Brady (BRC) 18 Nov 242025 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the 2025 First Quarter Brady Corporation Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Ann Thornton, CFO. Please go ahead.

you. Thank welcome Call. Corporation and Quarter XXXX the Conference Earnings to morning, Fiscal Brady First Good for morning's slides www.bradycorp.com/investors. The this website on at our call are located

is uncertainties, expected will not forecast about words is in and statement. It's forward-looking #X. to SEC Words factors such release examples on results. subject factors this We by copyrighted of rebroadcast were will, which identifying we Brady's which be and are information. fiscal prepared XX-K, and consent the important without may, just expect, teleconference that that the morning few with September. news believe, call, comments forward-looking note forward-looking Brady anticipate risk to Corporation our Also, of Risk during Slide was could make may significantly filed Brady. Form as our XXXX begin and a information Please please impact noted various note note remarks may this in this in that a

We will broadcasting it recording and the Internet. on this be call

such, Q&A constitute being consent to session the your participation your recorded. will As in

now call over to Officer, Russell Brady's I'll Shaller. Russell? turn and Chief President the Executive

organic grew fiscal and us X.X%. results, another XX%, Thank thanks, and per everyone, released for sales We and a quarter earnings and quarter strong grew earnings pretax we XXXX. first This you, grew morning, to share we joining our We I'm pleased Ann, report adjusted XXXX financial today. adjusted to XX%. start great

to this our organic growth region and of Asia with in X.X%, Americas and quarter. returned and region did Europe sales an job excellent Australia Our growth

conditions. in incredibly light executed well great teams and of current results macro Our delivered

the labels. connect scanning X top our that of scanner X our efficient wasted I-XXXX adjustments barcode seamlessly and setup, These to which allow our and a bundles This scanner. fast the printing quarter, for and X selling launched products and product X with printer, allows we customers V-XXXX one printers, with

bundled adhesive of Brady's we acquired first specialty the acquisition set the Code products technology materials. with This is and with Corp. technology incorporating printing

Cortex easily in read a barcodes our from are barcodes decoder user with seconds. to go incredibly keyboard Our different device the And small scan technology automated scanners first just or or our proprietary shiny interface equips that the surfaces curved. wide reading of from barcodes on user and setup variety ability allows dynamic to hard to to

easier. the integrated their that provide primary of to products of of types first our efforts with make our solutions These R&D problems following are solve a which our quarter marks are This customers also everyday jobs acquisition and focus their designed Gravotech.

forward mechanical We identification solutions an ecosystem are capabilities for customers. marking their goal of products. of marking and to long-term portfolio and to is looking to Brady's adding our our part existing reading create laser interoperable part

was start quarter This an to XXXX. excellent

has enabled our to invest years. Brady, their and emphasize With engage of responsible technologies. set single product Brady to to have no to solutions impact most We for with last This create needs. promising thrive growing customer our the material continue economic customers niche a ability in XXX markets diverse tailored the for we to to or

And financial Ann? results. now over to I'll turn Ann more to the details on provide call our

region grew very and the had by while Australia returned strong our and Thank X.X%, start a of this to our at excellent our which X.X%. growth quarter XXXX. to led sales a Americas with We was Europe great you, Russell. quarter We quarter, in Asia growth X.X% organic region and

force, net and acquisitions. after expanding income in our as pretax in growth in funding our even we strong well cash share increase funding adjusted finished an earnings reported as diluted and our the a quarter, also per sales in adjusted We while position R&D

trends. Organic X.X% X.X% on for start So net by currency this quarterly in sales sales quarter. start of increased of quarter. divestitures total great the Slide growth X.X% foreign for a sales translation added we're We'll and grew year. sales to our XX.X% off the Acquisitions #X in

Turning margin to This our details trending. quarterly Slide gross #X.

margin in profit quarter the this XX.X% of was last year. to quarter XX.X% compared first gross Our

in the been quarter, gross on XXX by fair margin this just XX.X%, the would of in profit of have closed mentioned, which to adjustments and purchase approximately acquired nonrecurring with adjustment, our resulted Without is inventory profit points We margin acquisition prior basis year. reduced in Gravotech this the recognize gross which this Russell accounting the and value our approximately quarter. line this

sales gross margin our growth as benefit we being profit to our realized margin strong gross by be led from highest profit Our continues products.

find Moving to the compared was expense year. in last to SG&A first of quarter $XX.X million SG&A Slide quarter million our trending. you'll $XXX.X #X, this

