||
Loss on sales of businesses
|
—
|
|
|
3,138
|
|
||
Deferred income taxes
|
(2,402
|
)
|
|
26,050
|
|
||
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures):
|
|
|
|
||||
Accounts receivable
|
(1,418
|
)
|
|
(5,418
|
)
|
||
Inventories
|
(8,754
|
)
|
|
(4,475
|
)
|
||
Prepaid expenses and other assets
|
(3,505
|
)
|
|
(2,772
|
)
|
||
Accounts payable and accrued liabilities
|
(7,263
|
)
|
|
(13,629
|
)
|
||
Income taxes
|
(2,050
|
)
|
|
(6,318
|
)
|
||
Net cash provided by operating activities
|
41,777
|
|
|
44,194
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(17,607
|
)
|
|
(15,667
|
)
|
||
Acquisition of business, net of cash acquired
|
—
|
|
|
(300,757
|
)
|
||
Sales of businesses, net of cash retained
|
—
|
|
|
10,178
|
|
||
Other
|
89
|
|
|
(549
|
)
|
||
Net cash used in investing activities
|
(17,518
|
)
|
|
(306,795
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Payment of dividends
|
(20,370
|
)
|
|
(19,499
|
)
|
||
Proceeds from issuance of common stock
|
10,894
|
|
|
4,409
|
|
||
Purchase of treasury stock
|
—
|
|
|
(5,121
|
)
|
||
Proceeds from borrowing on notes payable
|
—
|
|
|
220,000
|
|
||
Repayment of borrowing on notes payable
|
(30,000
|
)
|
|
(112,472
|
)
|
||
Proceeds from borrowings on line of credit
|
3,187
|
|
|
—
|
|
||
Income tax on the exercise of stock options and deferred compensation distributions, and other
|
(984
|
)
|
|
1,273
|
|
||
Net cash (used in) provided by financing activities
|
(37,273
|
)
|
|
88,590
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
1,072
|
|
|
9,422
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(11,942
|
)
|
|
(164,589
|
)
|
||
Cash and cash equivalents, beginning of period
|
91,058
|
|
|
305,900
|
|
||
|
|
|
|
||||
Cash and cash equivalents, end of period
|
$
|
79,116
|
|
|
$
|
141,311
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
7,283
|
|
|
$
|
7,866
|
|
Income taxes, net of refunds
|
14,083
|
|
|
19,964
|
|
||
Acquisitions:
|
|
|
|
||||
Fair value of assets acquired, net of cash
|
—
|
|
|
$
|
168,674
|
|
|
Liabilities assumed
|
—
|
|
|
(57,859
|
)
|
||
Goodwill
|
—
|
|
|
189,942
|
|
||
Net cash paid for acquisitions
|
—
|
|
|
$
|
300,757
|
|
|
IDS
|
|
WPS
|
|
Total
|
||||||
Balance as of July 31, 2013
|
$
|
517,030
|
|
|
$
|
100,206
|
|
|
$
|
617,236
|
|
Purchase accounting adjustments
|
(2,168
|
)
|
|
—
|
|
|
$
|
(2,168
|
)
|
||
Translation adjustments
|
(714
|
)
|
|
1,050
|
|
|
$
|
336
|
|
||
Balance as of January 31, 2014
|
$
|
514,148
|
|
|
$
|
101,256
|
|
|
$
|
615,404
|
|
|
January 31, 2014
|
|
July 31, 2013
|
||||||||||||||||||||||||
|
Weighted
Average
Amortization
Period
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Weighted
Average
Amortization
Period
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
Amortized other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patents
|
5
|
|
$
|
11,299
|
|
|
$
|
(9,883
|
)
|
|
$
|
1,416
|
|
|
5
|
|
$
|
11,053
|
|
|
$
|
(9,597
|
)
|
|
$
|
1,456
|
|
Trademarks and other
|
5
|
|
15,726
|
|
|
(9,761
|
)
|
|
5,965
|
|
|
5
|
|
15,289
|
|
|
(8,398
|
)
|
|
6,891
|
|
||||||
Customer relationships
|
8
|
|
261,245
|
|
|
(153,496
|
)
|
|
107,749
|
|
|
8
|
|
261,076
|
|
|
(144,620
|
)
|
|
116,456
|
|
||||||
Non-compete agreements and other
|
4
|
|
14,415
|
|
|
(13,761
|
)
|
|
654
|
|
|
4
|
|
14,942
|
|
|
(14,215
|
)
|
|
727
|
|
||||||
Unamortized other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks
|
N/A
|
|
31,075
|
|
|
—
|
|
|
31,075
|
|
|
N/A
|
|
31,321
|
|
|
—
|
|
|
31,321
|
|
||||||
Total
|
|
|
$
|
333,760
|
|
|
$
|
(186,901
|
)
|
|
$
|
146,859
|
|
|
|
|
$
|
333,681
|
|
|
