Release Details

Brady Corporation Reports Record EPS in its Fiscal 2024 Fourth Quarter, Expands its Share Buyback Program and Announces its Fiscal 2025 EPS Guidance

September 6, 2024
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  • Diluted EPS increased 15.0 percent to a record high of $1.15 in the fourth quarter of fiscal 2024 compared to $1.00 in the same quarter of the prior year. Diluted EPS Excluding Certain Items* increased 14.4 percent to a record high of $1.19 in the fourth quarter of fiscal 2024 compared to $1.04 in the same quarter of the prior year.
  • Gross profit margin increased to 51.6 percent in the fourth quarter of fiscal 2024 compared to 50.8 percent in the same quarter of the prior year.
  • Net cash provided by operating activities increased to a record high of $255.1 million in fiscal 2024 compared to $209.1 million in fiscal 2023.
  • On September 4, 2024, Brady’s Board of Directors authorized an additional $100 million of shares for repurchase, which based on current share prices equates to approximately 1.5 million shares and approximately 3.0 percent of total outstanding shares.
  • Diluted EPS guidance for the year ending July 31, 2025 was announced at a range of $4.15 to $4.45 on a GAAP basis, and a range of $4.40 to $4.70 on a non-GAAP basis.

MILWAUKEE, Sept. 06, 2024 (GLOBE NEWSWIRE) -- Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2024 fourth quarter ended July 31, 2024.

Quarter Ended July 31, 2024 Financial Results:
Sales for the quarter ended July 31, 2024 decreased 0.7 percent, which consisted of organic sales growth of 1.6 percent, a decrease of 0.8 percent from foreign currency translation and a decrease of 1.5 percent from divestitures. Sales for the quarter ended July 31, 2024 were $343.4 million compared to $345.9 million in the same quarter last year. By region, sales increased 0.4 percent in the Americas & Asia and decreased 3.0 percent in Europe & Australia, which consisted of organic sales growth of 3.4 percent in the Americas & Asia and an organic sales decline of 1.8 percent in Europe & Australia.

Income before income taxes increased 6.9 percent to $68.2 million for the quarter ended July 31, 2024, compared to $63.8 million in the same quarter last year. Income Before Income Taxes Excluding Certain Items* for the quarter ended July 31, 2024, which was adjusted for amortization expense of $2.3 million, was $70.5 million, an increase of 6.6 percent.

Net income for the quarter ended July 31, 2024 was $55.5 million compared to $49.4 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $1.15 in the fourth quarter of fiscal 2024, compared to $1.00 in the same quarter last year. Net Income Excluding Certain Items* for the quarter ended July 31, 2024 was $57.3 million and Diluted EPS Excluding Certain Items* for the quarter ended July 31, 2024 was $1.19. Net Income Excluding Certain Items* for the quarter ended July 31, 2023 was $51.2 million and Diluted EPS Excluding Certain Items* for the quarter ended July 31, 2023 was $1.04.

Year Ended July 31, 2024 Financial Results:
Sales for the year ended July 31, 2024 increased 0.7 percent, which consisted of organic sales growth of 2.6 percent, an increase of 0.2 percent from foreign currency translation and a decrease of 2.1 percent from divestitures. Sales for the year ended July 31, 2024 were $1.34 billion compared to $1.33 billion in the prior year. By region, sales decreased 0.3 percent in the Americas & Asia and increased 2.7 percent in Europe & Australia, which consisted of organic sales growth of 3.1 percent in the Americas & Asia and organic sales growth of 1.6 percent in Europe & Australia.

Income before income taxes increased 9.8 percent to $247.8 million for the year ended July 31, 2024, compared to $225.7 million for the year ended July 31, 2023. Income Before Income Taxes Excluding Certain Items* for the year ended July 31, 2024, which was adjusted for amortization expense of $9.4 million, was $257.3 million, an increase of 10.1 percent compared to the year ended July 31, 2023.

