[Executive Summary & Key Announcements](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Announcements) Brady Corporation's fiscal 2025 performance highlights strong sales and adjusted EPS growth, alongside fiscal 2026 guidance [Fiscal 2025 Fourth Quarter Highlights](index=1&type=section&id=Quarter%20Ended%20July%2031%2C%202025%20Financial%20Results%20Highlights) Brady Corporation reported a 15.7% increase in sales for Q4 FY2025, reaching $397.3 million, driven by acquisitions and foreign currency translation, alongside 2.4% organic growth. Adjusted Diluted EPS increased by 5.9% to a record $1.26, despite a GAAP EPS decline Q4 FY2025 Sales Performance | Metric | Q4 FY2025 | Q4 FY2024 | | :-------------------------- | :--------- | :--------- | | Total Sales | $397.3M | $343.4M | | Organic Sales Growth | 2.4% | - | | Acquisitions Impact | 11.3% | - | | Foreign Currency Impact | 2.0% | - | | Americas & Asia Sales Growth | 14.1% | - | | Europe & Australia Sales Growth | 18.8% | - | | Americas & Asia Organic Sales Growth | 4.3% | - | | Europe & Australia Organic Sales Growth | (1.3)% | - | Q4 FY2025 Earnings Per Share | Metric | Q4 FY2025 | Q4 FY2024 | Change (%) | | :-------------------- | :--------- | :--------- | :--------- | | Diluted EPS (GAAP) | $1.04 | $1.15 | (9.6)% | | Adjusted Diluted EPS | $1.26 | $1.19 | 5.9% | [Fiscal 2025 Annual Highlights](index=1&type=section&id=Year%20Ended%20July%2031%2C%202025%20Financial%20Results%20Highlights) For the full fiscal year 2025, Brady Corporation achieved a 12.8% sales increase to $1.51 billion, with 2.6% organic sales growth. Adjusted Diluted EPS reached a record $4.60, up 9.0% year-over-year. The company also returned $96.4 million to shareholders FY2025 Sales Performance | Metric | FY2025 | FY2024 | | :-------------------- | :------- | :------- | | Total Sales | $1.51B | $1.34B | | Organic Sales Growth | 2.6% | - | | Acquisitions Impact | 10.5% | - | | Divestitures Impact | (0.3)% | - | FY2025 Earnings Per Share | Metric | FY2025 | FY2024 | Change (%) | | :-------------------- | :------- | :------- | :--------- | | Diluted EPS (GAAP) | $3.94 | $4.07 | (3.2)% | | Adjusted Diluted EPS | $4.60 | $4.22 | 9.0% | - Returned **$96.4 million** to shareholders in fiscal 2025 through dividends and share repurchases[7](index=7&type=chunk)[11](index=11&type=chunk) [Fiscal 2026 EPS Guidance Announcement](index=1&type=section&id=Fiscal%202026%20EPS%20Guidance%20Announcement) Brady Corporation announced its diluted EPS guidance for the fiscal year ending July 31, 2026, projecting a range of $4.55 to $4.85 on a GAAP basis and $4.85 to $5.15 on an adjusted basis Fiscal 2026 Diluted EPS Guidance | Metric | Low End | High End | | :-------------------- | :------ | :------- | | GAAP EPS | $4.55 | $4.85 | | Adjusted Diluted EPS | $4.85 | $5.15 | [Company Overview](index=3&type=section&id=Company%20Overview) Brady Corporation is a global manufacturer of identification solutions, serving diverse industries with high-performance labels, signs, and printing systems [About Brady Corporation](index=3&type=section&id=About%20Brady%20Corporation) Brady Corporation is an international manufacturer and marketer of complete identification solutions, providing products like high-performance labels, signs, safety devices, printing systems, and software to diverse industries globally - Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places[16](index=16&type=chunk) - Products include high-performance labels, signs, safety devices, printing systems and software, helping customers increase safety, security, productivity and performance[16](index=16&type=chunk) - Serves a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and other industries[16](index=16&type=chunk) - Headquartered in Milwaukee, Wisconsin, with approximately **6,400 employees worldwide** as of July 31, 2025[16](index=16&type=chunk) - Fiscal 2025 sales were approximately **$1.51 billion**[16](index=16&type=chunk) [Fiscal 2025 Financial Performance](index=1&type=section&id=Fiscal%202025%20Financial%20Performance) This section details Brady Corporation's Q4 and full fiscal year 2025 financial results, highlighting sales, profitability, and earnings per share [Fourth Quarter Results](index=1&type=section&id=Fourth%20Quarter%20Results) For Q4 FY2025, Brady reported total sales of $397.3 million, a 15.7% increase. Income before income taxes decreased by 11.3% to $60.5 million, while Adjusted Income Before Income Taxes increased by 5.1% to $74.2 million. Net income and GAAP diluted EPS also saw declines, but Adjusted Net Income and Adjusted Diluted EPS increased Q4 FY2025 Sales Performance (in millions) | Metric | Q4 FY2025 | Q4 FY2024 | Change (%) | | :-------------------- | :--------- | :--------- | :--------- | | Net