BRADY CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts)

1. Summary of Significant Accounting Policies

Nature of Operations — Brady Corporation is a global manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The ability to provide customers with a broad range of proprietary, customized, and diverse products for use in various applications, along with a commitment to quality and service, a global footprint, and multiple sales channels, have made Brady a world leader in many of its markets.

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of Brady Corporation and its wholly owned subsidiaries. All intercompany accounts and transactions between consolidated subsidiaries have been eliminated in consolidation.

Use of Estimates — The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Acquisitions — The Company recognizes assets acquired, liabilities assumed, contractual contingencies and contingent consideration at their fair value on the acquisition date. The operating results of the acquired companies are included in the Company’s consolidated financial statements from the date of acquisition. Acquisition-related costs are expensed as incurred and changes in deferred tax asset valuation allowances and income tax uncertainties after the measurement period are recorded in income tax expense.

Cash Equivalents — The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.

Concentration of Credit Risk — The Company places temporary cash investments with global financial institutions of high credit quality. The Company performs periodic evaluations of the relative credit standing of its financial institutions and limits the amount of credit exposure with any one financial institution. In addition, the Company has a broad customer base representing many diverse industries throughout the globe. Consequently, no significant concentration of credit risk is considered to exist.

Accounts Receivable — The Company’s policy for estimating the allowance for credit losses on accounts receivables considers several factors including historical loss experience, the age of delinquent receivable balances due, and economic conditions. Specific customer reserves are made during review of significant outstanding balances due, in which customer creditworthiness and current economic trends may indicate that it is probable the receivable will not be recovered. Accounts receivable are written off after collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in selling, general and administrative (“SG&A”) expense.

Inventories — Inventories are stated at the lower of cost or net realizable value and include material, labor, and overhead. Cost has been determined using the last-in, first-out (“LIFO”) method for certain inventories in the U.S. (13.3% of total inventories at July 31, 2026, and 12.8% of total inventories at July 31, 2025) and the first-in, first-out (“FIFO”) or average cost methods for all other inventories. Had all inventories been accounted for on a FIFO basis instead of on a LIFO basis, the carrying value of inventories would have increased by $12,859 and $12,006 as of July 31, 2026 and 2025, respectively.

Inventories consist of the following as of July 31:

Property, Plant and Equipment — Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed primarily on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the respective asset. The estimated useful lives range from 3 to 33 years as shown below.

Property, plant and equipment consist of the following as of July 31:

Depreciation expense was $23,951, $21,723, and $20,452 for the years ended July 31, 2026, 2025 and 2024, respectively.

Goodwill — The Company tests goodwill for impairment on an annual basis on the first day of the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that it may be impaired. Under U.S. GAAP, the Company has the option to first assess qualitative factors to determine if it is more likely than not that the fair value of one of its reporting units is greater than its carrying value (“Step 0”). If the qualitative assessment leads to a determination that the reporting unit’s fair value is less than its carrying value, or if the Company elects to bypass the qualitative assessment altogether, it is required to perform a quantitative impairment test (“Step 1”) by calculating the fair value of the reporting unit and comparing the fair value with its associated carrying value. During the fiscal year 2026 annual impairment test, the Company first assessed goodwill recoverability qualitatively using the Step 0 approach for each reporting unit. For the qualitative assessment, the Company considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal year 2023 for all three reporting units, including assumptions used, such as discount rates, indicated fair values, and the amounts by which those fair values exceeded their carrying amounts. Further, the Company compared actual performance in fiscal year 2026 to the internal financial projections used in the prior quantitative analyses. Additionally, the Company considered various other factors including macroeconomic conditions, relevant industry and market trends, and factors specific to the Company that could indicate a potential change in the fair value of the reporting units. Lastly, the Company evaluated whether any events have occurred or any circumstances have changed since that time that would indicate that goodwill may have become impaired since the last quantitative tests. Based on these qualitative assessments, the Company determined it is more likely than not that the fair value of each reporting unit exceeds its respective carrying value, and goodwill was not considered impaired as of May 1, 2026. As such, the Step 1 quantitative goodwill impairment analysis was not necessary. No goodwill impairment charges were recognized during the year ended July 31, 2026.

Other Intangible and Long-Lived Assets —Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives to reflect the pattern of economic benefits consumed. Intangible assets with indefinite lives as well as goodwill are not subject to amortization. These assets are assessed for impairment on an annual basis or more frequently if events or changes in circumstances have occurred that indicate the asset may not be recoverable or that the remaining estimated useful life may warrant revision. In addition, the Company performs qualitative assessments on a quarterly basis of significant events and circumstances, such as historical and current results, assumptions regarding future performance, and strategic initiatives and overall economic factors.

The Company evaluates indefinite-lived intangible assets for impairment by comparing the estimated fair value of the asset to the carrying value. Fair value is estimated using the income approach based upon current sales projections applying the relief from royalty method. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company evaluates long-lived assets, including finite-lived intangible assets, operating lease assets, and property, plant, and equipment, for recoverability by comparing an estimate of undiscounted future cash flows, derived from internal forecasts, over the remaining life of the primary asset to the carrying amount of the asset group. To the extent the undiscounted future cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized for the amount by which the carrying value of the asset exceeds its fair value.

In fiscal 2026, long-lived and other intangible assets were analyzed for potential impairment. As a result of the analysis, no impairment charges were recorded.

Leases — The Company accounts for leases in accordance with Accounting Standards Codification (“ASC”) 842 “Leases.” The Company determines whether an arrangement contains a lease at contract inception based on whether the arrangement provides the Company with the right to direct the use of and the right to obtain substantially all of the economic benefits from an identified asset in exchange for consideration. The Company recognizes a right-of-use (“ROU” ) asset and lease liability for its lease commitments with initial terms greater than one year.

The initial measurement of ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the expected lease term. The ROU asset also includes any lease payments made on or before the commencement date, initial direct costs incurred, and is reduced by any lease incentives received. Some of the Company’s leases include options to extend the lease agreement, of which the exercise is at the Company’s sole discretion. The majority of renewal options are not included in the calculation of ROU assets and liabilities as they are not reasonably certain to be exercised. Some of the Company’s lease agreements include rental payments that are adjusted periodically for inflation or the change in an index or rate. These variable lease payments are generally excluded from the initial measurement of the ROU asset and lease liability and are recognized in the period in which the obligation for those payments is incurred. The Company has lease agreements that include both lease and non-lease components, which the Company elected to account for as a single lease component.

