Brady (US:BRC)2025-11-17 12:18Financial Performance - Net sales for the three months ended October 31, 2025, increased by 7.5% to $405.3 million compared to $377.1 million in the same period in the prior year, driven by organic sales growth of 2.8% and acquisitions contributing 3.2%[72] - Gross margin increased by 10.1% to $208.8 million, with a gross margin percentage of 51.5% for the three months ended October 31, 2025, compared to 50.3% in the prior year[73] - Operating income rose by 15.4% to $68.0 million, representing 16.8% of net sales for the three months ended October 31, 2025, compared to 15.6% in the same period in 2024[76] - Segment profit increased 9.0% to $59.9 million, with a segment profit margin of 22.3% compared to 22.4% in the prior year[85] Expenses - Research and development (R&D) expenses increased by 23.1% to $23.3 million, accounting for 5.7% of net sales, reflecting investments in microfluidic technologies and engraving systems[74] - Selling, general and administrative (SG&A) expenses increased by 5.1% to $117.6 million, but as a percentage of net sales, SG&A decreased to 29.0% from 29.7% in the prior year[75] Regional Performance - The Americas & Asia segment reported a net sales increase of 9.6% to $268.9 million, with organic sales growth of 4.7% and acquisitions contributing 4.9%[82] - The Europe & Australia segment experienced a total sales growth of 3.6%, with organic sales declining by 0.8%[81] - Europe & Australia net sales increased 3.6% to $136.4 million, with a 4.4% benefit from foreign currency translation[86] - Organic sales in Asia increased approximately 12% in the three months ended October 31, 2025, driven by growth in product identification and safety product lines[84] - Organic sales in Europe declined in the low-single digits, primarily due to decreases in people identification and safety product lines[87] - Organic sales in Australia increased in the low-single digits, driven by growth in the wire identification product line[88] Cash and Liquidity - The company had cash of $182.7 million and total available liquidity of $1,259.7 million as of October 31, 2025, supporting its growth strategy[68] - Cash and cash equivalents were $182.7 million at October 31, 2025, a decrease of $8.3 million from July 31, 2025[91] - Net cash provided by operating activities was $33.4 million, an increase from $23.4 million in the same period of the prior year[91] - Net cash used in investing activities was $28.4 million, reflecting the acquisition of a business for $17.4 million and capital expenditures of $11.0 million[92] - As of October 31, 2025, the outstanding balance on the Company's credit agreement was $115.9 million, with a maximum amount outstanding of $119.6 million during the period[99] Compliance and Strategy - The company plans to continue investing in acquisitions and organic growth opportunities while focusing on sustainable efficiency gains and automation across its operations[68] - The company's income tax rate was 21.2% for the three months ended October 31, 2025, compared to 20.4% in the prior year[79] - The Company was in compliance with financial covenants, with a debt to EBITDA ratio of 0.4 to 1.0 and an interest expense coverage ratio of 70.8 to 1.0[100]