Net income for the year ended July 31, 2024 was $197.2 million compared to $174.9 million for the year ended July 31, 2023. Earnings per diluted Class A Nonvoting Common Share were $4.07 for the year ended July 31, 2024 compared to $3.51 in the same period last year. Net Income Excluding Certain Items* for the year ended July 31, 2024 was $204.5 million and Diluted EPS Excluding Certain Items* for the year ended July 31, 2024 was $4.22. Net Income Excluding Certain Items* for the year ended July 31, 2023 was $181.5 million, and Diluted EPS Excluding Certain Items* for the year ended July 31, 2023 was $3.64.

Commentary:
“This quarter, we once again reported record-high EPS, marking Brady’s best earnings year ever. For the full year ended July 31, 2024, our GAAP EPS was $4.07, representing a 16.0 percent increase over the previous year’s record,” said Brady’s President and CEO, Russell R. Shaller. “Both regions continue to perform well, with growth in organic sales and operating income. I’m excited about the innovative new products we have slated for launch in fiscal 2025. We also look forward to expanding our product offerings with the addition of direct part marking and laser engraving solutions, following our acquisition of Gravotech, which closed on August 1, 2024.”

“In addition to our record EPS this quarter and this fiscal year, we also used our strong balance sheet and cash generation to return funds to our shareholders through share buybacks and increased dividends. This year, we repurchased a total of 1.3 million shares for $72.2 million, and returned another $45.1 million to our shareholders in the form of dividends,” said Brady’s Chief Financial Officer, Ann Thornton. “Our strong balance sheet provides us with opportunities to continue to invest in both organic growth and strategic acquisitions to increase shareholder value.”

Share Buyback Program:
On September 4, 2024, Brady’s Board of Directors authorized an additional $100 million of Class A Nonvoting Common Stock for repurchase under the Company’s share buyback program. The share buyback program may be implemented from time to time in the open market or in privately negotiated transactions and has no expiration date.

Fiscal 2025 Guidance:
The Company expects GAAP earnings per diluted Class A Nonvoting Common Share to range from $4.15 to $4.45, which would be an increase of 2.0 percent to 9.3 percent over GAAP earnings per diluted Class A Nonvoting Common Share of $4.07 for the year ended July 31, 2024.

The Company also expects Diluted EPS Excluding Certain Items* to range from $4.40 to $4.70 for the year ending July 31, 2024, which would be an increase of 4.3 percent to 11.4 percent over Diluted EPS Excluding Certain Items* of $4.22 for the year ended July 31, 2024. Adjusted from this Diluted EPS Excluding Certain Items* guidance is amortization expense estimated at $0.25 per share for the year ending July 31, 2025.

Included in fiscal 2025 guidance are a full-year income tax rate of approximately 20 percent and depreciation and amortization expense ranging from $38 million to $40 million. Capital expenditures are expected to approximate $35 million. Fiscal 2025 guidance is based upon foreign currency exchange rates as of July 31, 2024 and assumes continued economic growth.

A webcast regarding Brady’s fiscal 2024 fourth quarter financial results will be available at www.bradycorp.com/investors beginning at 9:30 a.m. central time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software.   Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2024, employed approximately 5,700 people in its worldwide businesses. Brady’s fiscal 2024 sales were approximately $1.34 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradyid.com.

* Income Before Income Taxes Excluding Certain Items, Net Income Excluding Certain Items, and Diluted EPS Excluding Certain Items are non-GAAP measures. See appendix for more information on these measures, including reconciliations to the most directly comparable GAAP measures.

In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations.

The use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project,” “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: increased cost of raw materials and labor as well as material shortages and supply chain disruptions; decreased demand for our products; our ability to compete effectively or to successfully execute our strategy; our ability to develop technologically advanced products that meet customer demands; Brady’s ability to identify, integrate and grow acquired companies, and to manage contingent liabilities from divested businesses; difficulties in protecting our websites, networks, and systems against security breaches; risks associated with the loss of key employees; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; global climate change and environmental regulations; litigation, including product liability claims; foreign currency fluctuations; changes in tax legislation and tax rates; potential write-offs of goodwill and other intangible assets; differing interests of voting and non-voting shareholders and changes in the regulatory and business environment around dual-class voting structures; numerous other matters of national, regional and global scale, including major public health crises and government responses thereto and those of a political, economic, business, competitive, and regulatory nature contained from time to time in Brady’s U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the “Risk Factors” section within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2024.

