x | ANNUAL 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) | (IRS Employer Identification No.) | |
6555 West Good Hope Road, Milwaukee, WI | 53223 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Class A Nonvoting Common Stock, Par Value $.01 per share | New York Stock Exchange |
Large accelerated filer | x | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
PART I | Page |
PART II | |
PART III | |
PART IV | |
• | Global leadership position in niche markets |
• | Innovation advantage — Internally developed products drive growth and sustain gross profit margins |
• | Operational excellence — Continuous productivity improvement, business simplification and process transformation |
• | Customer service — Focus on the customer and understanding customer needs |
• | Workplace Safety ("WPS") compliance expertise |
• | Strategic acquisition of Precision Dynamics Corporation (“PDC”) in the healthcare sector |
• | Global business simplification process |
• | Realignment of business structure from regional to two global product-based platforms: IDS and WPS |
• | Divestiture of non-strategic businesses including Precision Converting (“Brady Medical”) and Varitronics |
• | Announcement of management's intent to divest the Company's Asia Die-Cut and Europe businesses |
• | Decision to increase investment in the WPS platform and expand e-commerce capabilities |
2013 | 2012 | 2011 | |||||||
IDS | 63.7 | % | 59.3 | % | 59.0 | % | |||
WPS | 36.3 | % | 40.7 | % | 41.0 | % | |||
Total | 100 | % | 100 | % | 100 | % |
• | Facility identification, which includes safety signs, pipe markers, labeling systems, spill control products, and lockout/tagout devices |
• | Product identification, which includes materials and printing systems for product identification, brand protection labeling, work in process labeling, and finished product identification |
• | Wire identification, which includes hand-held printers, wire markers, sleeves, and tags |
• | People identification, which includes self-expiring name tags, badges, lanyards, and access control software |
• | Patient identification, which includes wristbands and labels used in hospitals for tracking and safety of patients |
• | Custom wristbands used in the leisure and entertainment industry such as theme parks, concerts and festivals |
• | Decreasing product life cycles |
• | Changes in customer preferences |
• | Cyclical demands of end-users |
• | Declines in general economic conditions |
• | Delays or disruptions in product deliveries and payments in connection with international manufacturing and sales |
• | Political and economic instability and disruptions |
• | Imposition of duties and tariffs |
• | Import and export controls |
• | Changes in governmental policies and business environments |
• | Disadvantages from competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (FCPA) |
• | Local labor market conditions |
• | Current and changing regulatory environments |
• | Potentially adverse tax consequences, including repatriation of earnings |
• | Stability of the Euro and its ability to serve as a single currency for a variety of countries |
• | Regulations relating to climate change, air emissions, wastewater discharges, handling and disposal of hazardous materials and wastes |
• | Regulations relating to health, safety and the protection of the environment |
• | Specific country regulations where our products are manufactured or sold |
• | Import, export and economic sanction laws |
• | Laws and regulations that apply to companies doing business with the government, audit for compliance with requirements of government contracts including procurement integrity, export control, employment practices, and the accuracy of records and recording of costs |
(a) | Market Information |
2013 | 2012 | 2011 | ||||||||||||||||||||||
High | Low | High | Low | High | Low | |||||||||||||||||||
4th Quarter | $ | 35.58 | $ | 29.76 | $ | 31.28 | $ | 25.15 | $ | 38.49 | $ | 29.60 | ||||||||||||
3rd Quarter | $ | 36.33 | $ | 31.51 | $ | 34.37 | $ | 29.41 | $ | 37.71 | $ | 33.37 | ||||||||||||
2nd Quarter | $ | 35.00 | $ | 30.18 | $ | 34.40 | $ | 27.09 | $ | 33.78 | $ | 30.83 | ||||||||||||
1st Quarter | $ | 31.22 | $ | 26.34 | $ | 32.24 | $ | 24.73 | $ | 31.33 | $ | 25.35 |
(b) | Holders |
(c) | Issuer Purchases of Equity Securities |
(d) | Dividends |
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
1st Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||||||||||||||||
Class A | $ | 0.195 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.185 | $ | 0.185 | $ | 0.185 | $ | 0.185 | ||||||||||||||||||
Class B | 0.17835 | 0.17335 | 0.19 | 0.19 | 0.19 | 0.16835 | 0.185 | 0.185 | 0.185 |
(e) | Common Stock Price Performance Graph |
* | $100 invested on July 31, 2008 in stock or index—including reinvestment of dividends. Fiscal years ended July 31: |
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |||||||||||||||||||
Brady Corporation | $ | 100.00 | $ | 82.42 | $ | 79.81 | $ | 93.50 | $ | 85.89 | $ | 110.20 | ||||||||||||
S&P 500 Index | 100.00 | 80.04 | 91.11 | 109.02 | 118.97 | 148.72 | ||||||||||||||||||
S&P SmallCap 600 Index | 100.00 | 80.73 | 96.21 | 119.99 | 124.78 | 168.17 | ||||||||||||||||||
Russell 2000 Index | 100.00 | 79.25 | 93.88 | 116.32 | 116.53 | 157.01 |
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
Operating Data (1) | ||||||||||||||||||||
Net Sales | $ | 1,152,109 | $ | 1,068,688 | $ | 1,059,355 | $ | 966,070 | $ | 954,737 | ||||||||||
Gross Margin | 606,080 | 589,570 | 587,950 | 546,413 | 516,066 | |||||||||||||||
Operating Expenses: | ||||||||||||||||||||
Research and development | 33,552 | 34,528 | 38,268 | 38,279 | 29,853 | |||||||||||||||
Selling, general and administrative | 427,661 | 392,526 | 397,472 | 381,071 | 349,358 | |||||||||||||||
Restructuring charges (2) | 26,046 | 6,084 | 6,451 | 12,640 | 22,810 | |||||||||||||||
Impairment charges (3) | 204,448 | — | — | — | — | |||||||||||||||
Total operating expenses | 691,707 | 433,138 | 442,191 | 431,990 | 402,021 | |||||||||||||||
Operating (Loss) Income | (85,627 | ) | 156,432 | 145,759 | 114,423 | 114,045 | ||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment and other income—net | 3,522 | 2,082 | 3,989 | 1,169 | 1,800 | |||||||||||||||
Interest expense | (16,641 | ) | (19,090 | ) | (22,124 | ) | (21,222 | ) | (24,901 | ) | ||||||||||
Net other expense | (13,119 | ) | (17,008 | ) | (18,135 | ) | (20,053 | ) | (23,101 | ) | ||||||||||
(Loss) earnings from continuing operations before income taxes | (98,746 | ) | 139,424 | 127,624 | 94,370 | 90,944 | ||||||||||||||
Income Taxes (4) | 42,070 | 36,953 | 21,667 | 18,605 | 23,366 | |||||||||||||||
(Loss) earnings from continuing operations | $ | (140,816 | ) | $ | 102,471 | $ | 105,957 | $ | 75,765 | $ | 67,578 | |||||||||
(Loss) earnings from discontinued operations, net of income taxes (5) | (13,719 | ) | (120,382 | ) | 2,695 | 6,191 | 2,544 | |||||||||||||
Net (loss) earnings | $ | (154,535 | ) | $ | (17,911 | ) | $ | 108,652 | $ | 81,956 | $ | 70,122 | ||||||||
(Loss) earnings from continuing operations per Common Share— (Diluted): | ||||||||||||||||||||
Class A nonvoting | $ | (2.75 | ) | $ | 1.94 | $ | 1.99 | $ | 1.43 | $ | 1.28 | |||||||||
Class B voting | $ | (2.76 | ) | $ | 1.92 | $ | 1.97 | $ | 1.41 | $ | 1.28 | |||||||||
(Loss) earnings from discontinued operations per Common Share - (Diluted): | ||||||||||||||||||||
Class A nonvoting | $ | (0.27 | ) | $ | (2.29 | ) | $ | 0.05 | $ | 0.12 | $ | 0.04 | ||||||||
Class B voting | $ | (0.27 | ) | $ | (2.28 | ) | $ | 0.05 | $ | 0.12 | $ | 0.03 | ||||||||
Cash Dividends on: | ||||||||||||||||||||
Class A common stock | $ | 0.76 | $ | 0.74 | $ | 0.72 | $ | 0.70 | $ | 0.68 | ||||||||||
Class B common stock | $ | 0.74 | $ | 0.72 | $ | 0.70 | $ | 0.68 | $ | 0.66 | ||||||||||
Balance Sheet at July 31: | ||||||||||||||||||||
Working capital | $ | 188,993 | $ | 383,836 | $ | 456,406 | $ | 375,184 | $ | 286,955 | ||||||||||
Total assets | 1,438,683 | 1,607,719 | 1,861,505 | 1,746,231 | 1,583,267 | |||||||||||||||
Long-term obligations, less current maturities | 201,150 | 254,944 | 331,914 | 382,940 | 346,457 | |||||||||||||||
Stockholders’ investment | 830,797 | 1,009,353 | 1,156,192 | 1,005,027 | 951,092 | |||||||||||||||
Cash Flow Data: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 143,503 | $ | 144,705 | $ | 167,350 | $ | 165,238 | $ | 126,645 | ||||||||||
Net cash provided by investing activities | (325,766 | ) | (64,604 | ) | (22,631 | ) | (48,681 | ) | (19,044 | ) | ||||||||||
Net cash provided by financing activities | (33,060 | ) | (147,824 | ) | (91,574 | ) | 15,275 | (160,311 | ) | |||||||||||
Depreciation and amortization | 48,725 | 43,987 | 48,827 | 53,022 | 54,851 | |||||||||||||||
Capital expenditures | (35,687 | ) | (24,147 | ) | (20,532 | ) | (26,296 | ) | (24,027 | ) |
(1) | Operating data has been impacted by the reclassification of the Asia Die-Cut and Balkhausen businesses into discontinued operations. The Company has elected to not separately disclose the cash flows related to the Asia Die-Cut and Balkhausen |
(2) | In fiscal 2009, in response to the global economic downturn, the Company initiated several measures to address its cost structure, including a reduction in its workforce and decreased discretionary spending. The Company continued certain of these measures during fiscal 2010, 2011, and 2012. During fiscal 2013, the Company executed a business simplification project which included various measures to address its cost structure and resulted in restructuring charges during fiscal 2013. |
(3) | The Company recognized an impairment charge of $204.4 million during the three months ended July 31, 2013, primarily related to the WPS segment. Refer to Note 1 within Item 8 for further information regarding the impairment charge. |
(4) | Fiscal 2013 was significantly impacted by the non-deductible portion of the goodwill impairment charge of $168.9 million recorded on the WPS Americas and IDS APAC reporting units, as well as a tax charge of $26.6 million associated with the funding of the PDC acquisition. |
(5) | The loss from discontinued operations in fiscal 2013 was primarily attributable to a $15.7 million write-down of the Asia Die-Cut disposal group to its estimated fair value less costs to sell. The loss from discontinued operations in fiscal 2012 was primarily attributable to the $115.7 million goodwill impairment charge recorded during the three months ending January 31, 2012, which was related to the Asia Die-Cut disposal group. |
(Dollars in thousands) | 2013 | % Sales | % Change | 2012 | % Sales | % Change | 2011 | % Sales | |||||||||||||||||||
Net Sales | $ | 1,152,109 | 7.8 | % | $ | 1,068,688 | 0.9 | % | $ | 1,059,355 | |||||||||||||||||
Gross Margin | 606,080 | 52.6 | % | 2.8 | % | 589,570 | 55.2 | % | 0.3 | % | 587,950 | 55.5 | % | ||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||
Research and Development | 33,552 | 2.9 | % | (2.8 | )% | 34,528 | 3.2 | % | (9.8 | )% | 38,268 | 3.6 | % | ||||||||||||||
Selling, General & Administrative | 427,661 | 37.1 | % | 9.0 | % | 392,526 | 36.7 | % | (1.2 | )% | 397,472 | 37.5 | % | ||||||||||||||
Restructuring charges | 26,046 | 2.3 | % | 328.1 | % | 6,084 | 0.6 | % | (5.7 | )% | 6,451 | 0.6 | % | ||||||||||||||
Impairment charges | 204,448 | 17.7 | % | — | — | — | % | — | % | — | — | % | |||||||||||||||
Total operating expenses | 691,707 | 60.0 | % | 59.7 | % | 433,138 | 40.5 | % | (2.0 | )% | 442,191 | 41.7 | % | ||||||||||||||
Operating (loss) income | $ | (85,627 | ) | (7.4 | )% | (154.7 | )% | $ | 156,432 | 14.6 | % | 7.3 | % | $ | 145,759 | 13.8 | % |
• | $172.3 million in goodwill in the WPS Americas reporting unit |
• | $18.2 million in goodwill in the IDS APAC reporting unit |
• | $10.6 million in tradenames in the WPS segment |
• | $3.3 million in fixed assets in the IDS APAC reporting unit |
(Dollars in thousands) | 2013 | % Sales | 2012 | % Sales | 2011 | % Sales | |||||||||||||||
Operating (loss) income | $ | (85,627 | ) | (7.4 | )% | $ | 156,432 | 14.6 | % | $ | 145,759 | 13.8 | % | ||||||||
Other income and (expense): | |||||||||||||||||||||
Investment and other income | 3,522 | 0.3 | % | 2,082 | 0.2 | % | 3,989 | 0.4 | % | ||||||||||||
Interest expense | (16,641 | ) | (1.4 | )% | (19,090 | ) | (1.8 | )% | (22,124 | ) | (2.1 | )% | |||||||||
(Loss) earnings from continuing operations before tax | (98,746 | ) | (8.6 | )% | 139,424 | 13.0 | % | 127,624 | 12.0 | % | |||||||||||
Income taxes | 42,070 | 3.7 | % | 36,953 | 3.5 | % | 21,667 | 2.0 | % | ||||||||||||
(Loss) earnings from continuing operations | (140,816 | ) | (12.2 | )% | 102,471 | 9.6 | % | 105,957 | 10.0 | % | |||||||||||
(Loss) earnings from discontinued operations, net of income taxes | (13,719 | ) | (1.2 | )% | (120,382 | ) | (11.3 | )% | 2,695 | 0.3 | % | ||||||||||
Net (loss) earnings | $ | (154,535 | ) | (13.4 | )% | $ | (17,911 | ) | (1.7 | )% | $ | 108,652 | 10.3 | % |
Years ended July 31, | ||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2011 | |||||||||
SALES TO EXTERNAL CUSTOMERS | ||||||||||||
ID Solutions | $ | 733,433 | $ | 633,774 | $ | 625,396 | ||||||
WPS | 418,676 | 434,914 | 433,959 | |||||||||
Total | $ | 1,152,109 | $ | 1,068,688 | $ | 1,059,355 | ||||||
SALES GROWTH INFORMATION | ||||||||||||
ID Solutions | ||||||||||||
Organic | 0.3 | % | 2.7 | % | N/A | |||||||
Currency | (0.9 | )% | (1.6 | )% | N/A | |||||||
Acquisitions | 16.3 | % | 0.2 | % | N/A | |||||||
Total | 15.7 | % | 1.3 | % | N/A | |||||||
Workplace Safety | ||||||||||||
Organic | (7.0 | )% | (0.2 | )% | N/A | |||||||
Currency | (0.7 | )% | (1.2 | )% | N/A | |||||||
Acquisitions | 4.0 | % | 1.6 | % | N/A | |||||||
Total | (3.7 | )% | 0.2 | % | N/A | |||||||
Total Company | ||||||||||||
Organic | (2.6 | )% | 1.5 | % | N/A | |||||||
Currency | (0.9 | )% | (1.4 | )% | N/A | |||||||
Acquisitions | 11.3 | % | 0.8 | % | N/A | |||||||
Total | 7.8 | % | 0.9 | % | N/A | |||||||
SEGMENT PROFIT | ||||||||||||
ID Solutions | $ | 171,319 | $ | 159,427 | $ | 146,124 | ||||||
Workplace Safety | 95,241 | 117,187 | 118,913 | |||||||||
Total | $ | 266,560 | $ | 276,614 | $ | 265,037 | ||||||
SEGMENT PROFIT AS A PERCENT OF SALES | ||||||||||||
ID Solutions | 23.4 | % | 25.2 | % | 23.4 | % | ||||||
Workplace Safety | 22.7 | % | 26.9 | % | 27.4 | % | ||||||
Total | 23.1 | % | 25.9 | % | 25.0 | % |
Years ended: | ||||||||||||
(Dollars in thousands) | July 31, 2013 | July 31, 2012 | July 31, 2011 | |||||||||
Total profit from reportable segments | $ | 266,560 | $ | 276,614 | $ | 265,037 | ||||||
Unallocated costs: | ||||||||||||
Administrative costs | 121,693 | 114,098 | 112,827 | |||||||||
Restructuring charges | 26,046 | 6,084 | 6,451 | |||||||||
Impairment charges | 204,448 | — | — | |||||||||
Investment and other income | (3,522 | ) | (2,082 | ) | (3,989 | ) | ||||||
Interest expense | 16,641 | 19,090 | 22,124 | |||||||||
(Loss) earnings from continuing operations before income taxes | $ | (98,746 | ) | $ | 139,424 | $ | 127,624 |
Years ended July 31, | |||||||||||
(Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||
Net cash flow provided by (used in): | |||||||||||
Operating activities | $ | 143,503 | $ | 144,705 | $ | 167,350 | |||||
Investing activities | (325,766 | ) | (64,604 | ) | (22,631 | ) | |||||
Financing activities | (33,060 | ) | (147,824 | ) | (91,574 | ) | |||||
Effect of exchange rate changes on cash | 481 | (16,348 | ) | 21,986 | |||||||
Net (decrease) increase in cash and cash equivalents | $ | (214,842 | ) | $ | (84,071 | ) | $ | 75,131 |
Payments Due by Period | ||||||||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Uncertain Timeframe | ||||||||||||||||||
Long-Term Debt Obligations | $ | 262,414 | $ | 61,264 | $ | 85,028 | $ | 56,272 | $ | 59,850 | $ | — | ||||||||||||
Operating Lease Obligations | 70,997 | 14,785 | 22,145 | 15,897 | 18,170 | — | ||||||||||||||||||
Purchase Obligations (1) | 43,237 | 42,992 | 245 | — | — | — | ||||||||||||||||||
Interest Obligations | 42,560 | 12,629 | 17,428 | 7,428 | 5,075 | — | ||||||||||||||||||
Tax Obligations | 35,575 | — | — | — | — | 35,575 | ||||||||||||||||||
Other Obligations (2) | 12,266 | 677 | 1,553 | 1,967 | 8,069 | — | ||||||||||||||||||
Total | $ | 467,049 | $ | 132,347 | $ | 126,399 | $ | 81,564 | $ | 91,164 | $ | 35,575 |
(1) | Purchase obligations include all open purchase orders as of July 31, 2013. |
(2) | Other obligations represent expected payments under the Company’s U.S. postretirement medical plan and international pension plans as disclosed in Note 3 to the consolidated financial statements, under Item 8 of this report. |
• | 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 this Form 10-K. |
Page | |
Financial Statements: | |
2013 | 2012 | ||||||
(Dollars in thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 91,058 | $ | 305,900 | |||
Accounts receivable — net | 169,261 | 199,006 | |||||
Inventories: | |||||||
Finished products | 64,544 | 64,740 | |||||
Work-in-process | 14,776 | 15,377 | |||||
Raw materials and supplies | 15,387 | 25,407 | |||||
Total inventories | 94,707 | 105,524 | |||||
Assets held for sale | 119,864 | — | |||||
Prepaid expenses and other current assets | 37,600 | 40,424 | |||||
Total current assets | 512,490 | 650,854 | |||||
Other assets: | |||||||
Goodwill | 617,236 | 676,791 | |||||
Other intangible assets | 156,851 | 84,119 | |||||
Deferred income taxes | 8,623 | 45,356 | |||||
Other | 21,325 | 20,584 | |||||
Property, plant and equipment: | |||||||
Cost: | |||||||
Land | 7,861 | 8,651 | |||||
Buildings and improvements | 91,471 | 101,962 | |||||
Machinery and equipment | 266,787 | 292,130 | |||||
Construction in progress | 11,842 | 10,417 | |||||
377,961 | 413,160 | ||||||
Less accumulated depreciation | 255,803 | 283,145 | |||||
Property, plant and equipment — net | 122,158 | 130,015 | |||||
Total | $ | 1,438,683 | $ | 1,607,719 | |||
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | |||||||
Current liabilities: | |||||||
Notes payable | $ | 50,613 | $ | — | |||
Accounts payable | 82,519 | 86,646 | |||||
Wages and amounts withheld from employees | 42,413 | 54,629 | |||||
Liabilities held for sale | 34,583 | — | |||||
Taxes, other than income taxes | 8,243 | 9,307 | |||||
Accrued income taxes | 7,056 | 14,357 | |||||
Other current liabilities | 36,806 | 40,815 | |||||
Current maturities on long-term debt | 61,264 | 61,264 | |||||
Total current liabilities | 323,497 | 267,018 | |||||
Long-term obligations, less current maturities | 201,150 | 254,944 | |||||
Other liabilities | 83,239 | 76,404 | |||||
Total liabilities | 607,886 | 598,366 | |||||
Stockholders’ investment: | |||||||
Class A nonvoting common stock — Issued 51,261,487 and 51,261,487 shares, respectively; (aggregate liquidation preference of $42,803 and $42,803 at July 31, 2013 and 2012, respectively) | 513 | 513 | |||||
Class B voting common stock — Issued and outstanding 3,538,628 shares | 35 | 35 | |||||
Additional paid-in capital | 306,191 | 313,008 | |||||
Earnings retained in the business | 538,512 | 732,290 | |||||
Treasury stock — 2,626,276 and 3,245,561 shares, respectively of Class A nonvoting common stock, at cost | (69,797 | ) | (92,600 | ) | |||
Accumulated other comprehensive income | 56,063 | 59,411 | |||||
Other | (720 | ) | (3,304 | ) | |||
Total stockholders’ investment | 830,797 | 1,009,353 | |||||
Total | $ | 1,438,683 | $ | 1,607,719 |
2013 | 2012 | 2011 | |||||||||
(In thousands, except per share amounts) | |||||||||||
Net sales | $ | 1,152,109 | $ | 1,068,688 | $ | 1,059,355 | |||||
Cost of products sold | 546,029 | 479,118 | 471,405 | ||||||||
Gross margin | 606,080 | 589,570 | 587,950 | ||||||||
Operating expenses: | |||||||||||
Research and development | 33,552 | 34,528 | 38,268 | ||||||||
Selling, general and administrative | 427,661 | 392,526 | 397,472 | ||||||||
Restructuring charges | 26,046 | 6,084 | 6,451 | ||||||||
Impairment charges | 204,448 | — | — | ||||||||
Total operating expenses | 691,707 | 433,138 | 442,191 | ||||||||
Operating (loss) income | (85,627 | ) | 156,432 | 145,759 | |||||||
Other income and (expense): | |||||||||||
Investment and other income | 3,522 | 2,082 | 3,989 | ||||||||
Interest expense | (16,641 | ) | (19,090 | ) | (22,124 | ) | |||||
(Loss) earnings from continuing operations before income taxes | (98,746 | ) | 139,424 | 127,624 | |||||||
Income taxes | 42,070 | 36,953 | 21,667 | ||||||||
(Loss) earnings from continuing operations | $ | (140,816 | ) | $ | 102,471 | $ | 105,957 | ||||
(Loss) earnings from discontinued operations, net of income taxes | (13,719 | ) | (120,382 | ) | 2,695 | ||||||
Net (loss) earnings | $ | (154,535 | ) | $ | (17,911 | ) | $ | 108,652 | |||
(Loss) earnings from continuing operations per Class A Nonvoting Common Share | |||||||||||
Basic | $ | (2.75 | ) | $ | 1.95 | $ | 2.01 | ||||
Diluted | $ | (2.75 | ) | $ | 1.94 | $ | 1.99 | ||||
(Loss) earnings from continuing operations per Class B Voting Common Share: | |||||||||||
Basic | $ | (2.76 | ) | $ | 1.93 | $ | 1.99 | ||||
Diluted | $ | (2.76 | ) | $ | 1.92 | $ | 1.97 | ||||
(Loss) earnings from discontinued operations per Class A Nonvoting Common Share: | |||||||||||
Basic | $ | (0.27 | ) | $ | (2.30 | ) | $ | 0.05 | |||
Diluted | $ | (0.27 | ) | $ | (2.29 | ) | $ | 0.05 | |||
(Loss) earnings from discontinued operations per Class B Voting Common Share: | |||||||||||
Basic | $ | (0.27 | ) | $ | (2.29 | ) | $ | 0.05 | |||
Diluted | $ | (0.27 | ) | $ | (2.28 | ) | $ | 0.05 | |||
Net (loss) earnings per Class A Nonvoting Common Share: | |||||||||||
Basic | $ | (3.02 | ) | $ | (0.35 | ) | $ | 2.06 | |||
Diluted | $ | (3.02 | ) | $ | (0.35 | ) | $ | 2.04 | |||
Dividends | $ | 0.76 | $ | 0.74 | $ | 0.72 | |||||
Net (loss) earnings per Class B Voting Common Share: | |||||||||||
Basic | $ | (3.03 | ) | $ | (0.36 | ) | $ | 2.04 | |||
Diluted | $ | (3.03 | ) | $ | (0.36 | ) | $ | 2.03 | |||
Dividends | $ | 0.74 | $ | 0.72 | $ | 0.70 | |||||
Weighted average common shares outstanding (in thousands): | |||||||||||
Basic | 51,330 | 52,453 | 52,639 | ||||||||
Diluted | 51,330 | 52,821 | 53,133 |
2013 | 2012 | 2011 | |||||||||
(Dollars in thousands) | |||||||||||
Net (loss) earnings | $ | (154,535 | ) | $ | (17,911 | ) | $ | 108,652 | |||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments | (2,312 | ) | (62,827 | ) | 62,832 | ||||||
Net investment hedge translation adjustments | (6,537 | ) | 20,508 | (23,907 | ) | ||||||
Long-term intercompany loan translation adjustments | 3,108 | (2,170 | ) | 18,545 | |||||||
Cash flow hedges: | |||||||||||
Net (loss) gain recognized in other comprehensive income | (652 | ) | 2,389 | (2,834 | ) | ||||||
Reclassification adjustment for (gains) losses included in net (loss) earnings | (578 | ) | 494 | 1,793 | |||||||
(1,230 | ) | 2,883 | (1,041 | ) | |||||||
Pension and other post-retirement benefits: | |||||||||||
Gain (loss) recognized in other comprehensive income | 1,617 | (1,015 | ) | 1,472 | |||||||
Actuarial gain amortization | (25 | ) | (201 | ) | (63 | ) | |||||
Prior service credit amortization | (203 | ) | (203 | ) | (82 | ) | |||||
1,389 | (1,419 | ) | 1,327 | ||||||||
Other comprehensive (loss) income, before tax | (5,582 | ) | (43,025 | ) | 57,756 | ||||||
Income tax benefit (expense) related to items of other comprehensive (loss) income | 2,234 | (11,462 | ) | 5,237 | |||||||
Other comprehensive (loss) income, net of tax | (3,348 | ) | (54,487 | ) | 62,993 | ||||||
Comprehensive (loss) income | $ | (157,883 | ) | $ | (72,398 | ) | $ | 171,645 |
Common Stock | Additional Paid-In Capital | Earnings Retained in the Business | Treasury Stock | Accumulated Other Comprehensive Income | Other | |||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||
Balances at July 31, 2010 | $ | 548 | $ | 304,205 | $ | 718,512 | $ | (66,314 | ) | $ | 50,905 | $ | (2,829 | ) | ||||||||||
Net income | — | — | 108,652 | — | — | — | ||||||||||||||||||
Net currency translation adjustment and other (Note 1) | — | — | — | — | 62,993 | — | ||||||||||||||||||
Issuance of 524,144 shares of Class A Common Stock under stock option plan | — | (5,684 | ) | — | 13,877 | — | — | |||||||||||||||||
Other (Note 6) | — | (1,964 | ) | — | 2,420 | — | (2,035 | ) | ||||||||||||||||
Tax benefit from exercise of stock options and deferred compensation distributions | — | 1,140 | — | — | — | — | ||||||||||||||||||
Stock-based compensation expense (Note 1) | — | 9,830 | — | — | — | — | ||||||||||||||||||
Cash dividends on Common Stock | ||||||||||||||||||||||||
Class A — $0.72 per share | — | — | (35,575 | ) | — | — | — | |||||||||||||||||
Class B — $0.70 per share | — | — | (2,489 | ) | — | — | — | |||||||||||||||||
Balances at July 31, 2011 | $ | 548 | $ | 307,527 | $ | 789,100 | $ | (50,017 | ) | $ | 113,898 | $ | (4,864 | ) | ||||||||||
Net (loss) income | — | — | (17,911 | ) | — | — | — | |||||||||||||||||
Net currency translation adjustment and other (Note 1) | — | — | — | — | (54,487 | ) | — | |||||||||||||||||
Issuance of 265,491 shares of Class A Common Stock under stock option plan | — | (3,516 | ) | — | 7,380 | — | — | |||||||||||||||||
Other (Note 6) | — | (1,637 | ) | — | (30 | ) | — | 1,560 | ||||||||||||||||
Tax benefit from exercise of stock options and deferred compensation distributions | — | 1,167 | — | — | — | — | ||||||||||||||||||
Stock-based compensation expense (Note 1) | — | 9,467 | — | — | — | — | ||||||||||||||||||
Purchase of 1,869,193 shares of Class A Common Stock | — | — | — | (49,933 | ) | — | — | |||||||||||||||||
Cash dividends on Common Stock | ||||||||||||||||||||||||
Class A — $0.74 per share | — | — | (36,340 | ) | — | — | — | |||||||||||||||||
Class B — $0.72 per share | — | — | (2,559 | ) | — | — | — | |||||||||||||||||
Balances at July 31, 2012 | $ | 548 | $ | 313,008 | $ | 732,290 | $ | (92,600 | ) | $ | 59,411 | $ | (3,304 | ) | ||||||||||
Net (loss) income | — | — | (154,535 | ) | — | — | — | |||||||||||||||||
Net currency translation adjustment and other (Note 1) | — | — | — | — | (3,348 | ) | — | |||||||||||||||||
Issuance of 1,080,089 shares of Class A Common Stock under stock option plan | — | (9,721 | ) | — | 30,045 | — | — | |||||||||||||||||
Other (Note 6) | — | (1,266 | ) | — | (2,121 | ) | — | 2,584 | ||||||||||||||||
Tax benefit from exercise of stock options and deferred compensation distributions | — | 2,434 | — | — | — | — | ||||||||||||||||||
Stock-based compensation expense (Note 1) | — | 1,736 | — | — | — | — | ||||||||||||||||||
Purchase of 188,167 shares of Class A Common Stock | — | — | — | (5,121 | ) | — | — | |||||||||||||||||
Cash dividends on Common Stock | — | — | — | — | — | — | ||||||||||||||||||
Class A — $0.76 per share | — | — | (36,613 | ) | — | — | — | |||||||||||||||||
Class B — $0.74 per share | — | — | (2,630 | ) | — | — | — | |||||||||||||||||
Balances at July 31, 2013 | $ | 548 | $ | 306,191 | $ | 538,512 | $ | (69,797 | ) | $ | 56,063 | $ | (720 | ) |
2013 | 2012 | 2011 | |||||||||
(Dollars in thousands) | |||||||||||
Operating activities: | |||||||||||
Net (loss) income | $ | (154,535 | ) | $ | (17,911 | ) | $ | 108,652 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 48,725 | 43,987 | 48,827 | ||||||||
Non-cash portion of restructuring charges | 3,699 | 458 | 2,155 | ||||||||
Non-cash portion of stock-based compensation expense | 1,736 | 9,735 | 9,830 | ||||||||
Impairment charges | 204,448 | 115,688 | — | ||||||||
Loss on write-down of assets held for sale | 15,658 | — | — | ||||||||
Loss (gain) on sales of businesses | 3,138 | 204 | (4,394 | ) | |||||||
Deferred income taxes | 21,630 | (9,679 | ) | (8,161 | ) | ||||||
Changes in operating assets and liabilities (net of effects of business acquisitions/divestitures): | |||||||||||
Accounts receivable | 1,535 | 18,089 | 7,680 | ||||||||
Inventories | 2,440 | (7,674 | ) | (2,886 | ) | ||||||
Prepaid expenses and other assets | 5,036 | (2,744 | ) | 5,624 | |||||||
Accounts payable and accrued liabilities | (2,285 | ) | (29,370 | ) | (3,365 | ) | |||||
Income taxes | (7,722 | ) | 23,922 | 3,388 | |||||||
Net cash provided by operating activities | 143,503 | 144,705 | 167,350 | ||||||||
Investing activities: | |||||||||||
Purchases of property, plant and equipment | (35,687 | ) | (24,147 | ) | (20,532 | ) | |||||
Payments of contingent consideration | — | (2,580 | ) | (1,528 | ) | ||||||
Settlement of net investment hedges | — | (797 | ) | (5,542 | ) | ||||||
Acquisition of business, net of cash acquired | (301,157 | ) | (37,649 | ) | (7,970 | ) | |||||
Sales of businesses, net of cash retained | 10,178 | 856 | 12,980 | ||||||||
Other | 900 | (287 | ) | (39 | ) | ||||||
Net cash used in investing activities | (325,766 | ) | (64,604 | ) | (22,631 | ) | |||||
Financing activities: | |||||||||||
Payment of dividends | (39,243 | ) | (38,899 | ) | (38,064 | ) | |||||
Proceeds from issuance of common stock | 20,324 | 3,864 | 8,193 | ||||||||
Purchase of treasury stock | (5,121 | ) | (49,933 | ) | — | ||||||
Proceeds from borrowing on notes payable | 220,000 | — | — | ||||||||
Repayment of borrowing on notes payable | (181,000 | ) | — | — | |||||||
