Brady (BRC) investor relations material

Executive summary

• Achieved record-high adjusted EPS of $1.50, up 23% year-over-year, with organic sales growth of 8.2% and gross margin near 52%.

• Net income and cash flow from operations both increased significantly year-over-year, with strong growth in key product lines and regions.

• Announced a definitive agreement to acquire Honeywell's Productivity Solutions and Services (PSS) business for $1.4 billion, expected to close in the second half of 2026, doubling the addressable market.

• Continued focus on operational efficiency, digital transformation, and integration of recent acquisitions.

Financial highlights

• Q3 2026 sales rose 13.8% year-over-year to $435.3M; organic sales up 8.2%, acquisitions 2.1%, FX 3.5%.

• Gross profit margin improved to 51.8% from 51% year-over-year.

• Net income increased 10.6% to $57.8M; adjusted net income up 22.3% to $71.9M.

• Operating cash flow rose 30.7% to $78.2M in Q3; free cash flow up 20.8% to $67.2M.

• Cash and equivalents at $175.5M as of April 30, 2026.

Outlook and guidance

• Raised full-year adjusted EPS guidance to $5.20–$5.30 (13–15.2% growth); GAAP EPS guidance to $4.66–$4.76.

• Guidance assumes a 21% tax rate, $44M depreciation/amortization, $45M capex, and mid-single-digit organic sales growth.

• Guidance excludes any impact from the pending PSS acquisition.

• Expects to close the PSS acquisition in the second half of 2026, funded by cash and new debt financing.