Brady Corp (BRC) 2025 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Brady Corporation Q4 2025 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

您好，感謝您的支持。歡迎參加布雷迪公司 2025 年第四季財報電話會議。（操作員指示）請注意，今天的會議正在錄音。

I would now like to hand the conference over to your speaker today, Ann Thornton, CFO. Please go ahead.

現在，我想將會議交給今天的發言人、財務長安桑頓 (Ann Thornton)。請繼續。

Good morning, and welcome to the Brady Corporation Fiscal 2025 Fourth Quarter Earnings Conference Call. The slides for this morning's call are located on our website at www.bradycorp.com/investors. We will begin our prepared remarks on slide number 3.

早安，歡迎參加布雷迪公司 2025 財年第四季財報電話會議。今早電話會議的幻燈片可在我們的網站 www.bradycorp.com/investors 上找到。我們將從第 3 張投影片開始我們的準備演講。

Please note that during this call, we may make comments about forward-looking information. Words such as expect, will, may, believe, forecast and anticipate are just a few examples of words identifying a forward-looking statement. It's important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected loss. Risk factors were noted in our news release this morning and in Brady's fiscal 2025 Form 10-K which was filed with the SEC this morning.

請注意，在本次通話中，我們可能會對前瞻性資訊發表評論。預期、將要、可能、相信、預測和預期等詞語只是識別前瞻性陳述的幾個例子。值得注意的是，前瞻性資訊受各種風險因素和不確定性的影響，這可能會對預期損失產生重大影響。我們今天早上發布的新聞稿和今天早上向美國證券交易委員會提交的 Brady 2025 財年 10-K 表格中都提到了風險因素。

Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. We will be recording this call and broadcasting it on the Internet. As such, your participation in the Q&A session will constitute your consent to being recorded.

另請注意，本次電話會議的版權歸 Brady Corporation 所有，未經 Brady 同意不得轉播。我們將錄製這通通話並在網路上播出。因此，您參與問答環節即表示您同意被記錄。

I'll now turn the call over to Brady's President and Chief Executive Officer, Russell Shaller. Russell?

現在我將電話轉交給布雷迪總裁兼執行長羅素·沙勒 (Russell Shaller)。拉塞爾？

Thanks, Ann, and thank you all for joining us today. We released our fiscal 2025 fourth quarter results this morning, and I'm pleased to announce another company record high adjusted EPS for the quarter and for the year. We grew organic sales 2.4% in the quarter. Acquisitions added 11.3% to our sales growth and we grew adjusted earnings per share by 5.9% to a new quarterly record of $1.26 per share.

謝謝，安，也謝謝大家今天的參與。我們今天早上發布了 2025 財年第四季業績，我很高興地宣布，公司本季和全年調整後每股收益再創歷史新高。本季我們的有機銷售額成長了 2.4%。收購使我們的銷售額增長了 11.3%，調整後每股收益增長了 5.9%，創下了每股 1.26 美元的季度新高。

Our Americas and Asia region once again reported strong organic sales growth of 4.3% in the quarter, finishing a terrific top line with 4.8% organic sales growth in 2025. Our Europe and Australia region has been operating in a challenging macro environment where organic sales declined 1.3% in the fourth quarter. However, excluding the impact of facility closure and other reorganization costs in the region, operating income increased 7.9% in the quarter. This streamlined cost structure is better aligned to our expectations for the business in 2026.

我們的美洲和亞洲地區本季再次報告強勁的有機銷售額成長 4.3%，並在 2025 年以 4.8% 的有機銷售額成長率取得了出色的業績。我們的歐洲和澳洲地區一直處於充滿挑戰的宏觀環境中，第四季有機銷售額下降了 1.3%。不過，若不計入該地區工廠關閉和其他重組成本的影響，本季營業收入成長了7.9%。這種精簡的成本結構更符合我們對2026年業務的預期。

A consistent theme for the last several years and one of the primary drivers of our organic sales growth is our increased investment in R&D. We increased R&D by 31% in the fourth quarter this year, which was driven by our investment in organic businesses as well as through our acquisition of Gravotech from the beginning of the fiscal year, and our acquisition of Funai's Microfluidics Solutions product line starting in the third quarter. Printers and the encoded consumable products for our printers represent just under 40% of our sales in fiscal 2025. And our sales of these products have been growing organically by between 6% and 7% annually for the last three years.

過去幾年的一貫主題以及我們有機銷售成長的主要驅動力之一是我們對研發的投資增加。我們在今年第四季將研發投入增加了 31%，這得益於我們對有機業務的投資以及從本財年開始對 Gravotech 的收購，以及從第三季度開始對 Funai 的微流體解決方案產品線的收購。印表機及其編碼耗材產品占我們 2025 財年銷售額的近 40%。過去三年來，這些產品的銷售額每年都以 6% 至 7% 的速度有機成長。

In particular, customers have responded positively to our new flagship printer, the i7500 industrial label printer that we launched in the second quarter, with sales well above our targets. Our R&D investment focus on the development of high-performance materials, which are combined with our safety products, printers, barcode and RFID readers create an ecosystem of interoperable products. To this core product offering, we have added the capabilities of direct part marking through our acquisition of Gravotech as well as through our acquisition of Mecco last month.

特別是我們第二季推出的新款旗艦印表機i7500工業標籤印表機，客戶反應積極，銷售遠超我們的目標。我們的研發投資專注於高效能材料的開發，這些材料與我們的安全產品、印表機、條碼和 RFID 讀取器相結合，創建了一個可互通的產品生態系統。對於這項核心產品，我們透過收購 Gravotech 以及上個月收購 Mecco 增加了直接零件標記功能。

Brady's goal is to provide seamless interoperability across our products and we are beginning to see the integration of multiple technologies into a single platform. For instance, we successfully combined our optics technology with our lasers and CortexDecoder software to enable real-time image capture and verification. What makes this unique and has me most excited is we are able to use low-cost consumer-grade electronics, combined with our software to provide a more cost-effective solution to our customers. Our goal is consistent to expand our workplace safety and identification solutions portfolios by providing complete tailored solutions that fulfill our customers' safety and identification needs.