$
|
(176,830
|
)
|
|
$
|
156,851
|
|
|
Unrealized gain on cash flow hedges
|
|
Unamortized gain on postretirement plans
|
|
Foreign currency translation adjustments
|
|
Accumulated other comprehensive income
|
||||||||
Beginning balance, July 31, 2013
|
$
|
99
|
|
|
$
|
1,853
|
|
|
$
|
54,111
|
|
|
$
|
56,063
|
|
Other comprehensive income (loss) before reclassification
|
136
|
|
|
—
|
|
|
(1,481
|
)
|
|
(1,345
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(57
|
)
|
|
(234
|
)
|
|
—
|
|
|
(291
|
)
|
||||
Ending balance, January 31, 2014
|
$
|
178
|
|
|
$
|
1,619
|
|
|
$
|
52,630
|
|
|
$
|
54,427
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Income tax (expense) benefit related to items of other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Net investment hedge translation adjustments
|
$
|
(576
|
)
|
|
$
|
1,789
|
|
|
$
|
738
|
|
|
$
|
3,742
|
|
Long-term intercompany loan settlements
|
440
|
|
|
(647
|
)
|
|
1,843
|
|
|
(592
|
)
|
||||
Cash flow hedges
|
(78
|
)
|
|
164
|
|
|
(60
|
)
|
|
598
|
|
||||
Other income tax adjustments
|
43
|
|
|
254
|
|
|
(50
|
)
|
|
67
|
|
||||
Income tax (expense) benefit related to items of other comprehensive income
|
$
|
(171
|
)
|
|
$
|
1,560
|
|
|
$
|
2,471
|
|
|
$
|
3,815
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator: (in thousands)
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from continuing operations
|
$
|
10,517
|
|
|
$
|
(10,671
|
)
|
|
$
|
28,652
|
|
|
$
|
15,620
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Restricted stock dividends
|
(16
|
)
|
|
(60
|
)
|
|
(61
|
)
|
|
(119
|
)
|
||||
Numerator for basic and diluted earnings (loss) from continuing operations per Class A Nonvoting Common Share
|
$
|
10,501
|
|
|
$
|
(10,731
|
)
|
|
$
|
28,591
|
|
|
$
|
15,501
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Preferential dividends
|
—
|
|
|
—
|
|
|
(813
|
)
|
|
(797
|
)
|
||||
Preferential dividends on dilutive stock options
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
||||
Numerator for basic and diluted earnings (loss) from continuing operations per Class B Voting Common Share
|
$
|
10,501
|
|
|
$
|
(10,731
|
)
|
|
$
|
27,772
|
|
|
$
|
14,700
|
|
Denominator: (in thousands)
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings (loss) from continuing operations per share for both Class A and Class B
|
52,208
|
|
|
51,177
|
|
|
52,140
|
|
|
51,108
|
|
||||
Plus: Effect of dilutive stock options
|
286
|
|
|
—
|
|
|
317
|
|
|
399
|
|
||||
Denominator for diluted earnings (loss) from continuing operations per share for both Class A and Class B
|
52,494
|
|
|
51,177
|
|
|
52,457
|
|
|
51,507
|
|
||||
Earnings (loss) from continuing operations per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
Earnings (loss) from continuing operations per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.53
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.53
|
|
|
$
|
0.29
|
|
Earnings from discontinued operations per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.22
|
|
|
$
|
0.06
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.22
|
|
|
$
|
0.06
|
|
Earnings from discontinued operations per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.23
|
|
|
$
|
0.05
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.22
|
|
|
$
|
0.05
|
|
Net earnings (loss) per Class A Nonvoting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.77
|
|
|
$
|
0.36
|
|
Diluted
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.77
|
|
|
$
|
0.36
|
|
Net earnings (loss) per Class B Voting Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.76
