brc-20250131

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended January 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number 1-14959

BRADY CORPORATION

(Exact name of registrant as specified in its charter)


Wisconsin						39-0178960
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6555 West Good Hope Road

Milwaukee, Wisconsin 53223

(Address of principal executive offices and zip code)

(414) 358-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Nonvoting Common Stock, par value $0.01 per share	BRC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of February 19, 2025, there were 44,241,601 outstanding shares of Class A Nonvoting Common Stock and 3,538,628 shares of Class B Voting Common Stock. The Class B Voting Common Stock, all of which is held by affiliates of the Registrant, is the only voting stock.

Table of Contents

INDEX



			Page
PART I. Financial Information			3
Item 1. Financial Statements (Unaudited)			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Income			4
Condensed Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Statements of Stockholders' Equity			6
Condensed Consolidated Statements of Cash Flows			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
Item 4. Controls and Procedures			25
PART II. Other Information			26
Item 1. Legal Proceedings			26
Item 1A. Risk Factors			26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			26
Item 5. Other Information			26
Item 6. Exhibits			27
Signatures			28

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)


	January 31, 2025		July 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	138,452	$	250,118
Accounts receivable, net of allowance for credit losses of $9,227 and $6,749, respectively	201,973		185,486
Inventories	181,810		152,729
Prepaid expenses and other current assets	14,080		11,382
Total current assets	536,315		599,715
Property, plant and equipment—net	199,075		195,758
Goodwill	661,288		589,611
Other intangible assets	108,456		51,839
Deferred income taxes	16,587		15,596
Operating lease assets	42,135		38,504
Other assets	24,844		24,546
Total	$	1,588,700	$	1,515,569
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	90,968	$	84,691
Accrued compensation and benefits	69,551		77,954
Taxes, other than income taxes	18,794		14,061
Accrued income taxes	4,416		7,424
Current operating lease liabilities	14,922		13,382
Other current liabilities	83,699		67,170
Total current liabilities	282,350		264,682
Long-term debt	87,687		90,935
Long-term operating lease liabilities	27,546		25,342
Other liabilities	70,649		67,952
Total liabilities	468,232		448,911
Stockholders’ equity:
Class A nonvoting common stock—Issued 51,261,487 shares, and outstanding 44,241,601 and 44,042,462 shares, respectively	513		513
Class B voting common stock—Issued and outstanding, 3,538,628 shares	35		35
Additional paid-in capital	356,531		353,654
Retained earnings	1,238,275		1,174,025
Treasury stock—7,019,886 and 7,219,025 shares, respectively, of Class A nonvoting common stock, at cost	(343,059)		(351,947)
Accumulated other comprehensive loss	(131,827)		(109,622)
Total stockholders’ equity	1,120,468		1,066,658
Total	$	1,588,700	$	1,515,569

See Notes to Condensed Consolidated Financial Statements.

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BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands, Except Per Share Amounts, Unaudited)


	Three months ended January 31,				Six months ended January 31,
	2025		2024		2025		2024
Net sales	$	356,675	$	322,624	$	733,740	$	654,607
Cost of goods sold	180,832		160,541		368,208		320,805
Gross margin	175,843		162,083		365,532		333,802
Operating expenses:
Research and development	18,723		16,832		37,644		32,534
Selling, general and administrative	105,886		91,325		217,732		187,612
Total operating expenses	124,609		108,157		255,376		220,146
Operating income	51,234		53,926		110,156		113,656
Other income (expense):
Investment and other income	2,125		2,684		3,359		3,122
Interest expense	(1,312)		(790)		(2,668)		(1,556)
Income before income taxes	52,047		55,820		110,847		115,222
Income tax expense	11,713		12,192		23,730		24,353
Net income	$	40,334	$	43,628	$	87,117	$	90,869
Net income per Class A Nonvoting Common Share:
Basic	$	0.84	$	0.90	$	1.82	$	1.88
Diluted	$	0.83	$	0.90	$	1.81	$	1.86
Net income per Class B Voting Common Share:
Basic	$	0.84	$	0.90	$	1.81	$	1.86
Diluted	$	0.83	$	0.90	$	1.79	$	1.85
Weighted average common shares outstanding:
Basic	47,851		48,374		47,792		48,440
Diluted	48,306		48,725		48,261		48,768

See Notes to Condensed Consolidated Financial Statements.