Brady 的目標是在我們的產品之間提供無縫的互通性，我們開始看到多種技術整合到單一平台中。例如，我們成功地將光學技術與雷射和 CortexDecoder 軟體結合，實現了即時影像擷取和驗證。最讓我感到興奮的是，我們能夠使用低成本的消費級電子產品，結合我們的軟體，為客戶提供更具成本效益的解決方案。我們的目標是透過提供滿足客戶安全和識別需求的完整客製化解決方案來擴展我們的工作場所安全和識別解決方案組合。

This quarter was a strong finish to 2025. Our 2025 adjusted EPS of $4.60 was another all-time record high following four consecutive years of record highs. We grew organic sales 2.6%, which was led by our Americas and Asia region with organic sales growth of 4.8%. We closed on the acquisition of Gravotech and Funai's Microfluidics Solutions product line, both of which add technical capabilities to our product portfolio, which we believe will be additive to our growth rate in the future.

本季為 2025 年畫上了圓滿的句號。我們 2025 年的調整後每股收益為 4.60 美元，這是連續四年創下歷史新高之後的另一個歷史新高。我們的有機銷售額成長了 2.6%，其中美洲和亞洲地區的有機銷售額成長了 4.8%。我們完成了對 Gravotech 和 Funai 微流體解決方案產品線的收購，這兩項收購都為我們的產品組合增添了技術能力，我們相信這將有助於我們未來的成長率。

We increased our investment in R&D to another record high of nearly $80 million, which was 5.3% of sales, and we returned $96 million to our shareholders through dividends and share buybacks. Our priorities for the next year are consistent, continue to develop unique products for our customers, particularly in the area of workplace automation, which we believe is a long-term growth opportunity. Continue to invest in R&D to stay ahead of the competition and deliver specialized products that help customers automate and drive efficiencies, generate sales growth above GDP in the geographies where we operate, deliver operational improvements that increase profitability as we grow and to effectively deploy our capital to drive long-term shareholder value, which includes organic investments such as R&D, strategic acquisitions that add technical capabilities and returning funds to our shareholders through dividends and share buybacks.

我們將研發投入再創新高，達到近 8,000 萬美元，佔銷售額的 5.3%，並透過股利和股票回購向股東返還了 9,600 萬美元。我們明年的重點是一致的，繼續為我們的客戶開發獨特的產品，特別是在工作場所自動化領域，我們相信這是一個長期的成長機會。繼續投資研發以保持競爭優勢，並提供專業產品來幫助客戶實現自動化和提高效率，在我們運營的地區產生高於 GDP 的銷售增長，提供運營改進以隨著我們的增長而提高盈利能力，並有效地部署我們的資本以推動長期股東價值，其中包括研發等有機投資、增加技術能力的戰略收購以及通過股息和股票回購向股東返還資金。

We demonstrated our commitment to returning funds to our shareholders this year as we repurchased 733,000 shares for $51 million. And yesterday, we announced an increase in our dividend, which represents the 40th consecutive year of annual dividend increases. We're incredibly proud to reach this milestone of 40 straight years of annual dividend increases, which shows our commitment to returning cash to our shareholders while delivering long-term shareholder return.

今年，我們以 5,100 萬美元回購了 733,000 股股票，履行了向股東返還資金的承諾。昨天，我們宣布增加股息，這是我們連續第 40 年增加年度股息。我們非常自豪能夠實現連續 40 年增加年度股息這一里程碑，這表明我們致力於向股東返還現金，同時實現長期股東回報。

And now I'll turn the call over to Ann to provide more details on our financial results. Ann?

現在我將把電話轉給安，讓她提供有關我們財務表現的更多詳細資訊。安？

Thanks, Russell. We had a good quarter and another strong year in fiscal 2025. Organic sales grew 2.4%, and we reported another quarterly record for adjusted earnings per share of $1.26 per share, which was up 5.9% from the fourth quarter of last year. Our sales results were led by our Americas and Asia region with organic sales growth of 4.3% in the fourth quarter, which was partially offset by an organic decline of 1.3% in our Europe and Australia region.

謝謝，拉塞爾。我們度過了一個良好的季度，並在 2025 財年又取得了強勁的一年。有機銷售額成長了 2.4%，我們報告的季度調整後每股收益再創紀錄，達到每股 1.26 美元，比去年第四季度增長了 5.9%。我們的銷售業績由美洲和亞洲地區領先，第四季度有機銷售額增長 4.3%，但歐洲和澳洲地區 1.3% 的有機銷售額下降部分抵消了這一增長。

The macro environment in Europe and Australia has become increasingly challenging during this fiscal year, which is the primary reason for the facility closure and other reorganization cost actions that we've taken over the last three quarters. We believe these actions will position us to improve our profitability as we look ahead into next year. We finalized the following actions that we began midyear in response to the performance of certain businesses as well as economic conditions.

本財年，歐洲和澳洲的宏觀環境變得越來越具有挑戰性，這是我們在過去三個季度採取關閉工廠和其他重整成本行動的主要原因。我們相信，這些措施將有助於我們在明年提高獲利能力。為了因應某些業務的表現以及經濟狀況，我們最終確定了從年中開始採取的以下行動。

First, we reduced additional head count in several of our locations in China in response to the continued decline in economic activity. We believe these actions were necessary in light of the decrease in sales as well as our growth outlook in the country. And second, we finalized our actions through reduced head count in Europe and Australia in order to operate with a more efficient structure while further integrating Gravotech's operations into our core operations. In total, we recognized facility closure and other reorganization costs of $8.9 million in the fourth quarter, and we do believe these actions position us to operate more effectively and efficiently going forward.