These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.

For More Information:
Investor contact: Ann Thornton 414-438-6887
Media contact: Kate Venne 414-358-5176


BRADY CORPORATION AND SUBSIDIARIES              
CONSOLIDATED STATEMENTS OF INCOME              
(Unaudited; Dollars in thousands, except per share data)              
               
  Three months ended July 31,   Year ended July 31,
    2024       2023       2024       2023  
Net sales $ 343,402     $ 345,929     $ 1,341,393     $ 1,331,863  
Cost of goods sold   166,347       170,049       653,509       674,588  
Gross margin   177,055       175,880       687,884       657,275  
Operating expenses:              
Research and development   17,533       16,340       67,748       61,365  
Selling, general and administrative   93,307       97,495       376,722       370,697  
Total operating expenses   110,840       113,835       444,470       432,062  
               
Operating income   66,215       62,045       243,414       225,213  
               
Other income (expense):              
Investment and other income   2,835       2,426       7,553       4,022  
Interest expense   (842 )     (653 )     (3,126 )     (3,539 )
               
Income before income taxes   68,208       63,818       247,841       225,696  
               
Income tax expense   12,752       14,440       50,626       50,839  
               
Net income $ 55,456     $ 49,378     $ 197,215     $ 174,857  
               
Net income per Class A Nonvoting Common Share:              
Basic $ 1.17     $ 1.01     $ 4.10     $ 3.53  
Diluted $ 1.15     $ 1.00     $ 4.07     $ 3.51  
               
Net income per Class B Voting Common Share:              
Basic $ 1.17     $ 1.01     $ 4.08     $ 3.51  
Diluted $ 1.15     $ 1.00     $ 4.05     $ 3.49  
               
Weighted average common shares outstanding:              
Basic   47,595       49,099       48,119       49,591  
Diluted   48,063       49,377       48,496       49,869  
               


BRADY CORPORATION AND SUBSIDIARIES      
CONSOLIDATED BALANCE SHEETS      
(Dollars in thousands)      
       
  July 31, 2024   July 31, 2023
       
ASSETS      
Current assets:      
Cash and cash equivalents $ 250,118     $ 151,532  
Accounts receivable, net of allowance for credit losses of $6,749 and $8,467, respectively   185,486       184,420  
Inventories   152,729       177,078  
Prepaid expenses and other current assets   11,382       11,790  
Total current assets   599,715       524,820  
Property, plant and equipment—net   195,758       142,149  
Goodwill   589,611       592,646  
Other intangible assets   51,839       62,096  
Deferred income taxes   15,596       15,716  
Operating lease assets   38,504       29,688  
Other assets   24,546       22,142  
Total $ 1,515,569     $ 1,389,257  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 84,691     $ 79,855  
Accrued compensation and benefits   77,954       71,470  
Taxes, other than income taxes   14,061       13,575  
Accrued income taxes   7,424       12,582  
Current operating lease liabilities   13,382       14,726  
Other current liabilities   67,170       65,828  
Total current liabilities   264,682       258,036  
Long-term debt   90,935       49,716  
Long-term operating lease liabilities   25,342       16,217  
Other liabilities   67,952       74,369  
Total liabilities   448,911       398,338  
Stockholders’ equity:      
Common stock:      
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 44,042,462 and 45,008,724 shares, respectively   513       513  
Class B voting common stock—Issued and outstanding, 3,538,628 shares   35       35  
Additional paid-in capital   353,654       351,771  
Retained earnings   1,174,025       1,021,870  
Treasury stock—7,219,025 and 6,252,763 shares, respectively, of Class A nonvoting common stock, at cost   (351,947 )     (290,209 )
Accumulated other comprehensive loss   (109,622 )     (93,061 )
Total stockholders’ equity   1,066,658       990,919  
Total $ 1,515,569     $ 1,389,257  
       


