EX-99.1 2 exhibit991731148ka.htm FISCAL 2014 PRESS RELEASE
EXHIBIT 99.1
For More Information:
Investor contact: Aaron Pearce 414-438-6895
Media contact: Carole Herbstreit 414-438-6882
Brady Corporation Reports Fiscal 2014 Fourth Quarter Results and Impairment Charges, and Announces Executive Appointments

• | Fourth quarter organic revenue growth was 1.1 percent, with 0.9 percent organic growth in Workplace Safety and 1.2 percent organic growth in Identification Solutions.

• | Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* were $0.41 during the fourth quarter ended July 31, 2014 compared to $0.55 in the same quarter of the prior year.

• | GAAP earnings from continuing operations were impacted by the impairment charges of $148.6 million primarily due to the write down of intangible assets in the Company’s PeopleID reporting unit.

• | On August 1, 2014, Brady completed the final phase of the divestiture of the die-cut business.

• | Fiscal 2015 Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* guidance is initiated at a range from $1.50 to $1.70.

• | Thomas J. Felmer has been appointed Senior Vice President and President of Brady’s Workplace Safety business. Aaron J. Pearce replaces Felmer as Senior Vice President and Chief Financial Officer.

MILWAUKEE (September 11, 2014)--Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for the fiscal 2014 fourth quarter ended July 31, 2014.
Quarter Ended July 31, 2014 Financial Results:
Sales from continuing operations for the quarter ended July 31, 2014 increased 2.0 percent to $316.7 million compared to the fourth quarter of fiscal 2013. Total organic sales increased 1.1 percent. By segment, organic sales were up 1.2 percent in Identification Solutions and 0.9 percent in Workplace Safety.
During the fourth quarter ended July 31, 2014, the Company recorded an impairment charge of $148.6 million primarily related to the write down of intangible assets in the Company’s PeopleID reporting unit. This reporting unit includes the December 2012 acquisition of Precision Dynamics Corporation (“PDC”), which primarily sells identification products into the healthcare industry. PDC’s organic sales declined low single digits for the fiscal year ended July 31, 2014 and are forecasted to grow at a slower pace than originally anticipated. This lack of historical sales growth and reduced forecasts for future sales growth are the main drivers for this impairment charge. In the fourth quarter of last year, the Company also incurred an impairment charge of $204.4 million related to the Company’s North American Workplace Safety reporting unit and its Asia reporting unit.
Net (loss) from continuing operations for the quarter ended July 31, 2014 was $(97.0) million compared to $(175.6) million in the same quarter last year. Non-GAAP net earnings from continuing operations* for the quarter ended July 31, 2014, were $21.0 million compared to $28.6 million in the same quarter last year.

Net (loss) from continuing operations per Class A Nonvoting Common Share was $(1.89) for the fourth quarter ended July 31, 2014 compared to $(3.40) in the same quarter last year. Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* were $0.41 in the fourth quarter of fiscal 2014 and $0.55 per share in the fourth quarter of fiscal 2013.
Year Ended July 31, 2014 Financial Results:
Sales from continuing operations for the year ended July 31, 2014 were up 5.8 percent to $1.23 billion compared to $1.16 billion in fiscal 2013. Organic sales were up 0.2 percent. By segment, organic sales were up 2.9 percent in Identification Solutions and down 4.6 percent in Workplace Safety.
Net (loss) from continuing operations for the year ended July 31, 2014 was $(48.1) million compared to $(138.3) million for the year ended July 31, 2013. Non-GAAP net earnings from continuing operations* for the year ended July 31, 2014 were $79.5 million compared to $102.4 million for the year ended July 31, 2013.
Net (loss) from continuing operations per Class A Nonvoting Common Share was $(0.93) for the year ended July 31, 2014 compared to $(2.70) for the year ended July 31, 2013. Non-GAAP earnings from continuing operations per diluted Class A Nonvoting Common Share* were $1.53 for the year ended July 31, 2014 and $1.98 per share for the year ended July 31, 2013.
Commentary:
“We were encouraged by our revenue growth in the fourth quarter, which marks the second consecutive quarter of organic sales growth. This marks the first quarter of growth in our Workplace Safety business since fiscal 2012 as we continue to add new customers, increase revenues over the internet and realize returns from increased catalog advertising,” said Brady President and CEO J. Michael Nauman.
“Although we had organic sales growth, we were not pleased with our profitability performance as we continued to incur costs related to the consolidation of our facilities and have been experiencing challenges in terms of sales mix and pricing. Our overall facility consolidation efforts have been scaled back, and we will continue to execute the facility consolidation activities in a manner that will allow us to maintain the highest service levels and least disruptions to our customers while still achieving efficiency gains over the long run. We are focused on executing business fundamentals to drive organic sales growth while deemphasizing acquisitions at this time. We are increasing our investments in R&D to create sustainable processes for developing new innovative products that generate significant value for our customers. We will also focus on penetrating specific vertical markets in our Identification Solutions business in order to drive sales growth within our current industries including healthcare; food and beverage; chemical, oil and gas; and aerospace and mass transit, as well as expand our presence and product offering in selected markets in Asia. This accelerated investment in Identification Solutions will be evident in our fiscal 2015 financial results and is included in our guidance for next year,” said Nauman.
“Although our fourth quarter profitability and cash flow did not meet our expectations, we continue to have a strong balance sheet which strengthened during the quarter as we repaid an additional $32.7 million of debt,” said Brady’s Chief Financial Officer Aaron J. Pearce.