|
|
|
$
|
0.34
|
|
Diluted
|
$
|
0.31
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.75
|
|
|
$
|
0.34
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Sales to External Customers
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
194,732
|
|
|
$
|
168,234
|
|
|
$
|
404,278
|
|
|
$
|
330,627
|
|
Workplace Safety
|
96,462
|
|
|
104,468
|
|
|
194,446
|
|
|
214,090
|
|
||||
Total Company
|
$
|
291,194
|
|
|
$
|
272,702
|
|
|
$
|
598,724
|
|
|
$
|
544,717
|
|
Segment Profit
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
37,526
|
|
|
$
|
34,643
|
|
|
$
|
88,493
|
|
|
$
|
79,223
|
|
Workplace Safety
|
14,668
|
|
|
23,600
|
|
|
33,042
|
|
|
51,429
|
|
||||
Total Company
|
$
|
52,194
|
|
|
$
|
58,243
|
|
|
$
|
121,535
|
|
|
$
|
130,652
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Total profit from reportable segments
|
$
|
52,194
|
|
|
$
|
58,243
|
|
|
$
|
121,535
|
|
|
$
|
130,652
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
||||||||
Administrative costs
|
(29,524
|
)
|
|
(34,513
|
)
|
|
(62,338
|
)
|
|
(63,686
|
)
|
||||
Restructuring charges
|
(4,324
|
)
|
|
(1,933
|
)
|
|
(11,163
|
)
|
|
(1,933
|
)
|
||||
Investment and other income
|
255
|
|
|
898
|
|
|
1,017
|
|
|
1,294
|
|
||||
Interest expense
|
(3,676
|
)
|
|
(4,406
|
)
|
|
(7,397
|
)
|
|
(8,569
|
)
|
||||
Earnings from continuing operations before income taxes
|
$
|
14,925
|
|
|
$
|
18,289
|
|
|
$
|
41,654
|
|
|
$
|
57,758
|
|
|
|
Six months ended January 31,
|
||||||
Black-Scholes Option Valuation Assumptions
|
|
2014
|
|
2013
|
||||
Expected term (in years)
|
|
5.97
|
|
|
5.95
|
|
||
Expected volatility
|
|
37.32
|
%
|
|
38.68
|
%
|
||
Expected dividend yield
|
|
2.35
|
%
|
|
2.20
|
%
|
||
Risk-free interest rate
|
|
1.80
|
%
|
|
0.90
|
%
|
||
Weighted-average market value of underlying stock at grant date
|
|
$
|
30.98
|
|
|
$
|
30.36
|
|
Weighted-average exercise price
|
|
$
|
30.98
|
|
|
$
|
30.36
|
|
Weighted-average fair value of options granted during the period
|
|
$
|
9.17
|
|
|
$
|
9.01
|
|
Options
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
||||
Outstanding at July 31, 2013
|
|
5,106,585
|
|
$
|
30.68
|
|
|
|
|
|
||
New grants
|
|
375,272
|
|
30.98
|
|
|
|
|
|
|||
Exercised
|
|
(407,507)
|
|
26.99
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(545,070)
|
|
32.30
|
|
|
|
|
|
|||
Outstanding at January 31, 2014
|
|
4,529,280
|
|
$
|
30.84
|
|
|
5.8
|
|
$
|
2,059
|
|
Exercisable at January 31, 2014
|
|
3,274,218
|
|
$
|
31.14
|
|
|
4.7
|
|
$
|
1,957
|
|
Service-Based RSUs and Restricted Shares
|
|
Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|||
Outstanding at July 31, 2013
|
|
5,000
|
|
|
$
|
32.99
|
|
New grants
|
|
108,055
|
|
|
30.93
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(1,710)
|
|
|
31.07
|
|
|
Outstanding at January 31, 2014
|
|
111,345
|
|
|
$
|
31.02
|
|
|
|
|
|
|
|||
Performance-Based RSUs and Restricted Shares
|
|
Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|||
Outstanding at July 31, 2013
|
|
231,667
|
|
|
$
|
31.43
|
|
New grants
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(35,001
|
)
|
|
28.35
|
|
|
Forfeited
|
|
(116,666
|
)
|
|
31.61
|
|
|
Outstanding at January 31, 2014
|
|
80,000
|
|
|
$
|
32.50
|
|
|
Inputs
Considered As
|
|
|
|
|
||||||||
|
Quoted Prices in Active Markets for Identical
Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Fair Values
|
|
Balance Sheet Classifications
|
||||||
January 31, 2014
|
|
|
|
|
|
|
|
||||||
Trading securities
|
$
|
15,043
|
|
|
$
|
—
|
|
|
$
|
15,043
|
|
|
Other assets
|
Foreign exchange contracts
|
—
|
|
|
612
|
|
|
612
