Q3 2025 Brady Corp Earnings Call
Yeah.
Speaker Change: Good day, and thank you for standing by and welcome to the Q3 2025 Brady Corporation earnings Conference call. At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded after the speaker's presentation there'll be a question and answer session to ask a question. Please press star.
Thornton: Our one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again I would now like to hand, the conference over to your speaker today and Thornton CFO.
Speaker Change: Thank you.
Thornton: Good morning, and welcome to the Brady Corporation fiscal 2025 third quarter earnings Conference call.
Thornton: This morning's call are located on our website at www Dot dot com slash investors, you'll begin our prepared remarks on slide number three.
Thornton: Please note that during this call we may make comments about forward looking information such.
Thornton: Such as expect well may indeed forecast and anticipate are just a few examples of words identifying forward looking statements.
Thornton: It's important to note that forward looking information is subject to various risk factors and uncertainties, which could significantly impact expected results.
Thornton: Risk factors were noted in our news release this morning, and in Brady's fiscal 2024, and Form 10-K, which was filed with the SEC in September.
Thornton: Also please note that this teleconference is copyrighted by Brady Corporation and May not be rebroadcast without the consent of Brady.
Thornton: We'll 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.
Speaker Change: I'll now turn the call over to Brady's, President and Chief Executive Officer by the seller.
Speaker Change: Thank you Anne and thank you for all joining US today, we released our fiscal 2025 third quarter results. This morning, and I'm pleased to report another quarter of record high adjusted earnings per share. We grew organic sales one 6% acquisitions grew sales at 10, 5% and we grew adjusted earnings.
Speaker Change: For sure by 11, 9% in the quarter, our Americas and Asia region reported excellent organic sales growth of five 4% and adjusted operating income growth of 22% are Europe, and Australia region is operating in a tough macro environment this quarter, which was reflected in organic.
L a decline of five 4%.
Speaker Change: Adjusted operating income increased three 8% in the quarter in large part due to restructuring actions, we've taken to lower our cost structure in that region. We're in a position to drive future earnings growth in Europe due to the efficiency actions. We've taken this fiscal year. We once again grew adjusted earnings per share while <unk>.
Speaker Change: Increasing our investment in R&D by more than 8%. This quarter. This was the result of our ongoing investment in our organic business as well as from our acquisition of grab attack at the beginning of this fiscal year, we continue to integrate our R&D functions and build out combined new product Roadmaps, which now include direct.
Speaker Change: Our marking technologies.
Speaker Change: I'm, especially happy to announce the acquisition of two nice Microfluidics tuition business based in Lexington, Kentucky with their main production facility in the Philippines.
Speaker Change: So now he has been a supplier to us for specialty ink cartridges and a further round out our portfolio to enable custom part market.
In light of the uncertainty presented by global trade and tariffs I'd like to spend a moment on the topic and provide additional details about some elements of our manufacturing footprint and our supply chain.
Speaker Change: Slide four provides an overview of our global operations as well as our revenue by geography through the first three quarters of 2025 for the most part we manufacture our products in country of the ultimate sale.
Speaker Change: Three primary exceptions to this our specialty adhesives materials, which are produced in the U S. Our printers, which are produced in Malaysia, and a variety of specialty identification products that we produce in Mexico. We distribute these product lines to our other locations globally for sale within their countries and from.
Speaker Change: Sourcing perspective, we import goods from China to the U S for a few specific product lines, which represent approximately $50 million in annual sales. The majority of our operations in China are for customers in China. Moreover, we do have some ability to use our global footprint to change either the sourcing country.
Speaker Change: Or the location of the product's point, a substantial conversion if one country has a particularly onerous tariff rate.
Speaker Change: Although we've been impacted by incremental tariffs and expect to continue to be impacted we do believe that are largely in country manufacturing operations and our geographic and end market diversification helps mitigate much of the impact of these tariffs.
Speaker Change: As far as our revenue by geography through the first three quarters of this fiscal year, 52% of our revenue is generated in the U S. 30% in Europe, 8% in Asia with the remaining 10% in Australia and the rest of Americans breaking Asia downward further 3% was in China, and 5% was in the rest of Asia.
Anne: Now I'll turn the call over to Anne to provide more details on our financial results.
<unk>.
Anne: In the third quarter organic sales was not as high growth was five 4% in the Americas and Asia region, which was partially offset by an organic sales decline of five 4% in Europe, and Australia, resulting in total organic sales growth was one 6%.
