BRADY CORP

BRADY CORP Annual Report - Key Takeaways for Investors (2025)

Let’s break down Brady Corp’s year in plain English: Are they making money? Growing? Worth your investment?

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1. What They Do

Brady Corp makes workplace safety products like safety signs, barcode scanners, spill kits, and RFID tags. They own brands like Seton (safety gear), Gravotech (laser engraving), and Nordic ID (tracking tech). New in 2025: They’re expanding into healthcare (patient wristbands) and aerospace materials.

Key advantage: They control their entire supply chain (like Apple), from adhesives to software. 50% of sales come from outside the U.S., mostly Europe and Australia.

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2. Financial Snapshot

• Sales: $1.33B (up 12% from $1.19B last year).
• Profit: $174M (down 1.7% from $177M).
• Why profit dipped? Operating costs (R&D, salaries) rose 18% to $488M.
• Bright spot: Gross margins improved to 50.6% (up from 49.7%) – they’re making products cheaper without sacrificing quality.

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3. Wins vs. Challenges

Wins ✅

• Launched a hit wearable safety device.
• Europe & Australia sales jumped to 30% of revenue (up from 25%).
• R&D spending up 18% – led to eco-friendly products and smarter safety tech.
• Acquired a software company (without overpaying!).

Challenges ❌

• Lost U.S. clients to cheaper rivals.
• Operating costs grew faster than sales (18% vs. 12%).
• Tariffs and supply chain delays raised material costs.

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4. Financial Health Check

Good news 🟢

• $250M cash on hand (even after paying dividends and debt).
• Dividends up sharply: Paid shareholders $42.2M ($0.96/share).
• Smart pricing: Raised prices just enough to offset inflation.

Risks 🔴

• Profit margins slipped to 13.1% (from 14.9%).
• Currency swings wiped out $1.8M in cash (a risk with 50% overseas sales).
• Supply chain threats: Trade wars or factory shutdowns could hurt.

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5. Competition & Opportunities

• Competitors: Mom-and-pop shops (cheaper) + giants like 3M and Honeywell.
• Edge: Global reach (100+ countries) and 40% of sales now online (ahead of rivals).
• Big opportunity: Stricter EU safety rules could mean $200M+ in new sales.
• New bets: AI safety tools, healthcare products, and eco-friendly materials.

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6. What’s Next?

• Goal: 10% sales growth in 2026 (focus: Europe, healthcare, and software).
• Investing in AI: Cameras that detect unsafe factory behavior.
• Sustainability push: Recycling 50% of manufacturing materials by 2026.

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7. Risks to Watch

• Inflation: Can they keep raising prices without losing customers?
• Tech race: Falling behind on innovation = products become generic.
• Climate rules: New eco-laws could force costly R&D.

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Bottom Line for Investors

Brady Corp is a steady, dividend-paying stock with global reach.

• 👍 Strengths: Sales growing (12%), strong margins (50.6%), smart R&D bets, and shareholder-friendly dividends.
• 👎 Weaknesses: Rising costs, currency risks, and competition from cheaper rivals.
• 💡 Opportunities: Stricter global safety rules and AI-driven products.

Who should invest? If you want a low-to-moderate risk stock with growth potential and dividends, Brady fits. Don’t expect explosive gains, but it’s a reliable player in a “boring” industry that’s not going away.

Final thought: Keep an eye on their operating costs and how well they handle inflation. If they keep margins stable while growing sales, this could be a long-term winner.

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