The Company determines the present value of future lease payments using its incremental borrowing rate, as the discount rate implicit within the Company’s leases generally cannot be readily determined. The incremental borrowing rate is estimated based on the sovereign credit rating for the countries in which the Company has its largest operations, adjusted for several factors, such as internal credit spread, lease terms, and other market information available at the lease commencement date.

As of July 31, 2026, all leases are accounted for as operating leases, with lease expense being recognized on a straight-line basis over the lease term. Operating leases are reflected in “Operating lease assets,” “Current operating lease liabilities,” and “Long-term operating lease liabilities” in the accompanying consolidated balance sheets. Operating lease expense is recognized in either cost of goods sold or selling, general, and administrative expenses in the consolidated statements of income, based on the nature of the lease. ROU assets are evaluated for impairment in the same manner as long-lived assets. No impairment charges were recognized related to operating lease assets during the year ended July 31, 2026.

Revenue Recognition — The Company recognizes revenue when a sales arrangement with a customer exists, the transaction price is fixed or determinable and the Company has satisfied its performance obligations per the sales arrangement. The majority of the Company’s revenue relates to the sale of identification and safety products and revenue is recognized at the point in which the customer obtains control of the products. The Company considers control to have transferred when legal title, physical possession, and the significant risks and rewards of ownership of the asset have transferred to the customer and the collection of the transaction price is reasonably assured, most of which occur upon the shipment or delivery of goods to customers. Revenue is measured at the determinable transaction price, net of estimated sales returns, including product returns and credit memos, and sales rebates. The Company estimates product returns and credit memos based on historical return rates. As of July 31, 2026 and 2025, the allowance for product returns and credit memos was $5,281 and $5,434, respectively.

Shipping and Handling Costs — Shipping and handling fees billed to a customer in a sale transaction are reported as net sales and the related costs incurred for shipping and handling are reported in cost of goods sold.

Advertising Costs — Advertising costs are expensed as incurred. Advertising expense for the years ended July 31, 2026, 2025, and 2024 was $53,311, $50,349, and $50,296, respectively.

Stock-Based Compensation — The Company measures and recognizes the compensation expense for all share-based awards made to employees and directors based on estimated grant-date fair values. The Black-Scholes option valuation model is used to determine the fair value of stock option awards on the date of grant. The Company recognizes the compensation cost, net of estimated forfeitures, of all share-based awards on a straight-line basis over the vesting period of the award. If it is determined that it is unlikely the award will vest, the expense recognized to date for the award is generally reversed in the period in which this is evident and the remaining expense is not recorded.

The Black-Scholes model requires the use of assumptions which determine the fair value of stock-based awards. The Company uses historical data regarding stock option exercise behaviors to estimate the expected term of options granted based on the period of time that options granted are expected to be outstanding. Expected volatilities are based on the historical volatility of the Company’s stock. The expected dividend yield is based on the Company’s historical dividend payments and historical yield. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the grant date for the length of time corresponding to the expected term of the option. The market value is calculated as the average of the high and the low stock price on the date of the grant. Refer to Note 7, “Stockholders’ Equity” for more information regarding the Company’s incentive stock plans.

Research and Development — Amounts expended for research and development are expensed as incurred.

Other Comprehensive Income — Other comprehensive income consists of net unrealized gains and losses from cash flow hedges, the unamortized gain on defined-benefit pension plans net of their related tax effects, and foreign currency translation adjustments, which includes the impact of foreign currency translations, the settlements of net investment hedges, and long-term intercompany loan translation adjustments.

Foreign Currency Translation — The assets and liabilities of subsidiaries whose functional currency is a currency other than the U.S. dollar are translated into U.S. dollars at end of period rates of exchange, and income and expense accounts are translated at the average rates of exchange for the period. Resulting foreign currency translation adjustments are included in other comprehensive income.

Income Taxes — The Company accounts for income taxes in accordance with ASC 740 “Income Taxes.” Deferred income tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the currently enacted tax laws and rates applicable to the periods in which the differences are expected to be realized or settled. Valuation allowances are established when it is estimated that it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The Company recognizes the benefit of income tax positions only if those positions are more likely than not to be sustained upon examination by the tax authority. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs.

Fair Value of Financial Instruments — The Company believes that the carrying amount of its financial instruments (cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities) approximates fair value due to the short-term nature of these instruments. Refer to Note 6, “Debt” for more information regarding the fair value of long-term debt and Note 13, “Fair Value Measurements” for information regarding fair value measurements.

Foreign Currency Hedging — The objective of the Company’s foreign currency exchange risk management is to minimize the impact of currency movements on non-functional currency transactions and minimize the foreign currency translation impact on the Company’s foreign operations. While the Company’s risk management objectives and strategies are driven from an economic perspective, the Company attempts, where possible and practical, to ensure that the hedging strategies it engages in qualify for hedge accounting and result in accounting treatment where the earnings effect of the hedging instrument provides substantial offset (in the same period) to the income effect of the hedged item.

The Company recognizes derivative instruments as either assets or liabilities in the accompanying consolidated balance sheets at fair value. Gains and losses resulting from changes in fair value of the derivatives designated as hedges are recorded as a component of Accumulated Other Comprehensive Income (“AOCI”) in the accompanying consolidated balance sheets and in the consolidated statements of comprehensive income and are reclassified into the same income statement line item in the period or periods during which the hedged transaction affects income. Refer to Note 14, “Derivatives and Hedging Activities” for more information regarding the Company’s derivative instruments and hedging activities.

New Accounting Standards

Adopted Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 Company adopted ASU 2023-09 for the year ended July 31, 2026, with retrospective application for the years ended July 31, 2025 and 2024. Additional information regarding the Company’s income tax rate reconciliations, including the application of the provisions of ASU 2023-09, is included in Note 11 to the consolidated financial statements.

Standards not yet adopted

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.