Anne: We also grew adjusted diluted earnings per share from $1 90 per share last Q3 to a new record high of $1 22 per share, which is an increase of 11, 9%.
Anne: We took further actions this quarter to address our cost structure in two primary areas in response to the performance of certain businesses as well as economic conditions.
Anne: We've reduced head count we have all of our locations in China.
Anne: Given the decline in economic activity in China. We believe this action was necessary to lower head count and reflects the decrease in sales and our growth outlook in the region.
Anne: Second we took further actions to lower head count in Europe in order to operate with a more efficient structure. All further integrate integrating the operations of our graduate at acquisition.
Anne: In total we recognized facility closure and other reorganization costs of $3 9 million next quarter and we believe these actions will allow us to operate more effectively and efficiently going forward.
Anne: Turning to slide number five this details of our quarterly sales trends.
Anne: Organic sales grew one 6% this quarter acquisitions added 10, 5% and foreign currency translation reduced sales by <unk>, 7% for total sales growth of 11, 4% in the corner.
Slide number six details our quarterly gross gross margin trending.
Anne: Profit margin was 51% this quarter compared to 51, 6% during the third quarter of last year.
Anne: The restructuring actions that I, just mentioned resulted in incremental expense of $1 1 million in cost of goods sold in the third quarter.
Anne: Excluding this expense our gross profit margin would've been 30 basis points higher or 51, 3%.
Anne: We continue to generate sales growth from our highest gross profit margin products.
Anne: Moving to slide number seven this details our SG&A expense trending.
Anne: SG&A was $108 7 million this quarter compared to $95 8 million in the third quarter of last year.
Anne: As a percent of sales SG&A increased to 28, 4% compared to 27, 9% last Q3.
Anne: If you exclude amortization expense of $4 8 million and facility closure and other reorganization costs of $2 8 million this quarter and SG&A was 26, 4% compared to 27, 2%.
Anne: In the third quarter of last year, which was a decrease of 80 basis points.
Anne: We continue to identify efficiencies through owner sales support function as well as other administrative support functions and the restructuring actions that we took last quarter are already paying off.
Anne: This allows us to invest in better growth opportunities in geographies, such as southeast Asia and to support additional growth opportunities for our high performance printing solutions.
Anne: Slide number eight detailed for trending of our investments in research and development.
Anne: We continue to increase our investment in R&D and through our acquisitions of prototypes and inkjet solutions business unit of food is we're investing in new product development more than ever R&D.
Anne: R&D expense was $19 2 million this quarter, which was an increase of eight 5% from $17 7 million in last year's third quarter.
Anne: We're very excited about our new product roadmap, along with two new products that we launched its part which vessel will describe in a moment.
Anne: On slide number nine you'll find the trending of our pretax earnings pre.
Anne: Pre tax earnings on a GAAP basis increased from $64 4 million to $65 7 million in the corner.
Anne: If you exclude amortization from both periods as well as the facility closure and other charges from the current quarter.
Anne: Pretax earnings increased 11, 5% from $66 8 million to 75 4 million.
Anne: On slide number types of trending of our net earnings and earnings per share.
Anne: GAAP net income to increase from $50 9 million to $52 3 million and our GAAP diluted earnings per share increased from a $1 <unk> to $1 nine tons in the third quarter.
Anne: If you exclude amortization from both periods and the facility closure and other charges from the current period.
Anne: Our adjusted net income increased from $52 7 million to $58 8 million an increase of 11, 6%.
Anne: And our adjusted diluted EPS increased from $1 nine per share to $1 22 per share, which was an increase of 11, 9% to a new company record quarter.
Anne: Moving to slide number 11, you'll find a summary of our cash generation.
Anne: Operating cash flow was $59 9 million in the third quarter of this year compared to $72 7 million in the third quarter last year.
Anne: Free cash flow was $55 6 million in Q3 of this year compared to $64 4 million in last year's Q3.
Anne: Slide number 12 details the impacts that our cash generation is that on our balance sheet.
Anne: As of April 30th we were in a net cash position of $49 3 million and in the quarter. We returned $44 5 million to our shareholders through the form of dividends and share buybacks and we funded the acquisition of the Microfluidics solution business at the beginning of April.
Anne: Our approach to capital allocation is consistent which is first to use our past dupont's organic sales growth and efficiency opportunities.
Anne: This includes investing in new product development sales generating resources and capability enhancing capex.
Anne: Consistently strong cash generation gives us the ability to invest throughout the economic cycle. So that we're positioned to drive future sales growth and improve profitability.