Sales | $397.3 | $343.4 | 15.7% | | Americas & Asia Sales | $260.8 | $228.5 | 14.1% | | Europe & Australia Sales | $136.5 | $114.9 | 18.8% | Q4 FY2025 Profitability (in millions) | Metric | Q4 FY2025 | Q4 FY2024 | Change (%) | | :-------------------------------- | :--------- | :--------- | :--------- | | Income before income taxes (GAAP) | $60.5 | $68.2 | (11.3)% | | Adjusted Income Before Income Taxes | $74.2 | $70.5 | 5.1% | | Net Income (GAAP) | $49.9 | $55.5 | (10.1)% | | Adjusted Net Income | $60.2 | $57.3 | 5.1% | Q4 FY2025 Earnings Per Share | Metric | Q4 FY2025 | Q4 FY2024 | Change (%) | | :-------------------- | :--------- | :--------- | :--------- | | Diluted EPS (GAAP) | $1.04 | $1.15 | (9.6)% | | Adjusted Diluted EPS | $1.26 | $1.19 | 5.9% | [Full Year Results](index=1&type=section&id=Full%20Year%20Results) For the full fiscal year 2025, Brady's sales increased 12.8% to $1.51 billion. Income before income taxes decreased by 4.3% to $237.1 million, while Adjusted Income Before Income Taxes rose 8.7% to $279.5 million. Net income and GAAP diluted EPS declined, but Adjusted Net Income and Adjusted Diluted EPS achieved record highs FY2025 Sales Performance (in billions) | Metric | FY2025 | FY2024 | Change (%) | | :-------------------- | :------- | :------- | :--------- | | Net Sales | $1.51 | $1.34 | 12.8% | | Americas & Asia Sales | $0.99 | $0.89 | 12.1% | | Europe & Australia Sales | $0.52 | $0.45 | 14.3% | FY2025 Profitability (in millions) | Metric | FY2025 | FY2024 | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | | Income before income taxes (GAAP) | $237.1 | $247.8 | (4.3)% | | Adjusted Income Before Income Taxes | $279.5 | $257.3 | 8.7% | | Net Income (GAAP) | $189.3 | $197.2 | (4.0)% | | Adjusted Net Income | $221.3 | $204.5 | 8.2% | FY2025 Earnings Per Share | Metric | FY2025 | FY2024 | Change (%) | | :-------------------- | :------- | :------- | :--------- | | Diluted EPS (GAAP) | $3.94 | $4.07 | (3.2)% | | Adjusted Diluted EPS | $4.60 | $4.22 | 9.0% | [Management Commentary and Outlook](index=2&type=section&id=Management%20Commentary%20and%20Outlook) Management commentary highlights strategic investments and acquisitions driving performance, alongside the fiscal 2026 diluted EPS guidance [Management Remarks](index=2&type=section&id=Commentary) Management highlighted strong organic sales growth in Americas & Asia due to new product investments, leading to record adjusted EPS. Strategic acquisitions (Gravotech, Mecco) expanded product portfolio in direct part marking and laser engraving. The company maintains a strong balance sheet, enabling continued investment in R&D and shareholder returns - Investments in new products led to strong results in the Americas & Asia region, with **4.3% organic sales growth in Q4** and **4.8% in fiscal 2025**, contributing to record adjusted earnings per share[11](index=11&type=chunk) - Acquired Gravotech (beginning of fiscal 2025) and Mecco (closed August 4, 2025) to add direct part marking and laser engraving capabilities, expanding identification solutions[11](index=11&type=chunk) - Strong balance sheet and net cash position provide flexibility to fund organic and inorganic opportunities, and return funds to shareholders[11](index=11&type=chunk) - Returned **$96.4 million** to shareholders in fiscal 2025 through dividends and share buybacks, while also investing a record-high in research and development[11](index=11&type=chunk) [Fiscal 2026 Guidance](index=2&type=section&id=Fiscal%202026%20Guidance) Brady Corporation provided diluted EPS guidance for fiscal year 2026, expecting GAAP EPS between $4.55 and $4.85 (15.5% to 23.1% increase) and Adjusted Diluted EPS between $4.85 and $5.15 (5.4% to 12.0% increase) Fiscal 2026 Diluted EPS Guidance | Metric | Low End | High End | YoY Change (vs. FY2025 GAAP $3.94) | YoY Change (vs. FY2025 Adj. $4.60) | | :-------------------- | :------ | :------- | :-------------------------------- | :---------------------------------- | | GAAP EPS | $4.55 | $4.85 | 15.5% - 23.1% | - | | Adjusted Diluted EPS | $4.85 | $5.15 | - | 5.4% - 12.0% | - Guidance assumptions include a full-year income tax rate of approximately **21%**, depreciation and amortization expense of approximately **$42 million**, and capital expenditures of approximately **$40 million**[14](index=14&type=chunk) - Fiscal 2026 guidance is based upon foreign currency exchange rates as of July 31, 2025, and assumes economic growth[14](index=14&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Brady Corporation's consolidated financial statements detail income, balance sheet positions, and cash flow activities for fiscal years 2025 and 2024 [Consolidated Statements of Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The