Brady Corporation Reports Record EPS in its Fiscal 2024 Fourth Quarter, Expands its Share Buyback Program and Announces its Fiscal 2025 EPS Guidance
Diluted EPS increased 15.0 percent to a record high of $1.15 in the fourth quarter of fiscal 2024 compared to $1.00 in the same quarter of the prior year. Diluted EPS Excluding Certain Items* increased 14.4 percent to a record high of $1.19 in the fourth quarter of fiscal 2024 compared to $1.04 in the same quarter of the prior year.
Gross profit margin increased to 51.6 percent in the fourth quarter of fiscal 2024 compared to 50.8 percent in the same quarter of the prior year.
Net cash provided by operating activities increased to a record high of $255.1 million in fiscal 2024 compared to $209.1 million in fiscal 2023.
On September 4, 2024, Brady's Board of Directors authorized an additional $100 million of shares for repurchase, which based on current share prices equates to approximately 1.5 million shares and approximately 3.0 percent of total outstanding shares.
Diluted EPS guidance for the year ending July 31, 2025 was announced at a range of $4.15 to $4.45 on a GAAP basis, and a range of $4.40 to $4.70 on a non-GAAP basis.
MILWAUKEE, Sept. 06, 2024 (GLOBE NEWSWIRE) -- Brady Corporation (NYSE:BRC) ("Brady" or "Company"), a world leader in identification solutions, today reported its financial results for its fiscal 2024 fourth quarter ended July 31, 2024.
Quarter Ended July 31, 2024 Financial Results:Sales for the quarter ended July 31, 2024 decreased 0.7 percent, which consisted of organic sales growth of 1.6 percent, a decrease of 0.8 percent from foreign currency translation and a decrease of 1.5 percent from divestitures. Sales for the quarter ended July 31, 2024 were $343.4 million compared to $345.9 million in the same quarter last year. By region, sales increased 0.4 percent in the Americas & Asia and decreased 3.0 percent in Europe & Australia, which consisted of organic sales growth of 3.4 percent in the Americas & Asia and an organic sales decline of 1.8 percent in Europe & Australia.
Income before income taxes increased 6.9 percent to $68.2 million for the quarter ended July 31, 2024, compared to $63.8 million in the same quarter last year. Income Before Income Taxes Excluding Certain Items* for the quarter ended July 31, 2024, which was adjusted for amortization expense of $2.3 million, was $70.5 million, an increase of 6.6 percent.
Net income for the quarter ended July 31, 2024 was $55.5 million compared to $49.4 million in the same quarter last year. Earnings per diluted Class A Nonvoting Common Share were $1.15 in the fourth quarter of fiscal 2024, compared to $1.00 in the same quarter last year. Net Income Excluding Certain Items* for the quarter ended July 31, 2024 was $57.3 million and Diluted EPS Excluding Certain Items* for the quarter ended July 31, 2024 was $1.19. Net Income Excluding Certain Items* for the quarter ended July 31, 2023 was $51.2 million and Diluted EPS Excluding Certain Items* for the quarter ended July 31, 2023 was $1.04.
Year Ended July 31, 2024 Financial Results:Sales for the year ended July 31, 2024 increased 0.7 percent, which consisted of organic sales growth of 2.6 percent, an increase of 0.2 percent from foreign currency translation and a decrease of 2.1 percent from divestitures. Sales for the year ended July 31, 2024 were $1.34 billion compared to $1.33 billion in the prior year. By region, sales decreased 0.3 percent in the Americas & Asia and increased 2.7 percent in Europe & Australia, which consisted of organic sales growth of 3.1 percent in the Americas & Asia and organic sales growth of 1.6 percent in Europe & Australia.
Income before income taxes increased 9.8 percent to $247.8 million for the year ended July 31, 2024, compared to $225.7 million for the year ended July 31, 2023. Income Before Income Taxes Excluding Certain Items* for the year ended July 31, 2024, which was adjusted for amortization expense of $9.4 million, was $257.3 million, an increase of 10.1 percent compared to the year ended July 31, 2023.
Net income for the year ended July 31, 2024 was $197.2 million compared to $174.9 million for the year ended July 31, 2023. Earnings per diluted Class A Nonvoting Common Share were $4.07 for the year ended July 31, 2024 compared to $3.51 in the same period last year. Net Income Excluding Certain Items* for the year ended July 31, 2024 was $204.5 million and Diluted EPS Excluding Certain Items* for the year ended July 31, 2024 was $4.22. Net Income Excluding Certain Items* for the year ended July 31, 2023 was $181.5 million, and Diluted EPS Excluding Certain Items* for the year ended July 31, 2023 was $3.64.
Commentary:"This quarter, we once again reported record-high EPS, marking Brady's best earnings year ever. For the full year ended July 31, 2024, our GAAP EPS was $4.07, representing a 16.0 percent increase over the previous year's record," said Brady's President and CEO, Russell R. Shaller. "Both regions continue to perform well, with growth in organic sales and operating income. I'm excited about the innovative new products we have slated for launch in fiscal 2025. We also look forward to expanding our product offerings with the addition of direct part marking and laser engraving solutions, following our acquisition of Gravotech, which closed on August 1, 2024."
