BRADY CORP
For the period ended Apr 30, 2025. Filed May 16, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2025 · Filed May 16, 2025
BRC$78.72-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-01-31; filed 2025-02-21.
0000746598-25-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-04-30; filed 2025-05-16.
0000746598-25-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 83 current paragraphs.
51 unchanged; 29 reworded; 2 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
In recent months, the U.S. government introduced incremental import tariffs on goods imported into the U.S. from numerous countries, triggering reciprocal tariffs and other actions from many trading partners on goods exported from the U.S. Trade policies of the U.S. and other countries, including China, are complex and rapidly evolving. Our strategy of manufacturing products near the point of sale reduces our overall exposure to tariffs, though certain sourced inputs and manufactured items remain subject to incremental tariffs. Our business has incurred, and expects to continue to incur, additional costs as it relates to these incremental tariffs for the remainder of fiscal 2025 and the foreseeable future. The Company has taken and will continue to take action to mitigate inflationary pressures caused by the incremental tariffs through a combination of targeted price increases and surcharges, strategic sourcing adjustments, product portfolio optimization, as well as our ongoing efforts to drive sustainable efficiency gains in our operations and administrative structures.
Current report
•Increased cost of materials, labor, material shortages and supply chain disruptions, including as a result of tariffs or other impacts of the global trade environment
Removed paragraphs (2)
Previous report
Organic sales in Europe were essentially flat in both the three and six months ended January 31, 2025. Organic sales growth in the product identification and wire identification product lines was offset by an organic sales decline in the safety and facility identification product line during the three-month period. Organic sales growth during the six-month period was primarily driven by growth in the safety and facility identification and wire identification product lines, which was offset by an organic sales decline in the product identification product line.
Previous report
•Increased cost of raw materials and labor as well as material shortages and supply chain disruptions
Reworded paragraphs (29)
Previous wording
The Company's operations and financial performance are subject to the risks and uncertainties inherent in the global economic environment, including inflationary pressures, supply chain disruptions, and other macroeconomic challenges. These pressures may impact the Company's business, financial condition and results of operations as the global economic outlook remains uncertain. The Company has taken and will continue to take actions to mitigate inflationary pressures through targeted pricing actions and a commitment to driving long-term efficiency improvements.
Current wording
The Company's operations and financial performance are subject to the risks and uncertainties inherent in the global economic environment, including inflationary pressures, supply chain disruptions, and other macroeconomic challenges. These pressures may impact the Company's business, financial condition and results of operations as the global economic outlook remains uncertain.
Previous wording
We believe our financial strength positions us well to continue investing in acquisitions and organic growth opportunities, such as expanded sales channels, marketing programs, and research and development (“R&D”). We remain focused on driving sustainable efficiency gains and automation across our operations and selling, general and administrative (“SG&A”) functions, while also returning capital to our shareholders through dividends and share repurchases. At January 31, 2025, we had cash of $138.5 million, as well as a credit agreement with $210.1 million available for future borrowing, which can be increased up to $1,095.1 million at the Company's option and subject to certain conditions, for total available liquidity of $1,233.6 million.
Current wording
Notwithstanding the fluid situation relating to tariffs, we believe our financial strength positions us well to continue investing in acquisitions and organic growth opportunities, such as expanded sales channels, marketing programs, and research and development (“R&D”). We remain focused on driving sustainable efficiency gains and automation across our operations and selling, general and administrative (“SG&A”) functions, while also returning capital to our shareholders through dividends and share repurchases. At April 30, 2025, we had cash of $152.2 million, as well as a credit agreement with $195.2 million available for future borrowing, which can be increased to $1,085.2 million at the Company's option and subject to certain conditions, for total available liquidity of $1,237.4 million.
Previous wording
The comparability of the operating results for the three and six months ended January 31, 2025 compared to the same periods in the prior year have been impacted by the acquisitions of Gravotech on August 1, 2024 and AB&R on October 1, 2024. The operating results of Gravotech and AB&R have been included since their acquisition dates. Gravotech has been included in both reportable segments, and AB&R has been included in the Americas & Asia reportable segment. The comparability of the year-to-date operating results of the Americas & Asia segment has also been impacted by the divestiture of a non-core business in October 2023.