Proceeds from borrowings on line of credit | 11,613 | — | — | ||||||||
Principal payments on debt | (61,264 | ) | (62,687 | ) | (61,264 | ) | |||||
Debt issuance costs | — | (961 | ) | — | |||||||
Income tax benefit from the exercise of stock options and deferred compensation distributions, and other | 1,631 | 792 | (439 | ) | |||||||
Net cash used in financing activities | (33,060 | ) | (147,824 | ) | (91,574 | ) | |||||
Effect of exchange rate changes on cash | 481 | (16,348 | ) | 21,986 | |||||||
Net (decrease) increase in cash and cash equivalents | (214,842 | ) | (84,071 | ) | 75,131 | ||||||
Cash and cash equivalents, beginning of period | 305,900 | 389,971 | 314,840 | ||||||||
Cash and cash equivalents, end of period | $ | 91,058 | $ | 305,900 | $ | 389,971 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest, net of capitalized interest | $ | 17,162 | $ | 19,194 | $ | 21,298 | |||||
Income taxes, net of refunds | 34,030 | 35,292 | 35,851 | ||||||||
Acquisitions: | |||||||||||
Fair value of assets acquired, net of cash | $ | 168,724 | $ | 23,792 | $ | 4,624 | |||||
Liabilities assumed | (37,747 | ) | (8,987 | ) | (1,446 | ) | |||||
Goodwill | 170,180 | 22,844 | 4,792 | ||||||||
Net cash paid for acquisitions | $ | 301,157 | $ | 37,649 | $ | 7,970 |
Asset Category | Range of Useful Lives | |
Buildings & Improvements | 10 to 33 Years | |
Computer Systems | 5 Years | |
Machinery & Equipment | 3 to 10 Years |
IDS | WPS | Die-Cut | Total | ||||||||||||
Balance as of July 31, 2011 | $ | 389,586 | $ | 260,807 | $ | 149,950 | $ | 800,343 | |||||||
Current year acquisitions | 1,227 | 21,617 | — | 22,844 | |||||||||||
Current year divestitures | (495 | ) | — | — | (495 | ) | |||||||||
Impairment charge | — | — | (115,688 | ) | (115,688 | ) | |||||||||
Translation adjustments | (22,425 | ) | (5,483 | ) | (2,305 | ) | (30,213 | ) | |||||||
Balance as of July 31, 2012 | $ | 367,893 | $ | 276,941 | $ | 31,957 | $ | 676,791 | |||||||
Current year acquisitions | 170,180 | — | — | 170,180 | |||||||||||
Current year divestitures | (2,882 | ) | — | — | (2,882 | ) | |||||||||
Reclassification to assets held for sale | (4,129 | ) | — | (33,218 | ) | (37,347 | ) | ||||||||
Impairment charges | (18,225 | ) | (172,280 | ) | — | (190,505 | ) | ||||||||
Translation adjustments | 4,192 | (4,454 | ) | 1,261 | 999 | ||||||||||
Balance as of July 31, 2013 | $ | 517,029 | $ | 100,207 | $ | — | $ | 617,236 |
July 31, 2013 | July 31, 2012 | ||||||||||||||||||||||||||
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 | $ | 11,053 | $ | (9,597 | ) | $ | 1,456 | 5 | $ | 10,418 | $ | (9,058 | ) | $ | 1,360 | |||||||||||
Tradenames and other | 5 | 15,289 | (8,398 | ) | 6,891 | 7 | 8,945 | (7,094 | ) | 1,851 | |||||||||||||||||
Customer relationships | 8 | 261,076 | (144,620 | ) | 116,456 | 7 | 164,392 | (128,805 | ) | 35,587 | |||||||||||||||||
Non-compete agreements and other | 4 | 14,942 | (14,215 | ) | 727 | 4 | 15,988 | (15,417 | ) | 571 | |||||||||||||||||
Unamortized other intangible assets: | |||||||||||||||||||||||||||
Tradenames | N/A | 31,321 | — | 31,321 | N/A | 44,750 | — | 44,750 | |||||||||||||||||||
Total | $ | 333,681 | $ | (176,830 | ) | $ | 156,851 | $ | 244,493 | $ | (160,374 | ) | $ | 84,119 |
2013 | 2012 | 2011 | ||||||||||||||||||||||
Service-Based | Performance-Based | Service-Based | Performance-Based | Service-Based | Performance-Based | |||||||||||||||||||
Black-Scholes Option Valuation Assumptions | Option Awards | Option Awards | Option Awards | Option Awards | Option Awards | Option Awards | ||||||||||||||||||
Expected term (in years) | 5.93 | — | 5.89 | 6.57 | 5.91 | 6.57 | ||||||||||||||||||
Expected volatility | 38.67 | % | — | 39.41 | % | 39.21 | % | 40.22 | % | 39.39 | % | |||||||||||||
Expected dividend yield | 2.21 | % | — | 2.07 | % | 1.99 | % | 1.94 | % | 1.96 | % | |||||||||||||
Risk-free interest rate | 0.91 | % | — | 1.16 | % | 2.05 | % | 1.65 | % | 2.35 | % | |||||||||||||
Weighted-average market value of underlying stock at grant date | $ | 30.58 | $ | — | $ | 27.05 | $ | 29.55 | $ | 29.13 | $ | 28.43 | ||||||||||||
Weighted-average exercise price | $ | 30.58 | $ | — | $ | 27.05 | $ | 29.55 | $ | 29.13 | $ | 28.35 | ||||||||||||
Weighted-average fair value of options granted during the period | $ | 9.05 | $ | — | $ | 8.42 | $ | 10.01 | $ | 9.59 | $ | 9.87 |
Unrealized (loss) gain on cash flow hedges | Gain (loss) on postretirement medical plan | Foreign currency translation adjustments | Accumulated other comprehensive income | ||||||||||||
Beginning balance, July 31, 2010 | $ | (321 | ) | $ | 1,357 | $ | 49,869 | $ | 50,905 | ||||||
Current-period change | (833 | ) | 831 | 62,995 | 62,993 | ||||||||||
Ending balance, July 31, 2011 | $ | (1,154 | ) | $ | 2,188 | $ | 112,864 | $ | 113,898 | ||||||
Current-period change | 2,030 | (1,210 | ) | (55,307 | ) | (54,487 | ) | ||||||||
Ending balance, July 31, 2012 | $ | 876 | $ | 978 | $ | 57,557 | $ | 59,411 | |||||||
Current-period change | (777 | ) | 875 | (3,446 | ) | (3,348 | ) | ||||||||
Ending balance, July 31, 2013 | $ | 99 | $ | 1,853 | $ | 54,111 | $ | 56,063 |
2013 | 2012 | 2011 | ||||||||||
Income tax benefit (expense) related to items of other comprehensive (loss) income: | ||||||||||||
Net investment hedge translation adjustments | $ | 2,877 | $ | (7,784 | ) | $ | 9,324 | |||||
Long-term intercompany loan settlements | (650 | ) | (2,508 | ) | (1,193 | ) | ||||||
Cash flow hedges | 454 | (855 | ) | 295 | ||||||||
Pension and other post-retirement benefits | (555 | ) | 583 | (490 | ) | |||||||
Other income tax adjustments | 108 | (898 | ) | (2,699 | ) | |||||||
Income tax benefit (expense) related to items of other comprehensive (loss) income | $ | 2,234 | $ | (11,462 | ) | $ | 5,237 |
Fair values: | July 31, 2013 | |||
Cash and cash equivalents | $ | 12,904 | ||
Accounts receivable — net | 21,178 | |||
Total inventories | 16,788 | |||
Prepaid expenses and other current assets | 3,915 | |||
Goodwill | 170,180 | |||
Other intangible assets | 109,300 | |||
Other assets | 483 | |||
Property, plant and equipment | 18,015 | |||
Accounts payable | (9,921 | ) | ||
Wages and amounts withheld from employees | (4,234 | ) | ||
Taxes, other than income taxes | (600 | ) | ||
Accrued income taxes | (57 | ) | ||
Other current liabilities | (5,045 | ) | ||
Other long-term liabilities | (18,845 | ) | ||
314,061 | ||||
Less: cash acquired | (12,904 | ) | ||
Fair value of total consideration | $ | 301,157 |
2013 | 2012 | |||||||
Net sales, as reported | $ | 1,152,109 | $ | 1,068,688 | ||||
Net sales, pro forma | 1,220,534 | 1,238,554 | ||||||
(Loss) earnings from continuing operations, as reported | (140,816 | ) | 102,471 | |||||
(Loss) earnings from continuing operations, pro forma | (136,517 | ) | 102,993 | |||||
Basic (loss) earnings from continuing operations per Class A Common Share, as reported | (2.75 | ) | 1.95 | |||||
Basic (loss) earnings from continuing operations per Class A Common Share, pro forma | (2.66 | ) | 1.96 | |||||
Diluted (loss) earnings from continuing operations per Class A Common Share, as reported | (2.75 | ) | 1.94 | |||||
Diluted (loss) earnings from continuing operations per Class A Common Share, pro forma | (2.66 | ) | 1.95 |
Current assets net of cash | $ | 5,082 | |
Property, plant & equipment | 2,743 | ||
Goodwill | 22,844 | ||
Customer relationships | 8,903 | ||
Tradenames | 6,878 | ||
Non-compete agreements | 186 | ||
Total assets acquired net of cash | $ | 46,636 | |
Liabilities assumed | 7,555 | ||
Debt assumed | 1,432 | ||
Net assets acquired | $ | 37,649 | |
Current assets net of cash | $ | 1,876 | |
Property, plant & equipment | 415 | ||
Goodwill | 4,792 | ||
Customer relationships | 1,846 | ||
Non-compete agreements | 487 | ||
Total assets acquired net of cash | $ | 9,416 | |
Liabilities assumed | 1,446 | ||
Net assets acquired | $ | 7,970 | |
2013 | 2012 | |||||||
Obligation at beginning of year | $ | 14,225 | $ | 15,011 | ||||
Service cost | 770 | 644 | ||||||
Interest cost | 476 | 633 | ||||||
Actuarial (gain)/loss | (1,745 | ) | 1,104 | |||||
Benefit payments | (703 | ) | (2,062 | ) | ||||
Plan amendments | — | (1,105 | ) | |||||
Obligation at end of fiscal year | $ | 13,023 | $ | 14,225 |
2013 | 2012 | |||||||
Current liability | $ | 677 | $ | 716 | ||||
Noncurrent liability | 12,346 | 13,509 | ||||||
$ | 13,023 | $ | 14,225 |
2013 | 2012 | |||||||
Net actuarial gain | $ | 3,534 | $ | 1,837 | ||||
Prior service credit | 1,203 | 1,405 | ||||||
$ | 4,737 | $ | 3,242 |
Years Ended July 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Net periodic postretirement benefit cost included the following components: | ||||||||||||
Service cost — benefits attributed to service during the period | $ | 770 | $ | 644 | $ | 666 | ||||||
Prior service credit | (203 | ) | (203 | ) | (82 | ) | ||||||
Interest cost on accumulated postretirement benefit obligation | 476 | 633 | 694 | |||||||||
Amortization of unrecognized gain | (47 | ) | (189 | ) | (76 | ) | ||||||
Periodic postretirement benefit cost | $ | 996 | $ | 885 | $ | 1,202 |
2013 | 2012 | 2011 | |||||||
Weighted average discount rate used in determining accumulated postretirement benefit obligation liability | 4.00 | % | 3.25 | % | 4.50 | % | |||
Weighted average discount rate used in determining net periodic benefit cost | 3.25 | % | 4.50 | % | 4.50 | % | |||
Assumed health care trend rate used to measure APBO at July 31 | 8.00 | % | 8.00 | % | 8.00 | % | |||
Rate to which cost trend rate is assumed to decline (the ultimate trend rate) | 5.50 | % | 5.50 | % | 5.50 | % | |||
Fiscal year the ultimate trend rate is reached | 2017 | 2016 | 2017 |
One-Percentage Point Increase | One-Percentage Point Decrease | |||||||
Effect on future service and interest cost | $ | 14 | $ | (26 | ) | |||
Effect on accumulated postretirement benefit obligation at July 31, 2013 | 234 | (238 | ) |
2014 | $ | 677 | |
2015 | 740 | ||
2016 | 813 | ||
2017 | 926 | ||
2018 | 1,041 | ||
2019 through 2023 | 6,733 |
Years Ended July 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
United States | $ | (144,941 | ) | $ | 44,713 | $ | 27,742 | |||||
Other Nations | 46,195 | 94,711 | 99,882 | |||||||||
Total | $ | (98,746 | ) | $ | 139,424 | $ | 127,624 |
Years Ended July 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Current income tax expense: | ||||||||||||
United States | $ | 64 | $ | 9,606 | $ | 4,937 | ||||||
Other Nations | 19,282 | 34,739 | 24,492 | |||||||||
States (U.S.) | 1,094 | 2,287 | 399 | |||||||||
$ | 20,440 | $ | 46,632 | $ | 29,828 | |||||||
Deferred income tax (benefit) expense: | ||||||||||||
United States | 22,882 | (1,480 | ) | (6,058 | ) | |||||||
Other Nations | (806 | ) | (7,325 | ) | (2,849 | ) | ||||||
States (U.S.) | (446 | ) | (874 | ) | 746 | |||||||
$ | 21,630 | $ | (9,679 | ) | $ | (8,161 | ) | |||||
Total | $ | 42,070 | $ | 36,953 | $ | 21,667 |
July 31, 2013 | ||||||||||||
Assets | Liabilities | Total | ||||||||||
Inventories | $ | 5,880 | $ | (280 | ) | $ | 5,600 | |||||
Prepaid catalog costs | 9 | (2,407 | ) | (2,398 | ) | |||||||
Employee benefits | 1,973 | (5 | ) | 1,968 | ||||||||
Accounts receivable | 1,292 | (63 | ) | 1,229 | ||||||||
Other, net | 9,721 | (4,684 | ) | 5,037 | ||||||||
Current | $ | 18,875 | $ | (7,439 | ) | $ | 11,436 | |||||
Fixed Assets | 2,717 | (4,811 | ) | (2,094 | ) | |||||||
Intangible Assets | 1,705 | (54,008 | ) | (52,303 | ) | |||||||
Capitalized R&D expenditures | 1,755 | — | 1,755 | |||||||||
Deferred compensation | 24,565 | — | 24,565 | |||||||||
Postretirement benefits | 7,220 | — | 7,220 | |||||||||
Tax credit carry-forwards and net operating losses | 62,199 | (125 | ) | 62,074 | ||||||||
Less valuation allowance | (37,142 | ) | — | (37,142 | ) | |||||||
Other, net | 109 | (8,952 | ) | (8,843 | ) | |||||||
Noncurrent | $ | 63,128 | $ | (67,896 | ) | $ | (4,768 | ) | ||||
Total | $ | 82,003 | $ | (75,335 | ) | $ | 6,668 |
July 31, 2012 | ||||||||||||
Assets | Liabilities | Total | ||||||||||
Inventories | $ | 4,984 | $ | (4 | ) | $ | 4,980 | |||||
Prepaid catalog costs | 13 | (3,520 | ) | (3,507 | ) | |||||||
Employee benefits | 2,980 | (4 | ) | 2,976 | ||||||||
Accounts receivable | 1,370 | (11 | ) | 1,359 | ||||||||
Other, net | 7,267 | (3,221 | ) | 4,046 | ||||||||
Current | $ | 16,614 | $ | (6,760 | ) | $ | 9,854 | |||||
Fixed Assets | 2,146 | (5,703 | ) | (3,557 | ) | |||||||
Intangible Assets | 1,885 | (39,561 | ) | (37,676 | ) | |||||||
Capitalized R&D expenditures | 2,047 | — | 2,047 | |||||||||
Deferred compensation | 27,122 | — | 27,122 | |||||||||
Postretirement benefits | 7,429 | — | 7,429 | |||||||||
Tax credit carry-forwards and net operating losses | 68,148 | — | 68,148 | |||||||||
Less valuation allowance | (25,847 | ) | — | (25,847 | ) | |||||||
Other, net | 156 | (7,146 | ) | (6,990 | ) | |||||||
Noncurrent | $ | 83,086 | $ | (52,410 | ) | $ | 30,676 | |||||
Total | $ | 99,700 | $ | (59,170 | ) | $ | 40,530 |
• | Foreign net operating loss carry-forwards of $124,325, of which $99,666 have no expiration date and the remainder of which expire within the next five to eight years. |
• | State net operating loss carry-forwards of $58,827, which expire from 2014 to 2033. |
• | Foreign tax credit carry-forwards of $12,486, which expire from 2021 to 2023. |
• | State research and development credit carry-forwards of $8,531, which expire from 2014 to 2028. |
Years Ended July 31, | |||||||||
2013 | 2012 | 2011 | |||||||
Tax at statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Goodwill impairment | (53.4 | )% | — | % | — | % | |||
State income taxes, net of federal tax benefit | (0.2 | )% | 0.1 | % | — | % | |||
International rate differential | (2.7 | )% | (6.5 | )% | (13.3 | )% | |||
Non-creditable withholding taxes | (1.5 | )% | 2.3 | % | 0.9 | % | |||
Rate variances arising from foreign subsidiary distributions | (25.3 | )% | (6.5 | )% | (7.4 | )% | |||
Adjustments to tax accruals and reserves | 1.0 | % | 7.5 | % | 4.3 | % | |||
Research and development tax credits and section 199 manufacturer’s deduction | 3.1 | % | (1.0 | )% | (1.2 | )% | |||
Foreign tax credit carryforward adjustments | 2.4 | % | (3.4 | )% | — | % | |||
Other, net | (1.0 | )% | (1.0 | )% | (1.3 | )% | |||
Effective tax rate | (42.6 | )% | 26.5 | % | 17.0 | % |
Balance at July 31, 2010 | $ | 17,668 | |
Additions based on tax positions related to the current year | 5,147 | ||
Additions for tax positions of prior years | 2,387 | ||
Reductions for tax positions of prior years | (291 | ) | |
Lapse of statute of limitations | (2,803 | ) | |
Settlements with tax authorities | (728 | ) | |
Cumulative Translation Adjustments and other | 963 | ||
Balance at July 31, 2011 | $ | 22,343 | |
Additions based on tax positions related to the current year | 6,983 | ||
Additions for tax positions of prior years | 9,460 | ||
Reductions for tax positions of prior years | — | ||
Lapse of statute of limitations | (949 | ) | |
Settlements with tax authorities | — | ||
Cumulative Translation Adjustments and other | (1,305 | ) | |
Balance at July 31, 2012 | $ | 36,532 | |
Additions based on tax positions related to the current year | 4,015 | ||
Additions for tax positions of prior years (1) | 2,809 | ||
Reductions for tax positions of prior years | — | ||
Lapse of statute of limitations | (5,613 | ) | |
Settlements with tax authorities | (590 | ) | |
Cumulative Translation Adjustments and other | 422 | ||
Balance at July 31, 2013 | $ | 37,575 |
(1) | Includes acquisitions |
Jurisdiction | Open Tax Years | |
United States — Federal | F’10 — F’13 | |
France | F’12 — F’13 | |
Germany | F’06 — F’13 | |
United Kingdom | F’10 — F’13 |
July 31, 2013 | Interest Rate | |||||
USD-denominated borrowing on revolving loan agreement | $ | 39,000 | 1.2787 | % | ||
USD-denominated borrowing on China line of credit | 11,613 | 1.1201 | % | |||
Notes payable | $ | 50,613 | 1.2423 | % |
2013 | 2012 | |||||||
Euro-denominated notes payable in 2017 at a fixed rate of 3.71% | $ | 39,900 | $ | 36,912.0 | ||||
Euro-denominated notes payable in 2020 at a fixed rate of 4.24% | 59,850 | 55,368 | ||||||
USD-denominated notes payable through 2014 at a fixed rate of 5.14% | 18,750 | 37,500 | ||||||
USD-denominated notes payable through 2016 at a fixed rate of 5.30% | 78,428 | 104,571 | ||||||
USD-denominated notes payable through 2017 at a fixed rate of 5.33% | 65,486 | 81,857 | ||||||
$ | 262,414 | $ | 316,208 | |||||
Less current maturities | $ | (61,264 | ) | $ | (61,264 | ) | ||
$ | 201,150 | $ | 254,944 |
Years Ending July 31, | |||
2014 | $ | 61,264 | |
2015 | 42,514 | ||
2016 | 42,514 | ||
2017 | 56,272 | ||
2018 | — | ||
Thereafter | 59,850 | ||
Total | $ | 262,414 | |
July 31, 2013 | July 31, 2012 | |||||||||||||||||||
Shares Authorized | Shares Issued | (thousands) Amount | Shares Authorized | Shares Issued | (thousands) Amount | |||||||||||||||
Preferred Stock, $.01 par value | 5,000,000 | 5,000,000 | ||||||||||||||||||
Cumulative Preferred Stock: 6% Cumulative | 5,000 | 5,000 | ||||||||||||||||||
1972 Series | 10,000 | 10,000 | ||||||||||||||||||
1979 Series | 30,000 | 30,000 | ||||||||||||||||||
Common Stock, $.01 par value: Class A Nonvoting | 100,000,000 | 51,261,487 | $ | 513 | 100,000,000 | 51,261,487 | $ | 513 | ||||||||||||
Class B Voting | 10,000,000 | 3,538,628 | 35 | 10,000,000 | 3,538,628 | 35 | ||||||||||||||
$ | 548 | $ | 548 |
Unearned Restricted Stock | Deferred Compensation | Shares Held in Rabbi Trust, at cost | Total | |||||||||||||
Balances at July 31, 2010 | $ | (3,373 | ) | $ | 12,848 | $ | (12,304 | ) | $ | (2,829 | ) | |||||
Shares at July 31, 2010 | 614,988 | 614,988 | ||||||||||||||
Sale of shares at cost | — | (1,421 | ) | 1,375 | (46 | ) | ||||||||||
Purchase of shares at cost | — | 666 | (666 | ) | — | |||||||||||
Issuance of restricted stock | (2,835 | ) | — | — | (2,835 | ) | ||||||||||
Amortization of restricted stock | 846 | — | — | 846 | ||||||||||||
Balances at July 31, 2011 | $ | (5,362 | ) | $ | 12,093 | $ | (11,595 | ) | $ | (4,864 | ) | |||||
Shares at July 31, 2011 | 560,078 | 560,078 | ||||||||||||||
Sale of shares at cost | — | (1,407 | ) | 1,368 | (39 | ) | ||||||||||
Purchase of shares at cost | — | 924 | (924 | ) | — | |||||||||||
Amortization of restricted stock | 1,599 | — | — | 1,599 | ||||||||||||
Balances at July 31, 2012 | $ | (3,763 | ) | $ | 11,610 | $ | (11,151 | ) | $ | (3,304 | ) | |||||
Shares at July 31, 2012 | 517,105 | 517,105 | ||||||||||||||
Sale of shares at cost | — | (1,461 | ) | 1,419 | (42 | ) | ||||||||||
Purchase of shares at cost | — | 891 | (891 | ) | — | |||||||||||
Forfeitures of restricted stock | 838 | 838 | ||||||||||||||
Amortization of restricted stock | 1,788 | — | — | 1,788 | ||||||||||||
Balances at July 31, 2013 | $ | (1,137 | ) | $ | 11,040 | $ | (10,623 | ) | $ | (720 | ) | |||||
Shares at July 31, 2013 | 469,797 | 469,797 |
Option Price | Options Outstanding | Weighted Average Exercise Price | |||||||
Balance, July 31, 2010 | $13.31–$40.37 | 5,108,736 | $ | 28.69 | |||||
Options granted | 28.35 – 37.95 | 1,365,500 | 28.86 | ||||||
Options exercised | 14.16 – 29.78 | (417,888 | ) | 19.62 | |||||
Options cancelled | 16.39 – 38.31 | (330,331 | ) | 31.37 | |||||
Balance, July 31, 2011 | $13.31–$40.37 | 5,726,017 | $ | 29.24 | |||||
Options granted | 27.00 – 33.54 | 1,212,450 | 27.91 | ||||||
Options exercised | 13.31 – 29.78 | (266,991 | ) | 20.21 | |||||
Options cancelled | 16.00 – 38.31 | (417,725 | ) | 31.16 | |||||
Balance, July 31, 2012 | $13.31–$40.37 | 6,253,751 | $ | 29.24 | |||||
Options granted | 30.21 – 36.25 | 828,450 | 30.58 | ||||||
Options exercised | 13.31 – 31.54 | (1,080,089 | ) | 22.79 | |||||
Options cancelled | 16.39 – 38.31 | (895,527 | ) | 30.02 | |||||
Balance, July 31, 2013 | $17.23 – $40.37 | 5,106,585 | $ | 30.68 |
Options Outstanding | Options Outstanding and Exercisable | |||||||||||||||
Range of Exercise Prices | Number of Shares Outstanding at July 31, 2013 | Weighted Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | Shares Exercisable at July 31, 2013 | Weighted Average Exercise Price | |||||||||||
$17.00 - $27.99 | 939,749 | 6.4 | $ | 24.67 | 561,740 | $ | 23.11 | |||||||||
$28.00 - $37.99 | 3,361,336 | 6.0 | 30.54 | 1,943,803 | 31.05 | |||||||||||
$38.00 and up | 805,500 | 3.2 | 38.26 | 805,500 | 38.26 | |||||||||||
Total | 5,106,585 | 5.7 | 30.68 | 3,311,043 | 31.46 |
2013 | 2012 | 2011 | ||||||||||
Sales to External Customers: | ||||||||||||
IDS | $ | 733,433 | $ | 633,774 | $ | 625,396 | ||||||
WPS | 418,676 | 434,914 | 433,959 | |||||||||
Total Company | $ | 1,152,109 | $ | 1,068,688 | $ | 1,059,355 | ||||||
Depreciation & Amortization: | ||||||||||||
IDS | $ | 25,920 | $ | 18,253 | $ | 19,252 | ||||||
WPS | 9,078 | 7,827 | 10,769 | |||||||||
Corporate | 13,727 | 17,907 | 18,806 | |||||||||
Total Company | $ | 48,725 | $ | 43,987 | $ | 48,827 | ||||||
Segment Profit: | ||||||||||||
IDS | $ | 171,319 | $ | 159,427 | $ | 146,124 | ||||||
WPS | 95,241 | 117,187 | 118,913 | |||||||||
Total Company | $ | 266,560 | $ | 276,614 | $ | 265,037 | ||||||
Assets: | ||||||||||||
IDS | $ | 989,216 | $ | 744,055 | $ | 782,324 | ||||||
WPS | 239,219 | 439,255 | 444,354 | |||||||||
Corporate | 210,248 | 424,409 | 634,827 | |||||||||
Total Company | $ | 1,438,683 | $ | 1,607,719 | $ | 1,861,505 | ||||||
Expenditures for property, plant & equipment: | ||||||||||||
IDS | $ | 18,186 | $ | 15,213 | $ | 13,406 | ||||||
WPS | 8,459 | 4,989 | 3,979 | |||||||||
Corporate | 9,042 | 3,945 | 3,147 | |||||||||
Total Company | $ | 35,687 | $ | 24,147 | $ | 20,532 |
Years Ended July 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Total profit from reportable segments | $ | 266,560 | $ | 276,614 | $ | 265,037 | |||||
Unallocated costs: | |||||||||||
Administrative costs | 121,693 | 114,098 | 112,827 | ||||||||
Restructuring charges | 26,046 | 6,084 | 6,451 | ||||||||
Impairment charges (1) | 204,448 | ||||||||||
Investment and other income | (3,522 | ) | (2,082 | ) | (3,989 | ) | |||||
Interest expense | 16,641 | 19,090 | 22,124 | ||||||||
(Loss) earnings from continuing operations before income taxes | $ | (98,746 | ) | $ | 139,424 | $ | 127,624 |
Revenues* Years Ended July 31, | Long-Lived Assets** As of Years Ended July 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||
Geographic information: | ||||||||||||||||||||||||
United States | $ | 615,861 | $ | 522,393 | $ | 497,030 | $ | 576,539 | $ | 479,791 | $ | 488,571 | ||||||||||||
Other | 596,899 | 609,083 | 623,839 | 319,706 | 411,134 | 541,648 | ||||||||||||||||||
Eliminations | (60,651 | ) | (62,788 | ) | (61,514 | ) | — | — | — | |||||||||||||||
Consolidated total | $ | 1,152,109 | $ | 1,068,688 | $ | 1,059,355 | $ | 896,245 | $ | 890,925 | $ | 1,030,219 |
* | Revenues are attributed based on country of origin. |
** | Long-lived assets consist of property, plant, and equipment, other intangible assets and goodwill. |
Years ended July 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Numerator: (in thousands) | ||||||||||||
(Loss) earnings from continuing operations | $ | (140,816 | ) | $ | 102,471 | $ | 105,957 | |||||
Less: | ||||||||||||
Restricted stock dividends | (238 | ) | (229 | ) | (223 | ) | ||||||
Numerator for basic and diluted earnings from continuing operations per Class A Nonvoting Common Share | $ | (141,054 | ) | $ | 102,242 | $ | 105,734 | |||||
Less: | ||||||||||||
Preferential dividends | (797 | ) | (818 | ) | (820 | ) | ||||||
Preferential dividends on dilutive stock options | (5 | ) | (5 | ) | (6 | ) | ||||||
Numerator for basic and diluted earnings from continuing operations per Class B Voting Common Share | $ | (141,856 | ) | $ | 101,419 | $ | 104,908 | |||||
Denominator: (in thousands) | ||||||||||||
Denominator for basic earnings from continuing operations per share for both Class A and Class B | 51,330 | 52,453 | 52,639 | |||||||||
Plus: Effect of dilutive stock options | — | 368 | 494 | |||||||||
Denominator for diluted earnings from continuing operations per share for both Class A and Class B | 51,330 | 52,821 | 53,133 | |||||||||
(Loss) earnings from continuing operations per Class A Nonvoting Common Share: | ||||||||||||
Basic | $ | (2.75 | ) | $ | 1.95 | $ | 2.01 | |||||
Diluted | $ | (2.75 | ) | $ | 1.94 | $ | 1.99 | |||||
(Loss) earnings from continuing operations per Class B Voting Common Share: | ||||||||||||
Basic | $ | (2.76 | ) | $ | 1.93 | $ | 1.99 | |||||
Diluted | $ | (2.76 | ) | $ | 1.92 | $ | 1.97 | |||||
(Loss) earnings from discontinued operations per Class A Nonvoting Common Share: | ||||||||||||
Basic | $ | (0.27 | ) | $ | (2.30 | ) | $ | 0.05 | ||||
Diluted | $ | (0.27 | ) | $ | (2.29 | ) | $ | 0.05 | ||||
(Loss) earnings from discontinued operations per Class B Voting Common Share: | ||||||||||||
Basic | $ | (0.27 | ) | $ | (2.29 | ) | $ | 0.05 | ||||
Diluted | $ | (0.27 | ) | $ | (2.28 | ) | $ | 0.05 | ||||
Net (loss) earnings per Class A Nonvoting Common Share: | ||||||||||||
Basic | $ | (3.02 | ) | $ | (0.35 | ) | $ | 2.06 | ||||
Diluted | $ | (3.02 | ) | $ | (0.35 | ) | $ | 2.04 | ||||
Net (loss) earnings per Class B Voting Common Share: | ||||||||||||
Basic | $ | (3.03 | ) | $ | (0.36 | ) | $ | 2.04 | ||||
Diluted | $ | (3.03 | ) | $ | (0.36 | ) | $ | 2.03 |
Years ending July 31, | |||
2014 | $ | 14,785 | |
2015 | 12,829 | ||
2016 | 9,316 | ||
2017 | 8,162 | ||
2018 | 7,735 | ||
Thereafter | 18,170 | ||
$ | 70,997 |
Inputs Considered As | |||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Fair Values | Balance Sheet Classifications | ||||||||||
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 | ||||||
Foreign currency denominated debt | — | 103,635 | 103,635 | Long term obligations, less current maturities | |||||||||
Total Liabilities | $ | — | $ | 104,525 | $ | 104,525 | |||||||
July 31, 2012 | |||||||||||||
Trading securities | $ | 12,676 | $ | — | $ | 12,676 | Other assets | ||||||
Foreign exchange contracts | — | 1,234 | 1,234 | Prepaid expenses and other current assets | |||||||||
Total Assets | $ | 12,676 | $ | 1,234 | $ | 13,910 | |||||||
Foreign exchange contracts | $ | — | $ | 281 | $ | 281 | Other current liabilities | ||||||
Foreign currency denominated debt | — | 99,081 | 99,081 | Long term obligations, less current maturities | |||||||||
Total Liabilities | $ | — | $ | 99,362 | $ | 99,362 |
Employee Related | Asset Write-offs | Other | Total | |||||||||||||
Restructuring liability ending balance, July 31, 2010 | $ | 6,055 | $ | — | $ | 106 | $ | 6,161 | ||||||||
Restructuring charges in continuing operations | 4,338 | 1,577 | 536 | 6,451 | ||||||||||||
Restructuring charges in discontinued operations | 2,003 | 578 | 157 | 2,738 | ||||||||||||
Non-cash write-offs | — | (2,155 | ) | — | (2,155 | ) | ||||||||||
Cash payments | (10,189 | ) | — | (749 | ) | (10,938 | ) | |||||||||
Restructuring liability ending balance, July 31, 2011 | $ | 2,207 | $ | — | $ | 50 | $ | 2,257 | ||||||||
Restructuring charges in continuing operations | $ | 4,947 | $ | 458 | $ | 679 | $ | 6,084 | ||||||||
Restructuring charges in discontinued operations | 5,997 | — | 29 | 6,026 | ||||||||||||
Non-cash write-offs | — | (458 | ) | — | (458 | ) | ||||||||||
Cash payments | (4,342 | ) | — | (492 | ) | (4,834 | ) | |||||||||
Restructuring liability ending balance, July 31, 2012 | $ | 8,809 | $ | — | $ | 266 | $ | 9,075 | ||||||||
Restructuring charges in continuing operations | $ | 18,350 | $ | 4,125 | $ | 3,571 | $ | 26,046 | ||||||||
Restructuring charges in discontinued operations | 2,811 | 362 | 1,376 | 4,549 | ||||||||||||
Non-cash write-offs | — | (4,487 | ) | — | (4,487 | ) | ||||||||||
Cash payments | (18,495 | ) | — | (2,482 | ) | (20,977 | ) | |||||||||
Restructuring liability ending balance, July 31, 2013 | $ | 11,475 | $ | — | $ | 2,731 | $ | 14,206 |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||
July 31, 2013 | July 31, 2012 | July 31, 2013 | July 31, 2012 | ||||||||||||||||||||
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 | $ | — | Prepaid expenses and other current assets | $ | 1,156 | Other current liabilities | $ | — | Other current liabilities | $ | 210 | |||||||||||
Net investment hedges | |||||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | 7 | Prepaid expenses and other current assets | $ | — | Other current liabilities | $ | — | Other current liabilities | $ | 71 | |||||||||||
Foreign currency denominated debt | Prepaid expenses and other current assets | $ | — | Prepaid expenses and other current assets | $ | — | Long term obligations, less current maturities | $ | 99,750 | Long term obligations, less current maturities | $ | 99,081 | |||||||||||
Total derivatives designated as hedging instruments | $ | 7 | $ | 1,156 | $ | 99,750 | $ | 99,362 | |||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | 287 | Prepaid expenses and other current assets | $ | 78 | Other current liabilities | $ | 890 | Other current liabilities | $ | — | |||||||||||
Total derivatives not designated as hedging instruments | $ | 287 | $ | 78 | $ | 890 | $ | — |
Divestitures | Segment | Date Completed | ||
Etimark | ID Solutions | July 2012 | ||
Precision Converting, LLC (“Brady Medical”) | ID Solutions | August 2012 | ||
Teklynx | ID Solutions | December 2010 | ||