2. Goodwill

Changes in the carrying amount of goodwill by reportable segment for the years ended July 31, 2026 and 2025, were as follows:

Goodwill increased $9,023 during the year ended July 31, 2026 due to the acquisition of Mecco and the positive effects of foreign currency translation.

Goodwill increased $87,334 during the year ended July 31, 2025. Of the $87,334 increase, $66,178 was due to the acquisition of Gravotech, $10,079 was due to the acquisition of AB&R and $11,077 was due to the positive effects of foreign currency translation.

The qualitative assessment performed on May 1, 2026, in accordance with ASC 350, “Intangibles - Goodwill and Other” indicated that it is more likely than not that the fair value exceeds the carrying value for each of the three reporting units with goodwill (North America, Europe and Latin America).

3. Other Intangible Assets

Other intangible assets include customer relationships, tradenames, and technology with finite lives being amortized in accordance with the accounting guidance for other intangible assets. The Company also has unamortized indefinite-lived tradenames that are classified as other intangible assets.

Other intangible assets as of July 31, 2026 and 2025 consisted of the following:

The change in the gross carrying amount of amortized other intangible assets as of July 31, 2026 compared to July 31, 2025 was primarily due to the acquisition of Mecco completed during the year ended July 31, 2026, partially offset by the removal of two fully amortized technology assets.

The following table summarizes the fair value and weighted average amortization period of other intangible assets associated with the acquisition of Mecco:

Amortization expense on intangible assets during the years ended July 31, 2026, 2025, and 2024 was $20,919, $18,916, and $9,421, respectively. Amortization expense over each of the next five fiscal years is projected to be $19,900, $19,488, $19,126, $14,317, and $9,738 for the fiscal years ending July 31, 2027, 2028, 2029, 2030, and 2031, respectively. Estimated future amortization expense for the next five years reflects the Company’s existing intangible assets as of July 31, 2026, and does not include any impact from the PSS acquisition, as the preliminary purchase price allocation is incomplete as of the issuance date of these consolidated financial statements.

4. Leases

The Company leases certain manufacturing facilities, warehouses and office space, computer equipment, and vehicles accounted for as operating leases. Lease terms typically range from one year to ten years. As of July 31, 2026 and 2025, the Company did not have any finance leases.

Short-term lease expense, variable lease expenses, and sublease income were immaterial to the consolidated statements of income for the years ended July 31, 2026, 2025 and 2024.

The following table summarizes lease expense recognized during the years ended July 31, 2026, 2025 and 2024:

The following table summarizes the maturity of the Company’s lease liabilities as of July 31, 2026:

The weighted average remaining lease terms and discount rates for the Company’s operating leases as of July 31, 2026 and 2025 were as follows:

Supplemental cash flow information related to the Company’s operating leases during the years ended July 31, 2026 and 2025 were as follows:

(1)Includes new leases, leases from acquired companies, and remeasurements or modifications of existing leases.

The Company evaluates right-of-use assets for impairment in the same manner as long-lived assets. No impairment charges were recorded during the years ended July 31, 2026, 2025 or 2024.

5. Employee Benefit Plans

The Company provides postretirement medical benefits (the “Plan”) for eligible regular full and part-time domestic employees (including spouses) who retired prior to January 1, 2016, as outlined by the Plan. The Plan is unfunded, and the liability, unrecognized gain, and associated income statement impact are immaterial. The current portion and non-current portion of the liabilities for postretirement medical benefits are included in “Other current liabilities” and “Other liabilities,” respectively, on the accompanying consolidated balance sheets as of July 31, 2026 and 2025. The unrecognized loss is reported as a component of AOCI.

The Company also has two deferred compensation plans, the Executive Deferred Compensation Plan and the Director Deferred Compensation Plan which allow for compensation to be deferred into either the Company’s Class A Nonvoting Common Stock or in other investment funds. Neither plan allows funds to be transferred between the Company’s Class A Nonvoting Common Stock and the other investment funds. The Company has an additional non-qualified deferred compensation plan, the Brady Restoration Plan, which allows an equivalent benefit to the Matched 401(k) Plan and the Funded Retirement Plan for executives’ income exceeding the Internal Revenue Service (“IRS”) limits for participation in a qualified 401(k) plan. Deferred compensation of $22,019 and $19,998 was included in “Other liabilities” in the accompanying consolidated balance sheets as of July 31, 2026 and 2025, respectively.

The Company has retirement and profit-sharing plans covering substantially all full-time domestic employees and certain employees of its foreign subsidiaries. Contributions to the plans are determined annually or quarterly, according to the respective plan, based on income of the respective companies and employee contributions. Accrued retirement and profit-sharing contributions of $4,962 and $4,742 were included in “Other current liabilities” in the accompanying consolidated balance sheets as of July 31, 2026 and 2025, respectively. The amounts charged to expense for these retirement and profit sharing plans were $20,657, $17,921, and $16,134 during the years ended July 31, 2026, 2025 and 2024, respectively.

6. Debt

On June 12, 2026, the Company and certain of its subsidiaries entered into a new credit agreement with a group of lenders party thereto, BMO Bank N.A., as administrative agent, swing line lender and letter of credit issuer, and Bank of America, N.A., as syndication agent and letter of credit issuer (the “new credit agreement”). The new credit agreement provides for an aggregate principal amount of $1.0 billion, consisting of a $500 million term loan facility and a $500 million revolving credit facility. The credit agreement replaced and terminated the Company’s previous credit agreement, which had been entered into on August 1, 2019 (the “previous credit agreement”). Upon execution, outstanding revolving loans under the previous credit agreement totaling €13.0 million were exchanged for revolving loans under the new credit agreement, and all other outstanding obligations thereunder were repaid in full. The Company paid $12.5 million of debt issuance costs during the year ended July 31, 2026. Prepaid financing costs of $5.9 million and $0.2 million are included in “Other assets” on the accompanying consolidated balance sheets as of July 31, 2026 and 2025, respectively.