首先，為了因應經濟活動的持續下滑，我們在中國多個地區減少了員工人數。我們認為，鑑於銷售額的下降以及我們在該國的成長前景，這些行動是必要的。其次，我們最終決定減少歐洲和澳洲的員工數量，以便以更有效率的結構運營，同時進一步將 Gravotech 的業務整合到我們的核心業務中。總體而言，我們在第四季度確認了 890 萬美元的設施關閉和其他重組成本，我們確實相信這些舉措將使我們在未來更有效、更有效率地運作。

I'll briefly touch on slide number 4 for our quarterly sales trends. Organic sales grew 2.4% this quarter and acquisitions added 11.3% growth. Foreign currency translation added another 2% for total sales growth of 15.7% in the quarter.

我將在第 4 張投影片中簡要介紹我們的季度銷售趨勢。本季有機銷售額成長 2.4%，收購貢獻了 11.3% 的成長。外幣折算又增加了 2%，使本季總銷售額成長 15.7%。

Turning to slide number 5. This details our quarterly gross margin trending. Our gross profit margin was 50.4% this quarter compared to 51.6% in the fourth quarter of last year. The cost reduction actions that I just mentioned resulted in incremental expense of $1.9 million in cost of goods sold in the fourth quarter. So if we exclude this expense, our gross profit margin would have been 50 basis points higher than we reported or 50.9%.

翻到第 5 張投影片。這詳細說明了我們的季度毛利率趨勢。本季我們的毛利率為 50.4%，去年第四季為 51.6%。我剛才提到的成本削減措施導致第四季銷售成本增加了 190 萬美元。因此，如果我們排除這筆費用，我們的毛利率將比我們報告的毛利率高出 50 個基點，即 50.9%。

Moving to slide number 6. This outlines our SG&A expense trending. SG&A was $117.9 million this quarter compared to $93.3 million in the fourth quarter of last year. As a percent of sales, SG&A increased to 29.7% compared to 27.2% last Q4. If you exclude amortization expense from both quarters and exclude the facility closure and other reorganization costs from the current quarter, and SG&A was 26.8% compared to 26.5% of sales in the fourth quarter of last year.

移至幻燈片 6。這概述了我們的銷售、一般及行政費用趨勢。本季銷售、一般及行政費用為 1.179 億美元，而去年第四季為 9,330 萬美元。作為銷售額的百分比，銷售、一般及行政費用從去年第四季的 27.2% 上升至 29.7%。若排除兩季的攤銷費用，並排除本季的設施關閉和其他重組成本，則銷售、一般及行政費用佔銷售額的 26.8%，而去年第四季為 26.5%。

Slide number 7 shows the trending of our investments in research and development. This quarter, we once again increased our investment in R&D, finishing at $23.1 million, which was 5.8% of sales in the quarter. We continue to increase our investment in our engineered products and with the acquisitions of Gravotech as well as Funai's Microfluidics Solutions product line, our commitment to R&D is higher than ever. We're looking forward to our new product road map, and we have another exciting lineup of products set to launch in fiscal 2026.

投影片 7 顯示了我們在研發方面的投資趨勢。本季度，我們再次增加了對研發的投資，最終達到 2,310 萬美元，佔本季銷售額的 5.8%。我們持續增加對工程產品的投資，隨著對 Gravotech 以及 Funai 微流體解決方案產品線的收購，我們對研發的投入比以往任何時候都更高。我們期待著我們的新產品路線圖，我們還有另一系列令人興奮的產品將於 2026 財年推出。

Slide number 8 outlines our pretax earnings on a GAAP basis. If you exclude amortization from the fourth quarter of this year and last year and excludes the facility closure and other organization costs from the fourth quarter of this year, adjusted pretax earnings increased 5.1% from $70.5 million to $74.2 million.

第 8 張投影片概述了我們根據 GAAP 計算的稅前收益。如果不計今年第四季和去年第四季的攤銷費用，也不計今年第四季的設施關閉和其他組織成本，調整後的稅前收益將從 7,050 萬美元成長 5.1% 至 7,420 萬美元。

Our trending of earnings and EPS are detailed on slide number 9. GAAP net income decreased from $55.5 million to $49.9 million, and GAAP diluted earnings per share decreased from $1.15 per share to $1.04 per share in the fourth quarter compared to the same quarter last year. If you exclude amortization from both periods and exclude the facility closure and other reorg charges from the current period, our adjusted net income was up from $57.3 million to $60.2 million, which was an increase of 5.1%. And our adjusted diluted EPS grew from $1.19 per share to a new company record quarter of $1.26 per share, which was an increase of 5.9%.

我們的收益和每股盈餘趨勢詳見第 9 張投影片。與去年同期相比，第四季 GAAP 淨收入從 5,550 萬美元減少至 4,990 萬美元，GAAP 稀釋每股收益從每股 1.15 美元減少至每股 1.04 美元。如果排除兩個期間的攤銷費用以及當前期間的設施關閉和其他重組費用，我們的調整後淨收入將從 5730 萬美元增至 6020 萬美元，增幅為 5.1%。我們的調整後稀釋每股盈餘從每股 1.19 美元成長至每股 1.26 美元，創下公司季新高，成長 5.9%。

Slide number 10 provides a summary of our cash generation. Operating cash flow was $58.3 million in the fourth quarter this year compared to $84 million in the fourth quarter last year. Free cash flow was $49.4 million compared to $73.2 million in the fourth quarter last year.