Current wording
The comparability of the operating results for the three and nine months ended April 30, 2025 compared to the same periods in the prior year have been impacted by the acquisitions of Gravotech on August 1, 2024, AB&R on October 1, 2024 and Microfluidic Solutions on April 1, 2025. The operating results of Gravotech, AB&R and Microfluidic Solutions have been included since their acquisition dates. Gravotech has been included in both reportable segments, and AB&R and Microfluidic Solutions have been included in the Americas & Asia reportable segment. The comparability of the year-to-date operating results of the Americas & Asia segment has also been impacted by the divestiture of a non-core business in October 2023.
Previous wording
A comparison of results of operating income for the three and six months ended January 31, 2025 and 2024, is as follows:
Current wording
A comparison of results of operating income for the three and nine months ended April 30, 2025 and 2024, is as follows:
Previous wording
Net sales for the three months ended January 31, 2025 increased 10.6% to $356.7 million compared to $322.6 million in the same period in the prior year. The increase consisted of organic sales growth of 2.6% and sales growth from acquisitions of 10.2%, which was partially offset by a decrease from foreign currency translation of 2.2%. Organic sales growth of 4.3% in the Americas & Asia segment was partially offset by an organic sales decline of 0.8% in the Europe & Australia segment during the three months ended January 31, 2025 compared to the same period in the prior year.
Current wording
Net sales for the three months ended April 30, 2025 increased 11.4% to $382.6 million compared to $343.4 million in the same period in the prior year. The increase consisted of organic sales growth of 1.6% and sales growth from acquisitions of 10.5%, which was partially offset by a decrease from foreign currency translation of 0.7%. Organic sales growth of 5.4% in the Americas & Asia segment was partially offset by an organic sales decline of 5.4% in the Europe & Australia segment during the three months ended April 30, 2025 compared to the same period in the prior year.
Previous wording
Net sales for the six months ended January 31, 2025 increased 12.1% to $733.7 million compared to $654.6 million in the same period in the prior year. The increase consisted of organic sales growth of 3.1% and sales growth from acquisitions of 10.0%, partially offset by a decrease from foreign currency translation of 0.5% and a decrease of 0.5% due to a divestiture. Organic sales grew 4.7% in the Americas & Asia segment and were flat in the Europe & Australia segment during the six months ended January 31, 2025 compared to the same period in the prior year.
Current wording
Net sales for the nine months ended April 30, 2025 increased 11.9% to $1,116.3 million compared to $998.0 million in the same period in the prior year. The increase consisted of organic sales growth of 2.6% and sales growth from acquisitions of 10.2%, partially offset by a decrease from foreign currency translation of 0.5% and a decrease of 0.4% due to a divestiture. Organic sales grew 5.0% in the Americas & Asia segment, while organic sales declined 1.9% in the Europe & Australia segment during the nine months ended April 30, 2025 compared to the same period in the prior year.
Previous wording
Gross margin increased 8.5% to $175.8 million in the three months ended January 31, 2025 compared to $162.1 million in the same period in the prior year. As a percentage of net sales, gross margin decreased to 49.3% from 50.2% in the three-month period. Gross margin increased 9.5% to $365.5 million in the six months ended January 31, 2025 compared to $333.8 million in the same period in the prior year. As a percentage of net sales, gross margin decreased to 49.8% from 51.0% in the six-month period. The decrease in gross margin as a percentage of net sales during the three months ended January 31, 2025 was primarily due to facility closure and other reorganization costs of $2.3 million, which were partially offset by organic sales growth in higher gross margin product lines. The facility closure and other reorganization costs primarily relate to headcount reductions associated with the closure of a manufacturing facility in China and the closure of a manufacturing facility in the U.S. The decrease in gross margin as a percentage of net sales during the six months ended January 31, 2025 was primarily due to a non-recurring increase in cost of goods sold of $4.1 million related to the fair value adjustment to inventory from acquisitions as well as the facility closure and other reorganization costs of $2.3 million, which were partially offset by organic sales growth in higher gross margin product lines.
Current wording
Gross margin increased 10.2% to $195.1 million in the three months ended April 30, 2025 compared to $177.0 million in the same period in the prior year. As a percentage of net sales, gross margin decreased to 51.0% from 51.6% in the three-month period. Gross margin increased 9.7% to $560.6 million in the nine months ended April 30, 2025 compared to $510.8 million in the same period in the prior year. As a percentage of net sales, gross margin decreased to 50.2% from 51.2% in the nine-month period. The decrease in gross margin as a percentage of net sales during the three-month period was primarily due to the impact of incremental tariffs, primarily on goods imported to the U.S. from China, and $1.1 million of facility closure and other reorganization costs, which were partially offset by organic sales growth in higher gross margin product lines. The decrease in gross margin as a percentage of net sales during the nine months ended April 30, 2025 was primarily due to a non-recurring increase in cost of goods sold of $4.1 million related to the fair value adjustment to inventory from acquisitions, facility closure and other reorganization costs of $3.0 million, as well as the impact of incremental tariffs, which were partially offset by organic sales growth in higher gross margin product lines.
