Brady Corporation Reports Fiscal 2026 First Quarter Results and Raises the Low End of its Fiscal 2026 Adjusted Diluted EPS Guidance

Core Insights - Brady Corporation reported a 7.5% increase in sales for the first quarter of fiscal 2026, reaching $405.3 million compared to $377.1 million in the same quarter last year [2][4] - The company experienced a 16.5% increase in income before income taxes, amounting to $68.5 million, and a net income of $53.9 million, up from $46.8 million in the previous year [3][4] - Adjusted diluted earnings per share (EPS) rose by 8.0% to $1.21, reflecting strong organic sales growth and improved gross profit margins [5][6] Financial Performance - Sales increased by 7.5%, driven by a 2.8% organic sales growth, a 3.2% increase from acquisitions, and a 1.5% boost from foreign currency translation [2][6] - By region, sales in the Americas & Asia rose by 9.6%, while Europe & Australia saw a 3.6% increase, with organic sales growth of 4.7% in the Americas & Asia and a decline of 0.8% in Europe & Australia [2][20] - Net income for the quarter was $53.9 million, with diluted EPS increasing to $1.13 from $0.97 in the same quarter last year [4][6] Adjusted Financial Metrics - Adjusted income before income taxes was $73.8 million, a 7.6% increase compared to the previous year [3][26] - Adjusted net income reached $58.0 million, compared to $54.2 million in the same quarter last year [4][26] - The company raised its adjusted diluted EPS guidance for the fiscal year ending July 31, 2026, from a range of $4.85 to $5.15 per share to $4.90 to $5.15 per share [6][7] Strategic Developments - The acquisition of Mecco at the beginning of the quarter is expected to enhance Brady's laser marking system product line, complementing the previous acquisition of Gravotech [5] - The company maintains a net cash position of $66.8 million, allowing for continued strategic investments and shareholder returns through dividends and share buybacks [5][6] Cash Flow and Guidance - Cash flow from operating activities increased by 42.5% to $33.4 million compared to $23.4 million in the same quarter last year [6] - The fiscal 2026 guidance includes an estimated income tax rate of approximately 21%, depreciation and amortization expense of about $44 million, and capital expenditures of around $40 million [8]