|
|
|
Prepaid expenses and other current assets
|
|||
Total Assets
|
$
|
15,043
|
|
|
$
|
612
|
|
|
$
|
15,655
|
|
|
|
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
563
|
|
|
$
|
563
|
|
|
Other current liabilities
|
Total Liabilities
|
$
|
—
|
|
|
$
|
563
|
|
|
$
|
563
|
|
|
|
July 31, 2013
|
|
|
|
|
|
|
|
||||||
Trading securities
|
$
|
14,975
|
|
|
$
|
—
|
|
|
$
|
14,975
|
|
|
Other assets
|
Foreign exchange contracts
|
—
|
|
|
294
|
|
|
294
|
|
|
Prepaid expenses and other current assets
|
|||
Total Assets
|
$
|
14,975
|
|
|
$
|
294
|
|
|
$
|
15,269
|
|
|
|
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
890
|
|
|
$
|
890
|
|
|
Other current liabilities
|
Total Liabilities
|
$
|
—
|
|
|
$
|
890
|
|
|
$
|
890
|
|
|
|
|
Employee
Related
|
|
Asset Write-offs
|
|
Other
|
|
Total
|
||||||||
Beginning balance, July 31, 2013
|
$
|
11,475
|
|
|
—
|
|
|
$
|
2,731
|
|
|
$
|
14,206
|
|
|
Restructuring charges in continuing operations
|
7,765
|
|
|
97
|
|
|
3,301
|
|
|
11,163
|
|
||||
Restructuring charges in discontinued operations
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
||||
Non-cash write-offs
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(97
|
)
|
||||
Cash payments
|
(13,002
|
)
|
|
—
|
|
|
(3,328
|
)
|
|
(16,330
|
)
|
||||
Ending balance, January 31, 2014
|
$
|
6,350
|
|
|
$
|
—
|
|
|
$
|
2,704
|
|
|
$
|
9,054
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||||||
|
January 31, 2014
|
|
July 31, 2013
|
|
January 31, 2014
|
|
July 31, 2013
|
||||||||||||||||
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
259
|
|
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
—
|
|
Net investment hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Prepaid expenses and other current assets
|
|
7
|
|
|
Other current liabilities
|
|
14
|
|
|
Other current liabilities
|
|
—
|
|
||||
Foreign currency denominated debt
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Long term obligations, less current maturities
|
|
101,663
|
|
|
Long term obligations, less current maturities
|
|
99,750
|
|
||||
Total derivatives designated as hedging instruments
|
|
|
$
|
259
|
|
|
|
|
$
|
7
|
|
|
|
|
$
|
101,677
|
|
|
|
|
$
|
99,750
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
353
|
|
|
Prepaid expenses and other current assets
|
|
$
|
287
|
|
|
Other current liabilities
|
|
$
|
549
|
|
|
Other current liabilities
|
|
$
|
890
|
|
Total derivatives not designated as hedging instruments
|
|
|
$
|
353
|
|
|
|
|
$
|
287
|
|
|
|
|
$
|
549
|
|
|
|
|
$
|
890
|
|
Fair values:
|
January 31, 2014
|
|||
|
Cash and cash equivalents
|
$
|
12,904
|
|
|
Accounts receivable — net
|
21,178
|
|
|
|
Total inventories
|
16,788
|
|
|
|
Prepaid expenses and other current assets
|
4,233
|
|
|
|
Goodwill
|
168,150
|
|
|
|
Other intangible assets
|
109,300
|
|
|
|
Other assets
|
483
|
|
|
|
Property, plant and equipment
|
18,015
|
|
|
|
Accounts payable
|
(10,060
|
)
|
|
|
Wages and amounts withheld from employees
|
(4,234
|
)
|
|
|
Taxes, other than income taxes
|
(600
|
)
|
|
|
Accrued income taxes
|
(57
|
)
|
|
|
Other current liabilities
|
(5,181
|
)
|
|
|
Other long-term liabilities
|
(16,858
|
)
|
|
|
|
314,061
|
|
|
|
Less: cash acquired
|
(12,904
|
)
|
|
Fair value of total consideration
|
$
|
301,157
|
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net sales, as reported
|
$
|
291,194
|
|
|
$
|
272,702
|
|
|
$
|
598,724
|
|
|
$
|
544,717
|
|
Net sales, pro forma
|
291,194
|
|
|
299,077
|
|
|
598,724
|
|
|
613,142
|
|
||||
Earnings (loss) from continuing operations, as reported
|
10,517
|
|
|
(10,671
|
)
|
|
28,652
|
|
|