Previous wording
R&D expenses increased 11.2% to $18.7 million in the three months ended January 31, 2025 compared to $16.8 million in the same period in the prior year. As a percentage of net sales, R&D expenses were unchanged at 5.2% in the three-month period compared to the same period in the prior year. R&D expenses increased 15.7% to $37.6 million in the six months ended January 31, 2025 compared to $32.5 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 5.1% from 5.0% in the six-month period. The increase in R&D spending was primarily due to the acquisition of Gravotech, and, to a lesser extent, an increase in R&D headcount within the Company's organic business. The Company remains committed to investing in new product development to drive long-term organic sales growth. Investments in new printing systems, materials and new product development within recent acquisitions are the primary focus of R&D expenditures in fiscal 2025.
Current wording
R&D expenses increased 8.5% to $19.2 million in the three months ended April 30, 2025 compared to $17.7 million in the same period in the prior year. As a percentage of net sales, R&D expenses decreased to 5.0% in the three-month period compared to 5.1% in the same period in the prior year. R&D expenses increased 13.2% to $56.8 million in the nine months ended April 30, 2025 compared to $50.2 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 5.1% from 5.0% in the nine-month period. The increase in R&D spending was primarily due to the acquisition of Gravotech, and, to a lesser extent, an increase in R&D headcount within the Company's organic business. The Company remains committed to investing in new product development to drive long-term organic sales growth. Investments in new printing systems, materials and new product development within recent acquisitions are the primary focus of R&D expenditures in fiscal 2025.
Previous wording
SG&A expenses include selling and administrative costs directly attributed to the Americas & Asia and Europe & Australia segments, as well as certain other corporate administrative expenses including finance, information technology, human resources and other administrative expenses. SG&A expenses increased 15.9% to $105.9 million in the three months ended January 31, 2025 compared to $91.3 million in the same period in the prior year. As a percentage of sales, SG&A expenses increased to 29.7% from 28.3% in the three-month period. SG&A expenses increased 16.1% to $217.7 million for the six months ended January 31, 2025 compared to $187.6 million in the same period in the prior year. As a percentage of net sales, SG&A expenses increased to 29.7% from 28.7% in the six-month period. The increase in SG&A expenses during the three and six months ended January 31, 2025 was primarily due to increased headcount and other selling-related costs from acquisitions, including incremental amortization expense from the acquired intangible assets. SG&A expenses during the three months ended January 31, 2025 also include facility closure and other reorganization costs of $3.4 million. SG&A expenses during the six months ended January 31, 2025 also include facility closure and other reorganization costs of $3.4 million and non-recurring acquisition-related costs and other expenses of $1.0 million.
Current wording
SG&A expenses include selling and administrative costs directly attributed to the Americas & Asia and Europe & Australia segments, as well as certain other corporate administrative expenses including finance, information technology, human resources and other administrative expenses. SG&A expenses increased 13.4% to $108.7 million in the three months ended April 30, 2025 compared to $95.8 million in the same period in the prior year. As a percentage of sales, SG&A expenses increased to 28.4% from 27.9% in the three-month period. SG&A expenses increased 15.2% to $326.4 million for the nine months ended April 30, 2025 compared to $283.4 million in the same period in the prior year. As a percentage of net sales, SG&A expenses increased to 29.2% from 28.4% in the nine-month period. The increase in SG&A expenses during the three and nine months ended April 30, 2025 was primarily due to increased headcount and other selling-related costs from acquisitions, including incremental amortization expense from the acquired intangible assets. Amortization expense increased $2.4 million and $7.1 million during the three and nine months ended April 30, 2025 compared to the same periods in the prior year. SG&A expenses during the three and nine months ended April 30, 2025 also include facility closure and other reorganization costs of $2.8 million and $6.6 million, respectively. SG&A expenses during the nine months ended April 30, 2025 also include non-recurring acquisition-related costs and other expenses of $1.0 million.
