Brady Corporation (BRC) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Brady Corp. Annual Shareholders Meeting 2024. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the call over to your speaker today, Ann Thornton, CFO. Please go ahead.

Good morning and welcome. Thank you for joining us today. The slides for this morning's call are located on our website at www.bradycorp.com/investors. Please note that during this call, we may make comments about forward-looking information. Words such as expect, will, may, believe, forecast and anticipate are just a few examples of words identifying a forward-looking statement. It's important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected results. You can read about these risk factors in more detail in our 2024 Form 10-K, which was filed with the SEC in September of this year. Moving to the agenda on Slide #3, we will first announce the results of the election of Brady's Board Directors. Next, Brady's President and CEO, Russell Shaller, will provide some brief comments, and then we'll open it up to a Q&A session, where Russell as well as myself will be able to answer your questions. Today's presentation is being broadcast live on the Internet and will be available on our website for replay. So your participation in the Q&A session will constitute your consent to being recorded. Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. I'd like to now move to Slide #4 for the formal business portion of this meeting and introduce Mr. Brad Richardson, the Chair of Brady's Board of Directors to read the results of the election of the Board of Directors. Brad?

Well, thank you, Ann, and good morning, everyone. As Ann mentioned, I'm Brad Richardson, the Chair of Brady's Board of Directors. The following are the individuals who are standing for election to Brady's Board of Directors. Pat Allender; David Bem; Elizabeth Bruno; Joanne Collins Smee; Dee Cusack; Chris Hix; Vineet Nargolwala; myself, Brad Richardson; Michelle Williams; and lastly, Russell Shaller. Our shareholders can find our Board members' bios in our annual report on Form 10-K as well as on Brady's website. We are proud to offer this high-quality and diverse set of directors for reelection to the Board. Let's turn to Slide 5 for the results of the election of the Board of Directors. I'm pleased to announce that the shareholders of 100% of the Class B common voting stock voted in favor of the election of the director nominees, and they are, therefore, elected to a 1-year term. Thank you again for all your time and support. I'll now turn the call over to Russell.

Thank you, Brad. Having a board that is engaged and brings their extensive experience and knowledge is critical to the success of the organization. Thank you all for helping Brady to be a better company every single day. Before starting the Q&A, I'd like to share a few comments about 2024. First of all, I'd like to thank every single employee of Brady. Without you, we wouldn't have had the success that we had in 2024, which is another great year for Brady. From a financial perspective, our GAAP EPS was up 16%, finishing at an all-time record high of $4.07 per share. This marks the fourth consecutive year of record earnings per share. Our earnings growth was driven by an increase in our gross profit margin to 51.3% and organic sales of 2.6% with excellent performance in both of our regions. We also continued our commitment to return funds to our shareholders through dividends and share buybacks totaling $117.3 million last year. And in September, we announced our 39th consecutive year of annual dividend increases. We've increased our dividend every year since going public. Our commitment to R&D also remains a top priority, and our pipeline of new products continue to differentiate us from our competition while driving organic sales and profitability improvements. This year, just a few of the new products we launched included a rugged barcode scanner, which was the result of an integrated development effort with one of the companies we acquired in 2021, and we launched a new industrial inkjet color label printer. On the material side, we launched ToughStripe Max, which is a reengineered, improved version of our high-quality floor marking tape designed for the highest traffic areas in the manufacturing site. These are just a few of the examples of new products we have, several new printers and other innovative new products in our pipeline planned for launch this coming year. And finally, I would like to highlight our people. It is critical to install a culture of responsibility to do the right thing every single day. And Brady's global team does just that. Brady is a fantastic organization with incredible brands and loyal customers who place their trust in us every single day, which is something that we don't take lightly. We're committed to an inclusive culture where our employees' voices are heard and where our leadership embodies our core values. I'm incredibly proud of 2024, which represents our fourth consecutive record year of EPS and a record year of cash generation, which would not have been possible without the hard work and dedication of the entire Brady team. With that, I would like to start the Q&A. Operator, would you please provide instructions to our shareholders?

[Operator Instructions]

Okay. As there are no additional questions, I would like to thank you all for your participation today. And on behalf of Brady's Board of Directors and everyone at Brady, we thank you for being a shareholder of Brady Corporation. Have a great day. Operator, you may disconnect the call.

Certainly. This concludes today's conference call. Thank you for participating. You may now disconnect.