第 10 張投影片概述了我們的現金產生。今年第四季的經營現金流為 5,830 萬美元，去年第四季為 8,400 萬美元。自由現金流為 4,940 萬美元，而去年第四季為 7,320 萬美元。

Turning to slide number 11. You can see the impact that our cash generation has had on our balance sheet. As of July 31, we were in a net cash position of $74.6 million. Our approach to capital allocation is consistent, which is to first use our cash to fund organic sales growth and efficiency opportunities. This includes investing in new product development and R&D, sales-generating resources, capability-enhancing CapEx and automation focused CapEx. We have the ability to continue to invest throughout the economic cycle to put ourselves in the best position possible to drive future sales growth and profitability.

翻到第 11 張投影片。您可以看到我們的現金產生對我們的資產負債表產生的影響。截至 7 月 31 日，我們的淨現金狀況為 7,460 萬美元。我們對資本配置的方法是一致的，即首先使用我們的現金來資助有機銷售成長和效率機會。這包括投資新產品開發和研發、銷售資源、能力增強資本支出和以自動化為重點的資本支出。我們有能力在整個經濟週期中持續投資，以使自己處於最佳位置，從而推動未來的銷售成長和獲利能力。

And second, we focus on consistently increasing our dividends. Yesterday, we announced our 40th consecutive year of annual dividend increases, which is an incredible milestone and one that we're very proud of. Other elements of our capital allocation approach are to deploy our cash in a disciplined manner for acquisitions where we have clear synergies and for opportunistic share buybacks when we see a disconnect between intrinsic value and Brady's trading price. In the fourth quarter, we repurchased 257,000 shares for $17.7 million, which was an average price of $68.73 per share. And for the full year fiscal 2025, we repurchased 733,000 shares for $50.9 million, which was an average price of $69.32 per share.

其次，我們專注於持續增加股利。昨天，我們宣布連續第 40 年增加年度股息，這是一個令人難以置信的里程碑，我們對此感到非常自豪。我們的資本配置方法的其他要素是，以嚴謹的方式部署現金，用於具有明顯協同效應的收購，以及在發現內在價值與布雷迪交易價格之間存在脫節時進行機會性股票回購。第四季度，我們以 1,770 萬美元回購了 257,000 股，平均價格為每股 68.73 美元。2025 財年全年，我們以 5,090 萬美元回購了 733,000 股，平均價格為每股 69.32 美元。

We believe that share buybacks are a valuable element of our capital allocation strategy. Our strong balance sheet puts us in a position to be able to continue to increase our investment in R&D and other organic sales opportunities to acquire companies strategically when the price is right and the synergies are clear and to return funds to our shareholders through dividends and share buybacks.

我們相信股票回購是我們資本配置策略的重要組成部分。我們強勁的資產負債表使我們能夠繼續增加對研發和其他有機銷售機會的投資，以便在價格合適且協同效應明顯時策略性地收購公司，並透過股息和股票回購向股東返還資金。

Slide number 13 outlines our guidance for next year. We're projecting GAAP EPS to range from $4.55 to $4.85 per share in fiscal 2026, which would represent an increase of between 15.5% and 23.1% compared to fiscal '25. And we're projecting adjusted EPS, which excludes the impact of amortization in 2026 to range from $4.85 per share to $5.15 per share in fiscal '26, which would represent an increase of between 5.4% and 12% compared to fiscal '25. We anticipate organic sales growth in the low single-digit percentages for the year ending July 31, 2026, and other elements of our guidance include an income tax rate of approximately 21%. Depreciation and amortization expense of approximately $42 million and capital expenditures of approximately $40 million.

第 13 張投影片概述了我們對明年的指導。我們預計 2026 財年的 GAAP EPS 將在 4.55 美元至 4.85 美元之間，與 25 財年相比成長 15.5% 至 23.1%。我們預計調整後的每股盈餘（不包括 2026 年攤銷的影響）將在 26 財年每股 4.85 美元至每股 5.15 美元之間，與 25 財年相比成長 5.4% 至 12%。我們預計截至 2026 年 7 月 31 日的年度有機銷售額成長率將達到低個位數百分比，我們的指導其他要素包括約 21% 的所得稅率。折舊和攤提費用約為 4,200 萬美元，資本支出約 4,000 萬美元。

As for the financial impact of tariffs, we realized approximately $2 million in incremental tariff expense in the fourth quarter and approximately $7 million in incremental tariff expense in fiscal year 2025, net of the impact of price increases and other mitigating actions.

至於關稅的財務影響，扣除價格上漲和其他緩解措施的影響，我們在第四季度實現了約 200 萬美元的增量關稅費用，在 2025 財年實現了約 700 萬美元的增量關稅費用。

Under current trade guidance, which is rapidly changing, we estimate a potential additional impact of $8 million to $12 million in fiscal year 2026 compared to fiscal year 2025, net of mitigating actions. This range represents an estimate based upon current tariff rates and scope, which have been changing rapidly and the outcome may change depending on trade policy developments as well as with the timing of our mitigating actions.

根據目前快速變化的貿易指導，我們估計，扣除緩解措施後，2026 財年的潛在額外影響將比 2025 財年增加 800 萬至 1,200 萬美元。這個範圍是根據當前關稅稅率和範圍做出的估計，這些稅率和範圍一直在迅速變化，其結果可能會根據貿易政策的發展以及我們採取緩解措施的時間而變化。

In addition to tariffs and trade policy, other potential risks to our 2026 guidance, among others, include the potential strengthening of the US dollar, inflationary pressures that were unable to offset in a timely enough manner or an overall slowdown in economic activity.

除了關稅和貿易政策之外，我們 2026 年指引面臨的其他潛在風險還包括美元可能走強、通膨壓力無法及時抵銷或整體經濟活動放緩。

I'll now turn the call back over to Russell to cover our regional results and to provide some closing thoughts before Q&A. Russell?