Previous wording
Operating income decreased 5.0% to $51.2 million and decreased 3.1% to $110.2 million in the three and six months ended January 31, 2025, respectively, compared to $53.9 million and $113.7 million in the same periods in the prior year. The decrease in operating income in both the three and six-month periods was primarily due to non-recurring acquisition-related costs and incremental amortization expense related to acquired businesses, as well as facility closure and other reorganization costs.
Current wording
Operating income increased 5.7% to $67.2 million and increased 0.1% to $177.3 million in the three and nine months ended April 30, 2025, respectively, compared to $63.5 million and $177.2 million in the same periods in the prior year. The increase in operating income in both the three and nine-month periods was primarily due to organic sales growth in higher gross margin product lines, which was partially offset by non-recurring acquisition-related costs and incremental amortization expense related to acquired businesses, as well as facility closure and other reorganization costs.
Previous wording
Investment and other income was $2.1 million in the three months ended January 31, 2025 compared to $2.7 million in the same period in the prior year. Investment and other income was $3.4 million in the six months ended January 31, 2025 compared to $3.1 million in the same period in the prior year. The change in investment and other income during both the three and six-month periods was primarily due to the change in market value of securities held in deferred compensation plans.
Current wording
Investment and other (expense) income was a net expense of $0.5 million in the three months ended April 30, 2025 compared to net investment income of $1.6 million in the same period in the prior year. Investment and other (expense) income decreased to $2.9 million of net investment income in the nine months ended April 30, 2025 compared to $4.7 million in the same period in the prior year. The change in investment and other (expense) income during both the three and nine-month periods was primarily due to the change in market value of securities held in deferred compensation plans.
Previous wording
Interest expense increased to $1.3 million and $2.7 million for the three and six months ended January 31, 2025, respectively, compared to $0.8 million and $1.6 million in the same periods in the prior year. The increase in interest expense was primarily due to an increase in outstanding borrowings on the Company's credit agreement to fund acquisitions, which was partially offset by a decrease in the weighted average interest rate compared to the same periods in the prior year.
Current wording
Interest expense increased to $0.9 million and $3.6 million for the three and nine months ended April 30, 2025, respectively, compared to $0.7 million and $2.3 million in the same periods in the prior year. The increase in interest expense was primarily due to an increase in outstanding borrowings on the Company's credit agreement to fund acquisitions, which was partially offset by a decrease in the weighted average interest rate compared to the same periods in the prior year.
Previous wording
The Company's income tax rate was 22.5% and 21.8% for the three months ended January 31, 2025 and 2024, respectively, and the income tax rate was 21.4% and 21.1% for the six months ended January 31, 2025 and 2024, respectively. The Company expects its ongoing annual income tax rate to be approximately 21% based on its current global business mix and based on tax laws and statutory rates currently in effect.
Current wording
The Company's income tax rate was 20.5% and 21.0% for the three months ended April 30, 2025 and 2024, respectively, and the income tax rate was 21.1% for both of the nine-month periods ended April 30, 2025 and 2024. The Company expects its ongoing annual income tax rate to be approximately 21% based on its current global business mix and based on tax laws and statutory rates currently in effect.
Previous wording
The following is a summary of segment information for the three and six months ended January 31, 2025 and 2024:
Current wording
The following is a summary of segment information for the three and nine months ended April 30, 2025 and 2024:
Previous wording
Americas & Asia net sales increased 10.5% to $233.8 million in the three months ended January 31, 2025 compared to $211.6 million in the same period in the prior year, which consisted of organic sales growth of 4.3% and sales growth from acquisitions of 7.6%, which were partially offset by a decrease from foreign currency translation of 1.4%. Americas & Asia net sales increased 10.6% to $479.3 million in the six months ended January 31, 2025 compared to $433.3 million in the same period in the prior year, which consisted of organic sales growth of 4.7% and sales growth from acquisitions of 7.5%, which were partially offset by a decrease from foreign currency translation of 0.8% and a decrease due to a divestiture of 0.8%.
Current wording
Americas & Asia net sales increased 12.9% to $253.7 million in the three months ended April 30, 2025 compared to $224.8 million in the same period in the prior year, which consisted of organic sales growth of 5.4% and sales growth from acquisitions of 8.6%, which were partially offset by a decrease from foreign currency translation of 1.1%. Americas & Asia net sales increased 11.4% to $732.9 million in the nine months ended April 30, 2025 compared to $658.0 million in the same period in the prior year, which consisted of organic sales growth of 5.0% and sales growth from acquisitions of 7.9%, which were partially offset by a decrease from foreign currency translation of 1.0% and a decrease due to a divestiture of 0.5%.
