Brady Corporation (BRC) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Brady Corp Annual Shareholder Meeting 2025. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Ann Thornton. Please go ahead.

Thank you. Good morning, and welcome to the Brady Corporation Fiscal 2025 Annual Shareholders Meeting. 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 2025 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 of 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, whereby Russell as well as myself will be available to answer 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. First, Mr. Pat Allender, Dr. David Bem; Dr. Elizabeth Bruno; Ms. Joanne Collins Smee; Ms. Deidre Cusack; Ms. Anne De Greef-Safft, Mr. Chris Hix, Mr. Vineet Nargolwala; myself, Brad Richardson; Dr. Michelle Williams; and lastly is 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 extremely proud to offer this high-quality group 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 of Brady. And now I'll turn the call over to Russell.

Thank you, Brad. Having a Board that is engaged and brings their broad experience and knowledge is critical to the success of any organization. So thank you all for helping Brady to be a better company. Before starting the Q&A session, I'd like to share a few comments about 2025. First of all, I'd like to thank our employees. You are helping both Brady and our customers to see beyond day-to-day task and to imagine a more productive and safer working environment. Without all of your efforts and the collaboration of our suppliers and customers, our success in 2025 would not be possible. And from a financial perspective, our adjusted earnings per share was up 9% in 2025 compared to last year, finishing at an all-time record high of $4.60 per share. This marked the fifth consecutive year of record earnings per share. Our record earnings were driven by organic sales growth, which was led by the Americas and Asia region with a growth of 4.8% in 2025. We navigated through the global trade environment while taking actions to reduce our cost structure in certain areas of our businesses in China, Europe and the United States, which helped set us up for continued improved results. We also continued our commitment to return funds to our shareholders through dividends of $45.5 million and share buybacks of $50.8 million in 2025. And in September, we announced our 40th consecutive year of annual dividend increases, which was an incredible milestone to reach, which we're very proud of. Our commitment to our investment in R&D remains a top priority and is the engine behind our ability to grow sales and improve our gross profit margin. Our pipeline of new products continue to differentiate us from our competition. And this year, just a few of the new products we launched included the i7500 industrial label printer. It incorporates Brady's proprietary LabelSense technology, which automatically calibrates for printing on over 4,000 label, adhesive and ribbon combinations, resulting in almost 0 setup time and no wasted labels. We also added 3 exciting acquisitions to our product portfolio in 2025 with Gravotech, [indiscernible] at the beginning of the fiscal year and Microfluidic Solutions in April. And just over 4 months ago, we acquired Mecco, which is an excellent addition to our laser and direct part marking technology. Brady's goal is to provide seamless interoperability across our platforms, and we are beginning to see the integration of multiple technologies into a single platform. Our goal is to bring the simplicity of consumer experience to industrial products that are needlessly complicated. Lastly, I would like to highlight our people. A culture of responsibility is critical to any strong organization's success, and our global team takes pride in their work and operates with integrity. Brady is a fantastic organization with loyal customers who place their trust in us, which we take very seriously. We're committed to a culture that develops our people and our employees' voices are heard and where our leadership embodies our core values. 2025 was another great year, which represented our fifth consecutive record year of adjusted earnings per share. None of this would have been possible with the hard work and dedication of the Brady team. And with that, I'd 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.

Thank you. Ladies and gentlemen, this concludes today's presentation. You may now disconnect, and have a wonderful day.