Anne: And second we focus on consistently increasing our dividend.
Anne: At the beginning of this fiscal year, we announced our 39th consecutive year of annual dividend increases, which has a street that we're very proud of.
Anne: After funding organic investments and dividends, we then deploy our cash in a disciplined banners for acquisitions, where the synergies are clear.
Anne: And for opportunistic share buybacks.
Anne: This quarter, we purchased humanized mice Microfluidic solution business for $11 6 million and we purchased 476000 shares for $33 $2 million, which was an average price of $69 64 per share.
Anne: Our balance sheet allows us to continue to increase our investment in organic sales opportunities to invest in new product development to acquire companies that are a strategic fit with both our core business and our capabilities and to return funds to our shareholders through dividends and opportunistic share buybacks.
Anne: As for the financial impact of tariffs, we realized approximately $3 million and incremental tariff expense in the third quarter or about five of diluted earnings per share.
Anne: And as we look ahead to the fourth quarter, we expect continued exposure to e-commerce.
Anne: Kelly.
Anne: While at the same time mitigating some of the impact through targeted price increases strategic sourcing alternatives analysis of our supply chain amongst several other actions.
Anne: But the situation is rapidly changing and we estimate incremental tariffs to impact our fourth quarter in the range of potentially 3 million to $5 million net of mitigating actions.
Anne: It is an estimate based upon current tariff rates and scope, which have been changing rapidly and the actual outcome may change, depending upon trade policy developments as well as and depending upon the timing of our mitigating actions.
Anne: As a result of this uncertainty combined with the fact that we've entered the fourth quarter of our fiscal year. We are tightening our adjusted diluted EPS guidance range from our previous range of $4 45 per share to $4 70 per share.
Anne: To a range of $4 48 to $4 63 per share.
Anne: Other elements of our guidance includes organic sales growth in the low single digit percentages for the year ending July 31 2025.
Anne: Depreciation and amortization expense of approximately $40 million.
Anne: Capital expenditures of approximately $25 million and our full year income tax rate of approximately 20%.
Anne: Our income tax rate generally tends to be slightly lower in the fourth quarter compared to our full year expectation, which is due to our historical profit mix and the expected timing of certain tax adjustments.
Anne: Potential risks to our guidance among others include strengthening of the U S. Dollar inflationary pressures continued changes in tariffs or other downstream impacts of global trade disruption or an overall slowdown in economic activity.
Anne: Now I will turn the call back over to Russell to discuss some new product launches and cover our regional results before Q&A.
Russell: Perfect. Thanks, and this quarter, we launched our <unk> 6100, industrial desktop label printer, which is a mid sized printer that can handle mid to high volume printing on a wide variety of Brady specialty materials. It offers a number of enhancements, including faster print speeds and an intuitive user interface to change.
Russell: <unk> like all of our new industrial printers. It comes with Brady workstation, and our wire I'd software suite with built in templates for fixed text or free form label design options as always set up is incredibly easy it's sturdy and its built for industrial environment. We also launched our <unk> 86.
Handheld RFID reader. This isn't all one device that can scan barcodes NFC H F. Nuh F. RFID labels, featuring an ergonomic grip extended battery life, and IP 65 rating and your ability to withstand a five foot drop it has been purposely designed to withstand challenging industrial.
Russell: The environment. Additionally, with the capability to read over 1000, RFID tags per second plus the ability to run the Android applications made I believe our reader can help our customers modernize their high speed production workflows.
Russell: We continue to see the benefit of our R&D investments with these and many new products, we will launch over the coming year. Our goal remains to have a complete integrated solution that enables our customers to market and identify their parts with all common methods.
Russell: Proud of our new products this quarter and this year and our products in the pipeline for the coming year will be excellent additions to our portfolio.
Russell: Now I'll provide some details of the financial performance of our regions.
Russell: For Americas, and Asia region are shown on slide 14.
Russell: Sales of our $253 7 million this quarter and organic sales growth was once again strong at five 4%.
Russell: Our Americas and Asia region grew 5.1% organically year to date acquisitions to increase sales to eight six and foreign currency decreased sales by one 1% for a total sales growth of 12, 9% this quarter.
Russell: Our wire I'd safety and facility I'd and product I'd product lines continue to lead our topline and our health care identification business grew in the low single digits this quarter.
Russell: Our Asia business continues to exceed our expectations with organic sales growth of nearly 23%. This quarter, we returned to growth in China. Following a year of decline, while our business in Japan, and Southeast Asia continue to grow as they benefit from manufacturing expansion growth in our printer product lines throughout the region.
