Brady (BRC) Q1 2025 earnings summary

Executive summary

• Sales grew 13.6% year-over-year to $377.1 million, with organic growth of 3.6%, acquisitions contributing 8.8%, and currency adding 1.2%.

• Adjusted diluted EPS rose 12% to $1.12, while GAAP EPS was flat at $0.97; adjusted net income increased 10.4% to $54.2 million.

• Net income (GAAP) was $46.8 million, nearly flat year-over-year.

• Acquisitions of Gravotech and AB&R expanded product offerings and contributed to sales growth.

• Americas and Asia regions led with 5.1% organic sales growth; Europe and Australia returned to growth.

Financial highlights

• Gross margin was 50.3%, down from 51.7% last year, impacted by acquisition-related and nonrecurring costs; adjusted gross margin was 51.4%.

• Adjusted pre-tax earnings rose 11% to $68.6 million; adjusted net income increased 10.4% to $54.2 million.

• Operating cash flow was $23.4 million, down from $62.3 million last year, mainly due to acquisition spending and timing of vendor payments.

• SG&A expenses increased to $111.8 million (29.7% of sales), mainly from higher amortization and headcount from acquisitions; adjusted SG&A was 28.3%.

• R&D expense increased to $18.9 million (5% of sales), up from $15.7 million (4.7%) last year.

Outlook and guidance

• Fiscal 2025 adjusted diluted EPS guidance is $4.40–$4.70 (4.3%–11.4% growth); GAAP EPS guidance is $4.02–$4.32.

• Expect low single-digit organic sales growth for fiscal 2025.

• Guidance assumes a 20% tax rate, $40 million in depreciation/amortization, and $35 million in capex.

• Guidance based on current foreign exchange rates and continued economic growth.