BRADY CORP

Previous wording

•Integrating recent acquisitions and evaluating future acquisition opportunities to enhance our strategic position and accelerate long-term sales growth.

Current wording

•Integrating recent acquisitions and advancing the pending acquisition of PSS business to enhance our strategic position and accelerate long-term sales growth.

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.

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, changes in trade policy, and other macroeconomic and geopolitical challenges. These conditions may impact the Company’s business, financial condition and results of operations as the global economic outlook remains uncertain.

Previous wording

The global trade environment remains complex and is rapidly evolving, driven by the imposition of tariffs on goods entering the U.S. and countermeasures from other nations. Our business has incurred, and expects to continue to incur, additional costs as it relates to these incremental tariffs and countermeasures for 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 wording

The global trade environment remains complex and continues to evolve, driven by the imposition of tariffs on goods entering the U.S. and countermeasures from other nations. Our business has incurred additional costs related to these incremental tariffs and countermeasures, and future impacts will depend on changes in trade policy and the timing, availability and amount of potential refunds of tariffs previously paid. We also continue to face broader macroeconomic pressures impacting the cost and availability of certain raw materials, components, freight and other inputs. The Company has taken and will continue to take action to mitigate these pressures through a combination of targeted price increase, strategic sourcing adjustments, product portfolio optimization, as well as our ongoing efforts to drive sustainable efficiency gains in our operations and administrative structures. However, these actions may not fully offset the impact of tariffs, inflationary pressures or other macroeconomic pressures on our results.

Previous wording

Notwithstanding the uncertain 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 opportunistic share repurchases.

Current wording

Notwithstanding the uncertain macroeconomic environment, 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 opportunistic share repurchases.

Previous wording

We believe that our financial resources and liquidity levels, including the undrawn portion of our credit agreement and our ability to increase that credit line as necessary, are sufficient to support the execution of our growth strategy and to manage the impact of economic or geopolitical events that could potentially reduce sales, net income, or cash provided by operating activities. Refer to Risk Factors, included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2025, for further discussion of the possible impact of global economic or geopolitical events on our business.

Current wording

We believe that our financial resources and liquidity levels, including the undrawn portion of our credit agreement and available financing commitments are sufficient to support the execution of our growth strategy and to manage the impact of economic or geopolitical events that could potentially reduce sales, net income, or cash provided by operating activities. In addition, in connection with the pending acquisition of the PSS business, we entered into a debt commitment letter that provides for 364-day bridge facilities with aggregate commitments of up to $1.8 billion, subject to customary closing conditions, including completion of the acquisition. Refer to Risk Factors, included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2025, and Part II, Item 1A of this Quarterly Report on Form 10-Q, for further discussion of the possible impact of global economic or geopolitical events on our business and additional risks relating to our acquisition of the PSS business.

Previous wording

The comparability of the operating results for the three and six months ended January 31, 2026 compared to the same periods in the prior year have been impacted by the acquisitions of Microfluidic Solutions business unit of Funai Electric Co., Ltd. (“Microfluidic Solutions”) on April 1, 2025 and MECCO Partners LLC (“Mecco”) on August 4, 2025. The comparability of the operating results for the six months ended January 31, 2026 compared to the same period in the prior year has also been impacted by the acquisition of American Barcode and RFID Incorporated (“AB&R”) on October 1, 2024. All three entities have been included in the Americas & Asia reportable segment since their respective acquisition dates.

Current wording

The comparability of the operating results for the three and nine months ended April 30, 2026 compared to the same periods in the prior year have been impacted by the acquisitions of Microfluidic Solutions business unit of Funai Electric Co., Ltd. (“Microfluidic Solutions”) on April 1, 2025 and MECCO Partners LLC (“Mecco”) on August 4, 2025. The comparability of the operating results for the nine months ended April 30, 2026 compared to the same period in the prior year has also been impacted by the acquisition of American Barcode and RFID Incorporated (“AB&R”) on October 1, 2024. All three entities have been included in the Americas & Asia reportable segment since their respective acquisition dates.

Previous wording

A comparison of results of operating income for the three and six months ended January 31, 2026 and 2025, is as follows:

Current wording

A comparison of results of operating income for the three and nine months ended April 30, 2026 and 2025, is as follows:

Previous wording

Net sales for the three months ended January 31, 2026 increased 7.7% to $384.1 million compared to $356.7 million in the same period in the prior year. The increase consisted of organic sales growth of 1.6%, sales growth from acquisitions of 2.3%, and a 3.8% increase from foreign currency translation. Organic sales grew 3.1% in the Americas & Asia segment, while organic sales declined 1.1% in the Europe & Australia segment during the three months ended January 31, 2026 compared to the same period in the prior year.