現在我將把電話轉回給 Russell，讓他介紹我們的區域業績，並在問答之前提供一些總結性的想法。拉塞爾？

Thanks, Ann. Slide 14 details the financial results of the Americas and Asia region. Sales were $260.8 million this quarter, and total sales growth was 14.1%, which consisted of organic sales growth of 4.3% and growth from our acquisitions of 9.8%. We realized the strongest growth in our wire identification product line with organic growth of nearly 12% in the quarter. This product line represents approximately 20% of the organic growth in the Americas and Asia region. Safety and Facility Identification and Product Identification also grew organically in the low to mid-single digits. Our business in Asia continues to perform extremely well with organic sales growth of 12% in the total in the fourth quarter.

謝謝，安。投影片 14 詳細介紹了美洲和亞洲地區的財務表現。本季銷售額為 2.608 億美元，總銷售額成長 14.1%，其中有機銷售額成長 4.3% 以及收購銷售額成長 9.8%。我們的電線識別產品線實現了最強勁的成長，本季有機成長率接近 12%。該產品線約佔美洲和亞洲地區有機成長的 20%。安全和設施識別以及產品識別也實現了低至中等個位數的自然成長。我們在亞洲的業務持續表現優異，第四季整體有機銷售額成長 12%。

Our business in China declined approximately 3%, but the remainder of our business in Asia more than made up for this decline with organic sales growth of 23% outside of China. Our businesses throughout Southeast Asia continue to do well as they benefit from manufacturing expansion as well as growth in our printer product lines throughout the region. Our segment profit in the Americas and Asia decreased 3.3% to $51.6 million and segment profit as a percentage of sales was 19.8% in the quarter.

我們在中國的業務下降了約 3%，但我們在亞洲其餘業務的有機銷售額增長了 23%，彌補了這一下降。我們在東南亞的業務繼續表現良好，這得益於製造業的擴張以及整個地區的印表機產品線成長。本季度，我們在美洲和亞洲的分部利潤下降 3.3% 至 5,160 萬美元，分部利潤佔銷售額的百分比為 19.8%。

If you exclude the impact of amortization in both the current quarter and last year's fourth quarter as well as the facility closure and other reorganization costs in the current quarter and the incremental tariff impact segment profit increased 7.5% compared to the prior year. Sales growth in printers and consumables continue to drive both top and bottom line within the region and targeted cost reduction actions we've taken within specific businesses also set us up for a more profitable growth in the future.

如果排除本季和去年第四季攤銷的影響以及本季​​設施關閉和其他重組費用和增量關稅的影響，部門利潤比上年增長7.5%。印表機和耗材的銷售成長繼續推動該地區的營收和利潤成長，我們在特定業務中採取的有針對性的成本削減措施也為我們未來實現更有利可圖的成長奠定了基礎。

Slide 15 outlines the performance of our Europe and Australia region. Sales were $136.5 million in the quarter. Organic sales declined 1.3%. Acquisitions added 14.4% and the impact of foreign currency translation increased sales 5.7% for a total growth of 18.8% in the region. Both Europe and Australia are operating in challenging economic conditions for industrial manufacturers. We've experienced a decline in this end market and within most of our major product lines during the second half of 2025. The majority of the decline in this quarter was due to our business in Australia, which declined 5.1% organically, while Europe saw a slight decline of 0.8%.

投影片 15 概述了我們歐洲和澳洲地區的表現。本季銷售額為 1.365 億美元。有機銷售額下降1.3%。收購增加了 14.4%，外幣折算的影響使銷售額增加了 5.7%，該地區整體成長了 18.8%。對工業製造商而言，歐洲和澳洲的經濟環境都充滿挑戰。2025 年下半年，我們的終端市場和大多數主要產品線都經歷了下滑。本季的下降主要是由於我們在澳洲的業務有機下降了 5.1%，而歐洲的業務則小幅下降了 0.8%。

We took additional actions in the quarter to reduce our cost structure in both Europe and Australia. So while our segment profit was down 21.8%. If you exclude the impact of amortization in both the current quarter and last year's fourth quarter as well as the reorganization costs we incurred in the current quarter, segment profit increased 7.9% compared to the prior year. We're setting ourselves up for improved profitability as we look ahead and we continue to utilize a creative approach to solving unique customer problems within our niche solutions. This customer intimate strategy has delivered long-term growth for Brady over many years.

我們在本季採取了額外措施來降低歐洲和澳洲的成本結構。因此，我們的分部利潤下降了 21.8%。如果排除本季和去年第四季攤銷的影響以及本季​​發生的重組費用，分部利潤將比上年增長 7.9%。展望未來，我們致力於提高獲利能力，並將繼續採用創意的方法來解決我們利基解決方案中獨特的客戶問題。這種貼近客戶的策略多年來為貝迪帶來了長期成長。

We have lot to look forward to in 2026. We've launched several exciting new products this year that are performing well and we have an incredible road map of new products planned for the next year. I'm particularly excited about the fact that we've added Mecco to Brady's portfolio as of a month ago. Mecco specializes in industrial, direct part marking and identification systems designed for a variety of applications and industries and their products are an ideal complement to Gravotech's direct part marking solutions.

我們對 2026 年充滿期待。我們今年推出了幾款令人興奮的新產品，它們表現良好，我們為明年制定了令人難以置信的新產品路線圖。我特別高興的是，我們一個月前就將 Mecco 加入了 Brady 的投資組合中。Mecco 專注於為各種應用和行業設計的工業、直接零件標記和識別系統，其產品是 Gravotech 直接零件標記解決方案的理想補充。

Similar to Gravotech in Europe, Mecco utilizes a consultative approach by collaborating with their customers to develop highly customized direct part marking solutions. We're looking forward to the future growth through the combination of these two companies, along with offering part-level barcode verification through our code group. Expanding on this, our goal is to have a complete set of regulatory compliance systems before GS1 and Europe's digital product passport take effect.

