## To our shareholders: 

## A Year of Transformation 

In fiscal 2003, Brady Corporation faced a difficult economic environment and a shifting global marketplace. Despite these challenges, we had modest sales gains. However, our reported net income dropped due primarily to charges we took for restructuring our organization in response to a prolonged weak economy and changes in our global markets. With no sign of a material economic rebound in the manufacturing sector, getting our cost structure back in line became a top priority. Staying the course with our long-term strategic initiatives, we also accelerated our efforts to transform the way we do business in order to return to higher levels of profitability and growth. With a renewed focus on our customers, we took action to simplify and streamline our operations. We believe this transformation is essential to ensure our future competitiveness and build shareholder value. 

## FINANCIAL RESULTS 

Our sales for the year were $554.9 million, up 7.3 percent from fiscal 2002 sales of $517.0 million. The impact of foreign-currency translations was a positive 5.1 percent. Sales from core businesses were down 0.7 percent, while acquisitions contributed 2.9 percent to annual sales. Sales in the Graphics & Workplace Solutions Group increased 10.2 percent, while the Identification Solutions & Specialty Tapes Group sales increased 3.6 percent. Regionally, sales in the U.S. declined slightly, while Europe showed modest improvement in local currencies. Asian and Latin American sales experienced more significant growth despite economic weakness in those regions. 