Under the new credit agreement, which has a final maturity date of June 12, 2031 for both the term loan and revolving credit facilities, the Company has the option to select either a base interest rate (based upon the highest of (i) the federal funds rate plus one-half of 1%, (ii) the prime rate of BMO Bank N.A., or (iii) the one-month Term SOFR rate plus 1%, plus a margin based on the Company’s consolidated net leverage ratio) or a term benchmark or risk-free interest rate (based on, as applicable, Term SOFR, Adjusted EURIBO, Adjusted TIBO, Adjusted Term CORRA, BBSY, or Daily Simple SONIA, plus a margin based on the Company’s consolidated net leverage ratio).

Following the funding of the term loan in connection with the PSS acquisition, the term loan is subject to quarterly amortization payments of 1.25% of the original principal amount funded on the closing date of the PSS acquisition, commencing on the last business day of the fiscal quarter occurring at least three months following such closing date, with the remaining balance payable on the maturity date. Total availability under the revolving credit facility was capped at $300 million prior to the closing of the PSS acquisition and expanded to the full $500 million commitment thereafter. Additionally, the new credit agreement contains an incremental facility feature permitting the Company to request an increase to the revolving commitments or add one or more additional tranches of term loans by up to $550 million, plus an unlimited additional amount subject to compliance with a pro forma consolidated net leverage ratio not to exceed 2.50 to 1.00.

The maximum amount outstanding on the previous credit agreement during the year ended July 31, 2026 was $119.6 million. As of July 31, 2026, the outstanding balance under the revolving credit facility was $15.0 million and approximately $283.2 million was available for future borrowing, subject to the $300 million pre-closing limitation on revolving credit availability. Borrowings are classified as long-term on the consolidated balance sheets.

The new credit agreement is guaranteed by certain of the Company’s material domestic subsidiaries. The Company’s new credit agreement requires it to maintain certain financial covenants, including a maximum consolidated net leverage ratio of 3.50 to 1.00, which shall temporarily be increased to up to 4.00 to 1.00 for the four computation periods ending after the closing of the PSS acquisition, and a minimum consolidated interest coverage ratio of 3.00 to 1.00. As of July 31, 2026, the Company was in compliance with such financial covenants.

Refer to Note 17, “Subsequent Events,” for additional information regarding the completion of the PSS acquisition and related financing.

As of July 31, 2026 and 2025, borrowings under the new credit agreement and the previous credit agreement, respectively, were as follows:

(1)Borrowings under the new credit agreement as of July 31, 2026 included Euro-denominated borrowings of $15.0 million. The weighted average interest rate of the Euro-denominated borrowings was 3.9% as of July 31, 2026.

(2)Borrowings under the previous credit agreement as of July 31, 2025 included USD-denominated, British pound-denominated and Euro-denominated borrowings of $39.0 million, $10.6 million and $50.2 million, respectively. The weighted average interest rate of the USD-denominated, British pound-denominated and Euro-denominated borrowings was 5.3%,5.1% and 2.8%, respectively, as of July 31, 2025.

Due to the variable interest rate pricing of the Company’s revolving debt, it is determined that the carrying value of the debt equals the fair value of the debt.

The Company had outstanding letters of credit of$1.8 million and $2.1 million at July 31, 2026 and 2025, respectively.

7. Stockholders’ Equity

Information as to the Company’s capital stock as of July 31, 2026 and 2025 was as follows:

Before any dividend may be paid on the Class B Common Stock, holders of the Class A Common Stock are entitled to receive an annual, noncumulative cash dividend of $0.01665 per share. Thereafter, any further dividend in that fiscal year must be paid on each share of Class A Common Stock and Class B Common Stock on an equal basis.

Other than as required by law, holders of the Class A Common Stock are not entitled to any vote on corporate matters, unless, in each of the three preceding fiscal years, the $0.01665 preferential dividend described above has not been paid in full. Holders of the Class A Common Stock are entitled to one vote per share for the entire fiscal year immediately following the third consecutive fiscal year in which the preferential dividend is not paid in full. Holders of Class B Common Stock are entitled to one vote per share for the election of directors and for all other purposes.

Upon liquidation, dissolution or winding up of the Company, and after distribution of any amounts due to holders of Preferred Stock, if any, holders of the Class A Common Stock are entitled to receive the sum of $0.8333 per share before any payment or distribution to holders of the Class B Common Stock. Thereafter, holders of the Class B Common Stock are entitled to receive a payment or distribution of $0.8333 per share. Thereafter, holders of the Class A Common Stock and Class B Common Stock share equally in all payments or distributions upon liquidation, dissolution or winding up of the Company.

The preferences in dividends and liquidation rights of the Class A Common Stock over the Class B Common Stock will terminate at any time that the voting rights of Class A Common Stock and Class B Common Stock become equal.

The following is a summary of other activity in stockholders’ equity during the years ended July 31, 2026, 2025, and 2024:

Deferred Compensation Plans

The Company has two deferred compensation plans, the Executive Deferred Compensation Plan and the Director Deferred Compensation Plan that allow for compensation to be deferred into either the Company's Class A Nonvoting Common Stock or into other investment funds. Neither plan allows funds to be transferred between the Company's Class A Nonvoting Common Stock and the other investment funds.

At July 31, 2026, the deferred compensation balance in stockholders’ equity represents the investment at the original cost of shares held in the Company’s Class A Nonvoting Common Stock for the deferred compensation plans. The balance of shares held in the Rabbi Trust represents the investment in the Company’s Class A Nonvoting Common Stock at the original cost of all the Company’s Class A Nonvoting Common Stock held in deferred compensation plans.

Incentive Stock Plans

The Company has an incentive stock plan under which the Board of Directors may grant nonqualified stock options to purchase shares of Class A Nonvoting Common Stock, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), or restricted and unrestricted shares of Class A Nonvoting Common Stock to employees and non-employee directors. Certain awards may be subject to pre-established performance goals. The majority of the Company’s annual share-based awards are granted in the first quarter of the fiscal year.

As of July 31, 2026, the Company has reserved 1,245,114 shares of Class A Nonvoting Common Stock for outstanding stock options and RSUs and 4,460,495 shares of Class A Nonvoting Common Stock remain for future issuance of stock options and restricted and unrestricted shares under the active plans. The Company uses treasury stock or will issue new Class A Nonvoting Common Stock to deliver shares under these plans.

