10-Q - BRADY CORP (0000746598) (Filer)

Fri, May 16, 11:15 AM (64 days ago)

**Brady Corporation (BRC) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Q1 2025 revenue increased by 11.4% to $382.6 million, driven by 1.6% organic sales growth and 10.5% from acquisitions, partially offset by a 0.7% decrease from foreign currency translation. - **Profit Margins:** Gross margin decreased to 51.0% from 51.6% in Q1 2024 due to incremental tariffs and facility closure costs. - **Earnings:** Net income increased by 2.7% to $52.3 million, with earnings per share (EPS) at $1.10 for Class A Nonvoting Common Stock. - **Cash Flow:** Operating cash flow decreased to $122.9 million due to changes in working capital and increased inventory outflows. - **Debt:** Long-term debt increased to $102.8 million, with a leverage ratio of 0.3 to 1.0 and an interest coverage ratio of 71.5 to 1.0. **Segment Performance:** - **Americas & Asia:** Sales increased by 12.9% with organic growth of 5.4% and acquisitions contributing 8.6%. Segment profit increased by 15.0% to $57.2 million. - **Europe & Australia:** Sales increased by 8.7% with acquisitions contributing 14.2%, but organic sales declined by 5.4%. Segment profit decreased by 10.5% to $17.5 million. **Trends and Uncertainties:** - **Macroeconomic Conditions:** Inflationary pressures, supply chain disruptions, and tariffs impact operations and financial performance. - **Acquisitions:** Recent acquisitions (Gravotech, AB&R, Microfluidic Solutions) drive growth but also introduce integration challenges and amortization expenses. - **Future Operations:** Focus on organic growth, customer service, digital capabilities, and operational excellence to drive long-term sales growth and profitability. **Future Outlook:** - **Growth Strategy:** Investing in R&D, enhancing customer service, expanding sales capabilities, and integrating acquisitions. - **Financial Strength:** Adequate liquidity and borrowing capacity to support growth strategy and manage economic uncertainties. - **Risk Factors:** Global economic conditions, regulatory changes, and competitive pressures may impact future performance.