consolidated statements of income show a significant increase in net sales for both the quarter and full year ended July 31, 2025, primarily driven by acquisitions. Gross margin also increased, but operating income and net income (GAAP) saw slight declines for the full year Key Income Statement Figures (in thousands) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------------- | :-------- | :-------- | :------- | :------- | | Net sales | $397,275 | $343,402 | $1,513,605 | $1,341,393 | | Cost of goods sold | $197,044 | $166,347 | $752,783 | $653,509 | | Gross margin | $200,231 | $177,055 | $760,822 | $687,884 | | Operating income | $59,292 | $66,215 | $236,638 | $243,414 | | Income before income taxes | $60,505 | $68,208 | $237,097 | $247,841 | | Net income | $49,876 | $55,456 | $189,256 | $197,215 | | Diluted EPS | $1.04 | $1.15 | $3.94 | $4.07 | [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet as of July 31, 2025, shows an increase in total assets, primarily driven by goodwill and other intangible assets, reflecting recent acquisitions. Total liabilities also increased, while stockholders' equity grew Key Balance Sheet Figures (in thousands) | Metric | July 31, 2025 | July 31, 2024 | | :---------------------------------------------------------------- | :------------ | :------------ | | Cash and cash equivalents | $174,349 | $250,118 | | Accounts receivable, net | $231,944 | $185,486 | | Inventories | $200,881 | $152,729 | | Total current assets | $621,835 | $599,715 | | Property, plant and equipment—net | $225,572 | $195,758 | | Goodwill | $676,945 | $589,611 | | Other intangible assets | $105,374 | $51,839 | | Total Assets | $1,734,253 | $1,515,569 | | Total current liabilities | $330,332 | $264,682 | | Long-term debt | $99,766 | $90,935 | | Total Liabilities | $542,042 | $448,911 | | Total Stockholders' Equity | $1,192,211 | $1,066,658 | [Consolidated Statements of Cash Flows](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash provided by operating activities decreased significantly in FY2025 compared to FY2024, largely due to changes in operating assets and liabilities. Cash used in investing activities increased substantially due to business acquisitions, while cash used in financing activities also increased Key Cash Flow Figures (in thousands) | Metric | FY2025 | FY2024 | | :---------------------------------------- | :------- | :------- | | Net cash provided by operating activities | $181,196 | $255,074 | | Net cash used in investing activities | $(171,254) | $(81,047) | | Net cash used in financing activities | $(83,871) | $(70,528) | | Net (decrease) increase in cash and cash equivalents | $(75,769) | $98,586 | | Cash and cash equivalents, end of period | $174,349 | $250,118 | [Segment Information](index=7&type=section&id=Segment%20Information) This section details Brady Corporation's net sales, growth, and profitability across its Americas & Asia and Europe & Australia operating segments [Net Sales and Growth by Segment](index=7&type=section&id=NET%20SALES%20by%20Segment) Both Americas & Asia and Europe & Australia segments reported increased net sales for Q4 and the full year FY2025. Americas & Asia showed strong organic growth, while Europe & Australia experienced organic sales decline but significant growth from acquisitions and currency translation Net Sales by Segment (in thousands) | Segment | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :----------------- | :-------- | :-------- | :------- | :------- | | Americas & Asia | $260,789 | $228,493 | $993,715 | $886,528 | | Europe & Australia | $136,486 | $114,909 | $519,890 | $454,865 | | Total | $397,275 | $343,402 | $1,513,605 | $1,341,393 | Sales Growth Components (Q4 YoY) | Segment | Organic | Acquisitions | Currency | Divestiture | Total | | :----------------- | :------ | :----------- | :------- | :---------- | :---- | | Americas & Asia | 4.3% | 9.8% | 0% | 0% | 14.1% | | Europe & Australia | (1.3)% | 14.4% | 5.7% | 0% | 18.8% | | Total Company | 2.4% | 11.3% | 2.0% | 0% | 15.7% | Sales Growth Components (FY YoY) | Segment | Organic | Acquisitions | Currency | Divestiture | Total | | :----------------- | :------ | :----------- | :------- | :---------- | :---- | | Americas & Asia | 4.8% | 8.3% | (0.6)% | (0.4)% | 12.1% | | Europe & Australia | (1.8)% | 14.7% | 1.4% | 0% | 14.3% | | Total Company | 2.6% | 10.5% | 0% | (0.3)% | 12.8% | [Segment Profitability](index=7&type=section&id=SEGMENT%20PROFIT) Total segment profit decreased for both the quarter and full year FY2025. Both Americas & Asia and Europe & Australia segments experienced a decline in segment profit and segment profit as a percentage of net sales Segment Profit (in thousands) | Segment | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :----------------- | :-------- | :-------- | :------- | :------- | | Americas & Asia | $51,617 | $53,353 | $209,765 | $196,842 | | Europe & Australia | $15,070 | $19,277 | $56,942 | $70,612 | | Total Segment Profit | $66,687 | $72,630 | $266,707 | $267,454 | Segment Profit as a Percent of Net Sales | Segment | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :----------------- | :-------- | :-------- | :------- | :------- | | Americas & Asia | 19.8% | 23.3% | 21.1% | 22.2% | | Europe & Australia | 11.0% | 16.8% | 11.0% | 15.5% | | Total | 16.8% | 21.2% | 17.6% | 19.9% | [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles Brady Corporation's GAAP to non-GAAP adjusted financial measures, including income, net income, and diluted EPS, for historical and guidance periods [Adjusted Income Before Income Taxes Reconciliation](index=8&type=section&id=Adjusted%20Income%20Before%20Income%20Taxes) Brady reconciles GAAP Income before income taxes to Adjusted Income Before Income Taxes by adding back amortization expense, facility closure and other reorganization costs, and non-recurring acquisition-related costs. This adjustment shows a 5.1% increase for Q4 and 8.7% for the full year FY2025 Adjusted Income Before Income Taxes Reconciliation (in thousands) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------------ | :-------- | :-------- | :------- | :------- | | Income before income taxes (GAAP) | $60,505 | $68,208 | $237,097 | $247,841 | | Amortization expense | $4,778 | $2,337 | $18,916 | $9,421 | | Facility closure and other reorganization costs | $8,890 | — | $18,474 | — | | Non-recurring acquisitions-related costs and other expenses | — | — | $5,059 | — | | Adjusted Income Before Income Taxes (non-GAAP) | $74,173 | $70,545 | $279,546 | $257,262 | [Adjusted Income Tax Expense Reconciliation](index=8&type=section&id=Adjusted%20Income%20Tax%20Expense) The reconciliation of GAAP Income tax expense to Adjusted Income Tax Expense shows an increase in adjusted tax expense for both the quarter and full year FY2025, reflecting the tax impact of the adjustments made to income before taxes Adjusted Income Tax Expense Reconciliation (in thousands) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------------ | :-------- | :-------- | :------- | :------- | | Income tax expense (GAAP) | $10,629 | $12,752 | $47,841 | $50,626 | | Amortization expense | $1,148 | $540 | $4,550 | $2,182 | | Facility closure and other reorganization costs | $2,222 | — | $4,618 | — | | Non-recurring acquisitions-related costs and other expenses | — | — | $1,265 | — | | Adjusted Income Tax Expense (non-GAAP) | $13,999 | $13,292 | $58,274 | $52,808 | [Adjusted Net Income Reconciliation](index=9&type=section&id=Adjusted%20Net%20Income) Adjusted Net Income, which excludes the after-tax impact of amortization, facility closure, and acquisition-related costs, increased by 5.1% for Q4 and 8.2% for the full year FY2025, indicating stronger underlying profitability Adjusted Net Income Reconciliation (in thousands) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------------ | :-------- | :-------- | :------- | :------- | | Net income (GAAP) | $49,876 | $55,456 | $189,256 | $197,215 | | Amortization expense | $3,630 | $1,797 | $14,366 | $7,239 | | Facility closure and other reorganization costs | $6,668 | — | $13,856 | — | | Non-recurring acquisitions-related costs and other expenses | — | — | $3,794 | — | | Adjusted Net Income (non-GAAP) | $60,174 | $57,253 | $221,272 | $204,454 | [Adjusted Diluted EPS Reconciliation](index=9&type=section&id=Adjusted%20Diluted%20EPS) Adjusted Diluted EPS, a key non-GAAP measure, increased to a record $1.26 for Q4 and $4.60 for the full year FY2025, reflecting the company's operational performance excluding certain non-recurring or non-cash items Adjusted Diluted EPS Reconciliation | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------------------ | :--------- | :--------- | :------- | :------- | | Net income per Class A Nonvoting Common Share (GAAP) | $1.04 | $1.15 | $3.94 | $4.07 | | Amortization expense | $0.08 | $0.04 | $0.30 | $0.15 | | Facility closure and other reorganization costs | $0.14 | — | $0.29 | — | | Non-recurring acquisitions-related costs and other expenses | — | — | $0.08 | — | | Adjusted Diluted EPS (non-GAAP) | $1.26 | $1.19 | $4.60 | $4.22 | [Adjusted Diluted EPS Guidance Reconciliation](index=9&type=section&id=Adjusted%20Diluted%20EPS%20Guidance) The company provides a reconciliation for its Fiscal 2026 Adjusted Diluted EPS guidance, which excludes an estimated $0.30 per share for amortization expense from the GAAP EPS guidance Adjusted Diluted EPS Guidance Reconciliation (FY2026) | Metric | Low End | High End | | :------------------------------------------ | :------ | :------- | | Earnings per Class A Nonvoting Common Share (GAAP) | $4.55 | $4.85 | | Amortization expense | $0.30 | $0.30 | | Adjusted Diluted EPS (non-GAAP) | $4.85 | $5.15 | [Forward-Looking Statements & Risks](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risks) This section outlines Brady Corporation's forward-looking statements and the various risk factors that could materially impact future financial results [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future financial position, business strategy, targets, and operations, which are inherently uncertain and subject to various risks - Statements that are not reported financial results or other historic information are 'forward-looking statements,' relating to future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels, cash flows, and management plans[19](index=19&type=chunk) - Identified by words such as 'may,' 'will,' 'expect,' 'intend,' 'estimate,' 'anticipate,' 'believe,' 'should,' 'project,' 'plan' or similar terminology[20](index=20&type=chunk) - These statements address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors beyond Brady's control[20](index=20&type=chunk) [Risk Factors](index=3&type=section&id=Risk%20Factors) Various factors could cause actual results to differ materially from forward-looking statements, including increased costs, decreased demand, competition, ability to develop new products, M&A integration, cybersecurity risks, regulatory changes, and global economic conditions - Uncertainties arise from increased cost of materials, labor, material shortages, supply chain disruptions, and decreased demand for products[20](index=20&type=chunk) - Risks include the ability to compete effectively, successfully execute strategy, develop technologically advanced products, and identify, integrate, and grow acquired companies[20](index=20&type=chunk) - Other factors include difficulties in protecting against security breaches, extensive regulations, loss of key employees, litigation, global climate change, foreign currency fluctuations, changes in tax legislation, potential write-offs of goodwill, and differing interests of shareholders[20](index=20&type=chunk)

Core Viewpoint - Brady Corporation reported strong financial results for the fourth quarter and fiscal year 2025, highlighting significant sales growth driven by acquisitions and product investments, despite a decline in net income compared to the previous year [1][4][5]. Financial Results for the Quarter Ended July 31, 2025 - Sales increased by 15.7% to $397.3 million, with organic sales growth of 2.4%, acquisition-related growth of 11.3%, and a 2.0% increase from foreign currency translation [2][9]. - Income before income taxes was $60.5 million, down from $68.2 million in the same quarter last year, while adjusted income before income taxes rose by 5.1% to $74.2 million [3][9]. - Net income decreased to $49.9 million from $55.5 million year-over-year, with diluted EPS at $1.04 compared to $1.15 previously; however, adjusted diluted EPS increased to a record $1.26 from $1.19 [4][9]. Financial Results for the Year Ended July 31, 2025 - Annual sales rose by 12.8% to $1.51 billion, with organic growth of 2.6% and a 10.5% increase from acquisitions [5][7]. - Income before income taxes for the year was $237.1 million, down from $247.8 million, while adjusted income before income taxes increased by 8.7% to $279.5 million [6]. - Net income for the year was $189.3 million, down from $197.2 million, with diluted EPS at $3.94 compared to $4.07; adjusted diluted EPS reached a record $4.60, up from $4.22 [7][9]. Regional Sales Performance - In the Americas & Asia, sales increased by 14.1%, with organic growth of 4.3%, while Europe & Australia saw an 18.8% increase, despite a 1.3% organic sales decline [2][5]. - For the fiscal year, sales in the Americas & Asia grew by 12.1%, with organic growth of 4.8%, while Europe & Australia experienced a 14.3% increase, with an organic decline of 1.8% [5][9]. Strategic Commentary - The company emphasized the success of new product investments, particularly in the Americas & Asia, and noted the strategic acquisitions of Gravotech and Mecco to enhance its product portfolio [8][10]. - Brady Corporation returned $96.4 million to shareholders through dividends and share repurchases while investing heavily in research and development [10][9]. Fiscal 2026 Guidance - The company anticipates GAAP earnings per diluted Class A Nonvoting Common Share to range from $4.55 to $4.85, representing a 15.5% to 23.1% increase compared to the previous year [11]. - Adjusted diluted EPS is expected to range from $4.85 to $5.15, indicating a 5.4% to 12.0% increase from the prior year [12].