Fiscal 2015 Guidance:
The Company anticipates low single-digit organic sales growth in fiscal 2015, with organic sales growth in both the Identification Solutions and Workplace Safety businesses. Brady also expects earnings from continuing operations per diluted Class A Nonvoting Common Share of between $1.50 and $1.70, exclusive of restructuring charges and other non-routine charges. This guidance is based on current exchange rates, a full-year income tax rate in the mid-to-upper 20 percent range. We also anticipate approximately $15 million of restructuring charges in fiscal 2015 and capital expenditures of approximately $30 million in fiscal 2015 before returning to a more normalized level in fiscal 2016.
Executive Appointments:
Brady’s Board of Directors has appointed Thomas J. Felmer to serve as the Company’s Senior Vice President and President - Workplace Safety. Mr. Felmer most recently served as Senior Vice President and CFO. He joined Brady in 1989 and has held various Group President and general management positions across several Brady businesses in both the U.S. and Europe.
With Mr. Felmer’s appointment as President - Workplace Safety, the Board has appointed Aaron J. Pearce to serve as Senior Vice President and Chief Financial Officer of the Company. Mr. Pearce joined Brady in 2004 as Director of Internal Audit, and has held various financial leadership positions including Finance Director for the Company’s Asia Pacific Region; Global Tax Director; Vice President, Treasurer and Director of Investor Relations; and Vice President - Finance, with responsibility for finance support to the Company’s Workplace Safety and ID Solutions businesses, as well as financial planning and analysis.
“Tom Felmer is a talented executive who has been with Brady for more than 25 years and I am pleased that he has accepted the role of President of Workplace Safety and that he will continue his excellent work leading the turnaround of this business unit,” said Brady President and CEO J. Michael Nauman. “Aaron Pearce brings a broad range of financial experience and intimate knowledge of Brady’s business to the role of CFO and I look forward to working with him in this capacity.”
A webcast regarding Brady’s fiscal 2014 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 people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, education, medical and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of August 1, 2014, employed approximately 6,400 people in its worldwide businesses. Brady’s fiscal 2014 sales were approximately $1.23 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.

###
In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company'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.
The use of 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: 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; risk, 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 Brady’s Form 10-K for the year ended July 31, 2013.
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 except as required by law.

BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited; Dollars in thousands, except per share data)

| Three months ended July 31, |  | Twelve Months Ended July 31,
| 2014 |  | 2013 |  | 2014 |  | 2013
Net sales | $ | 316,733 |  |  | $ | 310,592 |  |  | $ | 1,225,034 |  |  | $ | 1,157,792 |
Cost of products sold | 162,672 |  |  | 152,722 |  |  | 615,470 |  |  | 548,444 |
Gross margin | 154,061 |  |  | 157,870 |  |  | 609,564 |  |  | 609,348 |
Operating expenses: |  |  |  |  |  |  |
Research and development | 9,373 |  |  | 9,390 |  |  | 35,048 |  |  | 33,552 |
Selling, general and administrative | 111,340 |  |  | 106,983 |  |  | 452,164 |  |  | 427,858 |
Restructuring charges | 810 |  |  | 15,573 |  |  | 15,012 |  |  | 26,046 |
Impairment charges | 148,551 |  |  | 204,448 |  |  | 148,551 |  |  | 204,448 |
Total operating expenses | 270,074 |  |  | 336,394 |  |  | 650,775 |  |  | 691,904 |
Operating loss: | (116,013 | ) |  | (178,524 | ) |  | (41,211 | ) |  | (82,556 | )
Other income and (expense): |  |  |  |  |  |  |
Investment and other income | 515 |  |  | 1,097 |  |  | 2,402 |  |  | 3,523 |
Interest expense | (3,523 | ) |  | (3,887 | ) |  | (14,300 | ) |  | (16,641 | )
Loss from continuing operations before income taxes | (119,021 | ) |  | (181,314 | ) |  | (53,109 | ) |  | (95,674 | )
Income tax (benefit) expense | (22,040 | ) |  | (5,757 | ) |  | (4,963 | ) |  | 42,583 |
Loss from continuing operations | $ | (96,981 | ) |  | $ | (175,557 | ) |  | $ | (48,146 | ) |  | $ | (138,257 | )
(Loss) earnings from discontinued operations, net of income taxes | (13,428 | ) |  | (1,714 | ) |  | 2,178 |  |  | (16,278 | )
Net loss | $ | (110,409 | ) |  | $ | (177,271 | ) |  | $ | (45,968 | ) |  | $ | (154,535 | )
Loss from continuing operations per Class A Nonvoting Common Share: |  |  |  |  |  |  |
Basic | $ | (1.89 | ) |  | $ | (3.40 | ) |  | $ | (0.93 | ) |  | $ | (2.70 | )
Diluted | $ | (1.89 | ) |  | $ | (3.40 | ) |  | $ | (0.93 | ) |  | $ | (2.70 | )
Loss from continuing operations per Class B Nonvoting Common Share: |  |  |  |  |  |  |
Basic | $ | (1.89 | ) |  | $ | (3.40 | ) |  | $ | (0.95 | ) |  | $ | (2.71 | )
Diluted | $ | (1.89 | ) |  | $ | (3.40 | ) |  | $ | (0.95 | ) |  | $ | (2.71 | )
(Loss) earnings from discontinued operations per Class A Nonvoting Common Share: |  |  |  |  |  |  |
Basic | $ | (0.26 | ) |  | $ | (0.03 | ) |  | $ | 0.04 |  |  | $ | (0.32 | )
Diluted | $ | (0.26 | ) |  | $ | (0.03 | ) |  | $ | 0.04 |  |  | $ | (0.32 | )
(Loss) earnings from discontinued operations per Class B Voting Common Share: |  |  |  |  |  |  |
Basic | $ | (0.26 | ) |  | $ | (0.03 | ) |  | $ | 0.05 |  |  | $ | (0.32 | )
Diluted | $ | (0.26 | ) |  | $ | (0.03 | ) |  | $ | 0.05 |  |  | $ | (0.32 | )
Loss per Class A Nonvoting Common Share: |  |  |  |  |  |  |
Basic | $ | (2.15 | ) |  | $ | (3.43 | ) |  | $ | (0.89 | ) |  | $ | (3.02 | )
Diluted | $ | (2.15 | ) |  | $ | (3.43 | ) |  | $ | (0.89 | ) |  | $ | (3.02 | )
Dividends | $ | 0.195 |  |  | $ | 0.19 |  |  | $ | 0.78 |  |  | $ | 0.76 |
Loss per Class B Voting Common Share: |  |  |  |  |  |  |
Basic | $ | (2.15 | ) |  | $ | (3.43 | ) |  | $ | (0.90 | ) |  | $ | (3.03 | )
Diluted | $ | (2.15 | ) |  | $ | (3.43 | ) |  | $ | (0.90 | ) |  | $ | (3.03 | )
Dividends | $ | 0.195 |  |  | $ | 0.19 |  |  | $ | 0.76 |  |  | $ | 0.74 |
Weighted average common shares outstanding (in thousands): |  |  |  |  |  |  |
Basic | 51,250 |  |  | 51,689 |  |  | 51,866 |  |  | 51,330 |
Diluted | 51,250 |  |  | 51,689 |  |  | 51,866 |  |  | 51,330 |

BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)

| July 31, 2014 |  | July 31, 2013
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 81,834 |  |  | $ | 91,058 |
Accounts receivable—net | 177,648 |  |  | 169,261 |
Inventories: |  |  |
Finished products | 73,096 |  |  | 64,544 |
Work-in-process | 17,689 |  |  | 14,776 |
Raw materials and supplies | 22,490 |  |  | 15,387 |
Total inventories | 113,275 |  |  | 94,707 |
Assets held for sale | 49,542 |  |  | 119,864 |
Prepaid expenses and other current assets | 41,543 |  |  | 37,600 |
Total current assets | 463,842 |  |  | 512,490 |
Other assets: |  |  |
Goodwill | 515,004 |  |  | 617,236 |
Other intangible assets | 91,014 |  |  | 156,851 |
Deferred income taxes | 27,320 |  |  | 8,623 |
Other | 22,314 |  |  | 21,325 |
Property, plant and equipment: |  |  |
Cost: |  |  |
Land | 7,875 |  |  | 7,861 |
Buildings and improvements | 101,866 |  |  | 91,471 |
Machinery and equipment | 288,409 |  |  | 266,787 |
Construction in progress | 12,500 |  |  | 11,842 |
| 410,650 |  |  | 377,961 |
Less accumulated depreciation | 276,479 |  |  | 255,803 |
Property, plant and equipment—net | 134,171 |  |  | 122,158 |
Total | $ | 1,253,665 |  |  | $ | 1,438,683 |
LIABILITIES AND STOCKHOLDERS’ INVESTMENT |  |  |
Current liabilities: |  |  |
Notes payable | $ | 61,422 |  |  | $ | 50,613 |
Accounts payable | 88,099 |  |  | 82,519 |
Wages and amounts withheld from employees | 38,064 |  |  | 42,413 |
Liabilities held for sale | 10,640 |  |  | 34,583 |
Taxes, other than income taxes | 7,994 |  |  | 8,243 |
Accrued income taxes | 7,893 |  |  | 7,056 |
Other current liabilities | 35,319 |  |  | 36,806 |
Current maturities on long-term debt | 42,514 |  |  | 61,264 |
Total current liabilities | 291,945 |  |  | 323,497 |
Long-term obligations, less current maturities | 159,296 |  |  | 201,150 |
Other liabilities | 69,348 |  |  | 83,239 |
Total liabilities | 520,589 |  |  | 607,886 |
Stockholders’ investment: |  |  |
Common stock: |  |  |
Class A nonvoting common stock—Issued 51,261,487 and 51,261,487 shares, respectively and outstanding 47,704,196 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 | 311,811 |  |  | 306,191 |
Earnings retained in the business | 452,057 |  |  | 538,512 |
Treasury stock—3,477,291 and 2,626,276 shares, respectively of Class A nonvoting common stock, at cost | (93,337 | ) |  | (69,797 | )
Accumulated other comprehensive income | 64,156 |  |  | 56,063 |
Other | (2,159 | ) |  | (720 | )
Total stockholders’ investment | 733,076 |  |  | 830,797 |
Total | $ | 1,253,665 |  |  | $ | 1,438,683 |

BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; Dollars in thousands)

| July 31, 2014 |  | July 31, 2013
Operating activities: |  |  |
Net loss | $ | (45,968 | ) |  | $ | (154,535 | )
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 44,598 |  |  | 48,725 |
Non-cash portion of restructuring charges | 566 |  |  | 3,699 |
Non-cash portion of stock-based compensation expense | 5,214 |  |  | 1,736 |
Impairment charges | 148,551 |  |  | 204,448 |
Loss on write-down of assets held for sale | — |  |  | 15,658 |
Loss on sales of businesses | 1,238 |  |  | 3,138 |
Deferred income taxes | (30,419 | ) |  | 21,630 |
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures): |  |  |
Accounts receivable | (3,600 | ) |  | 1,535 |
Inventories | (12,608 | ) |  | 2,440 |
Prepaid expenses and other assets | (278 | ) |  | 5,036 |
Accounts payable and accrued liabilities | (20,508 | ) |  | (2,285 | )
Income taxes | 6,634 |  |  | (7,722 | )
Net cash provided by operating activities | 93,420 |  |  | 143,503 |
Investing activities: |  |  |
Purchases of property, plant and equipment | (43,398 | ) |  | (35,687 | )
Acquisition of business, net of cash acquired | — |  |  | (301,157 | )
Sales of businesses, net of cash retained | 54,242 |  |  | 10,178 |
Other | (637 | ) |  | 900 |
Net cash provided by (used in) investing activities | 10,207 |  |  | (325,766 | )
Financing activities: |  |  |
Payment of dividends | (40,487 | ) |  | (39,243 | )
Proceeds from issuance of common stock | 12,113 |  |  | 20,324 |
Purchase of treasury stock | (30,581 | ) |  | (5,121 | )
Proceeds from borrowings on notes payable | 63,000 |  |  | 220,000 |
Repayment of borrowings on notes payable | (60,000 | ) |  | (181,000 | )
Proceeds from borrowings on line of credit | 10,334 |  |  | 11,613 |
Repayment of borrowings on line of credit | (2,398 | ) |  |
Principal payments on debt | (61,264 | ) |  | (61,264 | )
Income tax benefit from the exercise of stock options and deferred compensation distributions, and other | (6,104 | ) |  | 1,631 |
Net cash used in financing activities | (115,387 | ) |  | (33,060 | )
Effect of exchange rate changes on cash | 2,536 |  |  | 481 |
Net decrease in cash and cash equivalents | (9,224 | ) |  | (214,842 | )
Cash and cash equivalents, beginning of period | 91,058 |  |  | 305,900 |
Cash and cash equivalents, end of period | $ | 81,834 |  |  | $ | 91,058 |
Supplemental disclosures: |  |  |
Cash paid during the period for: |  |  |
Interest, net of capitalized interest | $ | 14,594 |  |  | $ | 17,162 |
Income taxes, net of refunds | 33,043 |  |  | 34,030 |
Acquisitions: |  |  |
Fair value of assets acquired, net of cash | $ | — |  |  | $ | 168,724 |
Liabilities assumed | — |  |  | (37,747 | )
Goodwill | — |  |  | 170,180 |
Net cash paid for acquisitions | $ | — |  |  | $ | 301,157 |

BRADY CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited; Dollars in Thousands)