Varitronics | ID Solutions | October 2012 |
2013 | 2012 | 2011 | |||||||||
Net sales | $ | 219,819 | $ | 262,484 | $ | 289,407 | |||||
Earnings (loss) from operations of discontinued businesses (1) | 7,154 | (116,673 | ) | 16,434 | |||||||
(Loss) on write-down of disposal group (2) | (15,658 | ) | — | — | |||||||
Income tax expense (3) | (5,215 | ) | (3,709 | ) | (13,739 | ) | |||||
(Loss) earnings from discontinued operations, net of income tax | $ | (13,719 | ) | $ | (120,382 | ) | $ | 2,695 |
(1) | The loss from operations of discontinued businesses in fiscal 2012 was primarily attributable to the $115.7 million goodwill impairment charge recorded during the three months ending January 31, 2012, which was related to the Asia Die-Cut disposal group. |
(2) | The $15.7 million loss relates to the write-down of the Asia Die-Cut disposal group to its estimated fair value less costs to sell and was recorded in the three months ending April 30, 2013. |
(3) | Fiscal 2013 income tax expense was significantly impacted by the fiscal 2013 losses in China and Sweden, which had no tax benefit, and the increase in valuation allowance related to Shenzhen, China. |
July 31, 2013 | |||
Accounts receivable—net | $ | 47,499 | |
Total inventories | 20,200 | ||
Prepaid expenses and other current assets | 1,469 | ||
Total current assets | 69,168 | ||
Other assets: | |||
Goodwill | 37,347 | ||
Other intangible assets | 914 | ||
Other | 1,937 | ||
Property, plant and equipment—net | 26,156 | ||
Total assets | $ | 135,522 | |
Current liabilities: | |||
Accounts payable | $ | 29,769 | |
Wages and amounts withheld from employees | 3,143 | ||
Other current liabilities | 1,671 | ||
Total current liabilities | 34,583 | ||
Net assets of disposal group | 100,939 | ||
Less: write-down on disposal group | (15,658 | ) | |
Net assets of disposal group at fair value | $ | 85,281 |
Quarters | ||||||||||||||||||||
First | Second | Third | Fourth | Total | ||||||||||||||||
2013 | ||||||||||||||||||||
Net sales | $ | 270,866 | $ | 271,175 | $ | 300,971 | $ | 309,097 | $ | 1,152,109 | ||||||||||
Gross margin | 149,524 | 141,013 | 158,532 | 157,011 | 606,080 | |||||||||||||||
Operating income (loss) * | 42,628 | 20,968 | 30,115 | (179,338 | ) | (85,627 | ) | |||||||||||||
Earnings (loss) from continuing operations | 25,786 | (11,364 | ) | 20,996 | (176,234 | ) | (140,816 | ) | ||||||||||||
Net earnings (loss) from continuing operations per | ||||||||||||||||||||
Class A Common Share: | ||||||||||||||||||||
Basic** | $ | 0.50 | $ | (0.22 | ) | $ | 0.41 | $ | (3.41 | ) | $ | (2.75 | ) | |||||||
Diluted** | 0.50 | (0.22 | ) | 0.41 | (3.41 | ) | (2.75 | ) | ||||||||||||
2012 | ||||||||||||||||||||
Net sales | $ | 273,396 | $ | 255,052 | $ | 271,151 | $ | 269,089 | $ | 1,068,688 | ||||||||||
Gross margin | 150,450 | 141,237 | 150,430 | 147,453 | $ | 589,570 | ||||||||||||||
Operating income * | 42,745 | 37,393 | 42,228 | 34,066 | $ | 156,432 | ||||||||||||||
Earnings from continuing operations | 27,855 | 26,436 | 27,311 | 20,869 | $ | 102,471 | ||||||||||||||
Net earnings from continuing operations per | ||||||||||||||||||||
Class A Common Share: | ||||||||||||||||||||
Basic | $ | 0.53 | $ | 0.50 | $ | 0.52 | $ | 0.40 | $ | 1.95 | ||||||||||
Diluted** | 0.52 | 0.50 | 0.51 | 0.40 | 1.94 |
Name | Age | Title | ||
Frank M. Jaehnert | 55 | President, CEO and Director | ||
Thomas J. Felmer | 51 | Senior V.P., CFO | ||
Stephen Millar | 52 | President - Die Cut, President - Brady Asia Pacific and V.P., Brady Corporation | ||
Scott R. Hoffman | 50 | President - Workplace Safety and V.P., Brady Corporation | ||
Matthew O. Williamson | 57 | President - Identification Solutions and V.P., Brady Corporation | ||
Allan J. Klotsche (1) | 48 | Senior V.P. - Human Resources | ||
Louis T. Bolognini | 57 | Senior V.P., Secretary and General Counsel | ||
Lee E. Marks | 54 | V.P. - Global Operations and Supply Chain | ||
Bentley N. Curran | 51 | V.P. - Digital Business and Chief Information Officer | ||
Kathleen M. Johnson | 59 | V.P. and Chief Accounting Officer | ||
Paul T. Meyer | 44 | Treasurer | ||
Patrick W. Allender | 66 | Director | ||
Gary S. Balkema | 58 | Director | ||
Nancy L. Gioia | 53 | Nominee for Director at the November 2013 Annual Meeting of Shareholders | ||
Conrad G. Goodkind | 69 | Director | ||
Frank W. Harris | 71 | Director | ||
Elizabeth P. Pungello | 46 | Director | ||
Bradley C. Richardson | 55 | Director |
• | A Form 4 for Mr. Goodkind that was filed on March 29, 2012 to report the acquisition of 285 shares of Class A Nonvoting Common Stock from a dividend reinvestment on February 1, 2012 did not correctly report the acquisition of those shares and the amount of securities beneficially owned following this transaction, and thereafter, this was corrected on a Form 4/A for Mr. Goodkind that was filed on August 26, 2013; |
• | A Form 4 for Mr. Jaehnert that was not filed on or before June 13, 2013 as required to report the sale of 18,777 shares of Class A Nonvoting Common Stock. This transaction was reported on a Form 4 for Mr. Jaehnert that was filed on June 20, 2013; |
• | Forms 4 for Ms. Pungello that were filed on October 4, 2011 and September 25, 2012 to report the acquisition of 1,450 shares of Class A Nonvoting Common Stock on each of September 30, 2011 and September 21, 2012, respectively, pursuant to an equity compensation plan for non-management Directors, did not correctly report the direct ownership of such shares outside of a trust and did not correctly report the amount of securities beneficially owned following these transactions, and this was corrected on a Form 4/A for Ms. Pungello that was filed on September 3, 2013. |
• | Forms 4 for Mr. Harris that were not filed on or before (i) November 22, 2012 as required to report the sale of 1,000 shares of Class A Nonvoting Common Stock on November 20, 2012 and (ii) July 1, 2013 as required to report the sale of 2,000 shares of Class A Nonvoting Common Stock on June 27, 2013. These transactions were reported, and the amount of securities beneficially owned as of July 31, 2013 was corrected, on a Form 4/A for Mr. Harris that was filed on September 10, 2013. |
• | Frank M. Jaehnert, President, Chief Executive Officer and Director; |
• | Thomas J. Felmer, Senior Vice President and Chief Financial Officer; |
• | Allan J. Klotsche, Senior Vice President-Human Resources (1); |
• | Stephen Millar, President-Die Cut, President-Brady Asia Pacific and Vice President, Brady Corporation; |
• | Matthew O. Williamson, President-Identification Solutions and Vice President, Brady Corporation, and; |
• | Peter C. Sephton, Former President-Brady EMEA and Vice President, Brady Corporation (2) |
• | On a GAAP basis, we incurred a fiscal 2013 net loss from continuing operations of $140.8 million. |
• | Brady continues to demonstrate strong cash generation as we generated $143.5 million of cash flow from operating activities during the year ended July 31, 2013. |
• | Our sales from continuing operations for the full year were $1.15 billion, up 7.8% from fiscal 2012. Organic sales were down 2.6%, the acquisitions increased sales by 11.3%, and foreign currency translation decreased sales by 0.9%. |
Emphasis on Variable Compensation | Over 60% of the named executive officers' possible compensation is tied to Company performance which the Company believes drives shareholder value. | |
Ownership Requirements | The chief executive officer is required to own at least 100,000 shares of stock in the Company and all other named executive officers are required to hold at least 30,000 shares of stock. | |
Clawback Provisions | Following a review and analysis of relevant governance and incentive compensation practices and policies across our compensation peer group and other public companies, the Committee instituted a recoupment policy, effective August 2013, under which incentive compensation payments and/or awards may be recouped by the Company if such payments and/or awards were based on erroneous results. If the Committee determines that an executive officer or other key executive of the Company who participates in any of the Company's incentive plans has engaged in intentional misconduct that results in a material inaccuracy in the Company's financial statements or fraudulent or other willful and deliberate conduct that is detrimental to the Company or there is a material, negative revision of a performance measure for which incentive compensation was paid or awarded, the Committee may take a variety of actions including, among others, seeking repayment of incentive compensation (cash and/or equity) that is greater than what would have been awarded if the payments/awards had been based on accurate results and the forfeiture of incentive compensation. As this policy suggests, the Committee believes that any incentive compensation should be based only on accurate and reliable financial and operational information, and, thus, any inappropriately paid incentive compensation should be returned to the Company for the benefit of shareholders. The Committee expects that the implementation of this policy will serve to enhance the Company's compensation risk mitigation efforts. While the implemented policy affords the Committee discretion regarding the application and enforcement of the policy, the Company and the Committee will conform the policy to any requirements that may be promulgated by the national stock exchanges in the future, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. | |
Performance Thresholds and Caps | Generally, 100% of annual cash and equity incentive awards are performance-based. In addition, the annual cash incentive plan has a maximum payment cap. | |
Securities Trading Policy | We prohibit executive officers from trading during certain periods at the end of each quarter until after we disclose our financial and operating results. We may impose additional restricted trading periods at any time if we believe trading by executives would not be appropriate because of developments that are, or could be, material and which have not been publicly disclosed. | |
Annual Risk Reviews | The Company conducts an annual compensation-related risk review and presents findings and suggested risk mitigation actions to both the Audit and Management Development and Compensation Committees. |
No Excessive Change of Control Severance | For the chief executive officer, the maximum cash benefit is equal to 3x salary and the average bonus payment received in the three years immediately prior to the date the change of control occurs. For all other named executive officers, the maximum cash benefit is equal to 2x salary and the average bonus payment received in the three years immediately prior to the date the change of control occurs. Unexercised stock options become fully exercisable or, if cancelled, each named executive officer shall be given cash or stock equal to the in-the-money value of the cancelled stock options | |
No Employment Agreements | The Company does not maintain any employment agreements with its executives. | |
No Reloads, Repricing, or Options Issued at a Discount | Stock options issued are not repriced, replaced, or regranted through cancellation or by lowering the option price of a previously granted option. |
• | Provide a competitive total compensation package targeted at the median of our compensation peers; |
• | Incentivize long-term shareholder value creation by encouraging behaviors which facilitate long-term success without undue risk taking; and |
• | Realize top-tier company performance through a merit-based, pay-for-performance culture that is aligned with our Company values. |
Compensation Component | Purpose of Compensation Component | Compensation Component in Relation to Performance | ||
Base salary | A fixed level of income security used to attract and retain employees by compensating them for the primary functions and responsibilities of the position. | The base salary increase an employee receives depends upon the employee's individual performance, the employee's displayed skills and competencies and market competitiveness. | ||
Annual cash incentive awards | To attract, retain, motivate and reward employees for achieving or exceeding annual performance goals at company and regional levels. | Financial performance determines the actual amount of the executive's annual cash incentive award. Award amounts are “self-funded” because they are included in the financial performance results when determining actual financial performance. | ||
Annual equity incentive awards: Time-based stock options | To attract, retain, motivate and reward top talent for the successful creation of long-term stockholder value. | Market competitive grant levels are used to determine the amount of equity granted to each executive, established within an equity grant budget based on the Black-Scholes methodology for valuing stock options. Stock options are inherently performance-based in that the stock price must increase over time to provide compensation value to the executive. |
Named Executive Officer | Fiscal 2012 | Fiscal 2013 | Percentage Increase | |||||||||
Frank M. Jaehnert | $ | 800,000 | $ | 800,000 | — | % | ||||||
Thomas J. Felmer | 377,500 | 377,500 | — | % | ||||||||
Allan J. Klotsche | 321,500 | 321,500 | — | % | ||||||||
Stephen Millar (1) | 307,611 | 304,313 | — | % | ||||||||
Peter C. Sephton (2) | 363,009 | 360,226 | — | % | ||||||||
Matthew O. Williamson | 372,500 | 383,675 | 3.0 | % |
(1) | The amounts in this table for Mr. Millar, who lived and worked in Australia, were paid to him in Australian Dollars. The amounts shown in U.S. dollars in the table above were converted from Australian Dollars at the average exchange rate for fiscal 2013: 1USD = 0.9825AUD; 2012: 1USD = 0.9720AUD. The difference between fiscal 2012 and fiscal 2013 base salaries is entirely related to exchange rate fluctuation. Mr. Millar did not experience a base salary decrease in fiscal 2013. |
(2) | The amounts in this table for Mr. Sephton, who lived and worked in the United Kingdom, were paid to him in British Pounds. The amounts shown in U.S. dollars in the table above were converted from British Pounds at the average exchange rate for fiscal 2013: 1USD = 0.6385GBP; 2012: 1USD =0.6336GBP. The difference between the fiscal 2012 and fiscal 2013 base salaries is entirely related to exchange rate fluctuation. Mr. Sephton did not experience a base salary decrease in fiscal 2013. |
• | Core Sales Growth: Core sales are defined as total sales adjusted for foreign currency exchange and acquisitions and divestitures in the last 12 months. Core sales are also known as “organic sales” and “base sales.” Regional and total Company core sales growth is reported quarterly and annually in the Company's 10-Q and 10-K SEC filings. |
• | Income from Operations (IFO) growth before expenses for R&D: Total Company and regional IFO is defined as total Company sales less cost of goods sold, selling and group leadership expenses. IFO growth excludes currency translation. IFO for the prior year and the current year is restated at the current budgeted exchange rates for the growth calculation. |
• | Net Income Growth: Net income is defined as SEC reported net income. Net income growth is reported net income at actual exchange rates for the current year compared to reported net income for the prior year. Net income is reported quarterly and annually in the Company's 10-Q and 10-K SEC filings. |
• | Individual Performance: Funded by the achievement of net income growth, each named executive officer is evaluated on the attainment of goals agreed at the start of the fiscal year to be critical to the execution of the Company's strategy. |
Performance Measure (weighting) | Threshold | Target | Maximum | Actual (% of Salary) | Actual ($) | |||||||||
Core Sales Growth (30%) | 0 | % | 5 | % | 12.5% or more | |||||||||
IFO Growth before expenses for R&D (30%) | 0 | % | 10 | % | 15.0% or more | |||||||||
Net Income Growth (20%) | 20.7 | % | 32.9 | % | 51.3% or more | |||||||||
Individual Performance (20%) | Varies by Individual | |||||||||||||
Award as a Percentage of Base Salary | ||||||||||||||
F. Jaehnert | 0 | % | 100 | % | 200 | % | 0 | % | $0 | |||||
T. Felmer | 0 | % | 70 | % | 140 | % | 0 | % | $0 | |||||
A. Klotsche | 0 | % | 70 | % | 140 | % | 0 | % | $0 |
Performance Measure (weighting) | Threshold | Target | Maximum | Actual (% of Salary) | Actual ($) | |||||||||
Regional Core Sales Growth (30%) | 0 | % | 5 | % | 12.5% or more | |||||||||
IFO Growth before expenses for R&D (30%) | 0 | % | 10 | % | 15.0% or more | |||||||||
Net Income Growth (20%) | 20.7 | % | 32.9 | % | 51.3% or more | |||||||||
Individual Performance (20%) | Varies by Individual | |||||||||||||
Award as a Percentage of Base Salary | ||||||||||||||
S. Millar | 0 | % | 70 | % | 140 | % | 0 | % | $0 | |||||
P. Sephton | 0 | % | 70 | % | 140 | % | 0 | % | $0 | |||||
M. Williamson | 0 | % | 70 | % | 140 | % | 0 | % | $0 |
Named Officers | Number of Time-Based Stock Options | Grant Date Fair Value | Number of Performance-Based RSUs | Grant Date Fair Value | ||||
F. Jaehnert | 90,000 | $834,741 | _ | $0 | ||||
T. Felmer | 45,500 | $422,008 | _ | $0 | ||||
A. Klotsche | 30,000 | $278,247 | _ | $0 | ||||
S. Millar | 30,000 | $278,247 | 10,000 | $302,100 | ||||
P. Sephton | 30,000 | $278,247 | _ | $0 | ||||
M. Williamson | 34,500 | $319,984 | _ | $0 |
• | Annual allowance for financial and tax planning |
• | Company car |
• | Long-term care insurance |
• | Personal liability insurance |
F. Jaehnert | 100,000 shares | |
T. Felmer | 30,000 shares | |
A. Klotsche | 30,000 shares | |
S. Millar | 30,000 shares | |
P. Sephton | 30,000 shares | |
M. Williamson | 30,000 shares |
Name and Principal Position | Fiscal Year | Salary ($) | Restricted Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||||
F.M. Jaehnert | 2013 | $ | 800,000 | $ | — | $ | 834,740 | $ | — | $ | 117,038 | $ | 1,751,778 | |||||||||||||
President, CEO & Director | 2012 | 800,000 | — | 2,086,727 | — | 254,136 | 3,140,863 | |||||||||||||||||||
2011 | 793,269 | 2,803,500 | 2,470,157 | 1,632,548 | 223,329 | 7,922,803 | ||||||||||||||||||||
T.J. Felmer | 2013 | 377,500 | — | 422,007 | — | 54,164 | 853,671 | |||||||||||||||||||
Senior VP & CFO | 2012 | 375,481 | — | 755,909 | — | 105,811 | 1,237,200 | |||||||||||||||||||
2011 | 363,285 | (22,050 | ) | 914,386 | 523,349 | 93,163 | 1,872,133 | |||||||||||||||||||
A.J. Klotsche | 2013 | 321,500 | — | 278,247 | — | 45,475 | 645,222 | |||||||||||||||||||
Senior VP - Human Resources | 2012 | 319,750 | — | 662,218 | — | 77,358 | 1,059,326 | |||||||||||||||||||
2011 | 311,002 | (22,050 | ) | 790,878 | 348,353 | 77,148 | 1,505,331 | |||||||||||||||||||
S. Millar President - Die Cut & APAC,VP - Brady Corporation (5) | 2013 | 304,314 | 302,100 | 278,247 | — | 73,508 | 958,169 | |||||||||||||||||||
P.C. Sephton (6) | 2013 | 360,235 | — | 278,247 | — | 655,466 | 1,293,948 | |||||||||||||||||||
Former President-Brady EMEA & VP - Brady Corporation | 2012 | 361,244 | — | 662,218 | — | 109,486 | 1,132,948 | |||||||||||||||||||
2011 | 356,818 | (22,050 | ) | 790,878 | 341,190 | 106,249 | 1,573,084 | |||||||||||||||||||
M.O. Williamson | 2013 | 380,666 | — | 319,984 | — | 62,067 | 762,717 | |||||||||||||||||||
President - IDS & VP - Brady Corporation | 2012 | 370,481 | — | 662,218 | 122,148 | 92,492 | 1,247,339 | |||||||||||||||||||
2011 | 360,071 | (22,050 | ) | 790,878 | 462,461 | 73,093 | 1,664,453 |
(1) | Represents the grant date fair value computed in accordance with accounting guidance for equity grants made or modified in the applicable year for restricted stock awards. The grant date fair value is calculated based on the number of shares of Common Stock underlying the restricted stock awards, times the average of the high and low trade prices of Brady Common Stock on the date of grant. The actual value of a restricted stock award will depend on the market value of the Company’s Common Stock on the date the stock is sold. The restricted stock award granted on January 8, 2008, was amended effective July 20, 2011, so that the shares will vest upon meeting a performance vesting requirement based upon earnings per share growth at either July 31, 2013 or July 31, 2014, provided that the senior executives remain employed through July 31, 2014. The reduction in the incremental fair value of the restricted share grant as of the modification date is included in the table above. |
(2) | Represents the grant date fair value computed in accordance with accounting guidance for equity grants made or modified in the applicable year for performance-based and time-based stock options. The assumptions used to determine the value of the awards, including the use of the Black-Scholes method of valuation by the Company, are discussed in Note 1 of the Notes to Consolidated Financial Statements of the Company contained in Item 8 of this Form 10-K, for the fiscal year ended July 31, 2013. The actual value, if any, which an option holder will realize upon the exercise of an option will depend on the excess of the market value of the Company’s Common Stock over the exercise price on the date the option is exercised, which cannot be forecasted with any accuracy. |
(3) | Reflects incentive plan compensation earned during the listed fiscal years, which was paid during the next fiscal year. |
(4) | The amounts in this column for Messrs. Jaehnert, Felmer, Klotsche, and Williamson include: matching contributions to the Company’s Matched 401(k) Plan, Funded Retirement Plan and Restoration Plan, the costs of group term life insurance for each named executive officer, use of a Company car and associated expenses, the cost of long-term care insurance, the cost of personal liability insurance, the cost of disability insurance and other perquisites. The perquisites may include an annual allowance for financial and tax planning and the cost of an annual physical health exam. The amounts in this column for Mr. Sephton include: contributions for the Brady U.K. Pension Plan, the cost of group term life insurance, vehicle allowance and associated expenses and other perquisites as listed above. The amounts in this column for Mr. Millar include: contributions for the Brady Australia Pension Plan, vehicle allowance and associated expenses and other perquisites as listed above. |
(5) | The amounts in this table for Mr. Millar, who works and lives in Australia, were paid to him in Australian Dollars. The amounts shown in U.S. dollars in the table above were converted from Australian Dollars at the average exchange rate for fiscal 2013: $1 =0.9825 AUD. Fiscal 2013 is the first year during Mr. Millar's term as officer in which he met the criteria as a Named Executive Officer. |
(6) | The amounts in this table for Mr. Sephton, who works and lives in the United Kingdom, were paid to him in British Pounds. The amounts shown in U.S. dollars in the table above were converted from British Pounds at the average exchange rate for fiscal 2013: $1 = £0.6385, 2012: $1 =£0.6336, 2011: $1 = £0.6250. Mr. Sephton resigned as President-Brady EMEA and Vice President, Brady Corporation effective April 30, 2013 and his employment with the Company terminated on July 31, 2013. Mr. Sephton's severance payment of 349,000 GBP (converted into $546,618), inclusive of 9,000 GBP in legal fees, is included in All Other Compensation in the table above . |
Name | Fiscal Year | Retirement Plan Contributions ($) | Group Term Life Insurance ($) | Company Car ($) | Long-term Care Insurance ($) | Personal Liability Insurance ($) | Temporary/ Total Disability ($) | Other ($) | Total ($) | |||||||||||||||||||||||||
F.M. Jaehnert | 2013 | $ | 64,000 | $ | 4,028 | $ | 12,201 | $ | 5,141 | $ | 2,654 | $ | 23,760 | $ | 5,254 | $ | 117,038 | |||||||||||||||||
2012 | 195,835 | 2,925 | 18,966 | 5,141 | 2,654 | 23,760 | 4,855 | 254,136 | ||||||||||||||||||||||||||
2011 | 158,281 | 2,740 | 24,057 | 5,141 | 2,654 | 23,760 | 6,696 | 223,329 | ||||||||||||||||||||||||||
T.J. Felmer | 2013 | 30,200 | 791 | 14,940 | 3,737 | — | — | 4,496 | 54,164 | |||||||||||||||||||||||||
2012 | 72,759 | 478 | 24,761 | 3,737 | — | — | 4,076 | 105,811 | ||||||||||||||||||||||||||
2011 | 57,931 | 828 | 25,311 | 3,737 | — | — | 5,356 | 93,163 | ||||||||||||||||||||||||||
A.J. Klotsche | 2013 | 25,784 | 674 | 12,386 | 3,506 | — | — | 3,125 | 45,475 | |||||||||||||||||||||||||
2012 | 53,747 | 407 | 15,509 | 3,506 | — | — | 4,189 | 77,358 | ||||||||||||||||||||||||||
2011 | 53,191 | 709 | 14,606 | 3,506 | — | — | 5,135 | 77,148 | ||||||||||||||||||||||||||
S. Millar (1) | 2013 | 49,227 | — | 24,281 | — | — | — | — | 73,508 | |||||||||||||||||||||||||
P.C. Sephton(2) | 2013 | 57,264 | 12,063 | 32,259 | 4,658 | — | — | 549,222 | 655,466 | |||||||||||||||||||||||||
2012 | 57,231 | 12,156 | 32,508 | 4,967 | — | — | 2,624 | 109,486 | ||||||||||||||||||||||||||
2011 | 57,091 | 12,323 | 31,800 | 5,035 | — | — | — | 106,249 | ||||||||||||||||||||||||||
M. O. Williamson | 2013 | 40,581 | 798 | 10,847 | 5,501 | — | — | 4,340 | 62,067 | |||||||||||||||||||||||||
2012 | 67,001 | 471 | 15,188 | 5,501 | — | — | 4,332 | 92,492 | ||||||||||||||||||||||||||
2011 | 47,059 | 820 | 14,436 | 5,501 | — | — | 5,277 | 73,093 |
(2) | The amounts in this table for Mr. Sephton, who works and lives in the United Kingdom, were paid to him in British Pounds. The amounts shown in U.S. dollars in the table above were converted from British Pounds at the average exchange rate for fiscal 2013: $1 = £0.6385, 2012: $1 =£0.6336, 2011: $1 = £0.6250. Mr. Sephton resigned as President-Brady EMEA and Vice President, Brady Corporation effective April 30, 2013 and his employment with the Company terminated on July 31, 2013. Mr. Sephton's severance payment of 349,000 GBP (converted into $546,618), inclusive of 9,000 GBP in legal fees, is included in Other in the table above. |
Grant | Compensation Committee Approval | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | All Other Option Awards: Number of Securities Under- lying Options | All Other Stock Awards: Number of Shares of Stock or Units | Exercise or Base Price of Stock or Option Awards | Grant Date Fair Value of Stock and Option Awards | ||||||||||||||||||||||
Name | Date | Date | Threshold ($) | Target ($) | Maximum ($) | (#) | (#) | (2) | ($) | |||||||||||||||||||
F.M. Jaehnert | 8/1/2012 | 7/24/2012 | $ | — | $ | 800,000 | $ | 1,600,000 | ||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 90,000 | $ | 30.21 | $ | 834,300 | |||||||||||||||||||
T.J. Felmer | 8/1/2012 | 7/24/2012 | — | 264,250 | 369,950 | |||||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 45,500 | 30.21 | 421,785 | |||||||||||||||||||||
A.J. Klotsche | 8/1/2012 | 7/24/2012 | — | 223,825 | 447,650 | |||||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 30,000 | 30.21 | 278,100 | |||||||||||||||||||||
S. Millar | 8/1/2012 | 7/24/2012 | — | 213,020 | 298,227 | |||||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 30,000 | 30.21 | 278,100 | |||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 10,000 (3) | 30.21 | 302,100 | |||||||||||||||||||||
P.C. Sephton | 8/1/2012 | 7/24/2012 | — | 252,165 | 353,031 | |||||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 30,000 | 30.21 | 278,100 | |||||||||||||||||||||
M.O. Williamson | 8/1/2012 | 7/24/2012 | — | 266,466 | 373,053 | |||||||||||||||||||||||
9/21/2012 | 9/10/2012 | — | — | — | 30,000 | 30.21 | 278,100 |
(1) | The awards were made under the Company’s annual cash incentive plan. The structure of the plan is described in the Compensation Discussion and Analysis above. Award levels are set prior to the beginning of the fiscal year and payouts can range from 0 to 200 percent of the target. |
(2) | The exercise price is the average of the high and low sale prices of the Company’s Class A Common Stock as reported by the New York Stock Exchange on the date of the grant. The average of the high and low sale prices of the Company’s Class A Common Stock as reported by the New York Stock Exchange on the grant date was $30.21 on September 21, 2012. |
(3) | Represents 10,000 restricted stock units granted to Stephen Millar on September 21, 2012 at a fair value of $30.21 per RSU. |
Option Awards | Stock Awards | ||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||
F.M. Jaehnert | 60,000 | $ | 22.63 | 8/2/2014 | |||||||||||||||
60,000 | 28.84 | 11/18/2014 | |||||||||||||||||
60,000 | 33.89 | 8/1/2015 | |||||||||||||||||
50,000 | 37.83 | 11/30/2015 | |||||||||||||||||
50,000 | 38.19 | 11/30/2016 | |||||||||||||||||
50,000 | 38.31 | 12/4/2017 | |||||||||||||||||
50,000 | 20.95 | 12/4/2018 | |||||||||||||||||
56,667 | 29.78 | 8/3/2019 | |||||||||||||||||
70,000 | 28.73 | 9/25/2019 |
33,334 | 83,333 | (1) | 28.35 | 8/2/2020 | |||||||||||||||
66,667 | 33,333 | (2) | 29.10 | 9/24/2020 | |||||||||||||||
130,000 | (3) | 29.55 | 8/1/2021 | ||||||||||||||||
30,000 | 60,000 | (6) | 27.00 | 9/30/2021 | |||||||||||||||
90,000 | (7) | 30.21 | 9/21/2022 | ||||||||||||||||
50,000 | (4) | $ | 1,663,500 | ||||||||||||||||
66,667 | (8) | 2,218,011 | |||||||||||||||||