與歐洲的 Gravotech 類似，Mecco 採用諮詢方式與客戶合作開發高度客製化的直接零件標記解決方案。我們期待透過這兩家公司的合併實現未來的成長，並透過我們的代碼組提供部分級條碼驗證。在此基礎上，我們的目標是在GS1和歐洲數位產品護照生效之前，擁有一整套完整的監管合規體系。

Driven by our fantastic portfolio of products, we had another strong year of financial results. We're navigating the ever-changing global tariff and trade situation, and we're working through a variety of mitigating actions. As before, we're keeping our focus on what we can control and we're moving forward, always with the long term in mind. This approach has served us well as we just reported our fifth consecutive year of record EPS, which means that we need to continue this momentum into 2026 and beyond to deliver long-term value for our shareholders.

在我們出​​色的產品組合的推動下，我們又取得了強勁的財務表現。我們正在應對不斷變化的全球關稅和貿易形勢，並正在採取各種緩解措施。與以前一樣，我們將繼續專注於我們能夠控制的事情，並始終專注於長遠發展。這種方法對我們非常有效，因為我們剛剛報告了連續第五年創下每股收益記錄，這意味著我們需要將這種勢頭延續到 2026 年及以後，為股東創造長期價值。

I'd like to turn it over for Q&A. Operator, would you please provide instructions to our listeners.

我想把它翻過來以供問答。接線員，請您向我們的聽眾提供指示。

(Operator Instructions) Our first question comes from the line of Steve Ferazani from Sidoti.

（操作員指示）我們的第一個問題來自 Sidoti 的 Steve Ferazani。

I appreciate all the detail on the call. I want to start by asking about guidance. Given -- I mean, you walked through all the challenges in the environment you're currently facing with economic growth with tariff and trade impacts, I get the low single-digit organic sales growth, what surprised me is the EPS growth, particularly at the high end, that implies pretty significant margin expansion in a difficult environment. Just trying to figure out how you'll get there?

我很感謝通話中提供的所有詳細資訊。我想先詢問一下指導意見。鑑於——我的意思是，您經歷了當前經濟成長環境中的所有挑戰，包括關稅和貿易的影響，我得到了低個位數的有機銷售額增長，令我感到驚訝的是每股收益的增長，特別是在高端，這意味著在困難的環境中利潤率大幅擴張。只是想弄清楚如何到達那裡？

Yes. So there's a couple of things. First and foremost, we really took a decent amount of costs out of our structure in the last two quarters. And that in and of itself is going to get us a lot of the way there. The second part is we've incurred costs due to tariffs. But at the same time, we have a number of mitigating strategies that we've been rolling out from a combination of reshoring to redoing how the supply chain works and a variety of other tools. I think all of those put together is going to lessen the impact.

是的。所以有幾件事。首先，在過去兩個季度中，我們確實從結構中削減了相當多的成本。這本身就對我們有很大幫助。第二部分是我們因關稅而產生的成本。但同時，我們也推出了一系列緩解策略，包括將生產回流到重新制定供應鏈運作方式以及使用各種其他工具。我認為所有這些措施結合起來將會減輕影響。

Now we can't predict if there's some fundamental knock-on effect that happens throughout the globe. But from our vantage point right now and what we're seeing in terms of the uptake of our customers and the traction that we've got with our current product portfolio, I feel pretty good about the range that we gave. And I think it's pretty doable.

現在我們無法預測全球是否會發生一些根本性的連鎖反應。但從我們現在的角度來看，從客戶的接受度和我們目前產品組合的吸引力來看，我對我們提供的產品範圍感到非常滿意。我認為這是相當可行的。

So just so I can recap, a lot of this is going to be coming from the costs out.

因此，我可以總結一下，其中很大一部分將來自成本。

Yes. Well, two things. The cost out and remember when tariffs first came into play, we had little ability to mitigate those actions. Those take us months to roll through. We've already started that. We pushed through a first price increase in June. And so you don't see some of that effect until a few months later. And so I think we've digested the worst of it right now.

是的。嗯，有兩件事。成本出來了，記住，當關稅首次發揮作用時，我們幾乎沒有能力減輕這些行動。我們花了幾個月的時間才完成這些工作。我們已經開始了。我們在六月推動了首次價格上漲。因此，直到幾個月後你才能看到一些效果。所以我認為我們現在已經消化了最糟糕的情況。

Okay. Perfect. That's helpful. I did want to ask about free cash flow. Typically, historically, 4Q has always been your strong free cash flow quarter. This year, it wasn't and it was obviously down year-over-year pretty substantially. And in a year where your CapEx was way down, it was more than offset by lower cash flow from operations. I'm just trying to figure out how that affects your outlook for cash flow next year in a year where you're expecting higher CapEx.

好的。完美的。這很有幫助。我確實想問一下自由現金流。通常，從歷史上看，第四季度一直是自由現金流強勁的季度。今年卻不是這樣，而且顯然年比大幅下降。在資本支出大幅下降的一年裡，其下降幅度被營運現金流的下降所抵銷。我只是想弄清楚，在您預計資本支出會更高的情況下，這會如何影響您明年的現金流前景。

Sure. Yes. Great question, Steve. The primary item that drove our cash flow down in Q4, which you're absolutely right, usually, it's typically a pretty high quarter for us in terms of operating and free cash flow was a little bit of inventory build really that happens throughout this fiscal year as we moved a couple of actually three relatively large facilities, either into a new facility or a newly leased facility or following up on our announcement of our closure of our facility in Buffalo.

當然。是的。好問題，史蒂夫。導致我們第四季度現金流下降的主要原因是庫存的增加，您說得完全正確，通常情況下，就運營和自由現金流而言，第四季度對我們來說通常是一個相當高的季度，這是因為整個財年我們都在進行庫存積累，因為我們將兩個（實際上是三個）相對較大的工廠搬遷到了新工廠或新租賃的工廠，或者在我們宣布關閉的工廠工廠後。

So last year, we were talking about the build-out of a facility in Belgium. Well, now we're in it, but to be able to kind of work through operations and ensure that we're serving our customers and everything is on time, it just results in a little bit of lumpiness from inventory.