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BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands, Unaudited)


	Three months ended January 31,				Six months ended January 31,
	2025		2024		2025		2024
Net income	$	40,334	$	43,628	$	87,117	$	90,869
Other comprehensive (loss) income:
Foreign currency translation adjustments	(21,180)		14,591		(21,259)		(5,773)

Cash flow hedges:
Net gain (loss) recognized in other comprehensive (loss) income	935		1,083		(403)		789
Reclassification adjustment for losses (gains) included in net income	463		(254)		(1)		(1,539)
	1,398		829		(404)		(750)

Pension and other post-retirement benefits actuarial gain amortization	(151)		(151)		(302)		(302)

Other comprehensive (loss) income, before tax	(19,933)		15,269		(21,965)		(6,825)
Income tax (expense) benefit related to items of other comprehensive (loss) income	(292)		73		(240)		(55)
Other comprehensive (loss) income, net of tax	(20,225)		15,342		(22,205)		(6,880)
Comprehensive income	$	20,109	$	58,970	$	64,912	$	83,989

See Notes to Condensed Consolidated Financial Statements.

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BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in Thousands, Unaudited)


	Three months ended January 31, 2025
	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balances at October 31, 2024	$	548	$	354,592	$	1,209,406	$	(344,012)	$	(111,602)	$	1,108,932
Net income	—		—		40,334		—		—		40,334
Other comprehensive loss, net of tax	—		—		—		—		(20,225)		(20,225)
Issuance of shares of Class A Common Stock under stock plan	—		(241)		—		953		—		712
Stock-based compensation expense	—		2,180		—		—		—		2,180

Cash dividends on Common Stock:
Class A — $0.2400 per share	—		—		(10,616)		—		—		(10,616)
Class B — $0.2400 per share	—		—		(849)		—		—		(849)
Balances at January 31, 2025	$	548	$	356,531	$	1,238,275	$	(343,059)	$	(131,827)	$	1,120,468


	Six months ended January 31, 2025
	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balances at July 31, 2024	$	548	$	353,654	$	1,174,025	$	(351,947)	$	(109,622)	$	1,066,658
Net income	—		—		87,117		—		—		87,117
Other comprehensive loss, net of tax	—		—		—		—		(22,205)		(22,205)
Issuance of shares of Class A Common Stock under stock plan	—		(5,306)		—		8,888		—		3,582
Tax benefit and withholdings from deferred compensation distributions	—		190		—		—		—		190
Stock-based compensation expense	—		7,993		—		—		—		7,993

Cash dividends on Common Stock:
Class A — $0.4800 per share	—		—		(21,228)		—		—		(21,228)
Class B — $0.4634 per share	—		—		(1,639)		—		—		(1,639)
Balances at January 31, 2025	$	548	$	356,531	$	1,238,275	$	(343,059)	$	(131,827)	$	1,120,468


	Three months ended January 31, 2024
	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balances at October 31, 2023	$	548	$	352,421	$	1,057,773	$	(300,467)	$	(115,283)	$	994,992
Net income	—		—		43,628		—		—		43,628
Other comprehensive income, net of tax	—		—		—		—		15,342		15,342
Issuance of shares of Class A Common Stock under stock plan	—		273		—		2,466		—		2,739
Stock-based compensation expense	—		1,100		—		—		—		1,100
Repurchase of shares of Class A Common Stock, including excise taxes	—		—		—		(7,713)		—		(7,713)
Cash dividends on Common Stock:
Class A — $0.2350 per share	—		—		(10,525)		—		—		(10,525)
Class B — $0.2350 per share	—		—		(831)		—		—		(831)
Balances at January 31, 2024	$	548	$	353,794	$	1,090,045	$	(305,714)	$	(99,941)	$	1,038,732