Current wording

Net sales for the three months ended April 30, 2026 increased 13.8% to $435.2 million compared to $382.6 million in the same period in the prior year. The increase consisted of organic sales growth of 8.2%, sales growth from acquisitions of 2.1%, and a 3.5% increase from foreign currency translation. Organic sales grew 10.1% in the Americas & Asia segment and 4.5% in the Europe & Australia segment during the three months ended April 30, 2026 compared to the same period in the prior year.

Previous wording

Net sales for the six months ended January 31, 2026 increased 7.6% to $789.4 million compared to $733.7 million in the same period in the prior year. The increase consisted of organic sales growth of 2.2%, sales growth from acquisitions of 2.8%, and a 2.6% increase from foreign currency translation. Organic sales grew 3.9% in the Americas & Asia segment, while organic sales declined 0.9% in the Europe & Australia segment during the six months ended January 31, 2026 compared to the same period in the prior year.

Current wording

Net sales for the nine months ended April 30, 2026 increased 9.7% to $1,224.7 million compared to $1,116.3 million in the same period in the prior year. The increase consisted of organic sales growth of 4.3%, sales growth from acquisitions of 2.5%, and a 2.9% increase from foreign currency translation. Organic sales grew 6.0% in the Americas & Asia segment sales and 0.9% in the Europe & Australia segment during the nine months ended April 30, 2026 compared to the same period in the prior year.

Previous wording

Gross margin increased 10.5% to $194.4 million in the three months ended January 31, 2026 compared to $175.8 million in the same period in the prior year. As a percentage of net sales, gross margin increased to 50.6% from 49.3% in the three-month period. Gross margin increased 10.3% to $403.2 million in the six months ended January 31, 2026 compared to $365.5 million in the same period in the prior year. As a percentage of net sales, gross margin increased to 51.1% from 49.8% in the six-month period. The increase in gross margin as a percentage of net sales during the three-month period is primarily driven by the absence of facility closure and other reorganization costs of $1.9 million recorded in the prior-year period. The increase in gross margin as a percentage of net sales during the six months ended January 31, 2026 was primarily due to the absence of a $4.1 million non-recurring fair value adjustment related to acquisition inventory, as well as the facility closure and other reorganization costs recorded in the prior-year period. Organic sales growth in higher gross margin product lines also contributed to the increase in both the three and six-month periods, which was partially offset by incremental tariffs in the same periods.

Current wording

Gross margin increased 15.6% to $225.5 million in the three months ended April 30, 2026 compared to $195.1 million in the same period in the prior year. As a percentage of net sales, gross margin increased to 51.8% from 51.0% in the three-month period. Gross margin increased 12.1% to $628.7 million in the nine months ended April 30, 2026 compared to $560.6 million in the same period in the prior year. As a percentage of net sales, gross margin increased to 51.3% from 50.2% in the nine-month period. The increase in gross margin as a percentage of net sales was primarily driven by organic sales growth in higher gross margin products lines during both the three and nine-month periods compared to the same periods in the prior year. The absence of a $4.1 million non-recurring fair value adjustment related to acquisition inventory, as well as facility closure and other reorganization costs recorded in the prior-year period also contributed to the increase in the nine-month period.

Previous wording

R&D expenses increased 29.8% to $24.3 million in the three months ended January 31, 2026 compared to $18.7 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 6.3% in the three-month period compared to 5.2% in the same period in the prior year. R&D expenses increased 26.5% to $47.6 million in the six months ended January 31, 2026 compared to $37.6 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 6.0% from 5.1% in the six-month period. The increase in R&D spending was primarily due to the acquisitions of Microfluidic Solutions and Mecco, and, to a lesser extent, an increase in R&D headcount within the Company’s organic business. The Company remains committed to investing in innovative product development to drive long-term organic sales growth. Investments in new printing systems, pressure sensitive materials, engraving systems, microfluidic technologies, scanners and software remain the primary focus of R&D expenditures in fiscal 2026.