"In addition to our record EPS this quarter and this fiscal year, we also used our strong balance sheet and cash generation to return funds to our shareholders through share buybacks and increased dividends. This year, we repurchased a total of 1.3 million shares for $72.2 million, and returned another $45.1 million to our shareholders in the form of dividends," said Brady's Chief Financial Officer, Ann Thornton. "Our strong balance sheet provides us with opportunities to continue to invest in both organic growth and strategic acquisitions to increase shareholder value."
Share Buyback Program:On September 4, 2024, Brady's Board of Directors authorized an additional $100 million of Class A Nonvoting Common Stock for repurchase under the Company's share buyback program. The share buyback program may be implemented from time to time in the open market or in privately negotiated transactions and has no expiration date.
Fiscal 2025 Guidance:The Company expects GAAP earnings per diluted Class A Nonvoting Common Share to range from $4.15 to $4.45, which would be an increase of 2.0 percent to 9.3 percent over GAAP earnings per diluted Class A Nonvoting Common Share of $4.07 for the year ended July 31, 2024.
The Company also expects Diluted EPS Excluding Certain Items* to range from $4.40 to $4.70 for the year ending July 31, 2024, which would be an increase of 4.3 percent to 11.4 percent over Diluted EPS Excluding Certain Items* of $4.22 for the year ended July 31, 2024. Adjusted from this Diluted EPS Excluding Certain Items* guidance is amortization expense estimated at $0.25 per share for the year ending July 31, 2025.
Included in fiscal 2025 guidance are a full-year income tax rate of approximately 20 percent and depreciation and amortization expense ranging from $38 million to $40 million. Capital expenditures are expected to approximate $35 million. Fiscal 2025 guidance is based upon foreign currency exchange rates as of July 31, 2024 and assumes continued economic growth.
A webcast regarding Brady's fiscal 2024 fourth quarter financial results will be available at www.bradycorp.com/investors beginning at 9:30 a.m. central time today.
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries. Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2024, employed approximately 5,700 people in its worldwide businesses. Brady's fiscal 2024 sales were approximately $1.34 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradyid.com.
* Income Before Income Taxes Excluding Certain Items, Net Income Excluding Certain Items, and Diluted EPS Excluding Certain Items are non-GAAP measures. See appendix for more information on these measures, including reconciliations to the most directly comparable GAAP measures.
In this news release, statements that are not reported financial results or other historic information are "forward-looking statements." These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations.
The use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "project," "plan" or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: increased cost of raw materials and labor as well as material shortages and supply chain disruptions; decreased demand for our products; our ability to compete effectively or to successfully execute our strategy; our ability to develop technologically advanced products that meet customer demands; Brady's ability to identify, integrate and grow acquired companies, and to manage contingent liabilities from divested businesses; difficulties in protecting our websites, networks, and systems against security breaches; risks associated with the loss of key employees; extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities; global climate change and environmental regulations; litigation, including product liability claims; foreign currency fluctuations; changes in tax legislation and tax rates; potential write-offs of goodwill and other intangible assets; differing interests of voting and non-voting shareholders and changes in the regulatory and business environment around dual-class voting structures; 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 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, 2024.
These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.
For More Information:Investor contact: Ann Thornton 414-438-6887Media contact: Kate Venne 414-358-5176
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars in thousands, except per share data)
Three months ended July 31,
Year ended July 31,
2024
2023
2024
2023
Net sales
$
343,402
$
345,929
$
1,341,393
$
1,331,863
Cost of goods sold
166,347
170,049
653,509
674,588
Gross margin
177,055
175,880
687,884
657,275
Operating expenses:
Research and development
17,533
16,340
67,748
61,365
Selling, general and administrative
93,307
97,495
376,722
370,697
Total operating expenses
110,840
113,835
444,470
432,062
Operating income
66,215
62,045
243,414
225,213
Other income (expense):
Investment and other income
2,835
2,426
7,553
4,022
Interest expense
(842
)
(653
)
(3,126
)
(3,539
)
Income before income taxes
68,208
63,818
247,841
225,696
Income tax expense
12,752
14,440
50,626
50,839
Net income
$
55,456
$
49,378
$
197,215
$
174,857
Net income per Class A Nonvoting Common Share:
Basic
$
1.17
$
1.01
$
4.10
$
3.53
Diluted
$
1.15
$
1.00
$
4.07
$
3.51
Net income per Class B Voting Common Share:
Basic
$
1.17
$
1.01
$
4.08
$
3.51
Diluted
$
1.15
$
1.00
$
4.05
$
3.49
Weighted average common shares outstanding:
Basic
47,595
49,099
48,119
49,591
Diluted
48,063
49,377
48,496
49,869
BRADY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
July 31, 2024
July 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
250,118
$
151,532
Accounts receivable, net of allowance for credit losses of $6,749 and $8,467, respectively
185,486
184,420
Inventories
152,729
177,078
Prepaid expenses and other current assets
11,382
11,790
Total current assets
599,715
524,820
Property, plant and equipment—net
195,758
142,149
Goodwill
589,611
592,646
Other intangible assets
51,839
62,096
Deferred income taxes
15,596
15,716
Operating lease assets
38,504
29,688
Other assets
24,546