T.J. Felmer | 30,000 | 33.89 | 8/1/2015 | ||||||||||||||||
25,000 | 37.83 | 11/30/2015 | |||||||||||||||||
25,000 | 38.19 | 11/30/2016 | |||||||||||||||||
25,000 | 38.31 | 12/4/2017 | |||||||||||||||||
25,000 | 20.95 | 12/4/2018 | |||||||||||||||||
23,334 | 29.78 | 8/3/2019 | |||||||||||||||||
35,000 | 28.73 | 9/25/2019 | |||||||||||||||||
11,667 | 29,166 | (1) | 28.35 | 8/2/2020 | |||||||||||||||
26,667 | 13,333 | (2) | 29.10 | 9/24/2020 | |||||||||||||||
45,000 | (3) | 29.55 | 8/1/2021 | ||||||||||||||||
11,667 | 23,333 | (6) | 27.00 | 9/30/2021 | |||||||||||||||
45,500 | (7) | 30.21 | 9/21/2022 | ||||||||||||||||
35,000 | (4) | 1,164,450 | |||||||||||||||||
A.J. Klotsche | 30,000 | 33.89 | 8/1/2015 | ||||||||||||||||
25,000 | 37.83 | 11/30/2015 | |||||||||||||||||
25,000 | 38.19 | 11/30/2016 | |||||||||||||||||
25,000 | 38.31 | 12/4/2017 | |||||||||||||||||
23,334 | 29.78 | 8/3/2019 | |||||||||||||||||
35,000 | 28.73 | 9/25/2019 | |||||||||||||||||
10,000 | 25,000 | (1) | 28.35 | 8/2/2020 | |||||||||||||||
23,334 | 11,666 | (2) | 29.10 | 9/24/2020 | |||||||||||||||
40,000 | (3) | 29.55 | 8/1/2021 | ||||||||||||||||
10,000 | 20,000 | (6) | 27.00 | 9/30/2021 | |||||||||||||||
30,000 | (7) | 30.21 | 9/21/2022 | ||||||||||||||||
35,000 | (4) | 1,164,450 | |||||||||||||||||
S. Millar | 5,000 | 28.84 | 11/18/2014 | ||||||||||||||||
3,500 | 37.83 | 11/30/2015 | |||||||||||||||||
5,000 | 38.19 | 11/30/2016 | |||||||||||||||||
5,000 | 38.31 | 12/4/2017 | |||||||||||||||||
7,500 | 20.95 | 12/4/2018 | |||||||||||||||||
10,000 | 28.73 | 9/25/2019 | |||||||||||||||||
6,667 | 3,333 | (2) | 29.10 | 9/24/2020 | |||||||||||||||
40,000 | (3) | 29.55 | 8/1/2021 | ||||||||||||||||
10,000 | 20,000 | (6) | 27.00 | 9/30/2021 | |||||||||||||||
30,000 | (7) | 30.21 | 9/21/2022 | ||||||||||||||||
10,000 | (5) | 332,700 | |||||||||||||||||
P.C. Sephton (9) | 30,000 | 28.84 | 11/18/2014 | ||||||||||||||||
30,000 | 33.89 | 8/1/2015 | |||||||||||||||||
25,000 | 37.83 | 11/30/2015 | |||||||||||||||||
25,000 | 38.19 | 11/30/2016 | |||||||||||||||||
25,000 | 38.31 | 12/4/2017 | |||||||||||||||||
23,334 | 29.78 | 8/3/2019 | |||||||||||||||||
15,000 | 28.73 | 9/25/2019 |
23,334 | 29.10 | 9/24/2020 | |||||||||||||||||
M.O.Williamson | 30,000 | 22.63 | 8/2/2014 | ||||||||||||||||
30,000 | 28.84 | 11/18/2014 | |||||||||||||||||
30,000 | 33.89 | 8/1/2015 | |||||||||||||||||
25,000 | 37.83 | 11/30/2015 | |||||||||||||||||
25,000 | 38.19 | 11/30/2016 | |||||||||||||||||
25,000 | 38.31 | 12/4/2017 | |||||||||||||||||
25,000 | 20.95 | 12/4/2018 | |||||||||||||||||
23,334 | 29.78 | 8/3/2019 | |||||||||||||||||
35,000 | 28.73 | 9/25/2019 | |||||||||||||||||
10,000 | 25,000 | (1) | 28.35 | 8/2/2020 | |||||||||||||||
23,334 | 11,666 | (2) | 29.10 | 9/24/2020 | |||||||||||||||
40,000 | (3) | 29.55 | 8/1/2021 | ||||||||||||||||
10,000 | 20,000 | (6) | 27.00 | 9/30/2021 | |||||||||||||||
34,500 | (7) | 30.21 | 9/21/2022 | ||||||||||||||||
35,000 | (4) | 1,164,450 |
(1) | Two-thirds of the shares vest in equal installments over a three-year period, with the vesting date being the date the Audit Committee accepts the results of the fiscal year audit confirming the achievement of annual EPS growth levels. The remaining one-third of the shares vest at plan year three depending upon the Company’s EPS growth for fiscal 2013 over fiscal 2010 in comparison with other corporations in the S&P 600 Index. |
(2) | The remaining options will vest on September 24, 2013. |
(3) | The performance-based stock options granted on August 1, 2011 become exercisable in equal annual installments over a three-year period, with the vesting date being the date the Audit Committee accepts the results of the fiscal year audit confirming the achievement of annual 15 percent EPS growth. In the event the annual EPS growth goal is not achieved with respect to any fiscal year, the options may vest in full at the end of either fiscal 2013 or fiscal 2014 if the Corporation’s Compounded Annual Growth Rate (“CAGR”) for EPS over fiscal 2011 is 15 percent or more. |
(4) | Effective July 20, 2011, the Management Development & Compensation Committee of the Board of Directors of the Company approved an amendment to the granting agreement under which the Company issued performance-based restricted stock on January 8, 2008. Pursuant to the amendment, the shares will vest upon meeting a financial performance vesting requirement based upon the Company’s EPS growth at either July 31, 2013 or July 31, 2014, provided that the senior executives remain employed through July 31, 2014. |
(5) | On September 21, 2012, Mr. Millar was awarded 10,000 restricted stock units with both a performance vesting requirement and a service vesting requirement (two years). As of July 31, 2013, the vesting criteria for this award have not been met. |
(6) | One-half of the options vest on September 30, 2013 and the remaining options vest on September 30, 2014. |
(7) | One-third of the options vest on September 21, 2013, one-third of the options vest on September 21, 2014, and one-third of the options vest on September 21, 2015. |
(8) | Effective August 2, 2010, a grant of 100,000 shares of performance-based restricted stock was issued to Mr. Jaehnert, which included both a performance vesting requirement based upon earnings per share growth and a service vesting requirement prorated at July 31, 2013, July 31, 2014 and July 31, 2015. As of July 31, 2013, 1/3 or 33,333 shares have vested. |
(9) | On account of his resignation, Mr. Sephton has ninety days after his resignation date of July 31, 2013 to exercise the outstanding vested stock options not withstanding the expiration date. |
Option Awards | Stock Awards | |||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($) | ||||||||||
F.M. Jaehnert | 197,000 | $ | 3,411,368 | 33,333 | $ | 1,108,989 | ||||||||
T.J. Felmer | 70,000 | 598,760 | — | — | ||||||||||
A.J. Klotsche | 105,000 | 899,395 | — | — | ||||||||||
S. Millar | 6,000 | 98,550 | — | — | ||||||||||
P.C. Sephton | 109,000 | 1,063,786 | — | — | ||||||||||
M.O. Williamson | 14,000 | 197,555 | — | — |
Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | |||||||||||||||
F.M. Jaehnert | $ | 21,800 | $ | 43,800 | $ | 1,158,726 | $ | — | $ | 5,163,559 | ||||||||||
T.J. Felmer | 5,100 | 10,200 | 489,290 | — | 2,276,808 | |||||||||||||||
A.J. Klotsche | 4,220 | 5,720 | 133,102 | — | 627,356 | |||||||||||||||
S. Millar | — | — | — | — | — | |||||||||||||||
P.C. Sephton | — | — | — | — | — | |||||||||||||||
M.O. Williamson | 34,284 | 19,709 | 224,650 | — | 1,157,787 |
• | The amounts shown in the tables assume that each named executive officer terminated employment on July 31, 2013. Accordingly, the tables reflect amounts earned as of July 31, 2013, and include estimates of amounts that would be paid to the named executive officer upon the occurrence of a change in control. The actual amounts that would be paid to a named executive officer can only be determined at the time of termination. |
• | The tables below include amounts the Company is obligated to pay the named executive officer as a result of the executed change in control agreement. The tables do not include benefits that are paid generally to all salaried employees or a broad group of salaried employees. Therefore, the named executive officers would receive benefits in addition to those set forth in the tables. |
• | A named executive officer is entitled to receive base salary earned during his term of employment regardless of the manner in which the named executive officer’s employment is terminated. As such, this amount is not shown in the tables. |
Base Salary ($)(1) | Bonus ($) (2) | Restricted Stock Award Acceleration Gain $(3) | Stock Option Acceleration Gain $ (4) | Excise Tax Reimbursement ($) | Legal Fee Reimbursement ($) (5) | Total ($) | ||||||||||||
2,400,000 | 2,826,439 | 3,881,511 | 1,684,197 | 1,834,368 | 25,000 | 12,651,515 |
(1) | Represents three times the base salary in effect at July 31, 2013. |
(2) | Represents three times the average bonus payment received in the last three fiscal years ended July 31, 2013, 2012 and 2011. |
(3) | Represents the closing market price of $33.27 on 116,667 unvested awards that would vest due to the change in control. |
(4) | Represents the difference between the closing market price of $33.27 and the exercise price on 396,666 unvested stock options in-the-money that would vest due to the change in control. |
(5) | Represents the maximum reimbursement of legal fees allowed. |
Base Salary ($)(1) | Bonus ($) (2) | Restricted Stock Award Acceleration Gain $(3) | Stock Option Acceleration Gain $ (4) | Excise Tax Reimbursement ($) | Legal Fee Reimbursement ($) (5) | Total ($) | ||||||||||||
755,000 | 595,220 | 1,164,450 | 652,024 | 528,928 | 25,000 | 3,720,622 |
(1) | Represents two times the base salary in effect at July 31, 2013. |
(2) | Represents two times the average bonus payment received in the last three fiscal years ended July 31, 2013 and 2012. |
(3) | Represents the closing market price of $33.27 on 35,000 unvested awards that would vest due to the change in control. |
(4) | Represents the difference between the closing market price of $33.27 and the exercise price on 156,332 unvested stock options in-the-money that would vest due to the change in control. |
(5) | Represents the maximum reimbursement of legal fees allowed. |
Base Salary ($)(1) | Bonus ($) (2) | Restricted Stock Award Acceleration Gain $(3) | Stock Option Acceleration Gain $ (4) | Excise Tax Reimbursement ($) | Legal Fee Reimbursement ($) (5) | Total ($) | ||||||||||||
643,000 | 471,586 | 1,164,450 | 537,647 | 473,716 | 25,000 | 3,315,399 |
(1) | Represents two times the base salary in effect at July 31, 2013. |
(2) | Represents two times the average bonus payment received in the last three fiscal years ended July 31, 2013 and 2012. |
(3) | Represents the closing market price of $33.27 on 35,000 unvested awards that would vest due to the change in control. |
(4) | Represents the difference between the closing market price of $33.27 and the exercise price on 126,666 unvested stock options in-the-money that would vest due to the change in control. |
(5) | Represents the maximum reimbursement of legal fees allowed. |
Base Salary ($)(1) | Bonus ($) (2) | Restricted Stock Award Acceleration Gain $(3) | Stock Option Acceleration Gain $ (4) | Excise Tax Reimbursement ($) | Legal Fee Reimbursement ($) (5) | Total ($) | ||||||||||||
608,626 | 191,076 | 332,700 | 379,899 | 232,713 | 25,000 | 1,770,014 |
(1) | Represents two times the base salary in effect at July 31, 2013. As Mr. Millar works and lives in Australia, his base salary is paid to him in Australian Dollars. The amount shown in U.S. dollars was converted from Australian Dollars at the average fiscal 2013 exchange rate: $1 = 0.9825 AUD. |
(2) | Represents two times the average bonus payment received in the last three fiscal years ended July 31, 2013 and 2012. |
(3) | Represents the closing market price of $33.27 on 10,000 unvested awards that would vest due to the change in control. |
(4) | Represents the difference between the closing market price of $33.27 and the exercise price on 93,333 unvested stock options in-the-money that would vest due to the change in control. |
(5) | Represents the maximum reimbursement of legal fees allowed. |
Base Salary ($)(1) | Bonus ($) (2) | Restricted Stock Award Acceleration Gain $(3) | Stock Option Acceleration Gain $ (4) | Excise Tax Reimbursement ($) | Legal Fee Reimbursement ($) (5) | Total ($) | ||||||||||||
720,452 | 353,087 | 1,164,450 | — | 433,480 | 25,000 | 2,696,469 |
(1) | Represents two times the base salary in effect at July 31, 2013. As Mr. Sephton works and lives in the United Kingdom, his base salary is paid to him in British Pounds. The amount shown in U.S. dollars was converted from British Pounds at the average fiscal 2013 exchange rate: $1 = £0.6385. |
(2) | Represents two times the average bonus payment received in the last three fiscal years ended July 31, 2013 and 2012. |
(3) | Represents the closing market price of $33.27 on 35,000 unvested awards that would vest due to the change in control. |
(4) | There are no unvested stock options that are in-the-money based upon the closing market price of $33.27 at July 31, 2013. |
(5) | Represents the maximum reimbursement of legal fees allowed. |
Base Salary ($) (1) | Bonus ($) (2) | Restricted Stock Award Acceleration Gain $ (3) | Stock Option Acceleration Gain $ (4) | Excise Tax Reimbursement ($) | Legal Fee Reimbursement ($) (5) | Total ($) | ||||||||||||
761,333 | 546,076 | 1,164,450 | 551,417 | 532,935 | 25,000 | 3,581,211 |
(1) | Represents two times the base salary in effect at July 31, 2013 |
(2) | Represents two times the average bonus payment received in the last three fiscal years ended July 31, 2013 and 2012. |
(3) | Represents the closing market price of $33.27 on 35,000 unvested awards that would vest due to the change in control. |
(4) | Represents the difference between the closing market price of $33.27 and the exercise price on 131,166 unvested stock options in-the-money that would vest due to the change in control. |
(5) | Represents the maximum reimbursement of legal fees allowed. |
Name | Unvested Shares of Restricted Stock/RSUs as of July 31, 2013 | Restricted Stock/RSUs Award Acceleration Gain $ (1) | Unvested Stock Options In-the Money as of July 31, 2013 | Stock Option Acceleration Gain $ (2) | ||||||||
F.M. Jaehnert | 116,667 | 3,881,511 | 396,666 | 1,684,197 | ||||||||
T.J. Felmer | 35,000 | 1,164,450 | 156,332 | 652,024 | ||||||||
A.J. Klotsche | 35,000 | 1,164,450 | 126,666 | 537,647 | ||||||||
S. Millar | 10,000 | 332,700 | 93,333 | 379,899 | ||||||||
P.C. Sephton | 35,000 | 1,164,450 | — | — | ||||||||
M.O. Williamson | 35,000 | 1,164,450 | 131,166 | 551,417 |
(1) | Represents the closing market price of $33.27 on unvested awards that would vest due to the change in control. |
(2) | Represents the difference between the closing market price of $33.27 and the exercise price on unvested stock options in-the-money that would vest due to death or disability. |
Name | Fees Earned or Paid in Cash ($) | Option Awards ($) (1) | Stock Awards ($) (2) | Total ($) | ||||||||||||
Patrick W. Allender | $ | 107,500 | $ | 39,573 | $ | 43,587 | $ | 190,660 | ||||||||
Gary S. Balkema | 106,000 | 39,573 | 43,587 | 189,160 | ||||||||||||
Chan W. Galbato (3) | 120,250 | 39,573 | 43,587 | 203,410 | ||||||||||||
Conrad G. Goodkind | 112,500 | 39,573 | 43,587 | 195,660 | ||||||||||||
Frank W. Harris | 91,500 | 39,573 | 43,587 | 174,660 | ||||||||||||
Elizabeth P. Pungello | 86,000 | 39,573 | 43,587 | 169,160 | ||||||||||||
Bradley C. Richardson | 118,000 | 39,573 | 43,587 | 201,160 |
(1) | Represents the grant date fair value computed in accordance with accounting guidance for equity grants made in fiscal 2013 for time-based stock options. The assumptions used to determine the value of the option awards, including the use of the Black-Scholes method of valuation by the Company, are discussed in Note 1 of the Notes to Consolidated Financial Statements of the Company contained in Item 8 of this Form 10-K for the fiscal year ended July 31, 2013. |
(2) | Represents the fair value of shares of Brady Corporation Class A Non-Voting Common Stock granted in fiscal 2013 as compensation for their services. The shares were valued at the closing market price of $30.06 on September 21, 2012, the date of grant. |
(3) | Mr. Galbato resigned from the Board on May 19, 2013. |
Title of Class | Name and Address of Beneficial Owner | Amount of Beneficial Ownership | Percent of Ownership(2) | ||||||
Class B Common Stock | EBL GST Non-Exempt Stock B Trust(1) c/o Elizabeth P. Pungello 2002 S. Hawick Ct. Chapel Hill, NC 27516 | 1,769,304 | 50 | % | |||||
William H. Brady III Revocable Trust of 2003(3) | 1,769,304 | 50 | % | ||||||
c/o William H. Brady III 249 Rosemont Ave. Pasadena, CA 91103 |
(1) | The trustee is Elizabeth P. Pungello, who has sole voting and dispositive power and who is the remainder beneficiary. Elizabeth Pungello is the great-granddaughter of William H. Brady and currently serves on the Company’s Board of Directors. |
(2) | An additional 20 shares are owned by a third trust with different trustees. |
(3) | William H. Brady III is special trustee of this trust and has sole voting and dispositive powers with respect to these shares. William H. Brady III is the grandson of William H. Brady. |
Title of Class | Name of Beneficial Owner & Nature of Beneficial Ownership | Amount of Beneficial Ownership(4) | Percent of Ownership | |||||
Class A Common Stock | Elizabeth P. Pungello(1) | 1,291,267 | 2.7 | % | ||||
Frank M. Jaehnert(2) | 937,383 | 1.9 | ||||||
Matthew O. Williamson | 330,003 | 0.7 | ||||||
Thomas J. Felmer | 301,933 | 0.6 | ||||||
Allan J. Klotsche | 239,779 | 0.5 | ||||||
Conrad G. Goodkind | 116,939 | 0.2 | ||||||
Frank W. Harris | 75,879 | 0.2 | ||||||
Stephen Millar | 66,000 | 0.1 | ||||||
Patrick W. Allender | 63,730 | 0.1 | ||||||
Bradley C. Richardson | 43,273 | * | ||||||
Gary S. Balkema | 24,717 | * | ||||||
Nancy Gioia (3) | — | — | ||||||
All Officers and Directors as a Group (18 persons)(4) | 3,943,627 | 8.2 | ||||||
Class B Common Stock | Elizabeth P. Pungello(1) | 1,769,304 | 50.0 | % |
* | Indicates less than one-tenth of one percent. |
(1) | Ms. Pungello’s holdings of Class A Common Stock include 876,826 shares owned by a trust for which she is a trustee and has sole dispositive and voting authority. Ms. Pungello’s holdings of Class B Common Stock include 1,769,304 shares owned by a trust over which she has sole dispositive and voting authority. |
(2) | Of the amount reported, Mr. Jaehnert’s spouse owns 5,446 shares of Class A Common Stock directly. |
(3) | Ms. Gioia is a nominee for Director for fiscal 2014. She does not own any shares of Class A Common Stock as of August 2, 2013. |
(4) | The amount shown for all officers and directors individually and as a group (18 persons) includes options to acquire a total of 2,278,190 shares of Class A Common Stock, which are currently exercisable or will be exercisable within 60 days of July 31, 2013, including the following: Ms. Pungello, 55,634 shares; Mr. Jaehnert, 733,334 shares; Mr. Williamson, 314,834 shares; Mr. Felmer, 266,835 shares; Mr. Klotsche, 228,334 shares; Mr. Millar, 66,000 shares; Mr. Goodkind, 41,634 shares; Mr. Harris, 49,634 shares; Mr. Allender, 41,634 shares; Mr. Richardson, 35,634 shares; Mr. Balkema, 21,234 shares; Ms. Gioia (Director nominee), 0 shares; Mr. Hoffman, 192,891 shares; Mr. Curran, 131,891 shares; Ms. Johnson, 64,000 shares; Mr. Marks, 32,334 shares; and Mr. Meyer, 2,333 shares. It does not include other options for Class A Common Stock which have been granted at later dates and are not exercisable within 60 days of July 31, 2013. |
(5) | The amount shown for all officers and directors individually and as a group (18 persons) includes Class A Common Stock owned in deferred compensation plans totaling 192,767 shares of Class A Common Stock, including the following: Ms. Pungello, 2,267 shares; Mr. Jaehnert, 92,612 shares; Mr. Williamson, 15,169 shares; Mr. Felmer, 11,131 shares; Mr. Klotsche, 8,330 shares; Mr. Millar, 0 shares; Mr. Goodkind, 24,002 shares; Mr. Harris, 0 shares; Mr. Allender, 22,096 shares; Mr. Richardson, 7,639 shares; Mr. Balkema 1,483 shares; Ms. Gioia (Director nominee), 0 shares; Mr. Hoffman, 1,815 shares; Mr. Bolognini, 0 shares; Mr. Curran, 109 shares; Ms. Johnson, 6,114 shares; Mr. Marks, 0 shares; and Mr. Meyer, 0 shares. |
As of July 31, 2013 | ||||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||
Equity compensation plans approved by security holders | 5,150,975 | $ | 30.68 | 4,359,943 | ||||||
Equity compensation plans not approved by security holders | None | None | None | |||||||
Total | 5,150,975 | $ | 30.68 | 4,359,943 |
2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||
Audit, audit-related and tax compliance | ||||||||
Audit fees(1) | $ | 1,671 | $ | 1,411 | ||||
Tax fees — compliance | 292 | 115 | ||||||
Subtotal audit, audit-related and tax compliance fees | 1,963 | 1,526 | ||||||
Non-audit related | ||||||||
Tax fees — planning and advice | 464 | 314 | ||||||
Other fees (2) | 10 | 132 | ||||||
Subtotal non-audit related fees | 474 | 446 | ||||||
Total fees | $ | 2,437 | $ | 1,972 |
(1) | Audit fees consist of professional services rendered for the audit of the Company’s annual financial statements, attestation of management’s assessment of internal control, reviews of the quarterly financial statements and statutory reporting compliance. |
(2) | All other fees relate to expatriate activities. |
2013 | 2012 | |||
Ratio of Tax Planning and Advice Fees and All Other Fees to Audit Fees, Audit-Related Fees and Tax Compliance Fees | .2 to 1 | .3 to 1 |
Exhibit Number | Description | |
2.1 | Agreement and Plan of Merger, dated as of December 28, 2012, by and among Brady Corporation, BC I Merger Sub Corporation, Precision Dynamics Corporation, and Precision Dynamics Holding LLC (29) | |
3.1 | Restated Articles of Incorporation of Brady Corporation (1) | |
3.2 | By-laws of Brady Corporation, as amended (23) | |
*10.1 | Form of Change of Control Agreement, amended as of December 23, 2008, entered into with Thomas J. Felmer, Allan J. Klotsche, Peter C. Sephton, and Matthew O. Williamson (12) | |
*10.2 | Brady Corporation BradyGold Plan, as amended (2) | |
*10.3 | Executive Additional Compensation Plan, as amended (2) | |
*10.4 | Executive Deferred Compensation Plan, as amended (16) | |
*10.5 | Directors’ Deferred Compensation Plan, as amended (25) | |
*10.6 | Forms of Non-Qualified Employee Stock Option Agreement, Director Stock Option Agreement, and Employee Performance Stock Option Agreement under 2006 Omnibus Incentive Stock Plan (10) | |
*10.7 | Brady Corporation 2004 Omnibus Incentive Stock Plan, as amended (10) | |
*10.8 | Form of Brady Corporation 2004 Nonqualified Stock Option Agreement under the 2004 Omnibus Incentive Stock Plan, as amended (13) | |
10.9 | Brady Corporation Automatic Dividend Reinvestment Plan (4) | |
*10.10 | Brady Corporation 2005 Nonqualified Plan for Non-employee Directors, as amended (3) | |
*10.11 | Forms of Nonqualified Stock Option Agreements under 2005 Non-qualified Plan for Non-employee Directors, as amended (8) | |
*10.12 | Brady Corporation 1997 Omnibus Incentive Stock Plan, as amended (10) | |
*10.13 | Brady Corporation 1997 Nonqualified Stock Option Plan for Non-Employee Directors, as amended (10) | |
10.14 | Revolving Credit Facility Credit Agreement (Superseded) (14) | |
*10.15 | Brady Corporation 2006 Omnibus Incentive Stock Plan, as amended (10) | |
*10.16 | Change of Control Agreement, amended as of May 22, 2013, entered into with Scott Hoffman (30) | |
10.17 | First Amendment to Revolving Credit Facility Credit Agreement (Superseded) (6) | |
*10.18 | Form of Amendment, dated March 4, 2009, to granting agreement for performance-based stock options issued on August 2, 2004 to Frank M. Jaehnert, Thomas J. Felmer, Peter C. Sephton, Matthew O. Williamson, and Allan J. Klotsche (12) | |
*10.19 | Form of Performance-based Restricted Stock Agreement under Brady Corporation 2006 Omnibus Incentive Stock Plan (7) | |
*10.20 | Change of Control Agreement, amended as of December 23, 2008, entered into with Frank M. Jaehnert (12) | |
*10.21 | Restated Brady Corporation Restoration Plan (5) | |
*10.22 | Change of Control Agreement, dated as of February 28, 2013, entered into with Louis T. Bolognini (30) | |
*10.23 | Brady Corporation 2003 Omnibus Incentive Stock Plan, as amended (10) | |
10.24 | Brady Note Purchase Agreement dated June 28, 2004 (11) |
10.25 | First Supplement to Note Purchase Agreement, dated February 14, 2006 (9) | |
10.26 | Second Supplement to Note Purchase Agreement, dated March 23, 2007 (24) | |
*10.27 | Form of Change of Control Agreement, amended as of December 23, 2008, entered into with Kathleen Johnson (12) | |
*10.28 | Brady Corporation 2010 Omnibus Incentive Stock Plan, as amended (22) | |
*10.29 | Brady Corporation 2010 Nonqualified Stock Option Plan for Non-employee Directors (17) | |
*10.30 | Form of Non-Qualified Employee Stock Option Agreement and Employee Performance Stock Option Agreement under 2010 Omnibus Incentive Stock Plan (17) | |
*10.31 | Form of Director Stock Option Agreement under 2010 Nonqualified Stock Option Plan for Non-employee Directors (17) | |
*10.32 | Form of Amendment, dated February 17, 2010, to granting agreement for performance-based stock options issued on August 1, 2005 to Frank M. Jaehnert, Thomas J. Felmer, Peter C. Sephton, Matthew O. Williamson and Allan J. Klotsche (18) | |
10.33 | Brady Note Purchase Agreement dated May 13, 2010 (19) | |
*10.34 | Performance-based Restricted Stock Agreement with Frank M. Jaehnert, dated August 2, 2010 (20) | |
*10.35 | Form of Amendment to January 8, 2008 Brady Corporation Performance-Based Restricted Stock Agreement, dated July 20, 2011 (21) | |
*10.36 | Brady Corporation Incentive Compensation Plan for Senior Executives (15) | |
*10.37 | Form of Fiscal 2012 Performance Stock Option under the 2010 Omnibus Incentive Stock Plan (26) | |
*10.38 | Brady Corporation 2012 Omnibus Incentive Stock Plan (26) | |
*10.39 | Form of Non-Qualified Employee Stock Option Agreement under 2012 Omnibus Incentive Stock Plan (26) | |
*10.40 | Form of Non-Qualified Employee Performance Stock Option Agreement under 2012 Omnibus Incentive Stock Plan (26) | |
*10.41 | Form of Director Stock Option Agreement under 2012 Omnibus Incentive Stock Plan (26) | |
*10.42 | Change of Control Agreement, dated November 21, 2011, entered into with Stephen Millar (27) | |
10.43 | Revolving Credit Agreement, dated as of February 1, 2012 (28) | |
*10.44 | Form of Fiscal 2013 Non-Qualified Employee Stock Option Agreement under 2012 Omnibus Incentive Stock Plan (31) | |
*10.45 | Form of Fiscal 2013 Director Stock Option Agreement under 2012 Omnibus Incentive Stock Plan (31) | |
*10.46 | Performance-Based Restricted Stock Unit Agreement with Stephen Millar, dated September 21, 2012 (31) | |
*10.47 | Severance Agreement, dated as of March 25, 2013, entered into with Peter Sephton (30) | |
*10.48 | Form of Fiscal 2014 Non-Qualified Employee Stock Option Agreement under 2012 Omnibus Incentive Stock Plan | |
*10.49 | Form of Fiscal 2014 Director Stock Option Agreement under 2012 Omnibus Incentive Stock Plan | |
*10.50 | Form of Fiscal 2014 Restricted Stock Unit Agreement under 2012 Omnibus Incentive Stock Plan | |
21 | Subsidiaries of Brady Corporation | |
23 | Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm | |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Frank M. Jaehnert | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Thomas J. Felmer |
32.1 | Section 1350 Certification of Frank M. Jaehnert | |
32.2 | Section 1350 Certification of Thomas J. Felmer | |
101 | Interactive Data File |
* | Management contract or compensatory plan or arrangement |
(1) | Incorporated by reference to Registrant’s Registration Statement No. 333-04155 on Form S-3 |
(2) | Incorporated by reference to Registrant’s Annual Report on Form 10-K filed for the fiscal year ended July 31, 1989 |
(3) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed November 25, 2008 |
(4) | Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 1992 |
(5) | Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2008 |
(6) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed March 19, 2008 |
(7) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed January 9, 2008 |
(8) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed December 4, 2006 |
(9) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 17, 2006 |
(10) | Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2008 |
(11) | Incorporated by reference to Registrant’s 8-K/A filed August 3, 2004 |
(12) | Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2009 |
(13) | Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2005 |
(14) | Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2006 |
(15) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed September 2, 2011 |
(16) | Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011 |
(17) | Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2009 |
(18) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 23, 2010 |
(19) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed May 14, 2010 |
(20) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed August 4, 2010 |
(21) | Incorporated by reference to Registrant’s Current Report on Form 8-K/A filed July 28, 2011 |
(22) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed September 27, 2010 |
(23) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 16, 2012 |
(24) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed March 26, 2007 |
(25) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed September 15, 2011 |
(26) | Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2011 |
(27) | Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2011 |
(28) | Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 7, 2012 |