As a SG&A to sales, increased percent to XX% last compared QX. of XX.X%

both quarter If first well in from XX.X% incurred current year. costs this in other and you exclude of expense each amortization the periods and presented the of sales, acquisition-related nonrecurring as SG&A the would quarter been as have last of quarter,

to invest sales by our in omnichannel our and efficiencies while and our digital identifying force, functions. continue We back-end enhancing expanding strategies, throughout growth sales broadening our capabilities other support

of On in development. research trending find you'll our Slide and investments #X, the

of expense continue $XX.X business was X% X.X% $XX.X from this We sales R&D sales quarter, increase to organic within Gravotech. increase our last in and million, through acquisition investment R&D of the was year. or of million our an which

products comes have from ROI launch this do always very our of line best year. a highly Our engineered products, and set really to exciting almost we

quarter. current million our Slide quarter, you million. incurred and earnings Pretax that along a the the in in from $XX.X both of #X, basis $XX.X million we from from $XX.X But XX% exclude earnings. GAAP Pretax increased find to acquisition-related Moving if charges other to periods decreased slightly on trending to earnings amortization the you'll pretax million $XX.X

the find in quarter. incurred Turning other EPS. to to Similar incremental our Slide the decreased of income trending net slightly nonrecurring #X, and that pretax amortization our earnings you'll to net charges earnings, the due acquisition-related and we

which the amortization from well But charges from exclude period, $XX.X you an acquisition-related per XX.X%, as EPS share XX%. GAAP to increase from periods million, the per diluted other an net of both our earnings prior with million reported adjusted share. at as share Our $X of was current if $XX.X share, consistent diluted $X.XX the is our per from $X.XX adjusted grew year per income to increase grew and

So we ongoing had another strong earnings and on our from focus quarter resulting organic growth sales efficiencies. our

to supply also We've at more this levels of last the were first Slide larger $XX provided On quarter cash year, to returned reducing summary working some of normalized like in which apart the within in don't quarter. a was cash you'll quarter million year certain $XX.X million couple expect was a #XX, $XX.X time to capital of from of benefit of the last timing $XX.X saw timing we in find than million flow year. year's million from flow periodic so cash to which flow ago, quarter typically Gravotech. realize. Operating short-term cash shift was our due inventory following compared challenges we first working capital in payments, this Operating Free items inventory this year last years chain a compared down to this a vendor this QX. in mainly we generation. We QX was changes would expect large

the cash our sheet. details has balance impact on had historical generation our that #XX Slide

cash $XX in As position million. of of net October XX, we were a

that growth cash fund allocation to Our is in resources, first use sales investing organic capital capability-enhancing efficiency includes development, opportunities. is and our to new focused approach sales consistent, CapEx and and product automation generating to This CapEx.

consistently to street always our drive positioned our dividend the September, increasing ability very invest economic that of. We cycle future second, announced throughout have and a growth consecutive we're so proud to we're And focus XXth the In on profit that is annual which year we of dividends. improvements. increase, we sales

organic for funding where are investments our and cash for disciplined a then in share manner deploy opportunistic After and dividends, there synergies we acquisitions, buybacks.

increase a in R&D us investment through share our and acquire to in puts sales position return organic buybacks. our to to sheet shareholders and balance dividends to strong companies to be other opportunities strategically and funds able Our

find Slide Turning guidance. our XXXX to #XX, fiscal you'll

$X.XX EPS full $X.XX share guidance For range year of maintaining announced previously share. adjusted fiscal to XXXX diluted per our per

we $X.XX GAAP range adjusted guidance and charges, from for Our expect $X.XX EPS share. which now acquisition-related other range to per was amortization to

guidance EPS XXXX. between to over of of growth XX.X% a diluted X.X% represents adjusted Our range range

for an income the enough manner capital expenditures include to in organic that approximately or in depreciation anticipate million. low growth also $XX July guidance $XX activity. the potential others, to dollar, XX%, guidance, rate economic in of and approximately sales risks ending year of U.S. an strengthening pressures inflationary were among XX, our overall percentages of the offset million timely single-digit approximately slowdown a of We unable tax include elements our of Other Potential expense and amortization XXXX.

before Russell to to some I'll call results now to thoughts our the over Russell? provide closing and back turn cover regional Q&A.

financial and all our this growth this with the ID, and ID, results organic of details divestitures, strong our Asia Safety million most product region. total strongest Facility XX.X% organic X.X%. and growth was our was sales quarter XX Wire quarter growth sales and our a foreign October X.X% and Slide driven was in or increased in sales quarter. of of currency resulting growth Sales the month of Acquisitions, ID Americas by Product coming net decreased sales translation by Anne. lines from X.X%, were Thanks, $XXX.X

for was with well growth of driven Asia which every in total except performed growth China. business Our sales organic country, by X.X%,