15,620
|
|
||||
Earnings (loss) from continuing operations, pro forma
|
10,517
|
|
|
(7,275
|
)
|
|
28,652
|
|
|
19,920
|
|
||||
Basic earnings (loss) from continuing operations per Class A Common Share, as reported
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
Basic earnings (loss) from continuing operations per Class A Common Share, pro forma
|
$
|
0.20
|
|
|
$
|
(0.14
|
)
|
|
$
|
0.55
|
|
|
$
|
0.39
|
|
Diluted earnings (loss) from continuing operations per Class A Common Share, as reported
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
Diluted earnings (loss) from continuing operations per Class A Common Share, pro forma
|
$
|
0.20
|
|
|
$
|
(0.14
|
)
|
|
$
|
0.55
|
|
|
$
|
0.39
|
|
Divestitures
|
|
Segment
|
|
Date Completed
|
Precision Converting, LLC (“Brady Medical”)
|
|
ID Solutions
|
|
August 2012
|
Varitronics
|
|
ID Solutions
|
|
October 2012
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net sales
|
$
|
49,759
|
|
|
$
|
52,846
|
|
|
$
|
115,616
|
|
|
$
|
119,839
|
|
Earnings from operations of discontinued businesses
|
4,432
|
|
|
3,653
|
|
|
12,761
|
|
|
4,853
|
|
||||
Income tax benefit (expense)
|
1,475
|
|
|
(1,666
|
)
|
|
(1,060
|
)
|
|
(1,969
|
)
|
||||
Earnings from discontinued operations, net of income tax
|
$
|
5,907
|
|
|
$
|
1,987
|
|
|
$
|
11,701
|
|
|
$
|
2,884
|
|
|
January 31, 2014
|
||
Accounts receivable—net
|
$
|
51,266
|
|
Total inventories
|
19,699
|
|
|
Prepaid expenses and other current assets
|
1,410
|
|
|
Total current assets
|
72,375
|
|
|
|
|
||
Other assets:
|
|
||
Goodwill
|
37,826
|
|
|
Other intangible assets
|
914
|
|
|
Other
|
926
|
|
|
Property, plant and equipment—net
|
28,125
|
|
|
Total assets
|
$
|
140,166
|
|
|
|
||
Current liabilities:
|
|
||
Accounts payable
|
$
|
25,332
|
|
Wages and amounts withheld from employees
|
3,231
|
|
|
Other current liabilities
|
2,158
|
|
|
Total current liabilities
|
30,721
|
|
|
|
|
||
Other liabilities
|
1,034
|
|
|
Total liabilities
|
$
|
31,755
|
|
|
|
||
Net assets of disposal group
|
108,411
|
|
|
Less: write-down on disposal group
|
(15,658
|
)
|
|
Net assets of disposal group at fair value
|
$
|
92,753
|
|
|
|
Interest Rate
|
|
January 31, 2014
|
|||
USD-denominated borrowing on revolving loan agreement
|
|
1.2430
|
%
|
|
$
|
9,000
|
|
USD-denominated borrowing on China line of credit
|
|
1.4800
|
%
|
|
14,946
|
|
|
Notes payable
|
|
1.3615
|
%
|
|
$
|
23,946
|
|
•
|
Divestiture of non-strategic businesses and the announcement of management’s intent to divest its Die-Cut business in order to reduce its reliance on the consumer electronics industry.
|
•
|
Acquisition of Precision Dynamics Corporation (“PDC”), a leader in healthcare identification, providing Brady with an entrance into the healthcare industry.
|
•
|
Realignment of business structure from regional to two global product-based platforms: Identification Solutions (“IDS”) and Workplace Safety (“WPS”).
|
•
|
Returning the Workplace Safety business to organic sales growth. The Company is expanding its multi-channel direct marketing model by providing a broader set of workplace safety products with an increased focus on e-business.
|
•
|
Increasing the Company's IDS sales force in selected established economies while expanding its focus on strategic accounts and product categories.
|
•
|
Completing the sale of the Die-Cut business.
|
•
|
Reducing the Company's cost structure through the consolidation of selected manufacturing facilities in the Americas and Europe.
|
•
|
Providing the Company's customers with innovative products and the highest level of customer service.