Current wording

R&D expenses increased 22.6% to $23.5 million in the three months ended April 30, 2026 compared to $19.2 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 5.4% in the three-month period compared to 5.0% in the same period in the prior year. R&D expenses increased 25.2% to $71.1 million in the nine months ended April 30, 2026 compared to $56.8 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 5.8% from 5.1% in the nine-month period. The increase in R&D spending was primarily due to the acquisitions of Microfluidic Solutions and Mecco, and, to a lesser extent, an increase in R&D headcount within the Company’s organic business. The Company remains committed to investing in innovative product development to drive long-term organic sales growth. Investments in new printing systems, pressure sensitive materials, engraving systems, microfluidic technologies, scanners and software remain the primary focus of R&D expenditures in fiscal 2026.

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 1.9% to $107.9 million in the three months ended January 31, 2026 compared to $105.9 million in the same period in the prior year. As a percentage of net sales, SG&A expenses decreased to 28.1% from 29.7% in the three-month period. SG&A expenses increased 3.6% to $225.5 million for the six months ended January 31, 2026 compared to $217.7 million in the same period in the prior year. As a percentage of net sales, SG&A expenses decreased to 28.6% from 29.7% in the six-month period. The increase in SG&A expenses during the three and six months ended January 31, 2026 was primarily due to foreign currency translation, as well as increased headcount and other costs from acquisitions, including incremental amortization expense from the acquired intangible assets. The decrease in SG&A as a percentage of net sales for both the three and six-month periods is primarily due to cost reductions from facility closures and other reorganization activities completed in the prior fiscal year, as well as the absence of $3.8 million of charges related to those activities recorded in the prior-year periods.

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 18.5% to $128.7 million in the three months ended April 30, 2026 compared to $108.7 million in the same period in the prior year. As a percentage of net sales, SG&A expenses increased to 29.6% from 28.4% in the three-month period. The increase in SG&A as a percentage of net sales for the three-month period is primarily due to costs incurred related to the pending acquisition of the PSS business of $13.5 million, partially offset by cost reductions from facility closures and other reorganization activities completed in the prior fiscal year, as well as the absence of charges related to those activities recorded in the prior-year period.

Previous wording

Operating income increased 21.4% to $62.2 million and increased 18.2% to $130.2 million in the three and six months ended January 31, 2026, respectively, compared to $51.2 million and $110.2 million in the same periods in the prior year. The increase in operating income in both the three and six-month periods was driven by organic sales growth in the Americas & Asia reportable segment, gross margin improvement across both reportable segments, and SG&A cost efficiencies in the Europe & Australia segment. Additionally, operating income for the three and six months ended January 31, 2025 included facility closure and other reorganization costs of $5.7 million. Operating income for the six months ended January 31, 2025 also included non-recurring acquisition-related and other costs of $5.1 million.

Current wording

Operating income increased 9.0% to $73.2 million and increased 14.7% to $203.4 million in the three and nine months ended April 30, 2026, respectively, compared to $67.2 million and $177.3 million in the same periods in the prior year. The increase in operating income in both the three and nine-month periods was driven by organic sales growth in both reportable segments, gross margin improvement across both reportable segments, and SG&A cost efficiencies in the Europe & Australia segment, which was partially offset by PSS transaction related costs of $13.5 million. Additionally, operating income for the three and nine months ended April 30, 2025 included facility closure and other reorganization costs of $3.9 million and $9.6 million, respectively. Operating income for the nine months ended April 30, 2025 also included non-recurring acquisition-related and other costs of $5.1 million.

Previous wording

The Company’s income tax rate was 22.5% for both the three months ended January 31, 2026 and 2025, and the income tax rate was 21.8% and 21.4% for the six months ended January 31, 2026 and 2025, respectively.

Current wording

The Company’s income tax rate was 21.2% and 20.5% for the three months ended April 30, 2026 and 2025, respectively, and the income tax rate was 21.6% and 21.1% for the nine months ended April 30, 2026 and 2025, respectively.

Previous wording

The following is a summary of segment information for the three and six months ended January 31, 2026 and 2025:

Current wording

The following is a summary of segment information for the three and nine months ended April 30, 2026 and 2025:

Previous wording

Organic sales in the Americas increased in the low-single digits in both the three and six months ended January 31, 2026 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 and product identification product lines, which was partially offset by an organic sales decline in the people identification product line.

Current wording

Organic sales in the Americas increased approximately 10% in the three months ended April 30, 2026 and in the mid-single digits in the nine months ended April 30, 2026 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, product identification and safety and facility identification product lines, which was partially offset by an organic sales decline in the people identification product line in the nine-month period. Organic sales growth in the wire identification product line was supported by datacenter construction projects.