Group 1 - Brady Corporation's Board of Directors approved an increase in the annual dividend from $0.96 to $0.98 per share, marking the 40th consecutive annual increase in dividends [1] - A quarterly dividend of $0.245 per share will be paid on October 31, 2025, to shareholders of record as of October 10, 2025 [1] Group 2 - Brady Corporation is an international manufacturer and marketer of solutions that enhance safety, security, productivity, and performance [2] - The company offers a range of products including high-performance labels, signs, safety devices, printing systems, and software [2] - Founded in 1914, Brady serves a diverse customer base across various industries such as electronics, telecommunications, manufacturing, and aerospace [2] - As of July 31, 2024, Brady employed approximately 5,700 people and reported fiscal 2024 sales of approximately $1.34 billion [2]

Core Viewpoint - Brady Corporation has acquired Mecco Partners, LLC for approximately $20 million, expecting to generate similar revenue in the fiscal year ending July 31, 2026, funded by cash on hand [1][2]. Group 1: Acquisition Details - The acquisition of Mecco enhances Brady's existing direct part marking solutions, which were previously expanded with the acquisition of Gravotech in fiscal year 2025 [2][3]. - Mecco specializes in industrial product marking and identification systems, offering laser marking and pin marking technologies tailored for various applications [2][3]. Group 2: Strategic Implications - The integration of Mecco's consultative strategy and customized product offerings is expected to drive future growth for Brady, complementing its existing technologies [3]. - Brady aims to provide a comprehensive range of end-to-end direct part marking and specialty identification products, improving visibility in manufacturing processes for customers [2][3]. Group 3: Company Overview - Brady Corporation is an international manufacturer and marketer of solutions that enhance safety, security, productivity, and performance across various industries, including electronics, telecommunications, and medical [3]. - As of July 31, 2024, Brady employed approximately 5,700 people and reported fiscal 2024 sales of approximately $1.34 billion [3].

Core Insights - The article discusses the author's academic and professional background in Machine Learning, Economics, and Finance, highlighting expertise in Data Science and Machine Learning applications within the banking and finance sectors [1]. Group 1: Academic Background - The author holds a PhD in Machine Learning with a focus on Economics and Finance [1]. - The author has academic affiliations with IESE Business School, ESADE Business School, and the Barcelona Supercomputing Center [1]. Group 2: Professional Experience - The author has worked at Deloitte Financial Advisory, specializing in Data Science and Machine Learning applications for clients in banking, insurance, and finance [1]. - The author currently teaches Asset Pricing and Introduction to Corporate Finance at ESADE Business School at the MSc/BSc level [1]. Group 3: Research Focus - The current research of the author focuses on Generative AI in sustainable finance [1]. - The author's interests include machine learning and generative AI applications in finance and economics [1]. Group 4: Technical Proficiency - The author is proficient in programming languages such as Python, R, and SQL [1].

Summary of Brady Corporation Conference Call (June 11, 2025) Company Overview - **Company**: Brady Corporation (Ticker: BRC) - **Industry**: Specialty adhesives and printing solutions for safety and identification applications - **Product Portfolio**: Includes wire identification, specialty adhesive labels, printers, safety identification products, healthcare identification, and more [4][5] Core Financial Highlights - **Revenue Generation**: 48% of revenue generated outside the US; diversified customer base with no single customer exceeding 10% of total sales [5] - **R&D Investment**: R&D spending reached an all-time high of 5.1% of sales in fiscal year 2024, aimed at increasing organic growth [6][28] - **Earnings Performance**: Record EPS for four consecutive years (2021-2024), with a 17% increase in EPS from 2023 to 2024 [7][32] - **Operating Cash Flow**: Increased by 22% in 2024 compared to 2023, reaching $255 million, a company record [7] - **Shareholder Returns**: Announced 30 consecutive annual dividend increases; returned $117 million to shareholders in buybacks and dividends in 2024 [9][11] Geographic Revenue Breakdown - **Revenue by Geography**: 52% from the US, 30% from Europe, 8% from Asia, and 10% from Australia and the rest of the Americas [12] - **Asia Growth**: Reported 23% organic growth in Asia, with a recovery observed in China [44] Market and Economic Environment - **Competitive Landscape**: Fragmented market with a focus on innovation and operational efficiency [6] - **Tariff Impact**: Discussed the evolving global tariff situation and its potential impact on operations, with a focus on maintaining pricing power and operational efficiencies [13][48] Acquisitions and Strategic Focus - **Recent Acquisitions**: Notable acquisitions include Nordic ID, Code, and Gravotech, aimed at filling product portfolio gaps and enhancing capabilities [20][53] - **M&A Strategy**: Focused on acquiring technologies that complement existing offerings; maintaining a disciplined approach to acquisitions [10][56] Operational Efficiency - **SG&A Reduction**: Reduced SG&A as a percentage of sales by 800 basis points over the last eight years, contributing to improved profitability [6][30] - **Gross Profit Margin**: Improved to 51.3% in 2024, recovering from a dip during inflationary pressures [27] Future Outlook - **Growth Strategy**: Focused on organic sales growth, innovation, and automation; positioned well for long-term growth with a diverse product portfolio [22][24] - **Financial Position**: Maintains a strong balance sheet with a net cash position of $49 million, allowing for continued investment in growth and shareholder returns [35][36] Key Risks and Considerations - **Economic Environment**: Acknowledged tougher economic conditions in Europe and Australia compared to the Americas and Asia [42][45] - **Tariff Uncertainty**: Ongoing evaluation of the impact of tariffs on operations and pricing strategies [48][64] This summary encapsulates the key points discussed during the Brady Corporation conference call, highlighting the company's financial performance, strategic initiatives, and market outlook.