Total stock-based compensation expense recognized during the years ended July 31, 2026, 2025, and 2024, was $22,855, $11,882, and $7,361, respectively. Stock-based compensation expense during the year ended July 31, 2026 included $6,051 related to the modification of equity awards in connection with executive transitions. The total income tax benefit recognized in the consolidated statements of income was $2,557, $1,526 and $1,014 during the years ended July 31, 2026, 2025, and 2024, respectively.

Stock Options

The stock options issued under the plan have an exercise price equal to the fair market value of the underlying stock at the date of grant and generally vest ratably over athree-year period, with one-third becoming exercisable one year after the grant date and one-third additional in each of the succeeding two years. Options issued under the plan, referred to herein as “time-based” options, generally expireten years from the date of grant. The Company did not grant time-based stock option awards during the years ended July 31, 2026 or 2025.

The Company has estimated the fair value of its time-based stock option awards granted during the year ended July 31, 2024 using the Black-Scholes option valuation model. The weighted-average assumptions used in the Black-Scholes valuation model are reflected in the following table:

The following is a summary of stock option activity for the year ended July 31, 2026:

The following table summarizes additional stock option information:

As of July 31, 2026, total unrecognized compensation cost related to options that are expected to vest was $33 pre-tax, net of estimated forfeitures, which the Company expects to recognize over a weighted-average period of 0.2 years.

RSUs

RSUs issued under the plan have a grant date fair value equal to the market price of the Company's stock at the date of grant and generally vest ratably over three years, with one-third vesting one year after the grant date and one-third additional in each of the succeeding two years.

The following tables summarize the RSU activity during the year ended July 31, 2026:

The RSUs granted during the years ended July 31, 2025 and 2024, had a weighted-average grant-date fair value of $74.35 and $55.43, respectively.

The total fair value of time-based RSUs vested during the years ended July 31, 2026, 2025 and 2024, was $5,642, $5,350, and $3,888, respectively.

As of July 31, 2026, total unrecognized compensation cost related to RSUs that are expected to vest was $10,770 pre-tax, net of estimated forfeitures, which the Company expects to recognize over a weighted-average period of 2.3 years.

PRSUs

PRSUs are contingent on the achievement of predetermined market and performance targets. The PRSUs granted under the plan vest at the end of a three-year performance period provided the service period and specified performance targets are met. For the PRSUs granted during the years ended July 31, 2026, 2025, and 2024 awards will vest based on achievement of performance conditions relating to Company revenue and diluted EPS targets.

The PRSUs granted during the year ended July 31, 2026 had a fair value determined by the average of the high and low stock price on the date of grant.

The following tables summarize the PRSU activity during the year ended July 31, 2026:

The PRSUs granted during the year ended July 31, 2025 and 2024, had a weighted-average grant-date fair value of $71.24 and $51.16, respectively. The total fair value of PRSUs vested during the years ended July 31, 2026, 2025 and 2024, was $1,934, $595, and $141, respectively.

As of July 31, 2026, total unrecognized compensation cost related to PRSUs that are expected to vest was $3,151 pre-tax, net of estimated forfeitures, which the Company expects to recognize over a weighted-average period of 1.7 years.

8. Accumulated Other Comprehensive Loss

Other comprehensive loss consists of foreign currency translation adjustments which includes net investment hedges and long-term intercompany loan translation adjustments, unrealized gains or losses from cash flow hedges, and unamortized gains or losses on post-retirement plans, net of their related tax effects.

The following table illustrates the changes in the balances of each component of accumulated other comprehensive loss, net of tax, for the periods presented:

The decrease in accumulated other comprehensive loss as of July 31, 2026 compared to July 31, 2025 was primarily due to the depreciation of the U.S. dollar against certain other currencies during the fiscal year. Of the amounts reclassified from accumulated other comprehensive loss during the years ended July 31, 2026 and 2025, unrealized gains or losses on cash flow hedges were reclassified into “Cost of goods sold” and net unamortized gains on post-retirement plans were reclassified into “Investment and other income” on the consolidated statements of income.

The following table illustrates the income tax benefit (expense) on the components of other comprehensive income (loss):

9. Revenue Recognition

The Company recognizes revenue when control of the product or service transfers to the customer at an amount that represents the consideration expected to be received in exchange for those products and services.

Nature of Products

The Company’s revenues are primarily from the sale of identification solutions and workplace safety products that are shipped and billed to customers. All revenue is from contracts with customers and is included in “Net sales” on the consolidated statements of income.

Performance Obligations

The Company’s contracts with customers consist of purchase orders, which in some cases are governed by master supply or distributor agreements. For each contract, the Company considers the commitment to transfer tangible products, which are generally capable of being distinct, to be separate performance obligations.

The majority of the Company's revenue is earned and recognized at a point in time through ship-and-bill performance obligations where the customer typically obtains control of the product upon shipment or delivery, depending on freight terms. The Company considers control to have transferred if legal title, physical possession, and the significant risks and rewards of ownership of the asset have transferred to the customer and the Company has a present right to payment. In almost all cases, control transfers once a product is shipped or delivered, as this is when the customer is able to direct and obtain substantially all of the remaining benefits associated with use of the asset.

Transaction Price and Variable Consideration

Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for the transfer of product to a customer. The transaction price is generally the price stated in the contract specific for each item sold, adjusted for all applicable variable considerations. Variable consideration generally includes discounts, returns, credits, rebates, or other allowances that reduce the transaction price. Certain discounts and price assurances are fixed and known at the time of sale.

The Company estimates the amount of variable consideration and reduces the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The expected value method is used to estimate expected returns and allowances based on historical experience. The most likely amount method is used to estimate customer rebates, which are offered retrospectively and typically defined in the master supply or distributor agreement.

Payment Terms

While the Company’s standard payment terms are net 30 days, the specific payment terms and conditions in its contracts with customers vary by type and location of the customer. Cash discounts may be offered to certain customers. The Company has payment terms in its contracts with customers of less than one year, and therefore, does not recognize the time value of money or any financing component of such contracts.