BRADY CORPORATION AND SUBSIDIARIES      
CONSOLIDATED STATEMENTS OF CASH FLOWS      
(Unaudited; Dollars in thousands)      
  Year ended July 31,
    2024       2023  
Operating activities:      
Net income $ 197,215     $ 174,857  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   29,873       32,370  
Stock-based compensation expense   7,361       7,508  
Gain on sale of business   —       (3,770 )
Deferred income taxes   (9,399 )     (12,472 )
Other   1,401       (308 )
Changes in operating assets and liabilities:      
Accounts receivable   (6,581 )     2,380  
Inventories   21,697       14,972  
Prepaid expenses and other assets   (743 )     (1,023 )
Accounts payable and accrued liabilities   19,198       (9,459 )
Income taxes   (4,948 )     4,094  
       Net cash provided by operating activities   255,074       209,149  
       
Investing activities:      
Purchases of property, plant and equipment   (79,892 )     (19,226 )
Sale of business   —       8,000  
Other   (1,155 )     12  
      Net cash used in investing activities   (81,047 )     (11,214 )
       
Financing activities:      
Payment of dividends   (45,060 )     (45,404 )
Proceeds from exercise of stock options   8,186       4,091  
Payments for employee taxes withheld from stock-based awards   (2,797 )     (2,041 )
Purchase of treasury stock   (72,225 )     (74,996 )
Proceeds from borrowing on credit agreement   175,103       127,660  
Repayment of borrowing on credit agreement   (133,884 )     (172,944 )
Other   149       66  
     Net cash used in financing activities   (70,528 )     (163,568 )
       
Effect of exchange rate changes on cash and cash equivalents   (4,913 )     3,096  
       
Net increase in cash and cash equivalents   98,586       37,463  
Cash and cash equivalents, beginning of period   151,532       114,069  
       
Cash and cash equivalents, end of period $ 250,118     $ 151,532  
       


BRADY CORPORATION AND SUBSIDIARIES              
SEGMENT INFORMATION              
(Unaudited; Dollars in thousands)              
               
  Three months ended July 31,   Year ended July 31,
    2024       2023       2024       2023  
NET SALES              
Americas & Asia $ 228,493     $ 227,482     $ 886,528     $ 888,857  
Europe & Australia   114,909       118,447       454,865       443,006  
Total $ 343,402     $ 345,929     $ 1,341,393     $ 1,331,863  
               
SALES INFORMATION              
Americas & Asia              
Organic   3.4 %     5.6 %     3.1 %     4.4 %
Currency   (0.8 )%     (0.2 )%     (0.2 )%     (0.9 )%
Divestiture   (2.2 )%     (1.0 )%     (3.2 )%     (0.3 )%
Total   0.4 %     4.4 %     (0.3 )%     3.2 %
Europe & Australia              
Organic   (1.8 )%     9.5 %     1.6 %     7.6 %
Currency   (1.2 )%     2.0 %     1.1 %     (7.1 )%
Total   (3.0 )%     11.5 %     2.7 %     0.5 %
Total Company              
Organic   1.6 %     6.9 %     2.6 %     5.5 %
Currency   (0.8 )%     0.6 %     0.2 %     (3.0 )%
Divestiture   (1.5 )%     (0.7 )%     (2.1 )%     (0.2 )%
Total   (0.7 )%     6.8 %     0.7 %     2.3 %
               
SEGMENT PROFIT              
Americas & Asia $ 53,353     $ 49,992     $ 196,842     $ 180,503  
Europe & Australia   19,277       18,426       70,612       65,742  
Total segment profit $ 72,630     $ 68,418     $ 267,454     $ 246,245  
SEGMENT PROFIT AS A PERCENT OF NET SALES              
Americas & Asia   23.3 %     22.0 %     22.2 %     20.3 %
Europe & Australia   16.8 %     15.6 %     15.5 %     14.8 %
Total   21.2 %     19.8 %     19.9 %     18.5 %
               
               
  Three months ended July 31,   Year ended July 31,
    2024       2023       2024       2023  
Total segment profit $ 72,630     $ 68,418     $ 267,454     $ 246,245  
Unallocated amounts:              
Administrative costs   (6,415 )     (6,373 )     (24,040 )     (24,802 )
Gain on sale of business   -       -       -       3,770  
Investment and other income   2,835       2,426       7,553       4,022  
Interest expense   (842 )     (653 )     (3,126 )     (3,539 )
Income before income taxes $ 68,208     $ 63,818     $ 247,841     $ 225,696  
               


GAAP to NON-GAAP MEASURES                
(Unaudited; Dollars in Thousands, Except Per Share Amounts)
                     
In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure.
                     