China organic quarter, for Our XX% business X% the China, just nearly declined by our so growth. outside in business in over combined of

Southeast to fantastic have a throughout future and see Asia. We very we believe bright India, continue we growth in

XX% Our of a reported increased XX.X%. and to segment sales was in and million, as segment Asia $XX.X Americas profit profit percentage

quarter the If segment as the other to quarter, both well XX% you acquisition-related current QX of nonrecurring compared in increased expenses the amortization last prior and year. in as impact year's profit exclude current the

ongoing the These the results of and to work dedicated our our product are testament adoption launches. team hard incredibly of recent

and for XX.X% foreign of Moving million find of the currency quarter. region translation the growth to $XXX.X you'll XX, for our Europe Slide financial region. total this this growth increased Australia and results Acquisitions the organic our of in sales a impact were XX% added X.X% X.X% quarter. Sales by to

light Our conditions of European returned X in a organic this out macro the business sluggish region. in is which of to result following the of decline quarter significant XX, only last growth

profit XX%. in as million, sales profit percentage segment $XX.X segment in a of Australia the was to XX.X% reported and Europe quarter declined Our and

If you quarter, X.X% acquisition-related increased quarter expenses of the as year's both the segment to the nonrecurring the prior exclude and QX amortization as last compared other well in impact current profit in year.

focus Economic reflects environment. other as line Within product slowed product on well outcomes Europe seeing challenges Still, France, to sales trends of demand organic particular, this workers, well the we see our with line of our the our supply Facility and we and opportunities. within our people believe within our productivity business by doing a we in the as many that will for niche rate in chains Europe were ID geographies result grow as Identification to both of have as diversity Safety of by able our closer growth of in in conditions and maintaining solutions. European key U.S., most moving we're shortening such similar in benefit well. from finding which manufacturing of as Europe, our consistent that

you that, With to for Q&A. would it our to please listeners? like over provide I'd instructions turn Operator,

question of from Ferazani Sidoti. comes of the [Operator first Instructions] Steve line Our

Can of growth a call. that you a in the growth and covered growth all in bit doing surprise in that where great you Southeast the for remarks. you Thanks a Or detail. on organic getting industrials really market, not on penetration strength the to was in more Asia. in Asia, side. the India little driven about what's us products? me new much the Americas it your Can And separately was give bit then Americas How X% the Asia? more on -- little you Russell, by and are detail is

Yes.

on things. So I I briefly it a couple of in think And touched call. the

data all take One could that is centers of growth. you is good as markets think really that than ability others. United unusual at and in industrial that, applications. customers. there's niche doing if a best on servicing But there product strengths some to it's are focus some really areas, within applications I segments say of aerospace are States, our the the still Brady pretty There are of Brady languishing and Certainly, is the manufacturing whole There's in the of terms I better pockets.

in the So pockets it for those chase our down at when think that economy, sales hone lot within that I ability at and in and our And our people maybe U.S. able U.S. a people look opportunities. says small well. still and the doing about are a to in really you you being to product there are micro target the look niche U.S.

Turning Southeast Asia. to

I China some from think setting to Asia. you're corporations up benefiting factories related seeing and a in the of they're Southeast issues additional

So And for I combination penetration, increased most true a the that just would years. countries. that's the is sheer but which underlying place most in last of a India demand has us of been increase of dozen for also in half great say

that helpful. about ask the going? with wanted in about Want how to integration was I that you fits? October Gravotech smaller ask also acquisition That's to and how AB&R And made

Yes.

a of things. So couple

facet to direct part -- mark. So being ago, ability There's weeks where applications actually the marketing. had another which was we've really I And to has adopting forever to what traceability. able never wanted, laser our we enable X Brady product work. do been Gravotech, we've or we is labels exactly in but technology, only direct was there got of printing to the expand that and part a portfolio

we so to add now that ability And our have to portfolio.

period are So dozen we there, stars about anyway, for It factories. for able half talked the we've this and last we And we known do when quite time. years. I've came the by the and this acquisition to some we've went way, on company And about through just known company. aligned, off year. this were that the their of

whole systems time It's mesh of feel just significant ERP go-to-market. the acquisition It's get I is take to going in that like size. processes So and the pretty any good. up some to

those But niche that really And about personally to known small go-to-market salespeople, that something very solutions. have super I so again, years. And out. those question of happy salespeople and I asked things go-to-market or of how a difficult far, is dozen They're that -- then AB&R. is would a say, very, that half company, Yes, transpired. that it's so a integrated with type a you customized build somebody hire have company and approach provides to difficult type for

to force they basically in a to were able so the by expand along And our some technology one people, with dozen that over have company. we transaction, another internal little sales

a products. fit in a our acquisition, tailored again, really nice small So but providing solutions to

