BRADY CORP Q1 FY2025 earnings call

• Launched a bundled product combining the I-5300 printer and V-4500 barcode scanner, leveraging Code Corp acquisition technology. • Acquired Gravotech to add laser and mechanical part marking capabilities, aiming to create an ecosystem of interoperable part marking and reading solutions. • Grew organic sales 3.6%, adjusted pretax earnings 11%, and adjusted earnings per share 12%. • R&D expense was $18.9 million, 5% of sales, an increase from prior year. • Americas and Asia region had strong organic sales growth; Europe and Australia region returned to growth in the quarter.

Americas and Asia region: Organic sales grew 5.1%, sales were $245.4 million, segment profit was $54.9 million, and segment profit as a percentage of sales was 22.4%. Europe and Australia region: Returned to growth with 0.7% organic sales growth, sales were $131.6 million, segment profit was $13.1 million, and segment profit as a percentage of sales was 10%.

• Maintained adjusted diluted EPS guidance range of $4.40 per share to $4.70 per share for fiscal 2025. • GAAP EPS guidance range adjusted to $4.02 to $4.32 per share. • Anticipates low single-digit organic sales growth for the year ending July 31, 2025. • Income tax rate expected to be approximately 20%, depreciation and amortization expense ~$40 million, and capital expenditures ~$35 million.

• Potential strengthening of the U.S. dollar. • Inflationary pressures that cannot be offset in a timely manner. • Overall slowdown in economic activity.

Q: Strength in organic growth in Americas and Asia, detail on new products and Asia penetration A: In the U.S., there are pockets in industrial markets like data centers and aerospace; in Asia, Southeast Asia benefits from corporations setting up factories there, with India being a strong market for years.

Q: How the integration with Gravotech was going and about AB&R acquisition A: Gravotech expands part marking portfolio; AB&R is a small niche company that adds to sales force and customized solutions.

Q: Gravotech impact on seasonality, sales cadence A: Gravotech seasonality similar to Brady, August is typically weak; October was strong due to catch-up from lighter months after vacations.

Q: Gross margin post Gravotech A: Gravotech will contribute to mid-pack gross margin, aiming for ~50% as a corporation over time.

Q: Volume vs price growth driver A: All volume, no price