去年，我們討論了在比利時建造一座設施的事宜。好吧，現在我們已經進入了這一階段，但是為了能夠透過營運來確保我們為客戶提供服務並且一切都按時進行，這只會導致庫存出現一些波動。

Okay. Any cash costs you think carry over into next year related to the reorg and plant closures?

好的。您認為與重整和工廠關閉相關的現金成本會延續到明年嗎？

There will be some as we were finalizing the actions through the fourth quarter, but we'll be through those items by the end of the first quarter, for sure, the cash impact.

當我們在第四季度最終確定行動時，會有一些影響，但肯定會在第一季末完成這些項目，以及現金影響。

Fantastic. And then implied in your guidance, are you expecting R&D over 5% next year? And given the investments you're making in these acquisitions and these smaller ones, are they dilutive near term with better growth past that as you integrate them into your portfolio? Or how should we think about that?

極好的。那麼，您的指導中暗示，您是否預計明年的研發費用將超過 5%？考慮到您在這些收購和較小規模的投資中所做的投資，當您將它們整合到您的投資組合中時，它們是否會在短期內產生稀釋作用，而之後會實現更好的成長？或者說我們該如何思考這個問題？

Yes. So they're a little bit different. The microfluidics with Funai is a really core fundamental technology of not only inkjet, but it enables us to do a variety of other things ranging as far wide as cosmetic delivery to potentially even drug delivery. So that will be just a pure R&D platform with the associated sales for the inkjet. We're super excited with what that brings to us as a corporation.

是的。所以它們有一點不同。Funai 的微流體技術不僅是噴墨技術的真正核心基礎技術，而且它還使我們能夠做各種各樣的事情，範圍廣泛，從化妝品輸送甚至藥物。因此，這將只是一個純粹的研發平台，並附帶噴墨銷售。我們對這給我們公司帶來的一切感到非常興奮。

Mecco on the other hand, should be additive almost immediately. There is some advantage to the integration of Mecco and Gravotech and some overlap of cost that we can drive out very quickly. So a little bit of a different story for the two of them.

另一方面，Mecco 應該幾乎立即具有添加劑作用。Mecco 和 Gravotech 的整合具有一些優勢，而且我們可以很快消除一些成本重疊。所以他們兩個的故事有點不一樣。

Our next question comes from the line of Keith Housum from Northcoast Research.

我們的下一個問題來自 Northcoast Research 的 Keith Housum。

Russell, you historically have pointed to R&D being roughly 5% of sales. Obviously, a significant spike up here in the fourth quarter with this acquisition sounding like being a big driver of that. Are you thinking that R&D will get back to 5% of sales? Or are we kind of at a new normal at these levels?

拉塞爾，您曾指出研發費用約佔銷售額的 5%。顯然，第四季出現了大幅成長，而此次收購似乎是推動這一成長的主要因素。您是否認為研發費用將回到銷售額的 5% 呢？或者說我們在這些層面上處於一種新常態？

I don't think we have a target as a percent. We look at our opportunities and our investments and decide whether that is a go-forward project.

我認為我們沒有百分比目標。我們會審視我們的機會和投資，並決定這是否是一個可以繼續進行的項目。

Now what I will say is the more engineered products, the higher the gross margin to the point where some of our very engineered products are in the 60% and 70%. So I only wish that was our entire portfolio. Now some of those are carrying 10% or higher R&D loads, but it works its way to the bottom line in terms of a very differentiated solution. So whether the portfolio will increase potentially but at the same time, those products come with much higher gross margins. And so what falls to the bottom line is actually a more profitable business.

現在我想說的是，工程產品越多，毛利率就越高，我們的一些工程產品毛利率達到了 60% 到 70%。所以我只希望這就是我們的全部投資組合。現在其中一些承擔了 10% 或更高的研發負擔，但它以高度差異化的解決方案的方式影響著最終結果。因此，產品組合是否會有潛在成長，但同時這些產品的毛利率也會更高。因此，最終實現的實際上是更有利可圖的業務。

So we could, and I'm not saying this will happen by any stretch of the imagination, but some of our very engineered products are 10% plus R&D, and those are amongst the best-performing products we have in our portfolio. So like I said, I can only wish everything was at that level.

所以我們可以，而且我並不是說這一定會發生，但我們的一些精心設計的產品的研發投入是 10% 以上，而這些是我們產品組合中性能最好的產品。所以就像我說的，我只希望一切都達到那個水準。

Yes. So no problem with other commentary, but just trying to think about it. Should I think about $23 million a quarter being roughly a good cadence going forward? Or you have some work to come out of that, that may bring that number down a little bit.

是的。所以其他評論沒有問題，只是試著思考一下。我是否應該認為每季 2300 萬美元大致是一個良好的節奏？或者你需要做一些工作，這樣這個數字可能會下降一點。

I think in the short term, it probably will come down a hair as we look to merge some of the R&D teams. In the long term, we've been on a journey to increase our R&D for the past decade with some potential blips here and there and I see that trend continuing. So again, I'm a product person, I think that shows -- and I love R&D, and I love everything that we've been investing in. So that is not an area we're looking to save or consolidate. I think there's a lot of other ways that we can improve our operating income and R&D is not one of them.

我認為在短期內，由於我們希望合併一些研發團隊，所以結果可能會好一些。從長遠來看，過去十年來我們一直在加強研發力度，雖然過程中可能會出現一些小問題，但我認為這種趨勢將會持續下去。所以，我再說一次，我是一個產品人，我認為這表明了——我熱愛研發，我熱愛我們一直在投資的一切。所以這不是我們想要拯救或鞏固的領域。我認為有很多其他方法可以提高我們的營業收入，而研發並不是其中之一。

Okay. Appreciate that. With the $8 million to $12 million of incremental tariff impact in '26 over '25, should we assume that's going to be primarily first half loaded? Or is another way to think about that based on up-to-date information. Obviously, I know that things have changed dramatically over the past few months.