| Fiscal 2014 |  | Fiscal 2013
| Q1 |  | Q2 |  | Q3 |  | Q4 |  | YTD |  | Q1 |  | Q2 |  | Q3 |  | Q4 |  | YTD
SALES TO EXTERNAL CUSTOMERS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ID Solutions | $209,546 |  | $194,732 |  | $206,448 |  | $214,397 |  | $825,123 |  | $162,393 |  | $168,234 |  | $197,417 |  | $211,071 |  | $739,115
Workplace Safety | 97,984 |  | 96,462 |  | 103,129 |  | 102,336 |  | 399,911 |  | 109,622 |  | 104,468 |  | 105,066 |  | 99,521 |  | 418,677
Total | $307,530 |  | $291,194 |  | $309,577 |  | $316,733 |  | $1,225,034 |  | $272,015 |  | $272,702 |  | $302,483 |  | $310,592 |  | $1,157,792
SALES INFORMATION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ID Solutions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Organic | 3.3 | % |  | 2.5 | % |  | 4.8 | % |  | 1.2 | % |  | 2.9 | % |  | 0.9 | % |  | 1.8 | % |  | (1.9 | )% |  | 2.3 | % |  | 0.8 | %
Currency | (0.3 | )% |  | (0.5 | )% |  | (0.2 | )% |  | 0.4 | % |  | (0.2 | )% |  | (2.4 | )% |  | (0.5 | )% |  | (1.0 | )% |  | 0.2 | % |  | (1.0 | )%
Acquisitions | 26.0 | % |  | 13.8 | % |  | —% |  |  | —% |  |  | 8.9 | % |  | 0.4 | % |  | 11.1 | % |  | 25.3 | % |  | 28.2 | % |  | 16.3 | %
Total | 29.0 | % |  | 15.8 | % |  | 4.6 | % |  | 1.6 | % |  | 11.6 | % |  | (1.1 | )% |  | 12.4 | % |  | 22.4 | % |  | 30.7 | % |  | 16.1 | %
Workplace Safety |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Organic | (10.0 | )% |  | (6.8 | )% |  | (1.9 | )% |  | 0.9 | % |  | (4.6 | )% |  | (3.3 | )% |  | (7.0 | )% |  | (9.0 | )% |  | (8.6 | )% |  | (7.0 | )%
Currency | (0.6 | )% |  | (0.9 | )% |  | 0.1 | % |  | 1.9 | % |  | 0.1 | % |  | (2.3 | )% |  | 0.4 | % |  | (1.1 | )% |  | 0.1 | % |  | (0.7 | )%
Acquisitions | —% |  |  | —% |  |  | —% |  |  | —% |  |  | —% |  |  | 5.8 | % |  | 5.1 | % |  | 5.0 | % |  | —% |  |  | 4.0 | %
Total | (10.6 | )% |  | (7.7 | )% |  | (1.8 | )% |  | 2.8 | % |  | (4.5 | )% |  | 0.2 | % |  | (1.5 | )% |  | (5.1 | )% |  | (8.5 | )% |  | (3.7 | )%
Total Company |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Organic | (2.1 | )% |  | (1.1 | )% |  | 2.5 | % |  | 1.1 | % |  | 0.2 | % |  | (0.8 | )% |  | (1.8 | )% |  | (4.8 | )% |  | (2.1 | )% |  | (2.4 | )%
Currency | (0.4 | )% |  | (0.6 | )% |  | (0.2 | )% |  | 0.9 | % |  | (0.1 | )% |  | (2.4 | )% |  | (0.1 | )% |  | (1.0 | )% |  | 0.1 | % |  | (0.8 | )%
Acquisitions | 15.6 | % |  | 8.5 | % |  | —% |  |  | —% |  |  | 5.7 | % |  | 2.6 | % |  | 8.6 | % |  | 17.0 | % |  | 16.9 | % |  | 11.3 | %
Total | 13.1 | % |  | 6.8 | % |  | 2.3 | % |  | 2.0 | % |  | 5.8 | % |  | (0.6 | )% |  | 6.7 | % |  | 11.2 | % |  | 14.9 | % |  | 8.1 | %
SEGMENT PROFIT |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ID Solutions | $50,967 |  | $37,526 |  | $44,302 |  | $43,334 |  | $176,129 |  | $44,580 |  | $34,643 |  | $46,787 |  | $48,379 |  | $174,389
Workplace Safety | 18,374 |  | 14,668 |  | 14,771 |  | 18,425 |  | 66,238 |  | 27,829 |  | 23,600 |  | 23,453 |  | 20,360 |  | 95,242
Total | $69,341 |  | $52,194 |  | $59,073 |  | $61,759 |  | $242,367 |  | $72,409 |  | $58,243 |  | $70,240 |  | $68,739 |  | $269,631
SEGMENT PROFIT AS A PERCENT OF SALES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ID Solutions | 24.3 | % |  | 19.3 | % |  | 21.5 | % |  | 20.2 | % |  | 21.3 | % |  | 27.5 | % |  | 20.6 | % |  | 23.7 | % |  | 22.9 | % |  | 23.6 | %
Workplace Safety | 18.8 | % |  | 15.2 | % |  | 14.3 | % |  | 18.0 | % |  | 16.6 | % |  | 25.4 | % |  | 22.6 | % |  | 22.3 | % |  | 20.5 | % |  | 22.7 | %
Total | 22.5 | % |  | 17.9 | % |  | 19.1 | % |  | 19.5 | % |  | 19.8 | % |  | 26.6 | % |  | 21.4 | % |  | 23.2 | % |  | 22.1 | % |  | 23.3 | %
| Fiscal 2014 |  | Fiscal 2013
| Q1 |  | Q2 |  | Q3 |  | Q4 |  | YTD |  | Q1 |  | Q2 |  | Q3 |  | Q4 |  | YTD
Total segment profit | $69,341 |  | $52,194 |  | $59,073 |  | $61,759 |  | $242,367 |  | $72,409 |  | $58,243 |  | $70,240 |  | $68,739 |  | $269,631
Unallocated amounts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Administrative costs | (32,813) |  | (29,524) |  | (29,267) |  | (28,411) |  | (120,015) |  | (29,174) |  | (34,513) |  | (30,765) |  | (27,242) |  | (121,693)
Restructuring charges | (6,839) |  | (4,324) |  | (3,039) |  | (810) |  | (15,012) |  | — |  |  | (1,933) |  | (8,540) |  | (15,573) |  | (26,046)
Impairment charges | — |  |  | — |  |  | — |  |  | (148,551) |  | (148,551) |  | — |  |  | — |  |  | — |  |  | (204,448) |  | (204,448)
Investment and other income | 761 |  | 255 |  | 872 |  | 514 |  | 2,402 |  | 396 |  | 898 |  | 1,133 |  | 1,097 |  | 3,523
Interest expense | (3,721) |  | (3,676) |  | (3,381) |  | (3,522) |  | (14,300) |  | (4,163) |  | (4,406) |  | (4,186) |  | (3,887) |  | (16,641)
Earnings (loss) from continuing operations before income taxes | $26,729 |  | $14,925 |  | $24,258 |  | $(119,021) |  | $(53,109) |  | $39,468 |  | $18,289 |  | $27,882 |  | $(181,314) |  | $(95,674)