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	Six months ended January 31, 2024
	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balances at July 31, 2023	$	548	$	351,771	$	1,021,870	$	(290,209)	$	(93,061)	$	990,919
Net income	—		—		90,869		—		—		90,869
Other comprehensive loss, net of tax	—		—		—		—		(6,880)		(6,880)
Issuance of shares of Class A Common Stock under stock plan	—		(3,389)		—		6,393		—		3,004
Tax benefit and withholdings from deferred compensation distributions	—		149		—		—		—		149
Stock-based compensation expense	—		5,263		—		—		—		5,263
Repurchase of shares of Class A Common Stock, including excise taxes	—		—		—		(21,898)		—		(21,898)
Cash dividends on Common Stock:
Class A — $0.4700 per share	—		—		(21,090)		—		—		(21,090)
Class B — $0.4534 per share	—		—		(1,604)		—		—		(1,604)
Balances at January 31, 2024	$	548	$	353,794	$	1,090,045	$	(305,714)	$	(99,941)	$	1,038,732

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BRADY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands, Unaudited)


	Six months ended January 31,
	2025		2024
Operating activities:
Net income	$	87,117	$	90,869
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,096		15,008
Stock-based compensation expense	7,993		5,263

Deferred income taxes	(3,076)		(3,640)
Other	231		947
Changes in operating assets and liabilities:
Accounts receivable	6,605		(5,030)
Inventories	(8,384)		10,078
Prepaid expenses and other assets	(2,571)		(1,187)
Accounts payable and accrued liabilities	(41,650)		(9,754)
Income taxes	(3,361)		(4,203)
Net cash provided by operating activities	63,000		98,351

Investing activities:
Purchases of property, plant and equipment	(14,423)		(60,832)
Acquisition of businesses, net of cash acquired	(137,348)		—

Other	53		—
Net cash used in investing activities	(151,718)		(60,832)

Financing activities:
Payment of dividends	(22,867)		(22,694)
Proceeds from exercise of stock options	5,712		5,366
Payments for employee taxes withheld from stock-based awards	(2,130)		(2,362)
Purchase of treasury stock	—		(21,797)
Proceeds from borrowing on credit agreement	159,373		69,145
Repayment of borrowing on credit agreement	(162,621)		(70,771)
Other	190		149
Net cash used in financing activities	(22,343)		(42,964)

Effect of exchange rate changes on cash and cash equivalents	(605)		(2,227)

Net decrease in cash and cash equivalents	(111,666)		(7,672)
Cash and cash equivalents, beginning of period	250,118		151,532

Cash and cash equivalents, end of period	$	138,452	$	143,860

See Notes to Condensed Consolidated Financial Statements.

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BRADY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended January 31, 2025

(Unaudited)

(In thousands, except share and per share amounts)

NOTE A — Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Brady Corporation and subsidiaries (the “Company,” “Brady,” “we,” or “our”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of January 31, 2025 and July 31, 2024, its results of operations and comprehensive income for the three and six months ended January 31, 2025 and 2024, and cash flows for the six months ended January 31, 2025 and 2024. The condensed consolidated balance sheet as of July 31, 2024 has been derived from the audited consolidated financial statements as of that date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statement presentation. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2024.

NOTE B — New Accounting Pronouncements

Standards not yet adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The guidance requires expanded interim and annual disclosures of segment information including the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. The guidance is effective for the Company's fiscal 2025 Form 10-K and interim periods thereafter. The Company is currently assessing its segment information disclosures in connection with the adoption of ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The guidance requires expanded annual disclosures including the standardization and disaggregation of income tax rate reconciliation categories and the amount of income taxes paid by jurisdiction. The guidance is effective for the Company’s fiscal 2026 Form 10-K. The Company is currently assessing its income tax disclosures in connection with the adoption of ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The guidance requires expanded interim and annual disclosures of expense information including the amounts of inventory purchases, employee compensation, depreciation, amortization, and depletion within commonly presented expense captions during the period. The guidance is effective for the Company's fiscal 2028 Form 10-K and interim periods thereafter. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

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NOTE C — Additional Balance Sheet Information

Inventories

Inventories consisted of the following as of January 31, 2025 and July 31, 2024:

SEC Form 10-Q filed by Brady Corporation