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||||||||||||||||||||
(Dollars in thousands)
|
2014
|
|
% Sales
|
|
% Change
|
|
2013
|
|
% Sales
|
|
2014
|
|
% Sales
|
|
% Change
|
|
2013
|
|
% Sales
|
||||||||||||||
Net Sales
|
$
|
291,194
|
|
|
|
|
6.8
|
%
|
|
$
|
272,702
|
|
|
|
|
$
|
598,724
|
|
|
|
|
9.9
|
%
|
|
$
|
544,717
|
|
|
|
||||
Gross Margin
|
142,536
|
|
|
48.9
|
%
|
|
0.5
|
%
|
|
141,891
|
|
|
52.0
|
%
|
|
300,383
|
|
|
50.2
|
%
|
|
2.8
|
%
|
|
292,076
|
|
|
53.6
|
%
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Research and Development
|
8,440
|
|
|
2.9
|
%
|
|
2.8
|
%
|
|
8,213
|
|
|
3.0
|
%
|
|
17,027
|
|
|
2.8
|
%
|
|
5.8
|
%
|
|
16,100
|
|
|
3.0
|
%
|
||||
Selling, General & Administrative
|
111,426
|
|
|
38.3
|
%
|
|
1.3
|
%
|
|
109,948
|
|
|
40.3
|
%
|
|
224,159
|
|
|
37.4
|
%
|
|
7.2
|
%
|
|
209,010
|
|
|
38.4
|
%
|
||||
Restructuring charges
|
4,324
|
|
|
1.5
|
%
|
|
123.7
|
%
|
|
1,933
|
|
|
0.7
|
%
|
|
11,163
|
|
|
1.9
|
%
|
|
477.5
|
%
|
|
1,933
|
|
|
0.4
|
%
|
||||
Total operating expenses
|
124,190
|
|
|
42.6
|
%
|
|
3.4
|
%
|
|
120,094
|
|
|
44.0
|
%
|
|
252,349
|
|
|
42.1
|
%
|
|
11.1
|
%
|
|
227,043
|
|
|
41.7
|
%
|
||||
Operating Income
|
$
|
18,346
|
|
|
6.3
|
%
|
|
(15.8
|
)%
|
|
$
|
21,797
|
|
|
8.0
|
%
|
|
$
|
48,034
|
|
|
8.0
|
%
|
|
(26.1
|
)%
|
|
$
|
65,033
|
|
|
11.9
|
%
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||||||||||||||
(Dollars in thousands)
|
2014
|
|
% Sales
|
|
2013
|
|
% Sales
|
|
2014
|
|
% Sales
|
|
2013
|
|
% Sales
|
||||||||||||
Operating income
|
$
|
18,346
|
|
|
6.3
|
%
|
|
$
|
21,797
|
|
|
8.0
|
%
|
|
$
|
48,034
|
|
|
8.0
|
%
|
|
$
|
65,033
|
|
|
11.9
|
%
|
Other income and (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment and other income
|
255
|
|
|
0.1
|
%
|
|
898
|
|
|
0.3
|
%
|
|
1,017
|
|
|
0.2
|
%
|
|
1,294
|
|
|
0.2
|
%
|
||||
Interest expense
|
(3,676
|
)
|
|
(1.3
|
)%
|
|
(4,406
|
)
|
|
(1.6
|
)%
|
|
(7,397
|
)
|
|
(1.2
|
)%
|
|
(8,569
|
)
|
|
(1.6
|
)%
|
||||
Earnings from continuing operations before income tax
|
14,925
|
|
|
5.1
|
%
|
|
18,289
|
|
|
6.7
|
%
|
|
41,654
|
|
|
7.0
|
%
|
|
57,758
|
|
|
10.6
|
%
|
||||
Income tax expense
|
4,408
|
|
|
1.5
|
%
|
|
28,960
|
|
|
10.6
|
%
|
|
13,002
|
|
|
2.2
|
%
|
|
42,138
|
|
|
7.7
|
%
|
||||
Earnings (loss) from continuing operations
|
$
|
10,517
|
|
|
3.6
|
%
|
|
$
|
(10,671
|
)
|
|
(3.9
|
)%
|
|
$
|
28,652
|
|
|
4.8
|
%
|
|
$
|
15,620
|
|
|
2.9
|
%
|
Earnings from discontinued operations, net of income taxes
|
5,907
|
|
|
2.0
|
%
|
|
1,987
|
|
|
0.7
|
%
|
|
11,701
|
|
|
2.0
|
%
|
|
2,884
|
|
|
0.5
|
%
|
||||
Net earnings (loss)
|
$
|
16,424
|
|
|
5.6
|
%
|
|
$
|
(8,684
|
)
|
|
(3.2
|
)%
|
|
$
|
40,353
|
|
|
6.7
|
%
|
|
$
|
18,504
|
|
|
3.4
|
%
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
SALES TO EXTERNAL CUSTOMERS
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
194,732
|
|
|
$
|
168,234
|
|
|
$
|
404,278
|
|
|
$
|
330,627
|
|
Workplace Safety
|
96,462
|
|
|
104,468
|
|
|
194,446
|
|
|
214,090
|
|
||||
Total
|
$
|
291,194
|
|
|
$
|
272,702
|
|
|
$
|
598,724
|
|
|
$
|
544,717
|
|
SALES GROWTH INFORMATION
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