GAAP TO NON-GAAP MEASURES
(Unaudited; Dollars in Thousands, Except Per Share Amounts)

In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure. |  |

| 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 Consolidated Statements of Earnings 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 Loss from Continuing Operations Before Income Taxes to Earnings from Continuing Operations Before Income Taxes Excluding Certain Items:
|  |  | Three Months Ended July 31, |  | Year Ended July 31,
|  |  | 2014 |  | 2013 |  | 2014 |  | 2013
| Loss from Continuing Operations Before Income Taxes (GAAP measure) |  | $ | (119,021 | ) |  | $ | (181,314 | ) |  | $ | (53,109 | ) |  | $ | (95,674 | )
|  | Cost of goods sold: |  |  |  |  |  |  |  |
|  |  | Purchase accounting expense related to inventory |  | — |  |  | — |  |  | — |  |  | 1,530 |
|  | Selling, general and administrative: |  |  |  |  |  |  |  |
|  |  | Reversal of restricted stock grant expense |  | — |  |  | (4,232 | ) |  | — |  |  | (4,232 | )
|  |  | PDC acquisition-related expenses |  | — |  |  | — |  |  | — |  |  | 3,600 |
|  | Non-cash income tax charges |  | — |  |  | — |  |  | — |  |  | — |
|  | Restructuring charges |  | 810 |  |  | 15,573 |  |  | 15,012 |  |  | 26,046 |
|  | Impairment charges |  | 148,551 |  |  | 204,448 |  |  | 148,551 |  |  | 204,448 |
| Earnings from Continuing Operations Before Income Taxes Excluding Certain Items (non-GAAP measure) |  | $ | 30,340 |  |  | $ | 34,475 |  |  | $ | 110,454 |  |  | $ | 135,718 |
| 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 Consolidated Statements of Earnings 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 July 31, |  | Year Ended July 31,
|  |  | 2014 |  | 2013 |  | 2014 |  | 2013
| Income Taxes on Continuing Operations (GAAP measure) |  | $ | (22,040 | ) |  | $ | (5,757 | ) |  | $ | (4,963 | ) |  | $ | 42,583 |
|  | Cost of goods sold: |  |  |  |  |  |  |  |
|  |  | Purchase accounting expense related to inventory |  | — |  |  | — |  |  | — |  |  | 581 |
|  | Selling, general and administrative: |  |  |  |  |  |  |  |
|  |  | Reversal of restricted stock grant expense |  | — |  |  | (1,608 | ) |  | — |  |  | (1,608 | )
|  |  | PDC acquisition-related expenses |  | — |  |  | — |  |  | — |  |  | 641 |
|  | Non-cash income tax charges |  | — |  |  | (3,976 | ) |  | — |  |  | (28,976 | )
|  | Restructuring charges |  | 230 |  |  | 4,337 |  |  | 4,751 |  |  | 7,157 |
|  | Impairment charges |  | 31,157 |  |  | 12,892 |  |  | 31,157 |  |  | 12,892 |
| Income Taxes on Continuing Operations Excluding Certain Items (non-GAAP measure) |  | $ | 9,347 |  |  | $ | 5,888 |  |  | $ | 30,945 |  |  | $ | 33,270 |

