Brady Corporation

Quarterly revenue was not explicitly stated in the prepared remarks, but total sales growth was 13.8%, driven by 8.2% organic growth, 2.1% acquisition growth, and 3.5% foreign currency translation. Adjusted EPS was a record $1.50 versus $1.22 last year, up 23%; GAAP EPS was $1.21 versus $1.09. Gross profit margin was 51.8% versus 51.0% in the prior-year comparison cited on the call. Net income increased to $57.8 million from $52.3 million, and adjusted net income rose to $71.9 million from $58.8 million. For the full year fiscal 2026, Brady raised adjusted EPS guidance to $5.20-$5.30 from $4.95-$5.15, raised GAAP EPS guidance to $4.66-$4.76 from $4.62-$4.82, and reiterated organic sales growth expectations in the mid-single-digit percentages. Other guidance included about $44 million of depreciation and amortization, about $45 million of capex, and a roughly 21% full-year tax rate.

Russell Shaller characterized the quarter as “fantastic” and said Brady is seeing broad-based strength across key product lines, especially in wire and identification, data centers, and the new i4311 portable printer. He framed the Honeywell PSS deal as a major strategic step that more than doubles the markets Brady can serve and adds a third pillar—enterprise productivity—to the company’s identification and safety base. His tone was upbeat and confident, emphasizing long-term growth, product innovation, and the company’s ability to generate cash while investing for expansion.

Ann Thornton emphasized that record adjusted EPS came from strong organic sales, better gross margin, SG&A efficiencies, and higher operating income. She cited operating cash flow of $78.2 million for the quarter, free cash flow of $67.2 million, and net cash of $148.6 million, which she said leaves Brady well positioned to fund the PSS acquisition while continuing dividends and opportunistic buybacks. She also detailed the financing plan for PSS—$500 million of Term Loan A debt and $800 million of private placement debt—with expected interest below 6% and leverage of about 2.5x at close, declining to below 2x within two years.

Analysts pressed management on what drove the stronger-than-expected organic growth, whether the i4311 printer is taking share, the sustainability of gross margin near 52%, and how much of the PSS accretion estimate includes future investment. Russell said Q2 had timing-related weakness, data centers were a major contributor, the i4311 is a unique new product that is selling above expectations, and $52% is a reasonable gross-margin level but not a formal target. On PSS, management said the first-year ~$0.80 adjusted EPS accretion excludes synergies, includes some added R&D and sales investment, and excludes one-time integration costs. They also said the August 1 close date remains the best estimate and that board resignations were driven by the unusually heavy time commitment of the acquisition work, not disagreement with the deal.