(29) | Incorporated by reference to Registrant's Current Report on Form 8-K filed December 31, 2012 |
(30) | Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for the quarter ended April 30, 2013 |
(31) | Incorporated by reference to Registrant's Annual Report on Form 10-K for the fiscal year ended July 31, 2012 |
Year ended July 31, | ||||||||||||
Description | 2013 | 2012 | 2011 | |||||||||
(Dollars in thousands) | ||||||||||||
Valuation accounts deducted in balance sheet from assets to which they apply — Accounts receivable — allowance for doubtful accounts: | ||||||||||||
Balances at beginning of period | $ | 6,005 | $ | 6,183 | $ | 7,137 | ||||||
Additions — Charged to expense | 1,018 | 1,593 | 1,287 | |||||||||
Due to acquired businesses | 531 | 159 | 52 | |||||||||
Deductions — Bad debts written off, net of recoveries | (1,429 | ) | (1,930 | ) | (2,293 | ) | ||||||
Deductions — reclassified to discontinued operations | (1,032 | ) | — | — | ||||||||
Balances at end of period | $ | 5,093 | $ | 6,005 | $ | 6,183 | ||||||
Inventory — reserve for slow-moving inventory: | ||||||||||||
Balances at beginning of period | $ | 11,316 | $ | 13,009 | $ | 15,944 | ||||||
Additions — Charged to expense | 2,629 | 2,200 | 3,750 | |||||||||
Due to acquired businesses | 2,887 | 445 | 632 | |||||||||
Deductions — Inventory write-offs | (1,811 | ) | (4,338 | ) | (7,317 | ) | ||||||
Deductions — reclassified to discontinued operations | (3,704 | ) | — | — | ||||||||
Balances at end of period | $ | 11,317 | $ | 11,316 | $ | 13,009 | ||||||
Valuation allowances against deferred tax assets: | ||||||||||||
Balances at beginning of period | 25,847 | 31,844 | 27,510 | |||||||||
Additions during year | 10,853 | 2,579 | 5,933 | |||||||||
Due to acquired businesses | 983 | — | — | |||||||||
Deductions — valuation allowances reversed/utilized | (541 | ) | (3,226 | ) | (1,523 | ) | ||||||
Deductions — valuation allowances reversed/written off | — | (5,350 | ) | (76 | ) | |||||||
Balances at end of period | $ | 37,142 | $ | 25,847 | $ | 31,844 |
BRADY CORPORATION | ||
By: | /s/ THOMAS J. FELMER | |
Thomas J. Felmer | ||
Senior Vice President & Chief Financial Officer | ||
(Principal Financial Officer) |
Signature | Title | |
/s/ FRANK M. JAEHNERT | President and Chief Executive Officer; Director | |
Frank M. Jaehnert | (Principal Executive Officer) | |
/s/ KATHLEEN M. JOHNSON | Vice President and Chief Accounting Officer | |
Kathleen M. Johnson | (Principal Accounting Officer) | |
/s/ BRADLEY C. RICHARDSON | ||
Bradley C. Richardson | Director | |
/s/ PATRICK W. ALLENDER | ||
Patrick W. Allender | Director | |
/s/ FRANK W. HARRIS | ||
Frank W. Harris | Director | |
/s/ CONRAD G. GOODKIND | ||
Conrad G. Goodkind | Director | |
/s/ ELIZABETH P. PUNGELLO | ||
Elizabeth P. Pungello | Director | |
/s/ GARY S. BALKEMA | ||
Gary S. Balkema | Director |
* | Each of the above signatures is affixed as of September 30, 2013 |
1. | Number of Shares Optioned; Option Price |
2. | Conditions of Exercise of Options During Employee’s Lifetime; Vesting of Option |
Number of Completed Years After Date of Grant of this Option | Maximum Percentage of Shares For Which Option is Exercisable |
Less than 1 | Zero |
At least 1 but less than 2 | 33-1/3% |
At least 2 but less than 3 | 66-2/3% |
At least 3 | 100% |
3. | Termination of Employment |
(a) | is terminated by the death of the Employee, any unexercised, unexpired Stock Options granted hereunder to the Employee shall be 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of death, by the Employee’s personal representative or by the person to whom the Stock Options are transferred under the Employee’s last will and testament or the applicable laws of descent and distribution; |
(b) | dies within 90 days after termination of employment by the Corporation or its Affiliates, other than for cause, any unexercised, unexpired Stock Options granted hereunder to the Employee and exercisable as of the date of such termination of employment shall be exercisable, in whole or in part, at any time within one year after the date of death, by the Employee’s personal representative or by the person to whom the Stock Options are transferred under the Employee’s last will and testament or the applicable laws of descent and distribution; |
(c) | is terminated as a result of the disability of the Employee (a disability means that the Employee is disabled as a result of sickness or injury, such that he or she is unable to satisfactorily perform the material duties of Employee’s job, as determined by the Board of Directors, on the basis of medical evidence satisfactory to it), any unexercised, unexpired Stock Options granted hereunder to the Employee shall become 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of disability; or |
(d) | is terminated as a result of the Employee’s retirement (after age 55 with ten years of employment with the Corporation or an Affiliate or after age 65), any unexercised, unexpired Stock Options granted hereunder to the Employee shall continue to vest as provided in Section 2 hereof and any option that is or becomes vested may be exercised in whole or in part prior to the expiration date of such option. |
4. | Deferral of Exercise |
5. | Method of Exercising Option |
6. | Method of Payment |
7. | Expiration Date |
8. | Withholding Taxes |
9. | Method of Valuation of Stock |
10. | Confidentiality, Non-Solicitation and Non-Compete |
(a) | During Employee's employment with the Corporation and its Affiliates (the "Company"), the Company will provide Employee with Confidential Information relating to the Company, its business and clients, the disclosure or misuse of which would cause severe and irreparable harm to the Company. Employee agrees that all Confidential Information is and shall remain the sole and absolute property of the Company. Upon the |
(i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payments terms, customer lists and other similar information; |
(ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
(iii) | the Company’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; |
(iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and |
(v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
(b) | Employee agrees that, without the written consent of the Chief Executive Officer of the Corporation, in the case of the Chief Executive Officer of the Corporation, without the written approval of the Board of Directors of the Corporation, Employee shall not engage in any of the conduct described in subsections (i) or (ii), below, either directly or indirectly, or as an employee, contractor, consultant, partner, officer, director or stockholder, other than a stockholder of less than 5% of the equities of a publicly traded corporation, or in any other capacity for any person, firm, partnership or corporation: |
(i) | During the time of Employee's employment with Company, Employee will not: (A) perform duties as or for a Competitor; or (B) participate in the inducement of or otherwise encourage Company employees, clients, or vendors to currently and/or prospectively breach, modify, or terminate any agreement or relationship they have or had with Company. |
(ii) | For a period of 12 months following the termination of Employee's employment with Company, Employee will not: (A) perform duties as or for a Competitor that are the same as or similar to the duties performed by Employee for the Company at any time during any part of the 24 month period preceding the termination of Employee's employment with Company; or (B) participate in the inducement of or otherwise encourage Company employees, clients, or vendors to currently and/or prospectively breach, modify, or terminate any agreement or relationship they have or had with Company during any part of the 24 month period preceding the termination of Employee's employment with Company. |
(c) | Employee acknowledges and agrees that compliance with this Section 10 is necessary to protect the Company, and that a breach of any of this Section 10 will result in irreparable and continuing damage to the Company for which there will be no adequate remedy at law. In the event of a breach of this Section 10, or any part thereof, the Company, and its successors and assigns, shall be entitled to injunctive relief and to such other and further relief as is proper under the circumstances. The Company shall institute and prosecute proceedings in any Court of competent jurisdiction either in law or in equity to obtain damages for any such breach of this Section 10, or to enjoin Employee from performing services in breach of Section 10(b) during the term of employment and for a period of 12 months following the termination of employment. Employee hereby agrees to submit to the jurisdiction of any Court of competent jurisdiction in any disputes that arise under this Agreement. |
(d) | Employee further agrees that, in the event of a breach of this Section 10, the Corporation shall also be entitled to recover the value of any amounts previously paid or payable or any shares (or the value of any shares) delivered or deliverable to Employee pursuant to any Company bonus program, this Agreement, and any other Company plan or arrangement. |
(e) | Employee agrees that the terms of this Section 10 shall survive the termination of Employee's employment with the Company. |
(f) | EMPLOYEE HAS READ THIS SECTION 10 AND AGREES THAT THE CONSIDERATION PROVIDED BY THE CORPORATION IS FAIR AND REASONABLE AND FURTHER AGREES THAT GIVEN THE IMPORTANCE TO THE COMPANY OF ITS CONFIDENTIAL AND PROPRIETARY INFORMATION, THE POST-EMPLOYMENT RESTRICTIONS ON EMPLOYEE'S ACTIVITIES ARE LIKEWISE FAIR AND REASONABLE. |
11. | Clawback |
12. | No Rights in Shares Until Certificates Issued |
13. | Option Not Transferable |
14. | Prohibition Against Pledge, Attachment, Etc. |
15. | Changes in Stock |
16. | Dissolution or Merger |
17. | Notices |
18. | Provisions of Plan Controlling |
19. | Wisconsin Contract |
20. | Severability |
1. | Number of Shares Optioned; Option Price. The Company grants to the Director the right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate of X,XXX shares of the presently authorized Class A Common Stock of the Company, $.01 par value, whether unissued or issued and reacquired by the Company, at the price of $XX.XX per share (the “Option Price”). |
2. | Conditions of Exercise of Options During Director’s Lifetime; Vesting of Option. Except as provided hereinafter in this paragraph and in paragraph 3, this Option may not be exercised (a) unless Director is at the date of the exercise a Director of the Company and (b) until Director shall have been continuously a Director for a period of at least one year from the date hereof. Thereafter, this Option shall be exercisable for any amount of shares up to the maximum percentage of shares covered by this Option (rounded up to the nearest whole share) as follows (but in no event shall this Option be exercisable for any shares after the expiration date provided in paragraph 7): |
Number of Completed Years After Date of Grant of this Option | Maximum Percentage of Shares For Which Option is Exercisable |
Less than 1 | Zero |
At least 1 but less than 2 | 33-1/3% |
At least 2 but less than 3 | 66-2/3% |
At least 3 | 100% |
3. | Termination of Directorship, Etc. |
4. | Deferral of Exercise. Although the Company intends to exert its best efforts so that the shares purchasable upon the exercise of this Option will be registered under, or exempt from the registration requirements of, the Federal Securities Act of 1933 (the “Act”) and any applicable state securities law at the time or times this Option (or any portion of this Option) first becomes exercisable, if the exercise of this Option would otherwise result in the violation by the Company of any provision of the Act or of any state securities law, the Company may require that such exercise be deferred until the Company has taken appropriate action to avoid any such violation. |
5. | Method of Exercising Option. This Option shall be exercised by delivering to the Company, at the office of its Treasurer, a written notice of the number of shares with respect to which this Option is at the time being exercised and by paying the Company in full the Option Price of the shares being acquired at the time. |
6. | Method of Payment. Payment shall be made either (i) in cash; (ii) by delivering shares of the Company’s Class A Common Stock which have been beneficially owned by the Director, the spouse of the Director, or both of them, for a period of at least six months prior to the time of exercise (“Delivered Stock”); (iii) by surrendering to the Company shares of Class A Common Stock otherwise receivable upon exercise of the Option (a “Net Exercise”); or (iv) any combination of the foregoing. Payment in the form of Delivered Stock shall be in the amount of the Fair Market Value of the stock at the date of exercise, determined in accordance with paragraph 9. |
7. | Expiration Date. This Option shall expire ten years after the date on which this Option was granted. |
8. | Withholding Taxes. The Company may require payment of or withhold any tax which it believes is payable as a result of the exercise of this Option, and the Company may defer making delivery with respect to the shares until arrangements satisfactory to the Company have been made with regard to any such withholding obligations. In lieu of part or all of any such payment, the Director, in satisfaction of all withholding taxes (including, without limitation, Federal income, FICA (Social Security and Medicare) and any state and local income taxes) payable as a result of such exercise, may elect, subject to such rules and regulations as the Company may adopt from time to time, to have the Company withhold that number of shares (valued at Fair Market Value on the date of exercise and rounded upward) required to settle such withholding taxes. |
9. | Method of Valuation of Stock. The “Fair Market Value” of the Class A Common Stock of the Company on any date shall mean, if the stock is then listed and traded on a registered national securities exchange, or is quoted in the NASDAQ National Market System, the average of the high and low sale prices recorded in composite transactions for such date or, if such date is not a business day or if no sales of shares shall have been reported with respect to such date, the next preceding business date with respect to which sales were reported. In the absence of reported sales or if the stock is not so listed or quoted, but is traded in the over-the-counter market, Fair Market Value shall be the average of the closing bid and asked prices for such shares on the relevant date. |
10. | Clawback. This Option is subject to the terms of the Corporation's recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of awards or any shares of Common Stock or other cash or property received with respect to the awards (including any value received from a disposition of the shares acquired upon payment of the awards). |
11. | No Rights in Shares Until Certificates Issued. Neither the Director nor his heirs nor his personal representative shall have any of the rights or privileges of a stockholder of the Company in respect of any of the shares issuable upon the exercise of the Option herein granted, unless and until certificates representing such shares shall have been issued. |
12. | Option Not Transferable During Director’s Lifetime. This Option shall not be transferable by the Director other than by his will or by the laws of descent and distribution and shall be exercisable during his lifetime only by him. |
13. | Prohibition Against Pledge, Attachment, Etc. Except as otherwise herein provided, the Option herein granted and the rights and privileges pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. |
14. | Changes in Stock. In the event there are any changes in the Class A Common Stock of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, rights offering or any other change affecting the Class A Common Stock of the Company, appropriate changes shall be made by the Board of Directors of the Company, in the aggregate number of shares and the purchase price and kind of shares subject to this Option, to prevent substantial dilution or enlargement of the rights granted to or available for Director. |
15. | Dissolution or Merger. Anything contained herein to the contrary notwithstanding, upon the dissolution or liquidation of the Company, or upon any merger in which the Company is not the surviving corporation, at any time prior to the expiration date of the termination of this Option, the Director shall have the right immediately prior to the effective date of such dissolution, liquidation or merger, to surrender all or any unexercised portion of this Option to the Company for cash, subject to the discretion of the Board of Directors as to the exact timing of said surrender. Notwithstanding the foregoing, however, in the event Director has retired or died, Director’s right to surrender all or any unexercised portion of this Option under this paragraph shall be available only to the extent that at the time of any such surrender, Director would have been entitled to exercise this Option under paragraphs 2 or 3 hereof, as the case may be. The amount of cash to be paid to Director for the portion of this Option so surrendered, shall be equal to the number of shares of Class A Common Stock subject to the surrendered Option multiplied by the difference between the Option Price per share, as described in paragraph 1 hereof, and the Fair Market Value per share, determined in accordance with paragraph 9 hereof, as of the time of surrender. |
16. | Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company in care of its Vice President and Chief Financial Officer, and any notice to be given to the Director may be addressed at the address as it appears on the Company’s records, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given if and when enclosed in a properly sealed envelope addressed as aforesaid, and deposited, postage prepaid, in the United States mail. |
17. | Provisions of Plan Controlling. This Option is subject in all respects to the provisions of the Plan. In the event of any conflict between any provisions of this Option and the provisions of the Plan, the provisions of the Plan shall control, except to the extent the Plan permits the Committee to modify the terms of an Option grant and has done so herein. Terms defined in the Plan where used herein shall have the meanings as so defined. Director acknowledges receipt of a copy of the Plan. |
18. | Wisconsin Contract. This Option has been granted in Wisconsin and shall be construed under the laws of that state. |
19. | Severability. Wherever possible, each provision of this Option will be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions hereof. |
1. | Number of Units |
2. | Service Vesting Requirement |
(a) | Vesting. The Award shall be subject to the following service vesting requirement. If the Employee continues in employment through the vesting dates listed below, the Restricted Stock Units shall be vested as listed in the following table: |
Vesting Date | Cumulative Percentage of Vested Restricted Stock Units |
First anniversary of grant date | 33-1/3% |
Second anniversary of grant date | 66-2/3% |
Third anniversary of grant date | 100% |
(b) | Forfeiture of Restricted Stock Units. Except as provided in Section 3, if the Employee terminates employment prior to the satisfaction of the vesting requirements set forth in Section 2(a) above, any unvested Restricted Stock Units shall immediately be forfeited. The period of time during which the Restricted Stock Units covered by this Award are forfeitable is referred to as the “Restricted Period.” |
3. | Accelerated Vesting. |
(a) | Notwithstanding the terms and conditions of Section 2 hereof, in the event of the termination of the Employee’s employment with the Corporation (and any Affiliate) prior to the end of the Restricted Period due to death or Disability, the Restricted Stock Units shall become fully vested. |
(b) | In the event of the termination of the Employee’s employment with the Corporation (and any Affiliate) prior to the end of the Restricted Period due to a Change in Control, the Restricted Stock Units shall become unrestricted and fully vested. |
(c) | In the event of (i) the merger or consolidation of the Corporation with or into another corporation or corporations in which the Corporation is not the surviving corporation, (ii) the adoption of any plan for the dissolution of the Corporation, or (iii) the sale or exchange of all or substantially all the assets of the Corporation for cash or for shares of stock or other securities of another corporation, the Restricted Stock Units shall become fully vested. |
(d) | If the vesting of the Restricted Stock Units would result in any excise tax to the Employee as a result of Section 280G of the Code, the Corporation shall pay the Employee an amount equal to such excise tax. |
4. | No Dividends |
5. | Settlement of Restricted Stock Units. |
6. | Transfer Restrictions |
7. | Withholding Taxes |
8. | Death of Employee |
9. | Confidentiality, Non-Solicitation and Non-Compete |
(a) | During Employee's employment with the Corporation and its Affiliates (the "Company"), the Company will provide Employee with Confidential Information relating to the Company, its business and clients, the disclosure or misuse of which would cause severe and irreparable harm to the Company. Employee agrees that all Confidential Information is and shall remain the sole and absolute property of the Company. Upon the termination of Employee's employment with the Company for any reason, Employee shall immediately return to the Company all documents and materials that contain or constitute Confidential Information, in any form whatsoever, including but not limited to, all copies, abstracts, electronic versions, and summaries thereof. Executive further agrees that, without the written consent of the Chief Executive Officer of the Corporation or, in the case of the Chief Executive Officer of the Corporation, without the written approval of the Board of Directors of the Corporation, Employee will not disclose, use, copy or duplicate, or otherwise permit the use, disclosure, copying or duplication of any Confidential Information of the Company, other than in connection with the authorized activities conducted in the course of Employee's employment with the Company. Employee agrees to take all reasonable steps and precautions to prevent any unauthorized disclosure, use, copying or duplication of Confidential Information. For purposes of this Agreement, Confidential Information means any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, |
(i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payments terms, customer lists and other similar information; |
(ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
(iii) | the Company’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; |
(iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and |
(v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
(a) | Employee agrees that, without the written consent of the Chief Executive Officer of the Corporation, in the case of the Chief Executive Officer of the Corporation, without the written approval of the Board of Directors of the Corporation, Employee shall not engage in any of the conduct described in subsections (i) or (ii), below, either directly or indirectly, or as an employee, contractor, consultant, partner, officer, director or stockholder, other than a stockholder of less than 5% of the equities of a publicly traded corporation, or in any other capacity for any person, firm, partnership or corporation: |
(i) | During the time of Employee's employment with Company, Employee will not: (A) perform duties as or for a Competitor; or (B) participate in the inducement of or otherwise encourage Company employees, clients, or vendors to currently and/or prospectively breach, modify, or terminate any agreement or relationship they have or had with Company. |
(ii) | For a period of 12 months following the termination of Employee's employment with Company, Employee will not: (A) perform duties as or for a Competitor that are the same as or similar to the duties performed by Employee for the Company at any time during any part of the 24 month period preceding the termination of Employee's employment with Company; or (B) participate in the inducement of or otherwise encourage Company employees, clients, or vendors to currently and/or |
(b) | Employee acknowledges and agrees that compliance with this Section 9 is necessary to protect the Company, and that a breach of any of this Section 9 will result in irreparable and continuing damage to the Company for which there will be no adequate remedy at law. In the event of a breach of this Section 9, or any part thereof, the Company, and its successors and assigns, shall be entitled to injunctive relief and to such other and further relief as is proper under the circumstances. The Company shall institute and prosecute proceedings in any Court of competent jurisdiction either in law or in equity to obtain damages for any such breach of this Section 9, or to enjoin Employee from performing services in breach of Section 9(b) during the term of employment and for a period of 12 months following the termination of employment. Employee hereby agrees to submit to the jurisdiction of any Court of competent jurisdiction in any disputes that arise under this Agreement. |
(c) | Employee further agrees that, in the event of a breach of this Section 9, the Corporation shall also be entitled to recover the value of any amounts previously paid or payable or any shares (or the value of any shares) delivered or deliverable to Employee pursuant to any Company bonus program, this Agreement, and any other Company plan or arrangement. |
(d) | Employee agrees that the terms of this Section 9 shall survive the termination of Employee's employment with the Company. |
(e) | EMPLOYEE HAS READ THIS SECTION 9 AND AGREES THAT THE CONSIDERATION PROVIDED BY THE CORPORATION IS FAIR AND REASONABLE AND FURTHER AGREES THAT GIVEN THE IMPORTANCE TO THE COMPANY OF ITS CONFIDENTIAL AND PROPRIETARY INFORMATION, THE POST-EMPLOYMENT RESTRICTIONS ON EMPLOYEE'S ACTIVITIES ARE LIKEWISE FAIR AND REASONABLE. |
10. | Clawback |
11. | Adjustment of Shares |
12. | Provisions of Plan Controlling |
13. | Wisconsin Contract |
14. | Severability |
State (Country) | Percentage of Voting | |||
Name of Company | Of Incorporation | Securities Owned | ||
Brady Corporation | Wisconsin | Parent | ||
Tricor Direct, Inc. | Delaware | 100% | ||
Doing Business As: | ||||
Seton | ||||
Seton Name Plate Company | ||||
D&G Sign and Label | ||||
Seton Identification Products | ||||
Emedco | ||||
Champion America | ||||
DAWG, Inc. | ||||
Worldmark of Wisconsin Inc. | Delaware | 100% | ||
AIO Acquisition Inc. | Delaware | 100% | ||
Doing Business As: | ||||
All-In-One Products | ||||
Personnel Concepts | ||||
Personnel Concepts Limited | ||||
Personnel Concepts Ltd. | ||||
PC Limited | ||||
USA Printing & Mailing | ||||
Dual Core LLC | Wisconsin | 100% | ||
Doing Business As: | ||||
Identicard Systems Worldwide | ||||
Brady People ID | ||||
JAM Plastics | ||||
PromoVision Palomino | ||||
Temtec | ||||
Stopware | ||||
BIG Badges | ||||
Brady Holdings Mexico LLC | Delaware | 100% | ||
Clement Communications, Inc. | Pennsylvania | 100% | ||
Brady International Co. | Wisconsin | 100% | ||
Brady Worldwide, Inc. | Wisconsin | 100% | ||
Also Doing Business As: | ||||
Brandon International | ||||
Sorbent Products Company | ||||
TISCOR | ||||
Electromark | ||||
Precision Dynamics Corporation | California | 100% | ||
Also Doing Business As: | ||||
Pharmex | ||||
PDMX, Inc. | California | 100% | ||
Precision Dynamics International, Inc. | California | 100% | ||
Brady Australia Holdings Pty. Ltd. | Australia | 100% | ||
Brady Australia Pty. Ltd. | Australia | 100% | ||
Seton Australia Pty. Ltd. | Australia | 100% | ||
Accidental Health & Safety Pty. Ltd. | Australia | 100% | ||
Trafalgar First Aid Pty. Ltd. | Australia | 100% | ||
Carroll Australasia Pty. Ltd. | Australia | 100% |
Scafftag Australia Pty. Ltd. | Australia | 100% | ||
Visisign Pty. Ltd. | Australia | 100% | ||
ID Warehouse Pty. Ltd. | Australia | 100% | ||
Mix Group Australasia Pty. Ltd. | Australia | 100% | ||
Transposafe Systems Belgium NV/SA | Belgium | 100% | ||
W.H. Brady, N.V. | Belgium | 100% | ||
PDC Belgium Holdings Sprl | Belgium | 100% | ||
PDC Europe Sprl | Belgium | 100% | ||
Stickolor Industria e Comércio de Auto Adesivos Ltda. | Brazil | 100% | ||
W.H.B. do Brasil Ltda. | Brazil | 100% | ||
BRC Financial | Canada | 100% | ||
W.H.B. Identification Solutions Inc. | Canada | 100% | ||
Doing Business As: | ||||
Brady | ||||
Identicam Systems | ||||
Seton | ||||
Brady Cayman Finance Company | Cayman Islands | 100% | ||
Brady Investment Management (Shanghai) Co., Ltd. | China | 100% | ||
Brady Technology (Wuxi) Co. Ltd. | China | 100% | ||