Warranties

The Company offers standard warranty coverage on substantially all products which provides the customer with assurance that the product will function as intended. This standard warranty coverage is accounted for as an assurance warranty and is not considered to be a separate performance obligation. The Company records a liability for product warranty obligations at the time of sale based on historical warranty experience that is included in cost of goods sold.

The Company also offers extended warranty coverage for certain products, which it accounts for as service warranties. In most cases, the extended service warranty is included in the sales price of the product and is not sold separately. The Company considers the extended service warranty to be a separate performance obligation and allocates a portion of the transaction price to the service warranty based on the estimated stand-alone selling price. At the time of sale, the extended warranty transaction price is recorded as deferred revenue on the consolidated balance sheets and is recognized on a straight-line basis over the life of the service warranty period. The deferred revenue is considered a contract liability as the Company has a right to payment at the time the product with the related extended service warranty is shipped or delivered and therefore, payment is received in advance of the Company’s performance.

Contract Balances

The balance of contract liabilities associated with service warranty performance obligations was $3,732 and $3,060 as of July 31, 2026 and 2025, respectively. This also represents the amount of unsatisfied performance obligations related to contracts that extend beyond one year. The current portion and non-current portion of contract liabilities are included in “Other current liabilities” and “Other liabilities,” respectively, on the accompanying consolidated balance sheets. During the year ended July 31, 2026, the Company recognized revenue of $1,592 that was included in the contract liability balance at the beginning of the period from the amortization of extended service warranties. Of the contract liability balance outstanding at July 31, 2026, the Company expects to recognize 40% by the end of fiscal 2027, an additional 27% by the end of fiscal 2028, and the remaining balance thereafter.

The Company records deferred revenue for payments received in advance for certain software and services. These amounts are classified as contract liabilities and recognized as revenue over the service period. The balance of contract liabilities related to software and services was $10,092 and $9,246 as of July 31, 2026 and 2025, respectively. The Company recognized revenue of $7,951 and $5,728 during the years ended July 31, 2026 and 2025, respectively, which was previously included in the beginning balance of deferred revenue as of July 31, 2025 and July 31, 2024. Of the contract liability balance outstanding at July 31, 2026, the Company expects to recognize 87% by the end of fiscal 2027 and the remaining balance thereafter.

Costs of Obtaining a Contract

The Company expenses incremental direct costs of obtaining a contract (e.g., sales commissions) when incurred because the amortization period is generally twelve months or less. Contract costs are included in “Selling, general and administrative expense” on the consolidated statements of income.

Disaggregation of Revenue

The following is a summary of the Company’s revenue by geographic region within the reportable segments. See Note 10, “Segment Information” for information on the Company's reportable segments.

The following is a summary of sales by product category for the years ended July 31, 2026, 2025 and 2024:

During fiscal 2026, sales from Mecco were included in the product identification category.

During fiscal 2025, sales from Gravotech, AB&R and Microfluidic Solutions were included in the product identification category.

During fiscal 2024, the Company divested operations related to the safety and facility identification product line.

10. Segment Information

The Company is organized and managed withintwo regions: Americas & Asia and Europe & Australia, which are the reportable segments. The Company’s Chief Executive Officer (“CEO”), who is also the Company’s Chief Operating Decision Maker (“CODM”), uses segment profit in measuring segment performance, allocating resources, evaluating performance in periodic reviews, and during the development of the annual budget and the regular forecasting process. The CODM considers budget-to-actual variances on a quarterly basis, as well as segment-specific forecasting, when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses the segment's net sales in measuring segment performance.

The following is a summary of segment information as of and for the years ended July 31, 2026, 2025 and 2024:

(1)Unallocated administrative costs consist of corporate administrative expenses including finance, information technology, human resources and other administrative expenses as well as costs incurred related to the acquisition of the PSS business for the year ended July 31, 2026.

The following is a summary of sales and long-lived assets by geographic region for the years ended July 31, 2026, 2025 and 2024:

11. Income Taxes

Income before income taxes consists of the following:

Income tax expense consists of the following:

The tax effects of temporary differences are as follows as of July 31, 2026 and 2025:

Tax credit carry-forwards as of July 31, 2026 consist of the following:

•Foreign net operating loss carry-forwards of $205,127, of which $178,747 have no expiration date and the remainder of which expire from fiscal 2027 to fiscal 2036.

•State net operating loss carry-forwards of $22,423, all of which expire in fiscal 2032.

•Foreign tax credit carry-forwards of $19,810, which expire from fiscal 2027 to fiscal 2036.

•State credit carry-forwards of $14,466, which expire from fiscal 2027 to fiscal 2041.

Rate Reconciliation

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate for the years ended July 31, 2026, 2025, and 2024 are as follows:

(1)The following states make up the majority (greater than 50%) of the tax effect for the respective fiscal year as follows:

2026: California, Texas, Pennsylvania, and Illinois

2025: Illinois, New Jersey, Florida, and Pennsylvania

2024: New Jersey, Illinois, Pennsylvania, and Indiana

(2)The loss on sale of business relates to a non-core business divested in fiscal 2024.

A summary of income taxes paid (net of refunds) by jurisdiction for the years July 31, 2026, 2025, and 2024 are as follows:

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions for the July 31, 2026, 2025, and 2024:

*Jurisdiction below the threshold for the period presented

Uncertain Tax Positions

The Company follows the guidance in ASC 740, “Income Taxes” regarding uncertain tax positions. The guidance requires application of a more-likely-than-not threshold to the recognition and de-recognition of income tax positions. A reconciliation of unrecognized tax benefits (excluding interest and penalties) is as follows:

(1)Includes acquisitions.

(2)Of the $19,544 of unrecognized tax benefits as of July 31, 2026, $15,951, if recognized, would affect the Company’s income tax rate.

The following table summarizes the classification of the reserve for uncertain tax positions, excluding interest and penalties, within the accompanying consolidated balance sheets as of July 31, 2026 and 2025, respectively:

Interest expense is recognized on the amount of potentially underpaid taxes associated with the Company's tax positions, beginning in the first period in which interest starts accruing under the respective tax law and continuing until the tax positions are settled. Interest expense and penalties are recorded as a component of “Income tax expense” in the consolidated statements of income. The following table summarizes the amount of recognized interest expense and benefits related to penalties on the reserve, net of reversals due to reduction for tax positions of prior years, statute of limitations, and settlements, for uncertain tax positions during the years ended July 31, 2026, 2025, and 2024.