Core Insights - The article discusses the author's background in analytics and accounting, highlighting over 10 years of experience in the investment arena, progressing from an analyst to a management role [1]. Group 1 - The author holds a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting [1]. - The author has a personal interest in dividend investing and aims to share insights with the Seeking Alpha community [1].

Financial Data and Key Metrics Changes - The company reported record high adjusted earnings per share, increasing by 11.9% from $1.09 to $1.22 [11][17] - Organic sales growth was 1.6%, with acquisitions contributing 10.5% to sales growth, resulting in total sales growth of 11.4% [12][18] - Adjusted operating income in the Americas and Asia region grew by 20.2% [5][26] Business Line Data and Key Metrics Changes - The Americas region achieved organic sales growth of 5.4%, while Europe and Australia experienced a decline of 5.4% in organic sales [5][11] - Adjusted operating income in Europe increased by 3.8% despite the sales decline, attributed to restructuring actions [6][29] - Research and development (R&D) investment increased by over 8% this quarter, totaling $19.2 million [6][15] Market Data and Key Metrics Changes - Revenue by geography showed 52% from the US, 30% from Europe, 8% from Asia, and 10% from Australia and the rest of the Americas [10] - The Asia business reported organic sales growth of nearly 23%, with a return to growth in China [26][52] Company Strategy and Development Direction - The company is focused on integrating R&D functions and building new product roadmaps, including direct part marking technologies [6][25] - The acquisition of Funai's microfluidic solution business is expected to enhance the company's capabilities in custom part marking [7][40] - The company aims to mitigate tariff impacts through strategic sourcing and price adjustments while maintaining a focus on operational efficiency [21][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the global tariff environment but expressed confidence in the company's ability to mitigate impacts through geographic diversification [10][60] - The company tightened its adjusted diluted EPS guidance range for the fourth quarter due to anticipated tariff expenses and economic uncertainties [21][22] Other Important Information - The company returned $44.5 million to shareholders through dividends and share buybacks during the quarter [19][20] - Incremental tariff expenses were approximately $3 million in the third quarter, impacting diluted earnings per share by about $0.05 [20][21] Q&A Session Summary Question: Impact of tariffs on top line - Management indicated no significant demand destruction from tariffs yet, as inventory levels have buffered the immediate effects [33][34] Question: Sustainability of SG&A actions - Management noted ongoing efforts to drive down SG&A costs, with expectations for continued operational efficiency [36][37] Question: Details on the Funai acquisition - The acquisition is expected to enhance the company's product offerings in industrial inkjet solutions, with a purchase price of $11.6 million and estimated first-year sales of $15 to $20 million [38][54] Question: Fourth quarter guidance discrepancies - Management explained anticipated headwinds in the Americas due to tariffs, while expecting a flat performance in Europe [44][46] Question: Current situation in China - The company has reduced its footprint in China, focusing on multinational customers while maintaining a small presence [51][52]

Financial Data and Key Metrics Changes - The company reported record high adjusted earnings per share of $1.22, an increase of 11.9% from $1.09 in the same quarter last year [9][14] - Total sales growth for the quarter was 11.4%, driven by a 1.6% organic sales growth and a 10.5% contribution from acquisitions [10][11] - Gross profit margin decreased slightly to 51% from 51.6% year-over-year, with restructuring actions impacting costs [11] - Operating cash flow was $59.9 million, down from $72.7 million in the previous year [15] Business Line Data and Key Metrics Changes - The Americas and Asia region achieved organic sales growth of 5.4%, while Europe and Australia experienced a decline of 5.4% in organic sales [4][9] - Adjusted operating income in the Americas and Asia grew by 20.2%, while Europe saw a 3.8% increase in adjusted operating income despite the sales decline [5][28] - Research and development expenses increased by 8.5% to $19.2 million, reflecting ongoing investments in new product development [13] Market Data and Key Metrics Changes - Revenue by geography showed 52% from the US, 30% from Europe, 8% from Asia, and 10% from Australia and the rest of the Americas [8] - The Asia business reported organic sales growth of nearly 23%, with a return to growth in China after a previous decline [25] Company Strategy and Development Direction - The company is focused on integrating R&D functions and expanding product offerings, including the recent acquisition of Funai's microfluidic solution business [5][6] - Strategic actions are being taken to lower costs and improve efficiency, particularly in Europe, to drive future earnings growth [5][28] - The company aims to mitigate tariff impacts through targeted price increases and strategic sourcing alternatives [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth despite current uncertainties related to tariffs and economic conditions [60] - The company anticipates continued exposure to incremental tariff expenses but believes its geographic diversification will help mitigate impacts [19][60] Other Important Information - The company returned $44.5 million to shareholders through dividends and share buybacks