| 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 Consolidated Statements of Earnings 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 Loss from Continuing Operations to Net Earnings from Continuing Operations Excluding Certain Items:
|  |  |  |  |  |  | Three Months Ended July 31, |  | Year Ended July 31,
|  |  |  |  |  |  | 2014 |  | 2013 |  | 2014 |  | 2013
| Net Loss from Continuing Operations (GAAP measure) |  | $ | (96,981 | ) |  | $ | (175,557 | ) |  | $ | (48,146 | ) |  | $ | (138,257 | )
|  | Cost of goods sold: |  |  |  |  |  |  |  |
|  |  | Purchase accounting expense related to inventory |  | — |  |  | — |  |  | — |  |  | 949 |
|  | Selling, general and administrative: |  |  |  |  |  |  |  |
|  |  | Reversal of restricted stock grant expense |  | — |  |  | (2,624 | ) |  | — |  |  | (2,624 | )
|  |  | PDC acquisition-related expenses |  | — |  |  | — |  |  | — |  |  | 2,959 |
|  | Non-cash income tax charges |  | — |  |  | 3,976 |  |  | — |  |  | 28,976 |
|  | Restructuring charges |  | 580 |  |  | 11,236 |  |  | 10,261 |  |  | 18,889 |
|  | Impairment charges |  | 117,394 |  |  | 191,556 |  |  | 117,394 |  |  | 191,556 |
| Net Earnings from Continuing Operations Excluding Certain Items (non-GAAP measure) |  | $ | 20,993 |  |  | $ | 28,587 |  |  | $ | 79,509 |  |  | $ | 102,448 |
| Net Earnings from Continuing Operations Per Diluted Class A 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 Consolidated Financial Statements and supporting footnote disclosures. 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 Loss 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 July 31, |  | Year Ended July 31,
|  |  |  |  |  |  | 2014 |  | 2013 |  | 2014 |  | 2013
| Net Loss from Continuing Operations Per Diluted Class A Nonvoting Share (GAAP measure) |  | $ | (1.89 | ) |  | $ | (3.40 | ) |  | $ | (0.93 | ) |  | $ | (2.70 | )
|  | Cost of goods sold: |  |  |  |  |  |  |  |
|  |  | Purchase accounting expense related to inventory |  | — |  |  | — |  |  | — |  |  | 0.02 |
|  | Selling, general and administrative: |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Reversal of restricted stock grant expense |  | — |  |  | (0.05 | ) |  | — |  |  | (0.05 | )
|  |  | PDC acquisition-related expenses |  | — |  |  | — |  |  | — |  |  | 0.06 |
|  | Non-cash income tax charges |  | — |  |  | 0.08 |  |  | — |  |  | 0.56 |
|  | Restructuring charges |  | 0.01 |  |  | 0.22 |  |  | 0.20 |  |  | 0.37 |
|  | Impairment charges |  | 2.29 |  |  | 3.71 |  |  | 2.29 |  |  | 3.71 |
| Net Earnings from Continuing Operations Per Diluted Class A Nonvoting Share Excluding Certain Items (non-GAAP measure) |  | $ | 0.41 |  |  | $ | 0.55 |  |  | $ | 1.53 |  |  | $ | 1.98 |