The following table summarizes the amounts accrued for interest and penalties on unrecognized tax benefits as of July 31, 2026 and 2025.

(1) Penalties are accrued if the tax position does not meet the minimum statutory threshold to avoid the payment of a penalty.

During the year ended July 31, 2026, the Company recognized $6,137 of tax benefits (including interest and penalties) associated with the lapse of statutes of limitations.

The Company and its subsidiaries file income tax returns in the U.S., various states, and foreign jurisdictions. The following table summarizes the open tax years for the Company's major jurisdictions:

12. Net Income per Common Share

Reconciliations of the numerator and denominator of the basic and diluted per share computations for the Company’s Class A and Class B common stock are summarized as follows:

Potentially dilutive securities attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted earnings per share where the combined exercise price and average unamortized fair value were greater than the average market price of Brady's Class A Nonvoting Common Stock because the effect would have been anti-dilutive. The amount of anti-dilutive shares were 4,617,4,319, and 113,641 for the years ended July 31, 2026, 2025, and 2024, respectively.

13. Fair Value Measurements

In accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The inputs used to measure fair value are classified into the following hierarchy:

Level 1 — Unadjusted quoted prices in active markets for identical instruments that are accessible as of the reporting date.

Level 2— Other significant pricing inputs that are either directly or indirectly observable.

Level 3 — Significant unobservable pricing inputs, which result in the use of management's own assumptions.

The following table summarizes the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis at July 31, 2026 and July 31, 2025, according to the valuation techniques the Company used to determine their fair values.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Deferred compensation plan assets: The Company’s deferred compensation investments consist of investments in mutual funds, which are included in “Other assets” on the accompanying consolidated balance sheets. These investments were classified as Level 1 as the shares of these investments trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.

Foreign exchange contracts: The Company’s foreign exchange contracts were classified as Level 2 as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign exchange rates. See Note 14, “Derivatives and Hedging Activities,” for additional information.

There have been no transfers of assets or liabilities between the fair value hierarchy levels, outlined above, during the years ended July 31, 2026 and July 31, 2025.

See Note 6 for information regarding the fair value of the Company's long-term debt.

14. Derivatives and Hedging Activities

The Company utilizes forward foreign exchange currency contracts to reduce the exchange rate risk of specific foreign currency denominated transactions. These contracts typically require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date, with maturities of less than 18 months, which qualify as cash flow hedges or net investment hedges under the accounting guidance for derivative instruments and hedging activities. The primary objective of the Company’s foreign currency exchange risk management program is to minimize the impact of currency movements due to transactions in other than the respective subsidiaries’ functional currency and to minimize the impact of currency movements on the Company’s net investment denominated in a currency other than the U.S. dollar. To achieve this objective, the Company hedges a portion of known exposures using forward foreign exchange contracts.

Main foreign currency exposures are related to transactions denominated in the British Pound, Euro, Canadian dollar, Australian dollar, Mexican Peso, Chinese Yuan, Malaysian Ringgit and Singapore dollar. Generally, these risk management transactions will involve the use of foreign currency derivatives to minimize the impact of currency movements on non-functional currency transactions.

The U.S. dollar equivalent notional amounts of outstanding forward exchange contracts were as follows as of July 31, 2026 and 2025:

Cash Flow Hedges

The Company has designated a portion of its forward foreign exchange contracts as cash flow hedges and recorded these contracts at fair value on the accompanying consolidated balance sheets. For these instruments, the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”) and reclassified into income in the same period or periods during which the hedged transaction affects income. At July 31, 2026 and 2025, unrealized gains of $745 and unrealized losses $493 have been included in AOCI, respectively.

Net Investment Hedges

The Company has designated certain third party foreign currency denominated debt borrowed under its credit agreement as net investment hedges. These debt obligations, denominated in Euros and British Pounds, were designated as net investment hedges to hedge portions of the Company's net investment in its European operations. The Company’s foreign currency denominated debt obligations are valued under a market approach using publicized spot prices, and the net gains or losses attributable to the changes in spot prices are recorded as cumulative translation within AOCI and are included in the foreign currency translation adjustments section of the consolidated statements of comprehensive income. As of July 31, 2026 and July 31, 2025, the cumulative balance recognized in accumulated other comprehensive income were losses of $3,105 and $2,753, respectively, on any outstanding foreign currency denominated debt obligations.

The following table summarizes the amount of pre-tax gains and losses related to derivatives designated as hedging instruments:

Fair values of derivative and hedging instruments in the accompanying consolidated balance sheets were as follows:

15. Acquisitions

On August 4, 2025, the Company acquired all of the membership interest of Mecco for $18,919, net of cash acquired. The purchase price includes a cash payment of $17,416 and a holdback liability of $1,503. Based in Pittsburgh, Pennsylvania, Mecco specializes in industrial product marking and identification systems designed for a variety of applications and industries. The acquisition of Mecco complements the Company’s existing offering of direct part marking solutions and advances the Company’s strategy to provide customers with a variety of end-to-end direct part marking and specialty identification products. The acquisition was funded through cash on hand. The purchase price allocation was finalized in the fourth quarter of the year ended July 31, 2026. The purchase price allocation included goodwill of $3,165, intangible assets of $14,040, and net tangible assets of $1,714. The goodwill for this acquisition is assigned to the Americas & Asia segment and is deductible for tax purposes. The accompanying consolidated financial statements include the results of Mecco from the date of acquisition through July 31, 2026. Pro forma and other financial information are not presented for the Mecco acquisition because its impact on the Company’s results of operations and financial position is immaterial.