|
|
|
|
|
|
|
||||||||
Organic
|
2.5
|
%
|
|
1.8
|
%
|
|
2.9
|
%
|
|
1.4
|
%
|
||||
Currency
|
(0.5
|
)%
|
|
(0.5
|
)%
|
|
(0.4
|
)%
|
|
(1.5
|
)%
|
||||
Acquisitions
|
13.8
|
%
|
|
11.1
|
%
|
|
19.8
|
%
|
|
5.5
|
%
|
||||
Total
|
15.8
|
%
|
|
12.4
|
%
|
|
22.3
|
%
|
|
5.4
|
%
|
||||
Workplace Safety
|
|
|
|
|
|
|
|
||||||||
Organic
|
(6.8
|
)%
|
|
(7.0
|
)%
|
|
(8.4
|
)%
|
|
(5.1
|
)%
|
||||
Currency
|
(0.9
|
)%
|
|
0.4
|
%
|
|
(0.8
|
)%
|
|
(1.0
|
)%
|
||||
Acquisitions
|
—%
|
|
|
5.1
|
%
|
|
—%
|
|
|
5.5
|
%
|
||||
Total
|
(7.7
|
)%
|
|
(1.5
|
)%
|
|
(9.2
|
)%
|
|
(0.6
|
)%
|
||||
Total Company
|
|
|
|
|
|
|
|
||||||||
Organic
|
(1.1
|
)%
|
|
(1.8
|
)%
|
|
(1.6
|
)%
|
|
(1.3
|
)%
|
||||
Currency
|
(0.6
|
)%
|
|
(0.1
|
)%
|
|
(0.5
|
)%
|
|
(1.3
|
)%
|
||||
Acquisitions
|
8.5
|
%
|
|
8.6
|
%
|
|
12.0
|
%
|
|
5.5
|
%
|
||||
Total
|
6.8
|
%
|
|
6.7
|
%
|
|
9.9
|
%
|
|
2.9
|
%
|
||||
SEGMENT PROFIT
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
$
|
37,526
|
|
|
$
|
34,643
|
|
|
$
|
88,493
|
|
|
$
|
79,223
|
|
Workplace Safety
|
14,668
|
|
|
23,600
|
|
|
33,042
|
|
|
51,429
|
|
||||
Total
|
$
|
52,194
|
|
|
$
|
58,243
|
|
|
$
|
121,535
|
|
|
$
|
130,652
|
|
SEGMENT PROFIT AS A PERCENT OF SALES
|
|
|
|
|
|
|
|
||||||||
ID Solutions
|
19.3
|
%
|
|
20.6
|
%
|
|
21.9
|
%
|
|
24.0
|
%
|
||||
Workplace Safety
|
15.2
|
%
|
|
22.6
|
%
|
|
17.0
|
%
|
|
24.0
|
%
|
||||
Total
|
17.9
|
%
|
|
21.4
|
%
|
|
20.3
|
%
|
|
24.0
|
%
|
|
Three months ended January 31,
|
|
Six months ended January 31,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Total profit from reportable segments
|
$
|
52,194
|
|
|
$
|
58,243
|
|
|
$
|
121,535
|
|
|
$
|
130,652
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
||||||||
Administrative costs
|
(29,524
|
)
|
|
(34,513
|
)
|
|
(62,338
|
)
|
|
(63,686
|
)
|
||||
Restructuring charges
|
(4,324
|
)
|
|
(1,933
|
)
|
|
(11,163
|
)
|
|
(1,933
|
)
|
||||
Investment and other income
|
255
|
|
|
898
|
|
|
1,017
|
|
|
1,294
|
|
||||
Interest expense
|
(3,676
|
)
|
|
(4,406
|
)
|
|
(7,397
|
)
|
|
(8,569
|
)
|
||||
Earnings from continuing operations before income taxes
|
$
|
14,925
|
|
|
$
|
18,289
|
|
|
$
|
41,654
|
|
|
$
|
57,758
|
|
|
Six months ended January 31,
|
||||||
(Dollars in thousands)
|
2014
|
|
2013
|
||||
Net cash flow provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
41,777
|
|
|
$
|
44,194
|
|
Investing activities
|
(17,518
|
)
|
|
(306,795
|
)
|
||
Financing activities
|
(37,273
|
)
|
|
88,590
|
|
||
Effect of exchange rate changes on cash
|
1,072
|
|
|
9,422
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(11,942
|
)
|
|
$
|
(164,589
|
)
|
•
|
Implementation of the Workplace Safety strategy;
|
•
|
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, hard disk drive, manufacturing, electrical, construction, laboratory, education, governmental, public utility, computer, healthcare and transportation;
|
•
|
Future competition;
|
•
|
Changes in the supply of, or price for, parts and components;
|
•
|
Increased price pressure from suppliers and customers;
|
•
|
Brady's ability to retain significant contracts and customers;
|
•
|