Previous wording
Organic sales in Asia increased approximately 11% in the three months ended January 31, 2025 and increased in the high-single digits in the six months ended January 31, 2025 compared to the same periods in the prior year. The organic sales increase in both the three and six-month periods was primarily driven by organic sales growth in Japan and India, which was partially offset by an organic sales decline in China. Organic sales grew in all major products lines with the strongest growth in the product identification and safety and facility identification product lines.
Current wording
Organic sales in Asia increased approximately 23% in the three months ended April 30, 2025, and increased approximately 13% in the nine months ended April 30, 2025 compared to the same periods in the prior year. The organic sales increase in the three-month period was realized throughout Asia, which included a return to organic sales growth in China. Organic sales growth in the nine-month period resulted from growth throughout Asia, partially offset by flat organic sales in China. Organic sales in both the three and nine-month periods were driven by growth in all major product lines, with particularly strong growth in the product identification and safety and facility identification product lines.
Previous wording
Americas & Asia segment profit increased 4.8% to $46.0 million in the three months ended January 31, 2025 compared to $43.9 million in the same period in the prior year. Segment profit increased 7.6% to $100.9 million in the six months ended January 31, 2025 compared to $93.8 million in the same period in the prior year. As a percentage of net sales, segment profit decreased to 19.7% from 20.7% in the three-month period and segment profit decreased to 21.0% from 21.6% in the six-month period ended January 31, 2025 compared to the same periods in the prior year. The decrease in segment profit as a percentage of sales was primarily due to costs associated with the closure of two facilities during the three-month period, and incremental amortization from acquired businesses and purchase accounting adjustments during the six-month period, which was partially offset by increased profit from organic sales growth.
Current wording
Americas & Asia segment profit increased 15.0% to $57.2 million in the three months ended April 30, 2025 compared to $49.7 million in the same period in the prior year. Segment profit increased 10.2% to $158.1 million in the nine months ended April 30, 2025 compared to $143.5 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 22.5% from 22.1% in the three-month period and segment profit decreased to 21.6% from 21.8% in the nine-month period ended April 30, 2025 compared to the same periods in the prior year. The decrease in segment profit as a percentage of sales was primarily due to costs associated with the closure of two facilities, incremental amortization from acquired businesses and purchase accounting adjustments during the nine-month period, which was partially offset by increased profit from organic sales growth.
Previous wording
Europe & Australia net sales increased 10.7% to $122.8 million in the three months ended January 31, 2025 compared to $111.0 million in the same period in the prior year, which consisted of sales growth from acquisitions of 15.1% that was partially offset by an organic sales decline of 0.8% and a decrease from foreign currency translation of 3.6%. Europe & Australia net sales increased 15.0% to $254.5 million in the six months ended January 31, 2025 compared to $221.3 million in the same period in the prior year, which consisted of sales growth from acquisitions of 15.1%, which was partially offset by a decrease from foreign currency translation of 0.1% while organic sales were flat.
Current wording
Europe & Australia net sales increased 8.7% to $128.9 million in the three months ended April 30, 2025 compared to $118.6 million in the same period in the prior year, which consisted of sales growth from acquisitions of 14.2% that was partially offset by an organic sales decline of 5.4% and a decrease from foreign currency translation of 0.1%. Europe & Australia net sales increased 12.8% to $383.4 million in the nine months ended April 30, 2025 compared to $340.0 million in the same period in the prior year, which consisted of sales growth from acquisitions of 14.8%, which was partially offset by an organic sales decline of 1.9% and a decrease from foreign currency translation of 0.1%.
Previous wording
Organic sales in the Americas increased in the low-single digits in the three months ended January 31, 2025 and in the mid-single digits in the six months ended January 31, 2025 compared to the same periods in the prior year. Organic sales growth in both the three and six-month periods was driven by growth in the wire identification, safety and facility identification, and product identification product lines, which was partially offset by an organic sales decline in the healthcare identification product line.
Current wording
Organic sales in Europe declined in the mid-single digits in the three months ended April 30, 2025 and declined in the low-single digits in the nine months ended April 30, 2025 compared to the same periods in the prior year. Organic sales growth in the wire identification product line was more than offset by an organic sales decline in the product identification, safety and facility identification and people identification product lines during both the three and nine-month periods.