Income Before Income Taxes Excluding Certain Items:
Brady is presenting the non-GAAP measure, "Income Before Income Taxes Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our ongoing results. We believe this profit measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Income before income taxes to the non-GAAP measure of Income Before Income Taxes Excluding Certain Items:
                     
        Three months ended July 31,   Year ended July 31,
          2024     2023     2024     2023  
Income before income taxes (GAAP measure) $ 68,208   $ 63,818   $ 247,841   $ 225,696  
  Amortization expense     2,337     2,389     9,421     11,739  
  Gain on sale of business     -     -     -     (3,770 )
Income Before Income Taxes Excluding Certain Items (non-GAAP measure) $ 70,545   $ 66,207   $ 257,262   $ 233,665  
                     
                     
Income Tax Expense Excluding Certain Items:
Brady is presenting the non-GAAP measure, "Income Tax Expense Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our ongoing results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Income tax expense to the non-GAAP measure of Income Tax Expense Excluding Certain Items:
                     
        Three months ended July 31,   Year ended July 31,
          2024     2023     2024     2023  
Income tax expense (GAAP measure) $ 12,752   $ 14,440   $ 50,626   $ 50,839  
  Amortization expense     540     553     2,182     2,756  
  Gain on sale of business     -     -     -     (1,431 )
Income Tax Expense Excluding Certain Items (non-GAAP measure) $ 13,292   $ 14,993   $ 52,808   $ 52,164  
                     
                     
Net Income Excluding Certain Items:
Brady is presenting the non-GAAP measure, "Net Income Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements and supporting footnote disclosures. We do not view these items to be part of our ongoing results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Net income to the non-GAAP measure of Net Income Excluding Certain Items:
                     
        Three months ended July 31,   Year ended July 31,
          2024     2023     2024     2023  
Net income (GAAP measure) $ 55,456   $ 49,378   $ 197,215   $ 174,857  
  Amortization expense     1,797     1,836     7,239     8,983  
  Gain on sale of business     -     -     -     (2,339 )
Net Income Excluding Certain Items (non-GAAP measure) $ 57,253   $ 51,214   $ 204,454   $ 181,501  
                     
                     
Diluted EPS Excluding Certain Items:
Brady is presenting the non-GAAP measure, "Diluted EPS Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in this non-GAAP measure are derived from amounts included in the Consolidated Financial Statements. We do not view these items to be part of our ongoing results. We believe this measure provides an important perspective of underlying business trends and results and provides a more comparable measure from year to year. The table below provides a reconciliation of the GAAP measure of Net income per Class A Nonvoting Common Share to the non-GAAP measure of Diluted EPS Excluding Certain Items (Note that certain amounts will not foot due to rounding):
                     
        Three months ended July 31,   Year ended July 31,
          2024     2023     2024     2023  
Net income per Class A Nonvoting Common Share (GAAP measure) $ 1.15   $ 1.00   $ 4.07   $ 3.51  
  Amortization expense     0.04     0.04     0.15     0.18  
  Gain on sale of business     -     -     -     (0.05 )
Diluted EPS Excluding Certain Items (non-GAAP measure) $ 1.19   $ 1.04   $ 4.22   $ 3.64  
                     
                     
Diluted EPS Excluding Certain Items Guidance:           Fiscal 2025 Expectations
                Low   High
Earnings per diluted Class A Common Share (GAAP measure)           $ 4.15   $ 4.45  
  Amortization expense             0.25     0.25  
Diluted EPS Excluding Certain Items (non-GAAP measure)           $ 4.40   $ 4.70  
                     

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Source: Brady Corporation