Fiscal 2025

On August 1, 2024, the Company acquired all of the outstanding shares of Gravotech. Headquartered in Lyon, France, Gravotech is a leader in the design, manufacture and distribution of innovative solutions for specialized engraving, marking and cutting, offering laser, mechanical engraving, scribing and dot peen capabilities across multiple industries. The acquisition of Gravotech expands the Company’s identification product offerings and research and development capabilities to include specialized direct part marking and engraving expertise. The acquisition was funded through cash on hand and borrowings under the Company’s previous credit agreement. Net sales and net loss attributable to Gravotech from the acquisition date through July 31, 2025 were $113,919 and $15,375, respectively. The net loss attributable to Gravotech was due to a non-recurring increase in cost of goods sold related to the fair value adjustment to inventory upon acquisition and amortization expense for intangible assets. The purchase price allocation was finalized in the fourth quarter of the year ended July 31, 2025. Measurement period adjustments did not have a material impact on the Company’s consolidated statements of income.

The purchase price allocation included goodwill of $66,178 of which $46,951 was assigned to the Americas & Asia segment and $19,227 was assigned to the Europe & Australia segment. The goodwill for this acquisition is not deductible for tax purposes.

The following table summarizes the fair value of the assets acquired and liabilities assumed as of the date of the acquisition:

The following table presents the unaudited pro forma operating results of the Company for the year ended July 31, 2024, reflecting the acquisition of Gravotech as if it had occurred at the beginning of fiscal year 2024. Unaudited pro forma operating results are not presented for the years ended July 31, 2026 and 2025, as the financial impact of the acquisition is fully reflected in the accompanying consolidated financial statements. The unaudited pro forma operating results for the year ended July 31, 2024 include Gravotech’s normal operating results and pro forma adjustments to include cumulative expenses, net of tax, for the non-recurring fair value adjustment to inventory, amortization expense for acquired intangible assets and interest expense on acquisition-related debt. The unaudited pro forma operating results for the year ended July 31, 2024 are presented for comparative purposes only and do not necessarily reflect future operating results or those that would have occurred had the acquisition been completed at the beginning of fiscal year 2024.

On October 1, 2024, the Company acquired all of the outstanding shares of AB&R for $14,827, net of cash acquired. Based in Phoenix, Arizona, AB&R provides integrated solutions for asset tracking, inventory management, and workflow optimization using advanced identification and tracking technologies, including barcoding, radio frequency identification (“RFID”) and Internet of Things (“IoT”)-based systems. The acquisition was funded through cash on hand and borrowings under the Company’s previous credit agreement. The purchase price allocation was finalized in the fourth quarter of the year ended July 31, 2025. The purchase price allocation included goodwill of $10,079, intangible assets of $4,600, and net tangible assets of $148. The goodwill for this acquisition is assigned to the Americas & Asia segment and is deductible for tax purposes.

On April 1, 2025, the Company acquired certain assets and liabilities representing the Microfluidic Solutions business unit of Funai Electric Co., Ltd., for $10,731. Headquartered in Lexington, Kentucky, with a manufacturing facility in Cebu, Philippines, Microfluidic Solutions specializes in the research, development and manufacturing of advanced inkjet microfluidic technologies. The acquisition was funded through cash on hand and borrowings under the Company’s previous credit agreement. The purchase price allocation was finalized in the fourth quarter of the year ended July 31, 2025. The purchase price allocation included property, plant and equipment of $13,315, inventories of $3,028, accounts payable of $1,111, and other liabilities of $3,903.

The accompanying consolidated financial statements include the results of AB&R and Microfluidic Solutions since the date of acquisition. Pro forma and other financial information are not presented for AB&R or Microfluidic Solutions because their impact on the Company’s results of operations and financial position is immaterial.

16. Contingencies

In the normal course of business, the Company is subject to a variety of investigations, claims, suits, and other legal proceedings, including but not limited to, intellectual property, employment, unclaimed property, tort, and breach of contract matters. Any legal proceedings are subject to inherent uncertainties, and these matters and their potential effects may change in the future. The Company records a liability for contingencies when a loss is deemed to be probable and the loss can be reasonably estimated. The Company currently believes that the outcomes of such proceedings will not have a material adverse impact on its business, financial position, results of operations or cash flows.

17. Subsequent Events

On August 3, 2026, the Company completed the acquisition of the PSS business through the purchase of all related equity interests. The acquisition includes PSS’s global manufacturing operations for integrated mobile computing, scanning, and printing, supported by its software solutions and service operations. The cash purchase price was $1.4 billion, subject to customary post-closing adjustments. The acquisition was funded through a combination of cash on hand, $800 million of borrowings under the Company’s $1.0 billion credit agreement, and proceeds from the $800 million private placement of senior notes described below. The excess proceeds were designated for general corporate purposes.

As of the issuance date of these consolidated financial statements, the initial accounting for the acquisition for the PSS business was incomplete. Due to the proximity of the acquisition date to the issuance date of these consolidated financial statements, the Company has not completed the valuation of the assets acquired and liabilities assumed and is therefore unable to disclose the preliminary purchase price allocation, including the amounts assigned to the major classes of assets acquired, liabilities assumed, goodwill, or the supplemental unaudited pro forma information. The financial results of the PSS business will be integrated into the Company’s consolidated financial statements starting from August 3, 2026 and will be included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2026.

On August 3, 2026, the Company completed a private placement of $250 million aggregate principal amount of 5.43% Senior Notes, Series A, due August 3, 2031 (the “Series A Notes”), $300 million aggregate principal amount of 5.65% Senior Notes, Series B, due August 3, 2033 (the “Series B Notes”), and $250 million aggregate principal amount of 5.90% Senior Notes, Series C, due August 3, 2036 (the “Series C Notes”) and, together with the Series A Notes and the Series B Notes, the “Senior Notes”), in each case pursuant to a Note Purchase Agreement with the purchasers party thereto. The Senior Notes are senior unsecured obligations of the Company and are guaranteed by certain of the Company’s wholly-owned domestic subsidiaries. A portion of the proceeds of the Senior Notes were used to finance the PSS acquisition and related fees and expenses, with the remaining proceeds available for general corporate purposes.

On September 2, 2026, the Company announced an increase in the annual dividend to shareholders of the Company’s Class A Common Stock, from $0.98 to $1.00 per share. A quarterly dividend of $0.25 will be paid on October 30, 2026, to shareholders of record at the close of business on October 9, 2026. This dividend represents an increase of 2.0% and is the 41st consecutive annual increase in dividends.