Previous wording
Organic sales in Australia declined in the low-single digits in both the three and six months ended January 31, 2025 compared to the same periods in the prior year. The organic sales decline was primarily driven by a decrease in volume in the safety and facility and wire identification product lines.
Current wording
Organic sales in Australia declined in the mid-single digits in both the three and nine months ended April 30, 2025 compared to the same periods in the prior year. The organic sales decline was primarily driven by a decrease in volume in the safety and facility and wire identification product lines.
Previous wording
Europe & Australia segment profit decreased 24.4% to $11.4 million in the three months ended January 31, 2025 compared to $15.1 million in the same period in the prior year. Segment profit decreased 23.0% to $24.5 million in the six months ended January 31, 2025 compared to $31.8 million in the same period in the prior year. As a percentage of net sales, segment profit decreased to 9.3% from 13.6% for the three-month period and segment profit decreased to 9.6% from 14.4% for the six-month period ended January 31, 2025, compared to the same periods in the prior year. The decrease in segment profit was primarily due to incremental amortization from acquired businesses, purchase accounting adjustments and reorganization costs in order to streamline our operating structure.
Current wording
Europe & Australia segment profit decreased 10.5% to $17.5 million in the three months ended April 30, 2025 compared to $19.5 million in the same period in the prior year. Segment profit decreased 18.4% to $41.9 million in the nine months ended April 30, 2025 compared to $51.3 million in the same period in the prior year. As a percentage of net sales, segment profit decreased to 13.6% from 16.5% for the three-month period and segment profit decreased to 10.9% from 15.1% for the nine-month period ended April 30, 2025, compared to the same periods in the prior year. The decrease in segment profit and segment profit as a percentage of sales was primarily due to incremental amortization from acquired businesses, purchase accounting adjustments and reorganization costs in order to streamline our operating structure.
Previous wording
The Company's cash balances are generated and held in numerous locations throughout the world. At January 31, 2025, 94% of the Company's cash and cash equivalents were held outside the United States. The Company's organic and inorganic growth has historically been funded by a combination of cash provided by operating activities and debt financing. The Company believes that its cash flow from operating activities and its borrowing capacity are sufficient to fund its anticipated requirements for working capital, capital expenditures, research and development, common stock repurchases, and dividend payments for the next 12 months. Although the Company believes these sources of cash are currently sufficient to fund domestic operations, annual cash needs could require repatriation of cash to the U.S. from foreign jurisdictions, which may result in additional tax payments.
Current wording
The Company's cash balances are generated and held in numerous locations throughout the world. At April 30, 2025, 95% of the Company's cash and cash equivalents were held outside the United States. The Company's organic and inorganic growth has historically been funded by a combination of cash provided by operating activities and debt financing. The Company believes that its cash flow from operating activities and its borrowing capacity are sufficient to fund its anticipated requirements for working capital, capital expenditures, research and development, common stock repurchases, and dividend payments for the next 12 months. Although the Company believes these sources of cash are currently sufficient to fund domestic operations, annual cash needs could require repatriation of cash to the U.S. from foreign jurisdictions, which may result in additional tax payments.
Previous wording
Cash and cash equivalents were $138.5 million at January 31, 2025, an increase of $111.7 million from July 31, 2024. The significant changes were as follows:
Current wording
Cash and cash equivalents were $152.2 million at April 30, 2025, a decrease of $98.0 million from July 31, 2024. The significant changes were as follows:
Previous wording
Net cash provided by operating activities was $63.0 million in the six months ended January 31, 2025, compared to $98.4 million in the same period of the prior year. The decrease in cash provided by operating activities was primarily due to increased vendor payments related to acquired businesses, increased inventory purchases and higher annual incentive compensation payments.
Current wording
Net cash provided by operating activities was $122.9 million in the nine months ended April 30, 2025, compared to $171.1 million in the same period of the prior year. The decrease in cash provided by operating activities was primarily due to changes in working capital. Increased cash outflows related to inventory were primarily due to new product launches and the timing of facility moves during the nine months ended April 30, 2025. Additionally, higher cash outflows related to accounts payable in the current year were primarily driven by normalization of outstanding payables from acquired businesses.