That's add more great. could I And if X in.

code you're to work you're the who Just iXXXX sounds is me plan with it for technology, that's and tell customer is it incorporating base how the who like targeting? the with going the that, and

with hundred don't target, Yes. you're, centers. do Honeywell's I you provide and at would couple on I'll say, with ERP the providing that That's marking it scan manufacturer in say, manufacturers. Zebra's parts really make anything kind works time to distribution sure you same We We midsized dollar and of We're of to want to if solution. want then territory. million your But that system. and direct a labels

and and the thesis the is the always the scanning verify behind but point of corporation printed roll do somebody you place. versions else's the back, labels, going with and hardware this of we've reader a of And them out there If coming you're products had whole have software year. now step lot original development. the those getting We industrial some we've now to in use is in to see to putting more code the labels first

line Our Northcoast next Housum question from of of Research. the Keith comes

of seasonality Gravotech the in year? Brady A and out terms changes throughout seasonality the Gravotech business. Russell, like quick the you, question of for Does

Gravotech before mean, slower fall is there we I traditionally you weak a strong and of Brady see into get the materially. be the in And a general, impact Not strong that will Europe. summer and spring months. I because same then August pretty for always say would with

decent going maybe you as to Gravotech is frame August Brady, know, say a Europe in effect pronounced bit would a as tiny similar see a more I they the all in So time where, vacation. take

the sales perhaps and Yes, the cadence you when your like? in touch out November talked the absolutely. notice strongest you of guys guys. in on for script, started October the month quarter quarter Can I you for being the of did about you

Yes.

in of reasons, for month both We host Europe. their holidays. America just again, usually the take Brady pretty Not traditionally a and as for very see we than of even was light came August, more September end later the towards what than little of see people North momentum So October strongest start September. what always normally to strong, build expected. and then This is in the a middle year back we

from were with People rest Some the through go on get year. vacations, back carries through catch-up in of little is happy it months. for they and takes really start of lighter POs. momentum we finished system. we hope they of would placing how to the October, and And get I a bit what, But that the say, time vacation we from the

Now notes. I personally, -- and say the in it in the did

sitting a up And of uncertainty, call there's Corporation. it's decent production, of in decent is I'll target there's to for clearly, the amount industrial the think hesitancy. investment I be think of sidelines on amount that's resolved now the a that and U.S., freed Brady going we capital it, that really election

appreciate that. I Great.

In you gross obviously, know profitability, gross the a terms the your I margins guys quarter. even very of you quarter for it's strong that took charges with for

bit acquisition your XX% Gravotech thinking even the goal like of as lower out to you is for you're could Gravotech, about gross Are profitability. guys for understood of target? gross acquisition, acquisition, you I guys. XX% be with kind is you the post talking going a Before the little still margins be

and never the Gravotech, drive it there see but is sight little certainly XX%. can middle of produce how types bit terms pack at the products margin, of won't it of line not our best that it Yes. things our of gross It will take may But in quite be we a our get to to so efficiencies can get which we time for to be portfolio, of worst either. probably would be we do through of

going in be of hair above a good there place think I again, it we're So maybe a to as a XX%, corporation.

quarter. biggest for volume Okay. this the what driver terms of guess was versus the in the last price And question me I growth? of

no volume All price.

at I'm for Russell to would showing turn closing to no remarks. like it time. Shaller further this I now back questions

Thanks, and your today Perfect. for time everyone, your questions. for

Brady. the a increased was that start we now year. momentum part have to our of positive Our that we additional to organization. which we from capabilities capital the is to first result Gravotech, well, technical portfolio elections, clear favorable know-how. of And industrial the in gap have fills and can Solutions added a believe acquisition in us expect with investment, Identification with see quarter and provides We throughout the good direct We performed with U.S. marketing the which

environment dynamic is The changing. macroeconomic and rapidly

initiatives the So we top that automation line to on our shareholder our funds support through to dividends to to to internally continue operational execute we're on to grow effectively and returning controlling we capital offering further product efficiencies our are we control develop shareholders can that long-term which what to organic customers' to to value focused drive our deploy acquisitions grow so our and profitably deliver investments, continue and and can through priorities, ensure to share buybacks. invest

for future, and this and Brady. I the overcome [indiscernible] deliver to morning cost you ahead, help invest and results. Thank reduce your see launch about challenges your Looking may optimistic to Brady products. the to areas our ensure all can we review that for of call. interest we R&D portfolio structure, I'm in you in our our time objectives. disconnect new periodically us meets to Operator, know we'll to financial Meanwhile, continue while continue

in This for the program. your today's conclude Thank conference. you participation does

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