Brady (Beijing) Co. Ltd. | China | 100% | ||
Brady (Shenzhen) Co., Ltd. | China | 100% | ||
Brady Technology (Dongguan) Co., Ltd. | China | 100% | ||
Brady Technology (Langfang) Co., Ltd. | China | 100% | ||
Brady (Xiamen) Co., Ltd. | China | 100% | ||
Brady A/S | Denmark | 100% | ||
Braton Europe S.A.R.L | France | 100% | ||
Brady Groupe S.A.S | France | 100% | ||
Doing Business As: | ||||
Seton | ||||
Signals | ||||
BIG | ||||
Securimed S.A.S. | France | 100% | ||
Brady GmbH | Germany | 100% | ||
Doing Business As: | ||||
Seton | ||||
Balkhausen | ||||
Etimark | ||||
Brady Holdings GmbH & Co. KG | Germany | 100% | ||
Brady Holdings Verwaltungs GmbH | Germany | 100% | ||
Transposafe Systems Deutschland GmbH | Germany | 100% | ||
Bakee Metal Manufactory Company Limited | Hong Kong | 100% | ||
Brady Corporation Hong Kong Limited | Hong Kong | 100% | ||
Brady Company India Private Limited | India | 100% | ||
Brady Italia, S.r.l. | Italy | 100% | ||
Nippon Brady K.K. | Japan | 100% | ||
Brady S.à r.l. | Luxembourg | 100% | ||
Brady Luxembourg S.à r.l. | Luxembourg | 100% | ||
Brady Finance Luxembourg S.à r.l. | Luxembourg | 100% | ||
Brady Technology SDN. BHD. | Malaysia | 100% | ||
W. H. Brady S. de R.L. de C.V. | Mexico | 100% | ||
Brady Servicios, S. de R.L. de C.V. | Mexico | 100% | ||
Macquila Products del Noroeste S.de R.L. de C.V. | Mexico | 100% | ||
PDC Brazeletesy Productos S.de R.L. de C.V. | Mexico | 100% | ||
St. John Healthcare s.de R.L. de C.V. | Mexico | 100% | ||
Brady B.V. | Netherlands | 100% | ||
Brady Finance B.V. | Netherlands | 100% | ||
Holland Mounting Systems B.V. | Netherlands | 100% | ||
Transposafe Systems Holland B.V. | Netherlands | 100% |
Brady AS | Norway | 100% | ||
Pervaco AS | Norway | 100% | ||
Brady Philippines Direct Marketing Inc. | Philippines | 100% | ||
Transposafe Systems Polska Sp. Z.o.o. | Poland | 100% | ||
Brady ID Solutions S.R.L. | Romania | 100% | ||
Brady LLC | Russia | 100% | ||
Brady Corporation S.E.A. Pte. Ltd. | Singapore | 100% | ||
Brady Corporation Asia Pte. Ltd. | Singapore | 100% | ||
Brady Asia Holding Pte. Ltd. | Singapore | 100% | ||
Brady Corporation Asia Pacific Pte. Ltd. | Singapore | 100% | ||
Brady Asia Pacific Pte. Ltd. | Singapore | 100% | ||
Brady s.r.o. | Slovakia | 100% | ||
Wiremarkers Africa Pty. Ltd. | South Africa | 100% | ||
Grafo Wiremarkers Pty. Ltd. | South Africa | 100% | ||
Brady Korea LLP | South Korea | 100% | ||
Brady Identificación S.L.U. | Spain | 100% | ||
Brady AB | Sweden | 100% | ||
Brady Sweden Holding AB | Sweden | 100% | ||
Runelandhs Fastighter AB | Sweden | 100% | ||
Runelandhs Försäljnings AB | Sweden | 100% | ||
Brady Converting AB | Sweden | 100% | ||
Tradex AB | Sweden | 100% | ||
Brady Technologies (Thailand) Co. Ltd. | Thailand | 100% | ||
Brady Etiket ve Isaretleme Ticaret Ltd. Sirketi | Turkey | 100% | ||
Brady Middle East FZE | United Arab Emirates | 100% | ||
B.I. (UK) Limited | United Kingdom | 100% | ||
Brady Corporation Limited | United Kingdom | 100% | ||
Brady European Finance Limited | United Kingdom | 100% | ||
Brady European Holdings Limited | United Kingdom | 100% |
Date: September 30, 2013 | |
/s/ FRANK M. JAEHNERT | |
Frank M. Jaehnert | |
President and Chief Executive Officer |
Date: September 30, 2013 | |
/s/ THOMAS J. FELMER | |
Thomas J. Felmer | |
Senior Vice President and Chief Financial Officer |
Date: September 30, 2013 | |
/s/ FRANK M. JAEHNERT | |
Frank M. Jaehnert | |
President and Chief Executive Officer |
Date: September 30, 2013 | |
/s/ THOMAS J. FELMER | |
Thomas J. Felmer | |
Senior Vice President and Chief Financial Officer |
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Segment Information - Schedule of Segment Reporting Information By Segment (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Apr. 30, 2013
|
Jan. 31, 2013
|
Oct. 31, 2012
|
Jul. 31, 2012
|
Apr. 30, 2012
|
Jan. 31, 2012
|
Oct. 31, 2011
|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | $ 309,097 | $ 300,971 | $ 271,175 | $ 270,866 | $ 269,089 | $ 271,151 | $ 255,052 | $ 273,396 | $ 1,152,109 | $ 1,068,688 | $ 1,059,355 |
Depreciation and amortization | 48,725 | 43,987 | 48,827 | ||||||||
Total profit from reportable segments | 266,560 | 276,614 | 265,037 | ||||||||
Assets | 1,438,683 | 1,607,719 | 1,438,683 | 1,607,719 | 1,861,505 | ||||||
Payments to Acquire Property, Plant, and Equipment | 35,687 | 24,147 | 20,532 | ||||||||
Identification Solutions [Member]
|
|||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 733,433 | 633,774 | 625,396 | ||||||||
Depreciation and amortization | 25,920 | 18,253 | 19,252 | ||||||||
Total profit from reportable segments | 171,319 | 159,427 | 146,124 | ||||||||
Assets | 989,216 | 744,055 | 989,216 | 744,055 | 782,324 | ||||||
Payments to Acquire Property, Plant, and Equipment | 18,186 | 15,213 | 13,406 | ||||||||
Workplace Safety [Member]
|
|||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 418,676 | 434,914 | 433,959 | ||||||||
Depreciation and amortization | 9,078 | 7,827 | 10,769 | ||||||||
Total profit from reportable segments | 95,241 | 117,187 | 118,913 | ||||||||
Assets | 239,219 | 439,255 | 239,219 | 439,255 | 444,354 | ||||||
Payments to Acquire Property, Plant, and Equipment | 8,459 | 4,989 | 3,979 | ||||||||
Corporate [Member]
|
|||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 13,727 | 17,907 | 18,806 | ||||||||
Assets | 210,248 | 424,409 | 210,248 | 424,409 | 634,827 | ||||||
Payments to Acquire Property, Plant, and Equipment | $ 9,042 | $ 3,945 | $ 3,147 |
Discontinued Operations Operating Results, Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|||||||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||||||||
Net sales | $ 219,819 | $ 262,484 | $ 289,407 | ||||||||
Earnings (loss) from operations of discontinued businesses | 7,154 | (116,673) | [1] | 16,434 | |||||||
(Loss) on write-down of disposal group | (15,658) | [2] | 0 | 0 | |||||||
Income tax expense | (5,215) | [3] | (3,709) | (13,739) | |||||||
(Loss) earnings from discontinued operations, net of income tax | $ (13,719) | $ (120,382) | $ 2,695 | ||||||||
|
Fair Value Measurements
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Trading securities: The Company’s deferred compensation investments consist of investments in mutual funds. These investments were classified as Level 1 as the shares of these investments trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. Foreign exchange contracts: The Company’s foreign exchange contracts were classified as Level 2, as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign exchange rates. See Note 12, “Derivatives and Hedging Activities” for additional information. Foreign currency denominated debt: The Company’s foreign currency denominated debt designated as a net investment hedge was classified as Level 2, as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign currency exchange rates. See Note 12, “Derivatives and Hedging Activities” for additional information. There have been no transfers of assets or liabilities between the fair value hierarchy levels, outlined above, during the fiscal years ended July 31, 2013 and July 31, 2012. The Company’s financial instruments, other than those presented in the disclosures above, include cash and cash equivalents, accounts receivable, notes payable, accounts payable, accrued liabilities and short-term and long-term debt. The fair values of cash and cash equivalents, accounts receivable, notes payable, accounts payable, and accrued liabilities approximated carrying values because of the short-term nature of these instruments. See Note 5 for information regarding the fair values of the Company's short-term and long-term debt. During fiscal 2013, the Company implemented a plan to divest its Asia Die-Cut business, including Balkhausen. As such, the assets and liabilities of the Asia Die-Cut disposal group were recorded at approximate fair value less cost to sell and classified as "Assets held for sale" and "Liabilities held for sale." This resulted in a loss on the write-down of the disposal group of $15,658, recorded within discontinued operations for the fiscal year ended July 31, 2013. Fair value was determined utilizing a combination of external market factors and internal projections. During fiscal 2013, goodwill with a carrying amount of $183,146 in the WPS Americas reporting unit was written down to its estimated implied fair value of $10,866, resulting in a non-cash impairment charge of $172,280. In order to arrive at the implied fair value of goodwill, the Company calculated the fair value of all of the assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. After assigning fair value to the assets and liabilities of the reporting unit, the result was the implied fair value of goodwill of $10,866, which represented a Level 3 asset measured at fair value on a nonrecurring basis subsequent to its original recognition. The WPS Americas reporting unit had intangible assets consisting of tradenames and customer relationships, which were valued using the income approach as part of the goodwill impairment test described above. The valuation was based upon current sales projections and profitability for each asset group, and the relief from royalty method was applied. As a result of the analysis, indefinite-lived tradenames with a carrying amount of $25,449 were written down to the estimated fair value of $14,881, resulting in a non-cash impairment charge of $10,568 within the WPS segment. During fiscal 2013, goodwill with a carrying amount of $18,225 in the IDS APAC reporting unit was written off, resulting in a non-cash impairment charge of $18,225. When management compared the fair value to the carrying value of the reporting unit as part of the annual goodwill impairment test (Step One), a qualitative assessment was completed for Step Two because the amount by which the carrying value exceeded fair value was more than the balance of goodwill remaining. The fair value of the reporting unit was determined utilizing a combination of external market factors, internal projections, and other relevant Level 3 measurements. As such, the Company recognized a goodwill impairment charge of the entire remaining goodwill balance of $18,225 during the year ended July 31, 2013. As a result of the goodwill impairment, the Company analyzed fixed assets for potential impairment within the IDS APAC reporting unit by comparing undiscounted future cash flows to the carrying amount of the assets. Undiscounted future cash flows were determined using the Company's internal projections and other relevant Level 3 measurements. As a result, the Company concluded that fixed assets with a carrying amount of $4,367 was written down to their estimated fair value of $1,100 during the year ended July 31, 2013. During fiscal 2012, goodwill with a carrying amount of $163,702 in the former North/South Asia reporting unit was written down to its estimated implied fair value of $48,014, resulting in a non-cash impairment charge of $115,688. In order to arrive at the implied fair value of goodwill, the Company assigned the fair value to all of the assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Intangible assets consisted of customer lists, and were valued using the income approach based upon customers in existence at the valuation date. After assigning fair value to the assets and liabilities of the reporting unit, the result was the implied fair value of goodwill of $48,014, which represented a Level 3 asset measured at fair value on a nonrecurring basis subsequent to its original recognition. |
Acquisitions and Divestitures - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
1 Months Ended | 3 Months Ended | 12 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 31, 2013
|
Jul. 31, 2013
|
Apr. 30, 2013
|
Jan. 31, 2013
|
Oct. 31, 2012
|
Jul. 31, 2012
|
Apr. 30, 2012
|
Jan. 31, 2012
|
Oct. 31, 2011
|
Jul. 31, 2014
|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
Dec. 28, 2012
|
Apr. 30, 2013
Precision Dynamics Corporation [Member]
|
Apr. 30, 2012
Precision Dynamics Corporation [Member]
|
Jul. 31, 2013
Precision Dynamics Corporation [Member]
|
Jul. 31, 2013
Finite-lived customer relationships [Member]
|
Jul. 31, 2013
Trademarks [Member]
|
Jul. 31, 2013
|
Jul. 31, 2012
Grafo [Member]
|
Apr. 30, 2012
Grafo [Member]
|
Jul. 31, 2012
Runelandhs [Member]
|
Jul. 31, 2012
Pervaco [Member]
|
Jul. 31, 2011
Id Warehouse [Member]
|
Jul. 31, 2013
Pro Forma [Member]
|
Jul. 31, 2012
Pro Forma [Member]
|
Jul. 31, 2013
Pervaco [Member]
|
Jul. 31, 2013
Runelandhs [Member]
|
Jul. 31, 2013
Grafo [Member]
|
Jul. 31, 2013
Expected tax deduction [Member]
|
|
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items] | |||||||||||||||||||||||||||||||
Acquired Indefinite-lived Intangible Asset, Amount | $ 6,878 | $ 6,878 | $ 487 | $ 5,340 | $ 1,538 | ||||||||||||||||||||||||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | 3,000 | 19,000 | 6,000 | ||||||||||||||||||||||||||||
Goodwill, Acquired During Period | 170,180 | 22,844 | 4,792 | 8,440 | 13,177 | 1,227 | |||||||||||||||||||||||||
Notes Payable | 11,613 | ||||||||||||||||||||||||||||||
Proceeds from sale of operations | 10,178 | 856 | 12,980 | ||||||||||||||||||||||||||||
Loss (gain) on sales of businesses | (3,138) | (204) | 4,394 | ||||||||||||||||||||||||||||
Net sales | 309,097 | 300,971 | 271,175 | 270,866 | 269,089 | 271,151 | 255,052 | 273,396 | 1,152,109 | 1,068,688 | 1,059,355 | 102,329 | |||||||||||||||||||
Net (loss) income, as reported | (154,535) | (17,911) | 108,652 | 759 | |||||||||||||||||||||||||||
Assets, fair value adjustment | 16,788 | 16,788 | 1,530 | 1,530 | |||||||||||||||||||||||||||
Proceeds from borrowing on notes payable | 220,000 | 0 | 0 | ||||||||||||||||||||||||||||
Repayment of borrowing on notes payable | 181,000 | 0 | 0 | ||||||||||||||||||||||||||||
Expected completion of valuation | 12 | ||||||||||||||||||||||||||||||
Customer relationships | 8,903 | 8,903 | 1,846 | 102,500 | 961 | 5,474 | 2,468 | 1,846 | |||||||||||||||||||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | 10 years | 3 years | ||||||||||||||||||||||||||||
Finite-Lived Trade Names, Gross | 6,800 | ||||||||||||||||||||||||||||||
Goodwill | 170,180 | 22,844 | 170,180 | 22,844 | 4,792 | ||||||||||||||||||||||||||
Business Combination, Acquisition Related Costs | 3,600 | 3,600 | |||||||||||||||||||||||||||||
Interest Expense | 16,641 | 19,090 | 22,124 | 1,402 | 529 | ||||||||||||||||||||||||||
Income tax expense (benefit) | 2,526 | 429 | |||||||||||||||||||||||||||||
Amortization of Intangible Assets | 17,148 | 10,576 | 15,571 | 5,215 | 12,517 | ||||||||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price | 3,039 | 22,499 | 12,111 | 7,970 | |||||||||||||||||||||||||||
Finite-Lived Noncompete Agreements, Gross | 186 | 186 | 95 | 91 | 487 | ||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount | 57,374 | 57,374 | |||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Intangible Assets Other than Goodwill | 51,672 | ||||||||||||||||||||||||||||||
Other intangible assets | $ 109,300 | $ 109,300 |
CONSOLIDATED STATEMENTS OF EARNINGS (USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|||||||
Net sales | $ 1,152,109 | $ 1,068,688 | $ 1,059,355 | ||||||
Cost of products sold | 546,029 | 479,118 | 471,405 | ||||||
Gross margin | 606,080 | 589,570 | 587,950 | ||||||
Operating expenses: | |||||||||
Research and development | 33,552 | 34,528 | 38,268 | ||||||
Selling, general and administrative | 427,661 | 392,526 | 397,472 | ||||||
Restructuring charges | 26,046 | 6,084 | 6,451 | ||||||
Impairment charges | 204,448 | 0 | 0 | ||||||
Total operating expenses | 691,707 | 433,138 | 442,191 | ||||||
Operating (loss) income | (85,627) | [1] | 156,432 | [1] | 145,759 | ||||
Other income and (expense): | |||||||||
Investment and other income | 3,522 | 2,082 | 3,989 | ||||||
Interest expense | (16,641) | (19,090) | (22,124) | ||||||
(Loss) earnings from continuing operations before income taxes | (98,746) | 139,424 | 127,624 | ||||||
Income taxes | 42,070 | 36,953 | 21,667 | ||||||
(Loss) earnings from continuing operations | (140,816) | 102,471 | 105,957 | ||||||
(Loss) earnings from discontinued operations, net of income taxes | (13,719) | (120,382) | 2,695 | ||||||
Net (loss) earnings | (154,535) | (17,911) | 108,652 | ||||||
Earnings per share: | |||||||||
Dividends | $ 0.76 | ||||||||
Weighted average common shares outstanding (in thousands): | |||||||||
Basic (in shares) | 51,330 | 52,453 | 52,639 | ||||||
Diluted (in shares) | 51,330 | 52,821 | 53,133 | ||||||
Class A nonvoting common stock [Member]
|
|||||||||
Other income and (expense): | |||||||||
(Loss) earnings from continuing operations | (141,054) | 102,242 | 105,734 | ||||||
Earnings per share: | |||||||||
Income (Loss) from Continuing Operations, Per Basic Share | $ (2.75) | [2] | $ 1.95 | $ 2.01 | |||||
Income (Loss) from Continuing Operations, Per Diluted Share | $ (2.75) | [2] | $ 1.94 | [2] | $ 1.99 | ||||
Income (Loss) from Discontinued Operations, Net of Tax, Per Basic Share | $ (0.27) | $ (2.30) | $ 0.05 | ||||||
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Share | $ (0.27) | $ (2.29) | $ 0.05 | ||||||
Earnings Per Share, Basic | $ (3.02) | $ (0.35) | $ 2.06 | ||||||
Earnings Per Share, Diluted | $ (3.02) | $ (0.35) | $ 2.04 | ||||||
Dividends | $ 0.76 | $ 0.74 | $ 0.72 | ||||||
Class B voting common stock [Member]
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|||||||||
Other income and (expense): | |||||||||
(Loss) earnings from continuing operations | $ (141,856) | $ 101,419 | $ 104,908 | ||||||
Earnings per share: | |||||||||
Income (Loss) from Continuing Operations, Per Basic Share | $ (2.76) | $ 1.93 | $ 1.99 | ||||||
Income (Loss) from Continuing Operations, Per Diluted Share | $ (2.76) | $ 1.92 | $ 1.97 | ||||||
Income (Loss) from Discontinued Operations, Net of Tax, Per Basic Share | $ (0.27) | $ (2.29) | $ 0.05 | ||||||
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Share | $ (0.27) | $ (2.28) | $ 0.05 | ||||||
Earnings Per Share, Basic | $ (3.03) | $ (0.36) | $ 2.04 | ||||||
Earnings Per Share, Diluted | $ (3.03) | $ (0.36) | $ 2.03 | ||||||
Dividends | $ 0.74 | $ 0.72 | $ 0.70 | ||||||
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Employee Benefit Plans
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2014
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The Company provides postretirement medical benefits (the “Plan”) for eligible regular full and part-time domestic employees (including spouses) as outlined by the Plan. Postretirement benefits are provided only if the employee was hired prior to April 1, 2008, and retires on or after attainment of age 55 with 15 years of credited service. Credited service begins accruing at the later of age 40 or date of hire. All active employees first eligible to retire after July 31, 1992, are covered by an unfunded, contributory postretirement healthcare plan where employer contributions will not exceed a defined dollar benefit amount, regardless of the cost of the program. Employer contributions to the plan are based on the employee’s age and service at retirement. The accounting guidance on defined benefit pension and other postretirement plans requires full recognition of the funded status of defined benefit and other postretirement plans on the balance sheet as an asset or a liability. The guidance also requires that unrecognized prior service costs/credits, gains/losses, and transition obligations/assets be recorded in Accumulated Other Comprehensive Income, thus not changing the income statement recognition rules for such plans. The Plan is unfunded and recorded as a liability in the accompanying consolidated balance sheets as of July 31, 2013 and 2012. The following table provides a reconciliation of the changes in the Plan’s accumulated benefit obligations during the years ended July 31:
Benefit payments were $703 in fiscal 2013 as compared to $2,062 in fiscal 2012. The benefit payments in fiscal 2012 were unusually high as a result of four large claims that were realized within the Company's self-insured retiree population in the year. The plan was amended in fiscal 2012 to exclude dental and vision benefits for retirees over the age of 65, resulting in a reduction of $1,105 in the pension obligation as of July 31, 2012. As of July 31, 2013 and 2012, amounts recognized as liabilities in the accompanying consolidated balance sheets consist of:
As of July 31, 2013 and 2012, pre-tax amounts recognized in accumulated other comprehensive income in the accompanying consolidated balance sheets consist of:
Net periodic benefit cost for the Plan for fiscal years 2013, 2012, and 2011 includes the following components:
The estimated actuarial gain and prior service credit that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost over the next fiscal year are $244 and $203, respectively. The following assumptions were used in accounting for the Plan:
The discount rate utilized in preparing the accumulated postretirement benefit obligation liability was increased to 4.00% in fiscal 2013 from 3.25% in fiscal 2012 as a result of an increase in the bond yield as of the Company’s measurement date of July 31, 2013. A one-percentage point change in assumed health care cost trend rates would have the following effects on the Plan:
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the years ending July 31:
The Company sponsors defined benefit pension plans that are primarily unfunded and provide an income benefit upon termination or retirement for certain of its international employees. As of July 31, 2013 and 2012, the accumulated pension obligation related to these plans was $3,977 and $4,021, respectively. As of July 31, 2013 and 2012, pre-tax amounts recognized in accumulated other comprehensive income in the accompanying balance sheets were $(807) and ($828), respectively. The net periodic benefit cost for these plans was $388, $299, and $301 during the years ended July 31, 2013, 2012 and 2011, respectively. The Company has retirement and profit-sharing plans covering substantially all full-time domestic employees and certain employees of its foreign subsidiaries. Contributions to the plans are determined annually or quarterly, according to the respective plans, based on earnings of the respective companies and employee contributions. Accrued retirement and profit-sharing contributions of $3,615 and $4,371 were included in other long-term liabilities on the accompanying consolidated balance sheets as of July 31, 2013 and 2012, respectively. The amounts charged to expense for these retirement and profit sharing plans were $10,110, $12,569, and $12,875 during the years ended July 31, 2013, 2012 and 2011, respectively. The Company also has deferred compensation plans for directors, officers and key executives which are discussed below. At July 31, 2013 and 2012, $15,769 and $13,738, respectively, of deferred compensation was included in other long-term liabilities in the accompanying consolidated balance sheets. During fiscal 1998, the Company adopted a new deferred compensation plan that invests solely in shares of the Company’s Class A Nonvoting Common Stock. Participants in a predecessor phantom stock plan were allowed to convert their balances in the old plan to this new plan. The new plan was funded initially by the issuance of shares of Class A Nonvoting Common Stock to a Rabbi Trust. All deferrals into the new plan result in purchases of Class A Nonvoting Common Stock by the Rabbi Trust. No deferrals are allowed into a predecessor plan. Shares held by the Rabbi Trust are distributed to participants upon separation from the Company as defined in the plan agreement. During fiscal 2002, the Company adopted a new deferred compensation plan that allows future contributions to be invested in shares of the Company’s Class A Nonvoting Common Stock or in certain other investment vehicles. Prior deferred compensation deferrals must remain in the Company’s Class A Nonvoting Common Stock. All participant deferrals into the new plan result in purchases of Class A Nonvoting Common Stock or certain other investment vehicles by the Rabbi Trust. Balances held by the Rabbi Trust are distributed to participants upon separation from the Company as defined in the plan agreement. On May 1, 2006, the plan was amended to require that deferrals into the Company’s Class A Nonvoting Common Stock must remain in the Company’s Class A Nonvoting Common Stock and be distributed in shares of the Company’s Class A Nonvoting Common Stock. |
Summary of Significant Accounting Policies Schedule of Other Intangibles (Tables)
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24 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] |
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Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)
|
12 Months Ended | ||
---|---|---|---|
Jul. 31, 2013
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Jul. 31, 2012
|
Jul. 31, 2011
|
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Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
Tax at statutory rate | 35.00% | 35.00% | 35.00% |
Goodwill impairment | (53.40%) | 0.00% | 0.00% |
State income taxes, net of federal tax benefit | (0.20%) | 0.10% | 0.00% |
International rate differential | (2.70%) | (6.50%) | (13.30%) |
Non-creditable withholding taxes | (1.50%) | 2.30% | 0.90% |
Rate variances arising from foreign subsidiary distributions | (25.30%) | (6.50%) | (7.40%) |
Adjustments to tax accruals and reserves | 1.00% | 7.50% | 4.30% |
Research and development tax credits and section 199 manufacturer’s deduction | 3.10% | (1.00%) | (1.20%) |
Foreign tax credit carryforward adjustments | 2.40% | (3.40%) | 0.00% |
Other, net | (1.00%) | (1.00%) | (1.30%) |
Effective tax rate | (42.60%) | 26.50% | 17.00% |
Employee Benefit Plans - Schedule of Changes in Accumulated Benefit Obligations (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2011
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Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Obligation at beginning of year | $ 14,225 | $ 15,011 | |
Service cost | 770 | 644 | 666 |
Interest cost | 476 | 633 | 694 |
Actuarial (gain)/loss | (1,745) | 1,104 | |
Benefit payments | (703) | (2,062) | |
Plan amendments | 0 | (1,105) | |
Obligation at end of year | $ 13,023 | $ 14,225 | $ 15,011 |
Restructuring
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | 11. Restructuring In fiscal 2011, the Company continued executing its restructuring actions initiated in the prior periods and recorded restructuring charges of $6,451 in continuing operations. The fiscal 2011 restructuring charges consisted of $4,338 of employee separation costs, $1,577 of non-cash fixed asset write-offs, $293 of other facility closure related costs, and $243 of contract termination costs. Of the $6,451 of restructuring charges recorded during the fiscal year ended July 31, 2011, $2,896 was incurred within IDS and $3,555 within WPS. The costs related to these restructuring activities have been recorded on the consolidated statements of earnings as restructuring charges. During fiscal 2012, the Company took various measures to address its cost structure in response to weaker sales forecasts across the Company. As a result of these actions, the Company recorded restructuring charges in continuing operations of $6,084, which consisted of $4,947 of employee separation costs, $458 of fixed asset write-offs, $653 of other facility closure related costs, and $26 of contract termination costs. Of the $6,084 of restructuring charges recorded during fiscal 2012, $4,254 was incurred within IDS and $1,830 within WPS. In fiscal 2013, the Company announced a restructuring action to reduce its global workforce by approximately 5-7% in order to address its cost structure. In connection with this restructuring action, the Company incurred restructuring charges of $26,046 in continuing operations. These charges consisted of $18,350 of employee separation costs, $4,125 of fixed asset write-offs and $3,571 of other facility closure related costs. Of the $26,046 of restructuring charges recorded during fiscal 2013, $15,870 was incurred within IDS and $10,176 within WPS. The charges for employee separation costs consisted of severance pay, outplacement services, medical and other benefits. Long-lived asset write-offs include both the net book value of property, plant and equipment written off in conjunction with facility consolidations, as well as indefinite-lived tradenames written off in conjunction with brand consolidations within the WPS segment. The costs related to these restructuring activities were recorded on the consolidated statements of earnings as restructuring charges. The Company expects the majority of the remaining cash payments to be made during the next twelve months. The liability is included in wages and amounts withheld from employees on the consolidated balance sheet. A roll-forward of the Company’s restructuring activity for fiscal 2011, 2012 and 2013 is below.