Previous wording
Net cash used in investing activities was $151.7 million in the six months ended January 31, 2025, which primarily consisted of the acquisition of businesses of $137.3 million and capital expenditures of $14.4 million. Net cash used in investing activities was $60.8 million in the six months ended January 31, 2024, which consisted of capital expenditures including the purchase of a previously leased facility in Mexico and facility construction costs in Belgium.
Current wording
Net cash used in investing activities was $165.1 million in the nine months ended April 30, 2025, which primarily consisted of the acquisition of businesses of $147.2 million and capital expenditures of $18.7 million. Net cash used in investing activities was $70.3 million in the nine months ended April 30, 2024, which primarily consisted of capital expenditures including the purchase of a previously leased facility in Mexico and facility construction costs in Belgium.
Previous wording
Net cash used in financing activities was $22.3 million in the six months ended January 31, 2025 compared to $43.0 million in the same period in the prior year. The decrease in cash used in financing activities was primarily due to a decline in share repurchases compared to the same period in the prior year.
Current wording
Net cash used in financing activities was $52.1 million in the nine months ended April 30, 2025 compared to $89.0 million in the same period in the prior year. The decrease in cash used in financing activities was primarily due to a decline in share repurchases compared to the same period in the prior year.
Previous wording
As of January 31, 2025, the outstanding balance on the Company's credit agreement was $87.7 million. The maximum amount outstanding on the credit agreement during the six months ended January 31, 2025 was $144.8 million. As of January 31, 2025, the U.S. dollar-denominated borrowings of $31.0 million bear interest at 5.3%; the Euro-denominated borrowings of €45.0 million bear interest at 3.8%; and the British Pound-denominated borrowings of £8.0 million bear interest at 5.6%. The Company had letters of credit outstanding under the credit agreement of $2.2 million as of January 31, 2025, and there was $210.1 million available for future borrowing, which can be increased to $1,095.1 million at the Company's option, subject to certain conditions. The credit agreement has a final maturity date of November 14, 2027. As such, borrowings were classified as long-term on the condensed consolidated balance sheets.
Current wording
As of April 30, 2025, the outstanding balance on the Company's credit agreement was $102.8 million. The maximum amount outstanding on the credit agreement during the nine months ended April 30, 2025 was $144.8 million. As of April 30, 2025, the U.S. dollar-denominated borrowings of $42.0 million bear interest at 5.3%; the Euro-denominated borrowings of €44.0 million bear interest at 3.2%; and the British Pound-denominated borrowings of £8.0 million bear interest at 5.3%. The Company had letters of credit outstanding under the credit agreement of $2.0 million as of April 30, 2025, and there was $195.2 million available for future borrowing, which can be increased to $1,085.2 million at the Company's option, subject to certain conditions. The credit agreement has a final maturity date of November 14, 2027. As such, borrowings were classified as long-term on the condensed consolidated balance sheets.
Previous wording
The Company's credit agreement requires it to maintain certain financial covenants, including a ratio of debt to the trailing twelve months EBITDA, as defined in the debt agreements, of not more than a 3.5 to 1.0 ratio (leverage ratio) and the trailing twelve months EBITDA to interest expense of not less than a 3.0 to 1.0 ratio (interest expense coverage). As of January 31, 2025, the Company was in compliance with these financial covenants, with a ratio of debt to EBITDA, as defined by the agreements, equal to 0.3 to 1.0 and the interest expense coverage ratio equal to 73.5 to 1.0.
Current wording
The Company's credit agreement requires it to maintain certain financial covenants, including a ratio of debt to the trailing twelve months EBITDA, as defined in the debt agreements, of not more than a 3.5 to 1.0 ratio (leverage ratio) and the trailing twelve months EBITDA to interest expense of not less than a 3.0 to 1.0 ratio (interest expense coverage). As of April 30, 2025, the Company was in compliance with these financial covenants, with a ratio of debt to EBITDA, as defined by the agreements, equal to 0.3 to 1.0 and the interest expense coverage ratio equal to 71.5 to 1.0.
Previous wording
•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.
Current wording
•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 (“SEC”) 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Organic sales in the Americas increased in the low-single digits in both the three and nine months ended April 30, 2025 compared to the same periods in the prior year. Organic sales growth in both the three and nine-month periods was driven by growth in the wire identification, safety and facility identification and product identification product lines. Organic sales growth was partially offset by an organic sales decline in the people identification product line in the three months ended April 30, 2025, and an organic sales decline in the healthcare identification product line in the nine months ended April 30, 2025.