Previous wording

Organic sales in Asia increased approximately 14% in the three months ended January 31, 2026, and increased approximately 13% in the six months ended January 31, 2026 compared to the same periods in the prior year. The organic sales increase in both the three month and six-month periods was realized throughout Asia with continued growth from electronics manufacturing services providers, technology companies, and industrial suppliers across the region. Organic sales growth in both the three and six-month periods was primarily driven by increased organic sales in China, India and Malaysia, as well as Japan in the six-month period.

Current wording

Organic sales in Asia increased approximately 12% in the three months ended April 30, 2026, and increased approximately 13% in the nine months ended April 30, 2026 compared to the same periods in the prior year. The organic sales increase in both the three month and nine-month periods was realized throughout Asia with continued growth from electronics manufacturing services providers, technology companies, and industrial suppliers across the region. Organic sales growth in both the three and nine-month periods was primarily driven by increased organic sales across Southeast Asia, India and China, as well as Japan in the nine-month period.

Previous wording

Americas & Asia segment profit increased 16.9% to $53.8 million in the three months ended January 31, 2026 compared to $46.0 million in the same period in the prior year. Segment profit increased 12.6% to $113.6 million in the six months ended January 31, 2026 compared to $100.9 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 21.4% from 19.7% in the three-month period and segment profit increased to 21.8% from 21.0% in the six-month period ended January 31, 2026 compared to the same periods in the prior year. The increase in segment profit as a percentage of net sales was due to increased profit from organic sales growth in both the three and six-month periods, as well as the absence of costs from the prior year period related to the closure of two facilities during the three-month period and incremental amortization and purchase accounting adjustments during the six-month period.

Current wording

Americas & Asia segment profit increased 20.2% to $68.7 million in the three months ended April 30, 2026 compared to $57.2 million in the same period in the prior year. Segment profit increased 15.3% to $182.3 million in the nine months ended April 30, 2026 compared to $158.1 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 23.7% from 22.5% in the three-month period and segment profit increased to 22.5% from 21.6% in the nine-month period ended April 30, 2026 compared to the same periods in the prior year. The increase in segment profit as a percentage of net sales was due to increased profit from organic sales growth in both the three and nine-month periods, as well as the absence of costs related to the closure of two facilities from both prior year periods and purchase accounting adjustments in the prior nine-month period.

Previous wording

Europe & Australia net sales increased 7.9% to $132.5 million in the three months ended January 31, 2026 compared to $122.8 million in the same period in the prior year. The increase was due to foreign currency translation of 9.0%, which was partially offset by an organic sales decline of 1.1%. Europe & Australia net sales increased 5.7% to $268.9 million in the six months ended January 31, 2026 compared to $254.5 million in the same period in the prior year, which consisted of an increase of 6.6% from foreign currency translation, which was partially offset by an organic sales decline of 0.9%.

Current wording

Europe & Australia net sales increased 12.6% to $145.2 million in the three months ended April 30, 2026 compared to $128.9 million in the same period in the prior year, which consisted of organic sales growth of 4.5% and an 8.1% increase due to foreign currency translation. Europe & Australia net sales increased 8.0% to $414.1 million in the nine months ended April 30, 2026 compared to $383.4 million in the same period in the prior year, which consisted of organic sales growth of 0.9% and a 7.1% increase from foreign currency translation.

Previous wording

Organic sales in Europe declined in the low-single digits in both the three and six months ended January 31, 2026 compared to the same periods in the prior year. For both the three and six-month periods, the organic sales decline was primarily driven by lower volume in the safety and facility identification and product identification product lines, which was partially offset by organic growth in the wire identification product line.

Current wording

Organic sales in Europe increased in the mid-single digits in the three months ended April 30, 2026 and in the low-single digits in the nine months ended April 30, 2026 compared to the same periods in the prior year. Organic sales increased across all major product lines during the three-month period with the wire identification and product identification product lines driving the organic sales growth in 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, 2026 compared to the same periods in the prior year. The organic sales decline in both the three and six-month periods was driven by an organic sales decline in the product identification and safety and facility identification product lines, which was partially offset by organic sales growth in the wire identification product line.

Current wording

Organic sales in Australia increased in the low-single digits in both the three and nine months ended April 30, 2026 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 safety and facility identification and wire identification product lines, which was partially offset by an organic sales decline in the product identification product line.