Fluctuations in currency rates versus the U.S. dollar;
|
•
|
Risks associated with international operations;
|
•
|
Difficulties associated with exports;
|
•
|
Risks associated with obtaining governmental approvals and maintaining regulatory compliance;
|
•
|
Brady's ability to develop and successfully market new products;
|
•
|
Risks associated with identifying, completing, and integrating acquisitions;
|
•
|
Risks associated with divestitures and businesses held for sale;
|
•
|
Risks associated with restructuring plans;
|
•
|
Environmental, health and safety compliance costs and liabilities;
|
•
|
Risk associated with loss of key talent;
|
•
|
Risk associated with product liability claims;
|
•
|
Technology changes and potential security violations to the Company's information technology systems;
|
•
|
Brady's ability to maintain compliance with its debt covenants;
|
•
|
Increase in our level of debt;
|
•
|
Potential write-offs of Brady's substantial intangible assets;
|
•
|
Unforeseen tax consequences;
|
•
|
Risks associated with our ownership structure; 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 within Item 1A of Part I of the Form 10-K.
|
(a)
|
Exhibits
|
10.1
|
Change of Control Agreement, dated as of March 3, 2014, entered into with Helena R. Nelligan
|
|
|
10.2
|
Change of Control Agreement, dated as of March 3, 2014, entered into with Bentley N. Curran
|
|
|
10.3
|
Change of Control Agreement, dated as of March 3, 2014, entered into with Lee E. Marks
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Thomas J. Felmer
|
|
|
32.1
|
Section 1350 Certification of Thomas J. Felmer
|
|
|
101
|
Interactive Data File
|
|
|
|
|
|
|
BRADY CORPORATION
|
|
|
|
|
|||
Date: March 5, 2014
|
|
|
|
|
|
/s/ THOMAS J. FELMER
|
|
|
|
|
|
|
Thomas J. Felmer
|
|
|
|
|
|
|
Interim President & Chief Executive Officer and Chief Financial Officer
|
|
|
|
|
|
|
(Principal Executive Officer and Principal Financial Officer)
|
|
/s/ HELENA NELLIGAN
|
|
Executive - Helena Nelligan
|
|
Senior Vice President - Human Resources
|
|
|
|
Brady Corporation
|
By:
|
/s/ THOMAS J. FELMER
|
|
Interim President and Chief Executive Officer; Senior Vice President and Chief Financial Officer
|
|
|
|
/s/ BENTLEY CURRAN
|
|
Executive - Bentley Curran
|
|
Vice President - Digital Business and Chief Information Officer
|
|
|
|
Brady Corporation
|
By:
|
/s/ THOMAS J. FELMER
|
|
Interim President and Chief Executive Officer; Senior Vice President and Chief Financial Officer
|
|
|
|
/s/ LEE E. MARKS
|
|
Executive - Lee E. Marks
|
|
Vice President - Global Operations and Supply Chain
|
|
|
|
Brady Corporation
|
By:
|
/s/ THOMAS J. FELMER
|
|
Interim President and Chief Executive Officer; Senior Vice President and Chief Financial Officer
|
|
|
|
|
Date: March 5, 2014
|
|
|
|
/s/ THOMAS J. FELMER
|
|
Interim President & Chief Executive Officer and Chief Financial Officer
|
|
(Principal Executive Officer and Principal Financial Officer)
|
|
|
|
Date: March 5, 2014
|
|
|
|
/s/ THOMAS J. FELMER
|
|
Interim President & Chief Executive Officer and Chief Financial Officer
|
|
(Principal Executive Officer and Principal Financial Officer)
|
|