Brady (BRC) Q3 2026 Earnings Call Transcript

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DATE

Monday, May 18, 2026 at 10:30 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Russell R. Shaller

• Chief Financial Officer — Ann E. Thornton

• Operator

Full Conference Call Transcript

Russell R. Shaller. Russell?

Russell R. Shaller: Thanks, Ann, and thank you all for joining today. I am pleased to announce a fantastic quarter. We reported a new record high adjusted earnings per share of $1.5, an increase of 23% versus the third quarter of last year. Organic sales grew 8.2% and gross profit margin was nearly 52% while both regions reported significant growth in operating income and profitability. We are growing in our key product lines in both of our regions and we continue to see positive response to the new products we have introduced over the last several years. Launched in February, our I4.31 thousand is a 4-inch portable printer, which is tailored for plant safety and manufacturing professionals. it is selling well above expectations.

Our development team worked with a wide variety of users to create this product and customer feedback has been fantastic. We are seeing continued growth in wire and identification this quarter. Particularly in data centers, which is a key end market for this highly critical identification solution. Our top priorities are profitable sales growth and a constant focus on cash generation, and this quarter absolutely delivered both. In addition to 23% adjusted earnings per share growth, in the quarter, our cash generation was nearly $80 million. Operating cash flow is up 35% so far this fiscal year. Last month we announced that we entered into an agreement to acquire Honeywell's productivity solutions and services business.

This marked an exciting moment in Brady's history and we are looking forward to combining our highly engineered durable labels, printers, software with the data and devices powering the entire supply chain. This is an exciting moment in our company's history. Over the past several years, Brady has carefully evaluated the competitive landscape while identifying new growth opportunities that expand our addressable market. With this acquisition, the PSS more than doubles the markets Brady can serve. At the same time, we believe emerging marking and identification standards including GS1 and Europe's digital product passport initiatives along with new applications for RFID based product identification, support a long runway for future growth.

Additionally, our early work with AI augmented products points the way to exciting new use cases to improve our customer safety and efficiency. We see PSS as a unique opportunity to expand our-- into leading-edge mobility, and scanning solutions trusted by some of the world's largest transportation, warehousing, and logistics companies. By combining Brady's high performance printers, software, and specialty adhesive materials with PSS's full suite of mobility and scanning solutions, we will be able to offer a single source solution to a broader set of customers. The PSS business has an incredible product portfolio, a talented R&D team with deep technical expertise, and critical sales and support functions who know their business extremely well.