Previous wording

Europe & Australia segment profit increased 35.5% to $15.4 million in the three months ended January 31, 2026 compared to $11.4 million in the same period in the prior year. Segment profit increased 39.4% to $34.2 million in the six months ended January 31, 2026 compared to $24.5 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 11.6% from 9.3% for the three-month period and segment profit increased to 12.7% from 9.6% for the six-month period ended January 31, 2026, compared to the same periods in the prior year. The increase in segment profit was primarily driven by a more efficient cost structure following reorganization activities completed in the prior fiscal year. Additionally, segment profit for the three and six months ended January 31, 2025 included reorganization costs and purchase accounting adjustments.

Current wording

Europe & Australia segment profit increased 22.8% to $21.5 million in the three months ended April 30, 2026 compared to $17.5 million in the same period in the prior year. Segment profit increased 32.8% to $55.6 million in the nine months ended April 30, 2026 compared to $41.9 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 14.8% from 13.6% for the three-month period and segment profit increased to 13.4% from 10.9% for the nine-month period ended April 30, 2026, compared to the same periods in the prior year. The increase in segment profit as a percentage of net sales was primarily driven by a more efficient cost structure following reorganization activities completed in the prior fiscal year. Additionally, segment profit for the three and nine months ended April 30, 2025 included reorganization costs and purchase accounting adjustments.

Previous wording

The Company’s cash balances are generated and held in numerous locations throughout the world. At January 31, 2026, approximately 98% 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, share 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, 2026, approximately 97% 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, share 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 $176.5 million at January 31, 2026, an increase of $2.1 million from July 31, 2025. The significant changes were as follows:

Current wording

Cash and cash equivalents were $175.5 million at April 30, 2026, an increase of $1.1 million from July 31, 2025. The significant changes were as follows:

Previous wording

Net cash provided by operating activities was $86.7 million in the six months ended January 31, 2026, compared to $63.0 million in the same period of the prior year. The increase in cash provided by operating activities was primarily due to improved segment profit from both reportable segments.

Current wording

Net cash provided by operating activities was $164.9 million in the nine months ended April 30, 2026 compared to $122.9 million in the same period of the prior year. The increase in cash provided by operating activities was primarily due to increased net income and higher non-cash adjustments, driven by changes in deferred taxes, in the current nine-month period.

Previous wording

Net cash used in financing activities was $47.9 million in the six months ended January 31, 2026, compared to $22.3 million used in the same period of the prior year. The change was primarily driven by increased net repayments on the Company's credit agreement and, to a lesser extent, increased share repurchases during the six months ended January 31, 2026 compared to the same period in the prior year.

Current wording

Net cash used in financing activities was $125.5 million compared to $52.1 million in the same period of the prior year. The increase in cash used in financing activities was primarily due to net repayments on the Company’s credit agreement in the current-year period, compared to net borrowings in the prior-year period, which included borrowings used to fund the Gravotech acquisition.

Previous wording

As of January 31, 2026, the outstanding balance on the Company’s credit agreement was $78.7 million. The maximum amount outstanding on the credit agreement during the six months ended January 31, 2026 was $119.6 million. As of January 31, 2026, the U.S. dollar-denominated borrowings of $15.0 million bear interest at 4.9%; the Euro-denominated borrowings of €44.0 million bear interest at 2.8%; and the British Pound-denominated borrowings of £8.0 million bear interest at 4.6%. The Company had letters of credit outstanding under the credit agreement of $2.1 million as of January 31, 2026, and there was $219.2 million available for future borrowing, which can be increased to $1,169.2 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.

Current wording

As of April 30, 2026, the outstanding balance on the Company’s credit agreement was $26.9 million. The maximum amount outstanding on the credit agreement during the nine months ended April 30, 2026 was $119.6 million. As of April 30, 2026, the outstanding balance consists of Euro-denominated borrowings of €23.0 million bearing interest at 2.9%. The Company had letters of credit outstanding under the credit agreement of $1.8 million as of April 30, 2026, and there was $271.3 million available for future borrowing, which can be increased to $1,306.3 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, 2026, the Company was in compliance with these financial covenants, with a ratio of debt to EBITDA, as defined by the agreements, equal to 0.2 to 1.0 and the interest expense coverage ratio equal to 77.9 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, 2026, the Company was in compliance with these financial covenants, with a ratio of debt to EBITDA, as defined by the agreements, equal to 0.1 to 1.0 and the interest expense coverage ratio equal to 75.2 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 (“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, 2025.

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, 2025, and Part II, Item 1A of this Quarterly Report on Form 10-Q.