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Restructuring - Restructuring Reserve Roll Forward (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||
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Jul. 31, 2013
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Apr. 30, 2013
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Jan. 31, 2013
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Jul. 31, 2012
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Apr. 30, 2012
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Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2011
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Restructuring Reserve [Roll Forward] | ||||||||
Beginning balance | $ 9,075 | $ 2,257 | $ 6,161 | |||||
Restructuring charges | 15,573 | 8,540 | 1,933 | 4,107 | 1,977 | 26,046 | 6,084 | 6,451 |
Non-cash write-offs | (4,487) | (458) | (2,155) | |||||
Cash payments | (20,977) | (4,834) | (10,938) | |||||
Ending balance | 14,206 | 9,075 | 14,206 | 9,075 | 2,257 | |||
Employee Severance [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Beginning balance | 8,809 | 2,207 | 6,055 | |||||
Restructuring charges | 18,350 | 4,947 | 4,338 | |||||
Non-cash write-offs | 0 | 0 | 0 | |||||
Cash payments | (18,495) | (4,342) | (10,189) | |||||
Ending balance | 11,475 | 8,809 | 11,475 | 8,809 | 2,207 | |||
Asset Write Offs [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Beginning balance | 0 | 0 | 0 | |||||
Restructuring charges | 4,125 | 458 | 1,577 | |||||
Non-cash write-offs | (4,487) | (458) | (2,155) | |||||
Cash payments | 0 | 0 | 0 | |||||
Ending balance | 0 | 0 | 0 | 0 | 0 | |||
Other Restructuring Cost [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Beginning balance | 266 | 50 | 106 | |||||
Restructuring charges | 3,571 | 679 | 536 | |||||
Non-cash write-offs | 0 | 0 | 0 | |||||
Cash payments | (2,482) | (492) | (749) | |||||
Ending balance | 2,731 | 266 | 2,731 | 266 | 50 | |||
Die-Cut Asia [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Restructuring charges | 4,549 | 6,026 | 2,738 | |||||
Other Restructuring [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Restructuring charges | 1,376 | 29 | 157 | |||||
Asset Write Offs [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Restructuring charges | 362 | 0 | 578 | |||||
Employee Severance [Member]
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Restructuring Reserve [Roll Forward] | ||||||||
Restructuring charges | $ 2,811 | $ 5,997 | $ 2,003 |
Summary of Significant Accounting Policies Advertising Costs (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2011
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Accounting Policies [Abstract] | |||
Advertising Expense | $ 77,905 | $ 74,830 | $ 79,236 |
Employee Benefit Plans - Schedule of Amounts Recognized in Balance Sheet (Details) (USD $)
In Thousands, unless otherwise specified |
Jul. 31, 2013
|
Jul. 31, 2012
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Jul. 31, 2011
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---|---|---|---|
Compensation and Retirement Disclosure [Abstract] | |||
Current liability | $ 677 | $ 716 | |
Noncurrent liability | 12,346 | 13,509 | |
Defined Benefit Plan, Benefit Obligation | $ 13,023 | $ 14,225 | $ 15,011 |
Discontinued Operations (Tables)
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Jul. 31, 2013
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Divested Businesses | The operating results have been reported as discontinued operations for the comparative periods ended July 31, 2013, 2012, and 2011, including the operating results of the following four previously divested businesses:
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Asia Die-Cut & Balkhausen [Member]
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The following table summarizes the operating results of discontinued operations for the fiscal years ending July 31, 2013, 2012 and 2011:
The following table details assets and liabilities of the Asia Die-Cut & Balkhausen disposal groups classified as held for sale as of July 31, 2013:
|
Acquisitions and Divestitures Purchase price allocation (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
Precision Dynamics Corporation [Member]
|
Jul. 31, 2014
Grafo, Runelandhs and Pervaco Acquisitions [Member]
|
Jul. 31, 2014
Id Warehouse [Member]
|
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The table below details a preliminary allocation of the PDC purchase price:
|
The following table summarizes the combined estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
|
The following table summarizes the combined estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
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Pro Forma Information |
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Summary of Significant Accounting Policies Other Comprehensive Income (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2014
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Jul. 31, 2013
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Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] |
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Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block] | As of July 31, 2013 and 2012, pre-tax amounts recognized in accumulated other comprehensive income in the accompanying consolidated balance sheets consist of:
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Summary of Significant Accounting Policies Revenue Recognition (Details) (USD $)
In Thousands, unless otherwise specified |
Jul. 31, 2013
|
Jul. 31, 2012
|
---|---|---|
Accounting Policies [Abstract] | ||
Revenue Recognition Sales Return Reserve For Sales Returns | $ 2,711 | $ 3,046 |
Commitments and Contingencies (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases |
|
Summary of Significant Accounting Policies Subsequent Events (Details) (USD $)
|
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Oct. 31, 2013
|
Jul. 31, 2014
|
Jul. 31, 2013
|
|
Subsequent Event [Line Items] | |||
Percentage Increase In Dividend | 2.60% | ||
Dividends | $ 0.20 | $ 0.78 | $ 0.76 |
Summary of Significant Accounting Policies Stock-Based Compensation (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
1 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Aug. 31, 2010
|
Jan. 31, 2008
|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
Jul. 31, 2008
|
Jan. 08, 2008
|
Jul. 31, 2013
Total unvested stock-based compensation expense reversal [Domain]
|
Jul. 31, 2013
Unvested restricted stock expense reversal [Member]
|
Jul. 31, 2013
Unvested restricted stock expense reversal - service condition [Member]
|
Jul. 31, 2013
Unvested performance-based expense reversal [Domain]
|
Jul. 31, 2013
Service Based Option [Member]
|
Jul. 31, 2012
Service Based Option [Member]
|
Jul. 31, 2011
Service Based Option [Member]
|
Jul. 31, 2012
Performance Based Options [Member]
|
Jul. 31, 2011
Performance Based Options [Member]
|
Jul. 31, 2013
Nonvoting Common Stock [Member]
|
Jul. 31, 2013
Restricted Stock [Member]
Maximum [Member]
|
Jul. 31, 2013
Restricted Stock [Member]
Minimum [Member]
|
Jul. 31, 2013
Performance Based Options [Member]
|
Dec. 31, 2012
Cliff-Vested Restricted Shares [Member]
|
Jul. 31, 2013
Cliff-Vested Restricted Shares [Member]
|
Jul. 31, 2013
Cliff-Vested Restricted Shares [Member]
Maximum [Member]
|
Jul. 31, 2013
Restricted Stock Units (RSUs) [Member]
Maximum [Member]
|
Jul. 31, 2013
Service Based Option [Member]
|
Jul. 31, 2012
Service Based Option [Member]
|
Jul. 31, 2011
Service Based Option [Member]
|
Jul. 31, 2013
Service Based Option [Member]
Maximum [Member]
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedGranted | 5,000 | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Expiration Period | 10 years | 10 years | |||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 10,000 | 100,000 | 221,667 | 210,000 | 5,000 | ||||||||||||||||||||||||
Shares outstanding, new grants | 0 | 828,450 | 1,212,450 | 1,365,500 | |||||||||||||||||||||||||
Restricted stock units outstanding | 10,000 | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 11 months 5 days | 5 years 10 months 21 days | 5 years 10 months 28 days | 6 years 6 months 26 days | 6 years 6 months 26 days | ||||||||||||||||||||||||
Share-based Compensation | $ 1,736 | $ 9,735 | $ 9,830 | $ 7,883 | $ 4,232 | $ 1,502 | $ 2,149 | ||||||||||||||||||||||
Share Based Compensation Net Of Tax | 1,059 | 5,939 | 5,996 | ||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 30.21 | $ 32.83 | $ 9.05 | $ 8.42 | $ 9.59 | $ 10.01 | $ 9.87 | $ 32.99 | |||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 38.67% | 39.41% | 40.22% | 39.21% | 39.39% | ||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 2.21% | 2.07% | 1.94% | 1.99% | 1.96% | ||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.91% | 1.16% | 1.65% | 2.05% | 2.35% | ||||||||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Other Than Options Weighted Average Market Value Of Underlying Stock At Grant Date | $ 30.58 | $ 27.05 | $ 29.13 | $ 29.55 | $ 28.43 | ||||||||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Other Than Options Grants In Period Weighted Average Exercise Price | $ 30.21 | $ 28.35 | $ 32.83 | $ 30.58 | $ 27.05 | $ 29.13 | $ 29.55 | $ 28.35 | $ 32.99 | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 7 years | 5 years | 3 years | 2 years | 3 years | ||||||||||||||||||||||||
Outstanding stock options and restricted shares of Class A Nonvoting Common Stock | 5,150,975 | ||||||||||||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Authorized For Future Issuance | 4,359,943 | ||||||||||||||||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 8,342 | ||||||||||||||||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days |
Stockholder's Investments (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
|
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Capital Stock | Information as to the Company’s capital stock at July 31, 2013 and 2012 is as follows:
|
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Schedule of Other Activity in Stockholders' Investment | The following is a summary of other activity in stockholders’ investment for the years ended July 31, 2013, 2012, and 2011:
|
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | The following table summarizes information about stock options outstanding at July 31, 2013:
|
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Summary of Stock Option Activity under Company's Share-Based Compensation Plans | Changes in the options are as follows:
|
Income Taxes - Schedule of (Loss) Earnings from Continuing Operations (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Apr. 30, 2013
|
Jan. 31, 2013
|
Oct. 31, 2012
|
Jul. 31, 2012
|
Apr. 30, 2012
|
Jan. 31, 2012
|
Oct. 31, 2011
|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|
Income Tax Disclosure [Abstract] | |||||||||||
United States | $ (144,941) | $ 44,713 | $ 27,742 | ||||||||
Other Nations | 46,195 | 94,711 | 99,882 | ||||||||
(Loss) earnings from continuing operations before income taxes | $ (176,234) | $ 20,996 | $ (11,364) | $ 25,786 | $ 20,869 | $ 27,311 | $ 26,436 | $ 27,855 | $ (98,746) | $ 139,424 | $ 127,624 |
Long-Term Obligations - Schedule of Long-Term Debt (Details) (USD $)
In Thousands, unless otherwise specified |
Jul. 31, 2013
|
Jul. 31, 2012
|
---|---|---|
Debt Instrument [Line Items] | ||
Long-term Debt | $ 262,414 | $ 316,208 |
Long-term Debt, Current Maturities | (61,264) | (61,264) |
Long-term obligations, less current maturities | 201,150 | 254,944 |
Euro-denominated notes payable in 2017 at a fixed rate of 3.71% [Member]
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | 39,900 | 36,912 |
Euro-denominated notes payable in 2020 at a fixed rate of 4.24% [Member]
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | 59,850 | 55,368 |
USD-denominated notes payable through 2014 at a fixed rate of 5.14% [Member]
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | 18,750 | 37,500 |
USD-denominated notes payable through 2016 at a fixed rate of 5.30% [Member]
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | 78,428 | 104,571 |
USD-denominated notes payable through 2017 at a fixed rate of 5.33% [Member]
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 65,486 | $ 81,857 |
Summary of Significant Accounting Policies Property, Plant and Equipment (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 22,976 | $ 21,672 | $ 23,804 |
Building and Building Improvements [Member] | Minimum [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Building and Building Improvements [Member] | Maximum [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 33 years | ||
Computer Equipment [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Machinery and Equipment [Member] | Minimum [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Machinery and Equipment [Member] | Maximum [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years |
Unaudited Quarterly Financial Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Apr. 30, 2013
|
Jan. 31, 2013
|
Oct. 31, 2012
|
Jul. 31, 2012
|
Apr. 30, 2012
|
Jan. 31, 2012
|
Oct. 31, 2011
|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||
Net sales | $ 309,097 | $ 300,971 | $ 271,175 | $ 270,866 | $ 269,089 | $ 271,151 | $ 255,052 | $ 273,396 | $ 1,152,109 | $ 1,068,688 | $ 1,059,355 | ||||||||||||
Gross Profit | 157,011 | 158,532 | 141,013 | 149,524 | 147,453 | 150,430 | 141,237 | 150,450 | 606,080 | 589,570 | 587,950 | ||||||||||||
Operating Income (Loss) | (179,338) | [1] | 30,115 | [1] | 20,968 | [1] | 42,628 | [1] | 34,066 | [1] | 42,228 | [1] | 37,393 | [1] | 42,745 | [1] | (85,627) | [1] | 156,432 | [1] | 145,759 | ||
Earnings (loss) from continuing operations | (176,234) | 20,996 | (11,364) | 25,786 | 20,869 | 27,311 | 26,436 | 27,855 | (98,746) | 139,424 | 127,624 | ||||||||||||
Impairment charges | $ 204,448 | $ 204,448 | $ 0 | $ 0 | |||||||||||||||||||
|
Schedule II Valuation of Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2011
|
|
Allowance for Doubtful Accounts [Member]
|
|||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 5,093 | $ 6,005 | $ 6,183 |
Additions — Charged to expense | 1,018 | 1,593 | 1,287 |
Due to acquired businesses | 531 | 159 | 52 |
Deductions - written off | (1,429) | (1,930) | (2,293) |
Deductions | (1,032) | 0 | 0 |
Ending balance | 6,005 | 6,183 | 7,137 |
Inventory Valuation Reserve [Member]
|
|||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 11,317 | 11,316 | 13,009 |
Additions — Charged to expense | 2,629 | 2,200 | 3,750 |
Due to acquired businesses | 2,887 | 445 | 632 |
Deductions - written off | 1,811 | 4,338 | 7,317 |
Deductions | (3,704) | 0 | 0 |
Ending balance | 11,316 | 13,009 | 15,944 |
Valuation Allowance of Deferred Tax Assets [Member]
|
|||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 37,142 | 25,847 | 31,844 |
Additions — Charged to expense | 10,853 | 2,579 | 5,933 |
Due to acquired businesses | 983 | 0 | 0 |
Deductions - written off | 541 | 3,226 | 1,523 |
Deductions | 0 | (5,350) | (76) |
Ending balance | $ 25,847 | $ 31,844 | $ 27,510 |
Summary of Significant Accounting Policies Stock-Based Compensation (Tables)
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24 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The weighted-average assumptions used in the Black-Scholes valuation model are reflected in the following table:
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Summary of Significant Accounting Policies
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Jul. 31, 2014
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations — Brady Corporation is an international manufacturer of identification solutions and specialty materials that identify and protect premises, products and people. The ability to provide customers with a broad range of proprietary, customized, and diverse products for use in various applications, along with a commitment to quality and service, a global footprint, and multiple sales channels, have made Brady a world leader in many of its markets. Principles of Consolidation — The accompanying consolidated financial statements include the accounts of Brady Corporation and its subsidiaries (“Brady” or the “Company”), all of which are wholly-owned. All intercompany accounts and transactions have been eliminated in consolidation. Discontinued Operations — The results of operations of the Asia Die-Cut & Balkhausen businesses have been reported as discontinued operations for all periods presented. The corresponding assets and liabilities have been reclassified in accordance with the authoritative literature on assets held for sale at July 31, 2013 and, as a result, the balances are not comparable between periods. In accordance with the authoritative literature, the Company has elected to not separately disclose the cash flows related to the Asia Die-Cut & Balkhausen discontinued operations. See Note 13 for additional information about the Company's discontinued operations. Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Subsequent Events — On September 12, 2013, the Company announced an increase in the annual dividend to shareholders of the Company's Class A Common Stock, from $0.76 to $0.78 per share. A quarterly dividend of $0.195 will be paid on October 31, 2013, to shareholders of record at the close of business on October 10, 2013. This dividend represents an increase of 2.6% and is the 28th consecutive annual increase in dividends. Fair Value of Financial Instruments — The Company believes the carrying amount of its financial instruments (cash and cash equivalents, accounts receivable and accounts payable) is a reasonable estimate of the fair value of these instruments due to their short-term nature. See Note 5 for more information regarding the fair value of long-term debt and Note 10 for fair value measurements. Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less when acquired to be cash equivalents, which are recorded at cost. Accounts Receivables — Accounts receivables are stated net of allowances for doubtful accounts of $5,093 and $6,006 as of July 31, 2013 and 2012, respectively. No single customer comprises more than 5% of the Company’s consolidated net sales in 2013, 2012 or 2011, or 5% of the Company’s consolidated accounts receivable as of July 31, 2013 or 2012. Specific customer provisions may be made during review of significant outstanding amounts, utilizing information about customer creditworthiness and current economic trends, indicates that collection is doubtful. In addition, provisions are made for the remainder of accounts receivable based upon the age of the receivable and the Company’s historical collection experience. Inventories — Inventories are stated at the lower of cost or market. Cost has been determined using the last-in, first-out (“LIFO”) method for certain domestic inventories (approximately 12% of total inventories at July 31, 2013, and approximately 18% of total inventories at July 31, 2012) and the first-in, first-out (“FIFO”) or average cost methods for other inventories. Had all domestic inventories been accounted for on a FIFO basis instead of on a LIFO basis, the carrying value would have increased by $7,923 and $9,271 on July 31, 2013 and 2012, respectively. Property, Plant, and Equipment — Property, plant, and equipment are recorded at cost. The cost of buildings and improvements and machinery and equipment is being depreciated over their estimated useful lives using primarily the straight-line method for financial reporting purposes. The estimated useful lives range from 3 to 33 years as shown below.
Fully depreciated assets are retained in property and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the respective asset. Depreciation expense was $22,976, $21,672, and $23,804 for the years ended July 31, 2013, 2012 and 2011, respectively. Goodwill and Other Intangible Assets — The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed on a straight-line basis, over the estimated periods benefited. Intangible assets with indefinite useful lives and goodwill are not subjected to amortization. These assets are assessed for impairment annually or more frequently as deemed necessary. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company completes impairment reviews for its reporting units using a fair-value method based on management's judgments and assumptions. The fair value represents the amount at which a reporting unit could be bought or sold in a current transaction between market participants on an arms-length basis. In estimating the fair value, the Company utilizes a discounted cash flow model and market multiples approach. The estimated fair value is compared with the carrying amount of the reporting unit, including goodwill. The annual impairment testing performed on May 1, 2013, in accordance with ASC 350, “Intangibles - Goodwill and Other” (“Step One”) indicated that the following reporting units had a fair value substantially in excess of its carrying value: IDS Americas & Europe, WPS Europe and WPS APAC. The PeopleID reporting unit does not have a fair value substantially in excess of its carrying value, however, this reporting unit consists of the Company's fiscal 2013 acquisition of PDC, and given the short period of time between the date of the acquisition, December 28, 2012, and the Company's annual goodwill impairment assessment date of May 1, 2013, the fair value in excess of carrying value is considered reasonable and consistent with the valuation at acquisition. The results of the Step One analysis completed over the Company's remaining two reporting units, WPS Americas and IDS APAC, indicated that they were potentially impaired. WPS Americas Goodwill Impairment Since the global economic recession of 2009, organic growth within the WPS Americas reporting unit has been difficult to achieve, especially within mature markets such as the U.S. and Canada where business-to-business transactions over the Internet are more advanced than many of the European and Australian markets. With the acceleration of the Internet in the business-to-business market, competition and pricing have intensified. As a result, organic sales declined by approximately 7% and segment profit declined by nearly 20% during fiscal 2013 as compared to fiscal 2012. The Company is modifying its strategy within the WPS platform, which includes investments in the following: enhanced e-commerce capabilities, expanded product offerings, enhanced industry-specific expertise, and adjusting its pricing strategies. Although management believes the strategy modifications will improve organic sales and profitability of the WPS platform in future years, there is risk associated with any strategy. As such, the Company's annual goodwill impairment analysis ("Step One") reflects the risk in the strategy and the decline in fiscal 2013 sales and profitability, which occurred during a period of time in which the Company was redirecting its investment from the traditional catalog model to e-business. The Company used the discounted cash flow model and market multiples model in order to complete Step One, and concluded that the WPS Americas reporting unit failed, as the resulting fair value was less than the carrying value of the reporting unit. The Company proceeded to measure the amount of the potential impairment (“Step Two”) with the assistance of a third party valuation firm. In Step Two of the goodwill impairment test, the Company determined the implied fair value of the goodwill and compared it to the carrying value. The Company allocated the fair value of the WPS Americas reporting unit to its assets and liabilities as if the reporting unit had been acquired in a business combination. The excess fair value of the reporting unit over the fair value of its identifiable assets and liabilities was the implied fair value of goodwill. Upon completion of the assessment, the Company recognized a goodwill impairment charge of $172,280 during fiscal 2013. In conjunction with the goodwill impairment test of the WPS Americas reporting unit, indefinite-lived tradenames associated with the reporting unit were analyzed for potential impairment. Indefinite-lived tradenames in the amount of $10,568 associated with the WPS segment were impaired during the three months ended July 31, 2013. IDS APAC Goodwill Impairment The IDS APAC reporting unit had goodwill remaining of $18,225 at the annual impairment assessment date. Although sales grew within this reporting unit from 2012 to 2013, profit declined, and neither were as high as anticipated. Projections for the business were not sufficient to support the carrying value of the reporting unit. The Company used the discounted cash flow model and market multiples model in order to complete Step One, and concluded that the IDS APAC reporting failed, as the resulting fair value was less than the carrying value of the reporting unit. The amount by which the carrying value exceeded fair value was greater than the balance of goodwill remaining, as such, a qualitative assessment was completed for Step Two because the amount by which the carrying value exceeded fair value was more than the balance of goodwill remaining. The Company recognized a goodwill impairment charge for the entire remaining goodwill balance of $18,225 during the year ended July 31, 2013. Changes in the carrying amount of goodwill by reportable segment for the years ended July 31, 2013 and 2012, were as follows:
Goodwill decreased by $59,555 during fiscal 2013. The decline in the balance consisted of the following: •The reclassification of goodwill of $37,347 to the Asia Die-Cut and Balkhausen disposal group, which is classified as held for sale as of July 31, 2013 •An impairment charge of $172,280 recognized on the Company's WPS Americas reporting unit •An impairment charge of $18,225 recognized on the Company's IDS APAC reporting unit •The divestitures of Brady Medical and Varitronics within the IDS segment during the first quarter of 2013, which decreased goodwill by $863 and $2,019, respectively, for a total of $2,882 These decreases were partially offset by the current year acquisition of PDC, which added $170,180 to the goodwill balance, and the positive effects of currency fluctuations of $999. Goodwill decreased by $123,552 during fiscal 2012. The decline in the balance consisted of the following: •An impairment charge of $115,688 recognized on the Company's former North/South Asia reporting unit •The negative effects of currency fluctuations of $30,213 •The divestiture of Etimark within the IDS segment during the fourth quarter of 2012, which decreased goodwill by $495 These decreases were partially offset by the 2012 acquisitions of Grafo, Pervaco, and Runelandhs, which increased goodwill by $1,227, $8,440, and $13,177, respectively. Grafo is reported within the IDS segment, and Pervaco and Runelandhs are reported within the WPS segment. Goodwill at July 31, 2013 included $18,225 and $172,280 of accumulated impairment losses within the IDS and WPS segments, respectively, for a total of $190,505. Other intangible assets include patents, tradenames, customer relationships, non-compete agreements and other intangible assets with finite lives being amortized in accordance with the accounting guidance for other intangible assets. The net book value of these assets was as follows:
The value of goodwill and other intangible assets in the condensed consolidated balance sheets at July 31, 2013, differs from the value assigned to them in the original allocation of purchase price due to the effect of fluctuations in the exchange rates used to translate the financial statements into the United States Dollar between the date of acquisition and July 31, 2013. The acquisition of PDC increased customer relationships and amortized tradenames by $102,500 and $6,800 respectively. In conjunction with the goodwill impairment test over the WPS Americas reporting unit, indefinite-lived tradenames associated with the reporting unit were written down to fair value. As a result, indefinite-lived tradenames related to the WPS segment in the amount of $10,568 were impaired during the current period. Amortization expense on intangible assets during fiscal 2013, 2012, and 2011 was $17,148, $10,576 and $15,571, respectively. The amortization over each of the next five fiscal years is projected to be $19,321, $18,513, $16,349, $13,197 and $11,881 for the fiscal years ending July 31, 2014, 2015, 2016, 2017 and 2018, respectively. Impairment of Long-Lived and Other Intangible Assets — The Company evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived and other finite-lived intangible assets may warrant revision or that the remaining balance of an asset may not be recoverable. The measurement of possible impairment is based on fair value of the assets generally estimated by the ability to recover the balance of assets from expected future operating cash flows on an undiscounted basis. If impairment is determined to exist, any related impairment loss is calculated based on the fair value of the asset. In conjunction with the goodwill impairment test over the IDS APAC reporting unit, long-lived assets associated with the reporting unit were analyzed for potential impairment. As a result, long-lived assets in the amount of $3,375 were impaired during the current period. Catalog Costs and Related Amortization — The Company accumulates all direct costs incurred, net of vendor cooperative advertising payments, in the development, production, and circulation of its catalogs on its balance sheet until such time as the related catalog is mailed. The catalog costs are subsequently amortized into selling, general, and administrative expense over the expected sales realization cycle, which is one year or less. Consequently, any difference between the estimated and actual revenue stream for a particular catalog and the related impact on amortization expense is neutralized within a period of one year or less. The estimate of the expected sales realization cycle for a particular catalog is based on the Company’s historical sales experience with identical or similar catalogs, and an assessment of prevailing economic conditions and various competitive factors. The Company tracks subsequent sales realization, reassesses the marketplace, and compares its findings to the previous estimate, and adjusts the amortization of future catalogs, if necessary. At July 31, 2013 and 2012, $11,255 and $15,011, respectively, of prepaid catalog costs were included in prepaid expenses and other current assets. Revenue Recognition — Revenue is recognized when it is both earned and realized or realizable. The Company’s policy is to recognize revenue when title to the product and risk of loss have transferred to the customer, persuasive evidence of an arrangement exists, and collection of the sales proceeds is reasonably assured, all of which generally occur upon shipment of goods to customers. The majority of the Company’s revenue relates to the sale of inventory to customers, and revenue is recognized when title and the risks and rewards of ownership pass to the customer. Given the nature of the Company’s business and the applicable rules guiding revenue recognition, the Company’s revenue recognition practices do not contain estimates that materially affect the results of operations, with the exception of estimated returns and credit memos. The Company provides for an allowance for estimated product returns and credit memos which is recognized as a deduction from sales at the time of the sale. As of July 31, 2013 and 2012, the Company had a reserve of $2,711 and $3,046, respectively. Sales Incentives — The Company accounts for cash consideration (such as sales incentives and cash discounts) given to its customers or resellers as a reduction of revenue rather than an operating expense. Sales incentives for the years ended July 31, 2013, 2012, and 2011 were $20,209, $18,474, and $18,826, respectively. Shipping and Handling Fees and Costs — Amounts billed to a customer in a sale transaction related to shipping and handling fees are reported as net sales and the related costs incurred for shipping and handling are reported as cost of goods sold. Advertising Costs — Advertising costs are expensed as incurred, except catalog and mailing costs as outlined above. Advertising expense for the years ended July 31, 2013, 2012, and 2011 was $77,905, $74,830, and $79,236, respectively. Stock-Based Compensation — The Company has an incentive stock plan under which the Board of Directors may grant nonqualified stock options to purchase shares of Class A Nonvoting Common Stock or restricted shares of Class A Nonvoting Common Stock to employees and non-employee directors. The options have an exercise price equal to the fair market value of the underlying stock at the date of grant and generally vest ratably over a three-year period, with one-third becoming exercisable one year after the grant date and one-third additional in each of the succeeding two years. Options issued under the plan, referred to herein as “service-based” options, generally expire 10 years from the date of grant. The Company also grants stock options to certain executives and key management employees that vest upon meeting certain financial performance conditions over the vesting schedule described above. These options are referred to herein as “performance-based” options. Performance-based stock options expire 10 years from the date of grant. Restricted shares issued under the plan have an issuance price equal to the fair market value of the underlying stock at the date of grant. The restricted shares granted in fiscal 2008 were amended in fiscal 2011 to allow for vesting after either a five-year period or a seven-year period based upon both performance and service conditions. The restricted shares granted in fiscal 2011 vest ratably at the end of years 3, 4 and 5 upon meeting certain performance and service conditions. These shares are referred to herein as “performance-based restricted shares.” Restricted shares granted in fiscal 2013 vest at the end of a three-year period based upon service conditions. These shares are referred to herein as “cliff-vested restricted shares”. The Company also grants restricted stock units to certain executives and key management employees that vest upon meeting certain financial performance conditions over a specified vesting period, referred to herein as “performance-based restricted stock units.” The performance-based restricted stock units granted in fiscal 2013 vest over a two-year period period upon meeting both performance and service conditions. As of July 31, 2013, the Company has reserved 5,150,975 shares of Class A Nonvoting Common Stock for outstanding stock options and restricted shares and 4,359,943 shares of Class A Nonvoting Common Stock remain for future issuance of stock options and restricted shares under the active plans. The Company uses treasury stock or will issue new Class A Nonvoting Common Stock to deliver shares under these plans. The Company recognizes the compensation cost of all share-based awards at the time it is deemed probable the award will vest. The cost is recognized on a straight-line basis over the vesting period of the award. Total stock-based compensation expense recognized by the Company during the years ended July 31, 2013, 2012, and 2011 was $1,736 ($1,059 net of taxes), $9,735 ($5,939 net of taxes), and $9,830 ($5,996 net of taxes), respectively. The decrease in fiscal 2013 was due to the reversal of stock-based compensation of $7,883. The reversal consisted of $4,232 of stock-based compensation expense on the performance-based restricted shares granted in fiscal 2008 that were unlikely to meet the financial performance conditions, $1,502 of stock compensation expense on performance-based restricted shares for which the original service conditions will not be met, and $2,149 of stock compensation expense on performance-based stock options granted in fiscal 2011 and fiscal 2012 that will not meet the financial performance conditions to vest. As of July 31, 2013, total unrecognized compensation cost related to share-based compensation awards that are expected to vest was $8,342 pre-tax, net of estimated forfeitures, which the Company expects to recognize over a weighted-average period of 1.7 years. The Company has estimated the fair value of its service-based and performance-based stock option awards granted during the years ended July 31, 2013, 2012, and 2011 using the Black-Scholes option valuation model. The weighted-average assumptions used in the Black-Scholes valuation model are reflected in the following table:
The Company uses historical data regarding stock option exercise behaviors to estimate the expected term of options granted based on the period of time that options granted are expected to be outstanding. Expected volatilities are based on the historical volatility of the Company’s stock. The expected dividend yield is based on the Company’s historical dividend payments and historical yield. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the grant date for the length of time corresponding to the expected term of the option. The market value is calculated as the average of the high and the low stock price on the date of the grant. The Company granted 5,000 cliff-vested restricted shares in December 2012, with a grant price and fair value of $32.99. The Company granted 10,000 shares of performance-based restricted stock units in September 2012, with a grant price and fair value of $30.21. The Company granted 100,000 shares of performance-based restricted stock in August of 2010, with a grant price and fair value of $28.35, and 210,000 shares in fiscal 2008, with a grant price and fair value of $32.83. As of July 31, 2013, 5,000 cliff-vested restricted shares were outstanding, 10,000 performance-based restricted stock units were outstanding and 221,667 performance-based restricted shares were outstanding. The Company granted 828,450 service-based stock options during fiscal 2013, with a weighted average exercise price of $30.58 and a weighted average fair value of $9.05. There were no performance-based stock options granted during fiscal 2013. Research and Development — Amounts expended for research and development are expensed as incurred. Other Comprehensive Income — Other comprehensive income consists of foreign currency translation adjustments, net unrealized gains and losses from cash flow hedges and net investment hedges, and the unamortized gain on the post-retirement medical plans net of their related tax effects. The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the periods presented. The unrealized gain (loss) on cash flow hedges and the unrecognized gain on the postretirement medical plan are presented net of tax:
The decrease in accumulated other comprehensive income for the year ended July 31, 2013 compared to the year ended July 31, 2012 was primarily due to the depreciation of the U.S. dollar against other currencies. The foreign currency translation adjustments line in the table above includes the impact of foreign currency translation, foreign currency translation on intercompany notes, and the settlements of net investment hedges, net of tax. The following table illustrates the income tax benefit (expense) on the components of other comprehensive income:
Foreign Currency Translation — Foreign currency assets and liabilities are translated into United States dollars at end of period rates of exchange, and income and expense accounts are translated at the weighted average rates of exchange for the period. Resulting translation adjustments are included in other comprehensive income. Income Taxes — The Company accounts for income taxes in accordance with the applicable accounting guidance, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The Company recognizes the effect of income tax positions only if sustaining those positions is more likely than not. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. Risk Management Activities — The Company is exposed to market risk, such as changes in interest rates and currency exchange rates. The Company does not hold or issue derivative financial instruments for trading purposes. Foreign Currency Hedging — The objective of the Company’s foreign currency exchange risk management is to minimize the impact of currency movements on non-functional currency transactions and minimize the foreign currency translation impact on the Company’s foreign operations. While the Company’s risk management objectives and strategies are driven from an economic perspective, the Company attempts, where possible and practical, to ensure that the hedging strategies it engages in qualify for hedge accounting and result in accounting treatment where the earnings effect of the hedging instrument provides substantial offset (in the same period) to the earnings effect of the hedged item. Generally, these risk management transactions will involve the use of foreign currency derivatives to protect against exposure resulting from transactions in a currency differing from the respective functional currency. The Company utilizes forward foreign exchange currency contracts to reduce the exchange rate risk of specific foreign currency denominated transactions. These contracts typically require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date, with maturities of less than 18 months. These instruments may or may not qualify as hedges under the accounting guidance for derivative instruments and hedging activities based upon the intended objective of the contract. The fair value of these instruments at July 31, 2013 and 2012 was a liability of $596 and an asset of $953, respectively. As of July 31, 2013 and 2012, the notional amount of these outstanding forward exchange contracts was $157.5 million and $61.2 million. See Note 12 for more information regarding the Company’s derivative instruments and hedging activities. The Company has designated a portion of its foreign exchange contracts as cash flow hedges and recorded these contracts at fair value on the Consolidated Balance Sheets. For these instruments, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. At July 31, 2013 and July 31, 2012, unrealized gains of $118 and $1,348 have been included in AOCI, respectively. All balances are expected to be reclassified from AOCI to earnings during the next fifteen months when the hedged transactions impact earnings. The Company has designated a portion of its foreign exchange contracts as net investment hedges of the Company’s net investments in foreign operations and recorded these contracts at fair value on the Consolidated Balance Sheets. For net investment hedges that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded as cumulative translation within accumulated other comprehensive income. Any ineffective portions are to be recognized in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. At July 31, 2013 and July 31, 2012, unrealized losses of $150 and $1,041 have been included in AOCI, respectively. The Company also utilizes Euro-denominated debt, Euro-denominated intercompany loans, and British Pound-denominated intercompany loans designated as hedge instruments to hedge portions of the Company’s net investments in Euro and British- Pound denominated foreign operations. As of July 31, 2013, the Company had €75.0 million foreign denominated debt and £25.0 million intercompany debt outstanding designated as net investment hedges of the Company’s net investment in its European foreign operations. See Note 12 for more information regarding the Company’s derivative instruments and hedging activities. For net investment hedges that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within accumulated other comprehensive income. Any ineffective portions are to be recognized in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. At July 31, 2013 and July 31, 2012, unrealized losses of $2,715 and unrealized gains of $2,635, have been included in AOCI, respectively. The Company also enters into foreign exchange contracts to create economic hedges to manage foreign exchange risk exposure. The fair value of these instruments at July 31, 2013 and 2012 was a liability of $603 and an asset of $78, respectively. The Company has not designated these derivative contracts as hedge transactions, and accordingly, the mark-to-market impact of these derivatives is recorded each period in current earnings. Hedge effectiveness is determined by how closely the changes in the fair value of the hedging instrument offset the changes in the fair value or cash flows of the hedged item. Hedge accounting is permitted only if the hedging relationship is expected to be highly effective at the inception of the hedge and on an on-going basis. Gains or losses on the derivative related to hedge ineffectiveness are recognized in current earnings. The amount of hedge ineffectiveness was not significant for the fiscal years ended July 31, 2013, 2012, and 2011. New Accounting Standards — In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, “Presentation of Comprehensive Income,” which eliminates the option to present components of other comprehensive income (“OCI”) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Subsequently, in December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income,” which indefinitely defers the requirements in ASU 2011-05 to present on the face of the financial statements adjustments for items that are reclassified from OCI to net earnings in the statement where the components of net earnings and the components of OCI are presented. The ASU does not change the items that must be reported in OCI. The Company has provided the required statements of comprehensive income beginning with the first quarter of fiscal 2013. In January 2013, the FASB issued ASU 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," which clarified that the scope of the disclosures under U.S. GAAP is limited to derivatives, including bifurcated embedded derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are offset either in accordance with ASC 210 or ASC 815. Entities with other types of financial assets and financial liabilities subject to a master netting arrangement or similar agreement are no longer subject to the disclosure requirements in ASU 2011-11. The guidance is effective for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. Disclosures are to be provided retrospectively for all periods presented. The adoption of this update will not have a material impact on the financial statements of the Company. In February 2013, the FASB issued ASU 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income," which requires entities to disclose additional information for items reclassified out of accumulated other comprehensive income ("AOCI"). For items reclassified out of AOCI and into net earnings in their entirety, entities are required to disclose the effect of the reclassification in each affected line in the statement of earnings. For AOCI reclassification items that are not reclassified in their entirety into net earnings, a cross reference to other required U.S. GAAP disclosures is required. This information may be provided either in the notes or parenthetically on the face of the statement that reports net earnings as long as all the information is disclosed in a single location. However, an entity is prohibited from providing this information parenthetically on the face of the statement that reports net earnings if it has items that are not reclassified in their entirety into net earnings. The guidance is effective for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update will not have a material impact on the financial statements of the Company. In March 2013, the FASB issued ASU 2013-05, "Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity," which applies to the release of the cumulative translation adjustment into net earnings when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. The guidance requires that a parent deconsolidate a subsidiary or derecognize a group of assets that is a business if the parent ceases to have a controlling financial interest in that group of assets, and resolves the diversity in practice for the treatment of business combinations achieved in stages involving a foreign entity. The guidance is effective for annual and interim reporting periods beginning after December 15, 2013. The adoption of this update will not have a material impact on the financial statements of the Company. |
Income Taxes
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | (Loss) earnings from continuing operations consists of the following:
Income taxes consist of the following:
Deferred income taxes result from temporary differences in the recognition of revenues and expenses for financial statement and income tax purposes. The approximate tax effects of temporary differences are as follows:
Tax loss carry-forwards at July 31, 2013 are comprised of:
The valuation allowance increased by $11,295 during the fiscal year ended July 31, 2013 mainly due to additional valuation allowances for Wuxi, Shenzhen, and Brazil. The valuation allowance decreased by $1,629 during the fiscal year ended July 31, 2012. If realized or reversed in future periods, substantially all of the valuation allowance would impact the income tax rate. Rate Reconciliation A reconciliation of the tax computed by applying the statutory U.S. federal income tax rate to earnings (loss) from continuing operations before income taxes to the total income tax expense is as follows:
The Company is eligible for tax holidays on the earnings of certain subsidiaries. The benefits realized as a result of these tax holidays reduced the consolidated effective tax rate by approximately 0.7%, 0.7%, and 0.9% during the years ended July 31, 2013, 2012, and 2011, respectively. These tax holidays are fully expired as of July 31, 2013. Uncertain Tax Positions On August 1, 2007, the Company adopted guidance regarding uncertain tax positions. The guidance requires application of a “more likely than not” threshold to the recognition and de-recognition of tax positions. A reconciliation of unrecognized tax benefits (excluding interest and penalties) is as follows:
Approximately $32,339 of unrecognized tax benefits, if recognized, would affect the Company's effective income tax rate. The Company has classified $32,759 and $29,765, excluding interest and penalties, of the reserve for uncertain tax positions in Other Liabilities on the Consolidated Balance Sheet as of July 31, 2013 and 2012, respectively. The Company has classified $4,815, excluding interest and penalties, as a reduction of long-term deferred income tax assets on the Consolidated Balance Sheet as of July 31, 2013. The Company recognizes interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statements of income. Interest expense is recognized on the amount of potentially underpaid taxes associated with the Company's tax positions, beginning in the first period in which interest starts accruing under the respective tax law and continuing until the tax positions are settled. During the years ended July 31, 2013, 2012, and 2011, the Company recognized a $200, and $539 increase in interest expense, and a $990 decrease in interest expense, as well as $313, $855 and $500 of penalties, respectively, related to the reserve for uncertain tax positions. These amounts are net of reversals due to reductions for tax positions of prior years, statute of limitations, and settlements. At July 31, 2013 and 2012, the Company had $2,265 and $1,986, respectively, accrued for interest on unrecognized tax benefits. Penalties are accrued if the tax position does not meet the minimum statutory threshold to avoid the payment of a penalty. At July 31, 2013 and 2012, the Company had $2,689 and $2,840, respectively, accrued for penalties on unrecognized tax benefits. The Company estimates that it is reasonably possible that the unrecognized tax benefits may be reduced by $13,934 within twelve months as a result of the resolution of worldwide tax matters, tax audit settlements, amended tax filings, and/or statute expirations. The maximum amount that would be recognized through the consolidated statements of earnings as expense is $3,978. During the year ended July 31, 2013, the Company recognized tax benefits associated with the lapse of statutes of limitations. The Company and its subsidiaries file income tax returns in the U.S., various state, and foreign jurisdictions. The following table summarizes the open tax years for the Company's major jurisdictions:
Unremitted Earnings The Company does not provide for U.S. deferred taxes on cumulative earnings of non-U.S. affiliates and associated companies that have been reinvested indefinitely. These earnings relate to ongoing operations and at July 31, 2013, were approximately $425,743. These earnings have been reinvested in non-U.S. business operations, and the Company does not intend to repatriate these earnings to fund U.S. operations. It is impracticable to determine the income tax liability that would be payable if such earnings were not indefinitely reinvested. |
Long-Term Obligations - Additional Information (Details)
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3 Months Ended | 12 Months Ended | 24 Months Ended | 36 Months Ended | 12 Months Ended | 69 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
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Apr. 30, 2012
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Jul. 31, 2013
USD ($)
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Jul. 31, 2012
USD ($)
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Jul. 31, 2011
USD ($)
|
Jul. 31, 2013
USD ($)
|
Jul. 31, 2007
USD ($)
|
Jul. 31, 2012
EUR (€)
|
Jul. 31, 2013
USD-Denominated Borrowing Credit Revolver [Member]
USD ($)
|
Jul. 31, 2013
Senior Unsecured Notes [Member]
EUR (€)
|
May 13, 2010
Senior Unsecured Notes [Member]
USD ($)
|
May 13, 2010
Senior Unsecured Notes [Member]
EUR (€)
|
Jul. 31, 2013
Euro-denominated notes payable in 2017 at a fixed rate of 3.71% [Member]
USD ($)
|
Jul. 31, 2012
Euro-denominated notes payable in 2017 at a fixed rate of 3.71% [Member]
USD ($)
|
May 13, 2010
Euro-denominated notes payable in 2017 at a fixed rate of 3.71% [Member]
USD ($)
|
Jul. 31, 2013
Euro-denominated notes payable in 2020 at a fixed rate of 4.24% [Member]
USD ($)
|
Jul. 31, 2012
Euro-denominated notes payable in 2020 at a fixed rate of 4.24% [Member]
USD ($)
|
May 13, 2010
Euro-denominated notes payable in 2020 at a fixed rate of 4.24% [Member]
USD ($)
|
Jul. 31, 2013
Private Placement Debt [Member]
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May 01, 2010
Private Placement Debt [Member]
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Apr. 30, 2012
USD-Denominated Borrowing Credit Revolver [Member]
|
Jul. 31, 2013
USD-Denominated Borrowing Credit Revolver [Member]
|
Jul. 31, 2013
USD-denominated credit facility China [Member]
USD ($)
|
Jul. 31, 2013
USD-Denominated Borrowing Credit Revolver [Member]
USD ($)
|
Jul. 31, 2013
USD-denominated credit facility China [Member]
USD ($)
|
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Debt Instrument [Line Items] | ||||||||||||||||||||||||
Line of credit, current borrowing capacity | $ 26,200,000 | $ 300,000,000 | ||||||||||||||||||||||
Line of credit, expiration date | Feb. 01, 2017 | |||||||||||||||||||||||
Line of credit, maximum borrowing capacity | 450,000,000 | |||||||||||||||||||||||
Proceeds from borrowing on notes payable | 220,000,000 | 0 | 0 | 220,000,000 | ||||||||||||||||||||
Repayment of borrowing on notes payable | 181,000,000 | 0 | 0 | |||||||||||||||||||||
Notes Payable, Current | 50,613,000 | 0 | 50,613,000 | 39,000,000 | ||||||||||||||||||||
Line of credit, remaining borrowing capacity | 261,000,000 | 14,587,000 | ||||||||||||||||||||||
Excess Available Under Maximum Capacity | 411,000,000 | 411,000,000 | ||||||||||||||||||||||
Letters of credit outstanding | 3,570,000 | 3,762,000 | 3,570,000 | |||||||||||||||||||||
Notes Payable | 11,613,000 | |||||||||||||||||||||||
Debt face amount | 4,581,000 | 75,000,000.0 | 75,000,000.0 | 75,000,000 | 30,000,000.0 | 45,000,000.0 | ||||||||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.71% | 4.24% | ||||||||||||||||||||||
Debt Instrument Aggregate Face Amount During Period | 500,000,000 | |||||||||||||||||||||||
Debt Instrument, Interest Rate Terms | from 5.14%to 5.33% | |||||||||||||||||||||||
Repayments of Long-term Debt | 61,300,000 | |||||||||||||||||||||||
Long-term debt, fair value | 276,000,000 | 339,000,000 | 276,000,000 | |||||||||||||||||||||
Long-term debt, carrying value | $ 262,414,000 | $ 316,208,000 | $ 262,414,000 | $ 39,900,000 | $ 36,912,000 | $ 59,850,000 | $ 55,368,000 | |||||||||||||||||
Ratio Of Debt To Ebitda Related To Debt Agreement | equal to 1.6 to 1.0 | not more than a 3.5 to 1.0 ratio | not more than a 3.25 to 1.0 ratio | equal to 1.6 to 1.0 | ||||||||||||||||||||
Interest Expense Coverage Ratio | not less than a 3.0 to 1.0 ratio | equal to 9.2 to 1.0 |
Acquisitions and Divestitures
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Jul. 31, 2013
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Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions The Company completed one business acquisition during each of the fiscal years ended July 31, 2013 and July 31, 2011 and three business acquisitions during the fiscal year ended July 31, 2012. All of these transactions were accounted for using business combination accounting; therefore, the results of the acquired operations are included in the accompanying consolidated financial statements only since their acquisition dates. Fiscal 2013 On December 28, 2012, the Company acquired all of the outstanding shares of Precision Dynamics Corporation ("PDC"), a manufacturer of identification products primarily for the healthcare sector headquartered in Valencia, California. PDC is reported within the Company's ID Solutions segment. Net sales and net income attributable to PDC from the acquisition date through July 31, 2013 were approximately $102,329 and $759, respectively. Financing for this acquisition consisted of $220,000 from the Company's revolving loan agreement with a group of six banks and the balance from cash on hand. As of July 31, 2013, the Company repaid $181,000 of the borrowing on the credit facility with cash on hand. The Company incurred $3,600 in acquisition-related expenses during fiscal 2013. These costs are included in SG&A expenses on the statement of earnings for the year ended July 31, 2013. The Company acquired PDC to create an anchor position in the healthcare sector, consistent with the Company's mission to identify and protect premises, products and people. PDC's large customer base, strong channels to market, and broad product offering provide a strong foundation to build upon PDC's market position. The table below details a preliminary allocation of the PDC purchase price:
The final purchase price allocation is subject to completion of final valuation of the assets acquired and liabilities assumed. The final valuation is expected to be completed as soon as is practicable, but no later than 12 months after the closing date of the acquisition. The intangible assets consist of a customer relationship of $102,500, which is being amortized over a life of 10 years, and a definite-lived trademark of $6,800, which is being amortized over a life of 3 years. Of the total $170,180 in acquired goodwill, $57,374 is tax deductible and $51,672 of the total $109,300 in intangibles is tax deductible. The following table reflects the unaudited pro forma operating results of the Company for fiscal years 2013 and 2012, which give effect to the acquisition of PDC as if it had occurred at the beginning of fiscal 2012, after giving effect to certain adjustments, including amortization of intangible assets, interest expense on acquisition debt, and income tax effects. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations which may occur in the future or that would have occurred had the acquisitions been effected on the date indicated, nor are they necessarily indicative of the Company's future results of operations.
Pro forma results for fiscal 2012, were adjusted to include $3,600 of acquisition-related expenses, $1,530 of nonrecurring expense related to the fair value adjustment to acquisition-date inventory, $1,402 in interest expense on acquisition debt, and $2,526 in income tax expense. Pro forma results for fiscal 2013, were adjusted to exclude $3,600 of acquisition-related expenses and $1,530 of nonrecurring expense related to the fair value adjustment to acquisition-date inventory, and were adjusted to include $529 in interest expense on acquisition debt and $429 in income tax benefit. Pro forma results for fiscal years 2013 and 2012 include $5,215 and $12,517 of pre-tax amortization expense related to intangible assets, respectively. Fiscal 2012 In March 2012, the Company acquired Grafo Wiremarkers Africa (Proprietary) Limited (“Grafo”), based in Johannesburg, South Africa for $3,039. Grafo offers a comprehensive range of wire identification products and is the sole distributor in Africa of locally developed Dartag® ABS cablemarkers, and stainless steel ties and tags. Grafo has annual sales of approximately $3,000 and is included in the Company’s IDS segment. The purchase price allocation resulted in $1,227 assigned to goodwill and $961 assigned to customer relationships. The amount assigned to the customer relationships is being amortized over seven years. The Company expects the acquisition to provide a solid base in South Africa where it can further expand its business with the established distributors and customers throughout South Africa and the Southern African Development Community (SADC) countries. In May 2012, the Company acquired Runelandhs Försäljnings AB (“Runelandhs”), based in Kalmar, Sweden for $22,499, net of cash received. Runelandhs is a direct marketer of industrial and office equipment with annual sales of approximately $19,000. Its products include lifting, transporting, and warehouse equipment; workbenches and material handling supplies; products for environmental protection; and entrance, reception, and office furnishings. Runelandhs is included in the Company’s WPS segment. The final purchase price allocation resulted in $13,177 assigned to goodwill, $5,340 assigned to the tradename, $5,474 assigned to customer relationships, and $95 assigned to non-compete agreements. The amount assigned to the trademark has an indefinite life. The amounts assigned to the customer relationships and non-compete agreements are being amortized over seven and five years, respectively. The Company expects the acquisition to expand its direct marketing presence in Scandinavia. In May 2012, the Company acquired Pervaco AS (“Pervaco”), based in Kjeller, Norway for $12,111, net of cash received. Pervaco is a direct marketer of facility identification products with annual sales of approximately $6,000. Pervaco is included in the Company’s WPS segment. The purchase price allocation resulted in $8,440 assigned to goodwill, $1,538 assigned to the tradename, $2,468 assigned to customer relationships, and $91 assigned to non-compete agreements. The amount assigned to the tradename has an indefinite life. The amounts assigned to the customer relationships and non-compete agreements are being amortized over five and three years, respectively. The Company also expects the acquisition to expand its direct marketing presence in Scandinavia. The following table summarizes the combined estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
The results of the operations of the acquired business have been included since the date of acquisition in the accompanying consolidated financial statements. Pro forma information related to the acquisitions during the twelve months ended July 31, 2012, is not included because the impact on the Company’s consolidated results of operations is considered to be immaterial. Fiscal 2011 In November 2010, the Company acquired ID Warehouse, based in New South Wales, Australia for $7,970. ID Warehouse offers security identification and visitor management products including identification card printers, access control cards, wristbands, tamper-evident security seals and identification accessories. The business is included in the Company’s WPS segment. The purchase price allocation resulted in $4,792 assigned to goodwill, $1,846 assigned to customer relationships, and $487 assigned to non-compete agreements. The amounts assigned to the customer relationships and non-compete agreements are being amortized over ten and five years, respectively. The acquisition further strengthened the Company’s position in the people identification business in Australia and within the segment. The following table summarizes the combined estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
The results of the operations of the acquired business have been included since the date of acquisition in the accompanying consolidated financial statements. Pro forma information related to the acquisition of ID Warehouse was not included because the impact on the Company’s consolidated results of operations is considered to be immaterial. |
Summary of Significant Accounting Policies Accounts Receivables (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
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Jul. 31, 2013
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Jul. 31, 2012
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 5,093 | $ 6,006 |
Entity-Wide Revenue, Major Customer, Percentage | 5.00% | |
Percentage Of Maximum Customers Shares In Companys Consolidated Accounts Receivable | 5.00% |
Employee Benefit Plans (Tables)
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Jul. 31, 2014
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Jul. 31, 2013
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Postemployment Benefit Obligations | The following table provides a reconciliation of the changes in the Plan’s accumulated benefit obligations during the years ended July 31:
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Schedule of Amounts Recognized in Balance Sheet | As of July 31, 2013 and 2012, amounts recognized as liabilities in the accompanying consolidated balance sheets consist of:
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Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | As of July 31, 2013 and 2012, pre-tax amounts recognized in accumulated other comprehensive income in the accompanying consolidated balance sheets consist of:
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Schedule of Net Periodic Benefit Cost Not yet Recognized | Net periodic benefit cost for the Plan for fiscal years 2013, 2012, and 2011 includes the following components:
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Schedule of Assumptions Used | The following assumptions were used in accounting for the Plan:
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Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | A one-percentage point change in assumed health care cost trend rates would have the following effects on the Plan:
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Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the years ending July 31:
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Segment Information (Tables)
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Jul. 31, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Segment | Following is a summary of segment information for the years ended July 31, 2013, 2012 and 2011:
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Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Following is a reconciliation of segment profit to net earnings (loss) for the years ended July 31, 2013, 2012 and 2011:
(1) Of the total $204,448 impairment charges in fiscal 2013, $182,800 was in the WPS reportable segment and $21,648 was in the IDS reportable segment. |
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas |
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Long-Term Obligations - Schedule of Maturities of Long-Term Debt (Details) (USD $)
In Thousands, unless otherwise specified |
Jul. 31, 2013
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Jul. 31, 2012
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Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2014 | $ 61,264 | |
2015 | 42,514 | |
2016 | 42,514 | |
2017 | 56,272 | |
2018 | 0 | |
Thereafter | 59,850 | |
Long-term Debt | $ 262,414 | $ 316,208 |
Derivatives and Hedging Activities (Tables)
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Jul. 31, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments in Consolidated Balance Sheets | Fair values of derivative instruments in the consolidated balance sheets were as follows:
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Long-Term Obligations - Schedule of Borrowings on Revolving Loan Agreement (Details) (USD $)
In Thousands, unless otherwise specified |
Jul. 31, 2013
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Jul. 31, 2012
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Line of Credit Facility [Line Items] | ||
Notes payable | $ 50,613 | $ 0 |
Weighted average borrowing rate | 1.2423% | |
USD-Denominated Borrowing Credit Revolver [Member]
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Line of Credit Facility [Line Items] | ||
Notes Payable | 39,000 | |
Interest rate | 1.2787% | |
USD-denominated credit facility China [Member]
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Line of Credit Facility [Line Items] | ||
Notes Payable | $ 11,613 | |
Interest rate | 1.1201% |
Acquisitions and Divestitures - Pro Forma (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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Apr. 30, 2013
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Jan. 31, 2013
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Oct. 31, 2012
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Jul. 31, 2012
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Apr. 30, 2012
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Jan. 31, 2012
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Oct. 31, 2011
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Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2011
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Jul. 31, 2013
Nonvoting Common Stock [Member]
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Apr. 30, 2013
Nonvoting Common Stock [Member]
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Jan. 31, 2013
Nonvoting Common Stock [Member]
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Oct. 31, 2012
Nonvoting Common Stock [Member]
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Jul. 31, 2012
Nonvoting Common Stock [Member]
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Apr. 30, 2012
Nonvoting Common Stock [Member]
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Jan. 31, 2012
Nonvoting Common Stock [Member]
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Oct. 31, 2011
Nonvoting Common Stock [Member]
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Jul. 31, 2013
Nonvoting Common Stock [Member]
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Jul. 31, 2012
Nonvoting Common Stock [Member]
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Jul. 31, 2011
Nonvoting Common Stock [Member]
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Apr. 30, 2012
Precision Dynamics Corporation [Member]
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Jul. 31, 2013
Precision Dynamics Corporation [Member]
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Jul. 31, 2013
Pro Forma [Member]
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Jul. 31, 2012
Pro Forma [Member]
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Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||
Total inventories | $ 16,788 | $ 16,788 | $ 1,530 | $ 1,530 | ||||||||||||||||||||||||||||||||||
Interest Expense | 16,641 | 19,090 | 22,124 | 1,402 | 529 | |||||||||||||||||||||||||||||||||
Income Tax Expense (Benefit) | 2,526 | 429 | ||||||||||||||||||||||||||||||||||||
Business Combination, Acquisition Related Costs | 3,600 | 3,600 | ||||||||||||||||||||||||||||||||||||
Net sales | 309,097 | 300,971 | 271,175 | 270,866 | 269,089 | 271,151 | 255,052 | 273,396 | 1,152,109 | 1,068,688 | 1,059,355 | 102,329 | ||||||||||||||||||||||||||
Net sales, pro forma | 1,220,534 | 1,238,554 | ||||||||||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations Attributable to Parent | (140,816) | 102,471 | 105,957 | (141,054) | 102,242 | 105,734 | ||||||||||||||||||||||||||||||||
(Loss) earnings from continuing operations, pro forma | (136,517) | 102,993 | ||||||||||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations, Per Basic Share | $ (3.41) | [1] | $ 0.41 | [1] | $ (0.22) | [1] | $ 0.50 | [1] | $ 0.40 | $ 0.52 | $ 0.50 | $ 0.53 | $ (2.75) | [1] | $ 1.95 | $ 2.01 | ||||||||||||||||||||||
Basic net (loss) income per Class A Common Share, pro forma (USD per share) | $ (2.66) | $ 1.96 | ||||||||||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations, Per Diluted Share | $ (3.41) | [1] | $ 0.41 | [1] | $ (0.22) | [1] | $ 0.50 | [1] | $ 0.40 | [1] | $ 0.51 | [1] | $ 0.50 | [1] | $ 0.52 | [1] | $ (2.75) | [1] | $ 1.94 | [1] | $ 1.99 | |||||||||||||||||
Diluted net (loss) income per Class A Common Share, pro forma (USD per share) | $ (2.66) | $ 1.95 | ||||||||||||||||||||||||||||||||||||
Amortization of Intangible Assets | $ 17,148 | $ 10,576 | $ 15,571 | $ 5,215 | $ 12,517 | |||||||||||||||||||||||||||||||||
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