好的。非常感謝。由於 26 年關稅增量比 25 年增加了 800 萬至 1200 萬美元，我們是否應該假設這主要發生在上半年？或是基於最新資訊來思考這個問題的另一種方式。顯然，我知道過去幾個月情況發生了巨大變化。

Yes. It's kind of a bouncing ball. But I would say that it will be more to the first couple of quarters than the next quarters as we slowly walk through price increases. But again, it's a very nuanced approach and it's very product category specific. Our goal is to be reasonable with our customers, some of whom expect pricing to go along with the tariffs and have passed that through to their customers and others aren't quite there yet. So every day, month and quarter is a journey on the whole tariff front.

是的。它就像一個彈跳球。但我想說的是，隨著價格緩慢上漲，前幾季的漲幅會比接下來幾季更大。但同樣，這是一種非常微妙的方法，並且非常針對特定產品類別。我們的目標是合理對待我們的客戶，其中一些客戶期望價格與關稅一致，並已將這一預期轉嫁給他們的客戶，而其他客戶則尚未實現這一目標。因此，每天、每月和每季都是整個關稅方面的一次旅程。

Yes, absolutely. But that's also in your guidance, right? Is your mitigation efforts also in your guidance?

是的，絕對是。但這也是你的指導方針，對嗎？您的緩解措施也在您的指導範圍內嗎？

Yes.

是的。

Okay. Great. And then, I guess a follow-up question, I'll turn it over here. Did I hear you say that printers and cartridges are just under 40% of your business now?

好的。偉大的。然後，我想這是一個後續問題，我會在這裡提出。我是否聽到您說過印表機和墨水匣現在佔您業務的 40% 以下？

Yes.

是的。

Okay. As we think about the growth that you've seen that, I mean, obviously, I know you guys have had a lot of new products here in the past several years. But now can you perhaps conceptualize for me like some of your biggest end markets that you're experiencing that growth? Is it electricians or plumbers industrial? Is there one or two areas that we should be thinking about what's driving that growth?

好的。當我們思考您所看到的成長時，我的意思是，顯然，我知道你們在過去幾年裡推出了許多新產品。但是現在您能否為我概念一下您正在經歷成長的一些最大的終端市場？是工業電工還是水管工？是否有一、兩個領域值得我們思考，推動這種成長的因素是什麼？

Well, the biggest one is you can see from our wire markers, which data centers is a significant part of the wire marker business. Data centers have been doing no surprise to anybody, phenomenal. The other part of wire markers and that we've seen pick up is the aerospace and defense with the defense side being particularly strong in the last couple of years. So those two segments drive a lot of that revenue. Yes, we are absolutely in construction and some other areas. But right now, those are the two principal growth areas that we're seeing.

嗯，最大的一個是您可以從我們的電線標記中看到，資料中心是電線標記業務的重要組成部分。資料中心的進展對任何人來說都毫不意外，非常驚人。我們看到，電線標記的另一部分是航空航太和國防，其中國防方面在過去幾年中表現特別強勁。因此，這兩個部分推動了大部分收入。是的，我們確實涉足建築業和其他一些領域。但目前，這是我們看到的兩個主要成長領域。

That makes sense. So your wire markers will you include in your category of printers and consumables, correct?

這很有道理。那麼，您的電線標記將包含在印表機和耗材類別中，對嗎？

Yes.

是的。

Thank you. At this time, I would now like to turn the conference back over to Russell Shaller, CEO, for closing remarks.

謝謝。現在，我想將會議交還給執行長 Russell Shaller 來致閉幕詞。

Thank you for your time today and for your questions. 2025 was another great year. We're accelerating our business by expanding sales capabilities while significantly increasing our R&D. Our organic sales growth is heavily driven by our steady launch of highly engineered products which we expect to continue to fuel sales growth into the long term. Additionally, these R&D investments are given Brady the ability to engage with a broader set of customers and markets. The current dynamics of global trade environment and constant changes in tariff guidance results in uncertainty for any global manufacturer as well as to the entire economy.

感謝您今天的時間和提問。 2025 年又是偉大的一年。我們正在透過擴大銷售能力並大幅增加研發來加速我們的業務。我們的有機銷售成長很大程度上得益於我們穩定推出的高科技產品，我們預計這些產品將長期繼續推動銷售成長。此外，這些研發投資使 Brady 能夠接觸到更廣泛的客戶和市場。當前全球貿易環境的動態和關稅指導的不斷變化給任何全球製造商以及整個經濟帶來了不確定性。

And although we do expect to continue to be impacted by incremental tariffs as we believe that our global manufacturing presence and largely in-country manufacturing as well as our geographic diversification helps to mitigate some of this impact. We're monitoring the situation closely and adopting where we can, while ensuring that we're never sacrificing the quality or reliability of our products. I'm looking forward to the future. And I know that our global team has the ability to overcome challenges, think creatively and continue to deliver results for our shareholders.

儘管我們確實預計將繼續受到增量關稅的影響，但我們相信，我們的全球製造業務和主要的國內製造以及我們的地理多樣化有助於減輕部分影響。我們正在密切關注情況並採取可能的措施，同時確保我們不會犧牲產品的品質或可靠性。我對未來充滿期待。我知道我們的全球團隊有能力克服挑戰，並發揮創造性思維，繼續為我們的股東創造成果。

Thank you for your time this morning and for your interest in Brady. Operator, you may disconnect the call.

感謝您今天上午抽出時間並關注布雷迪。接線員，您可以掛斷電話了。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。