during the quarter [17] - The acquisition of Funai's microfluidic solutions is expected to enhance the company's capabilities in custom part marking [6][37] Q&A Session Summary Question: Impact of tariffs on top line - Management noted no significant demand destruction from tariffs yet, as inventory levels have buffered the immediate effects [31][32] Question: Sustainability of SG&A actions - Management indicated ongoing efforts to drive down SG&A costs, with expectations for continued operational efficiency [34][35] Question: Details on the recent acquisition - The acquisition of Funai is seen as a growth opportunity, enhancing the company's capabilities in high-performance inks and direct part marking [36][37] Question: Q4 guidance rationale - Management expects headwinds in the Americas due to tariffs while anticipating a recovery in Europe to flat growth [42][44] Question: Performance in China - The company has reduced its footprint in China, focusing on multinational customers while maintaining a small presence [49][50]

Financial Performance - Net sales for the three months ended April 30, 2025 increased 11.4% to $382.6 million compared to $343.4 million in the same period in the prior year, driven by organic sales growth of 1.6% and acquisition-related growth of 10.5%[68] - For the nine months ended April 30, 2025, net sales increased 11.9% to $1,116.3 million compared to $998.0 million in the same period in the prior year, with organic sales growth of 2.6% and acquisition-related growth of 10.2%[69] - Operating income for the three months ended April 30, 2025 increased 5.7% to $67.2 million, while for the nine months it remained relatively stable at $177.3 million, reflecting organic sales growth in higher gross margin product lines[73] - Net income for the three months ended April 30, 2025, was $52.3 million, or 13.7% of sales, compared to $50.9 million (14.8% of sales) in the same period of 2024[74] - Total company organic sales growth was 1.6% in the three months ended April 30, 2025, compared to 4.5% in the same period of 2024[80] Expenses - Gross margin for the three months ended April 30, 2025 was $195.1 million, a 10.2% increase from $177.0 million in the same period last year, although the gross margin percentage decreased to 51.0% from 51.6%[70] - Research and development (R&D) expenses increased 8.5% to $19.2 million for the three months ended April 30, 2025, and 13.2% to $56.8 million for the nine months ended April 30, 2025, reflecting a commitment to new product development[71] - Selling, general and administrative (SG&A) expenses rose 13.4% to $108.7 million for the three months ended April 30, 2025, and 15.2% to $326.4 million for the nine months ended April 30, 2025, primarily due to increased headcount and acquisition-related costs[72] Cash Flow and Liquidity - The company had cash of $152.2 million and total available liquidity of $1,237.4 million as of April 30, 2025, supporting its growth strategy and ability to manage economic challenges[63] - Cash and cash equivalents decreased by $98.0 million to $152.2 million at April 30, 2025, primarily due to changes in working capital and increased inventory outflows[91] - Net cash provided by operating activities was $122.9 million in the nine months ended April 30, 2025, down from $171.1 million in the same period of 2024[91] - Net cash used in investing activities was $165.1 million in the nine months ended April 30, 2025, primarily for business acquisitions of $147.2 million[92] Debt and Financial Obligations - As of April 30, 2025, the outstanding balance on the Company's credit agreement was $102.8 million, with a maximum outstanding amount of $144.8 million during the nine months ended April 30, 2025[98] - The Company has $195.2 million available for future borrowing under the credit agreement, which can be increased to $1,085.2 million at the Company's option, subject to certain conditions[98] - The Company is in compliance with financial covenants, maintaining a debt to EBITDA ratio of 0.3 to 1.0 and an interest expense coverage ratio of 71.5 to 1.0 as of April 30, 2025[99] - The credit agreement has a final maturity date of November 14, 2027, and includes an increase in lending commitments to $300 million[96] - The Company had letters of credit outstanding under the credit agreement of $2.0 million as of April 30, 2025[98] Strategic Focus - The company is focused on integrating recent acquisitions to enhance its strategic position and accelerate long-term sales growth[61] - The company plans to mitigate inflationary pressures and tariff impacts through targeted price increases, strategic sourcing adjustments, and operational efficiency gains[62] - The Company aims to enhance its digital capabilities and customer service through improved sales channels and data-driven marketing automation tools[61] Tax and Compliance - The company's income tax rate was 20.5% for the three months ended April 30, 2025, down from 21.0% in the same period of 2024, with an expected ongoing annual rate of approximately 21%[78] - The Company does not believe that cash requirements for uncertain tax positions will be material[94] Future Outlook - The Company anticipates future financial position and business strategy changes, including projected sales and capital expenditures, as part of its forward-looking statements[100] - The Company has material cash requirements for known contractual obligations, including capital expenditures and lease obligations, and expects net cash from operating activities to be adequate for liquidity needs over the next 12 months[94] - The Company does not have significant agreements for minimum order quantities for inventory purchases, indicating flexibility in managing cash flow[94]