Russell: Our reported segment profit in the Americas, and Asia increased 15% to $57 2 million and segment profit as a percentage of sales was 22, 5% if exclude.
Russell: The impact of amortization in both the current quarter and last year's Q3, as well as the facility closure and other re organization costs in the current quarter segment profit increased 22% compared to the prior year sales growth in our specialty identification products and the optical reader technologies that we acquired.
Russell: Several years ago continued to drive both top and bottom line.
Russell: The actions, we're taking in non core areas of our business also set us up for more profitable growth in the future.
Russell: Turning to slide 15, this details of our results for Europe, and the Australia region.
Russell: Sales were $128 9 million this quarter acquisition sales added 14, 2%, while organic sales declined five 4% and foreign currency translation decreased sales by 1%, resulting in total sales growth of eight 7% in the region.
Russell: Our businesses in both Europe, and Australia are operating in a challenging economic environment for industrial manufacturers. We saw a decline in this end market as well as within most of our major product lines. We took additional actions in the quarter to lower our cost structure in both regions and the reorganization actions, we took last quarter.
Russell: <unk> contributed to the improvement in our segment profit for this quarter.
Russell: Our reported segment profit was down 10, 5%, but if you exclude the impact of amortization in both the current quarter and last year's Q3, as well as the recognition of costs incurred in the quarter.
Russell: Segment profit increased by three 8% compared to the prior year.
Russell: We're setting ourselves up for increased profitable growth in the future I'm pleased with our results. This quarter, we've been navigating the ever changing global tariff situation and we're working through mitigating actions as quickly as we can Meanwhile, will continue to invest in new product development throughout our business, including grab attack.
Russell: Our newest acquisition of Microfluidic solutions, we need to keep our momentum going through the end of the year and ensure that we're positioned for long term profitable growth and we'll do that by staying focused on our strategy and controlling what we can control with that I'd like to turn it over for Q&A. Operator would you please provide instructions to our.
Russell: Listeners.
Russell: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.
Keith Awesome: Our first question comes from Keith Awesome.
Speaker Change: Northcoast Research you May proceed.
Speaker Change: Good morning, Thanks, guys I appreciate it in terms of the tariff I appreciate the color on the special expense there, but Russell can you perhaps provide a bit color are you seeing any.
Speaker Change: On the top line either demand destruction or actually additional.
Speaker Change: Revenue as people are starting to talk.
Speaker Change: Make some actions on moving manufacturing around.
Speaker Change: Yeah.
Speaker Change: So couple of a couple of things to that entire question no. We haven't seen any tariff related demand destruction at this point, however, I think both.
Speaker Change: Brady as well as a lot of the industrial companies carry a couple of months worth of inventory. So you haven't really seen the effect of tariffs just yet a lot of what where we're shipping was manufactured pre tariff and we did get hit a little bit on certainly towards the end of the.
Quarter by by and large you having by any means seeing the full effect of tariffs. So.
Speaker Change: I do.
Speaker Change: I think there has been much recognition one way or another about the tariffs long term impact.
Speaker Change: Anybody that follows this it it changes literally on a daily basis.
Speaker Change: In terms of both the amount and what's included and what isn't included so ultimately if you assume that we're going to wind up with a little bit more tariffs than what we had.
Speaker Change: I would expect to see some price increases rolling through from both ourselves as others.
Speaker Change: Look to recapture most if not all of the tariff changes that have come through now.
Speaker Change: That ultimately be inflationary well that turned out to be demand destruction or will people just yawn.
Speaker Change: It depends on the amount of the tariff.
Speaker Change: In which countries in particular got hit and whether it turns out to be substantially more than 10% at any one country.
Speaker Change: Okay, Great I appreciate it.
Speaker Change: Your commentary on adjusted SG&A, I think was insightful.
Speaker Change: Fair is probably one of your lowest quarters in none of those core in recent memory, how sustainable are those actions.
Speaker Change: So I guess, a one time items that are perhaps was artificially low for the quarter or just kind of a new general run rate, we should be thinking about going forward.
Speaker Change: Yeah. So.
Speaker Change: Of course, the future is always a little uncertain, but no Brady.
Speaker Change: Brady has had a long term journey that lasted for years to keep driving down SG&A and we continue to look for ways of operational efficiency.
Speaker Change: There was always a little bit of bounce around the data points. So if.
Speaker Change: If it could tick up maybe a couple of hundred basis points or down a couple hundred basis points in any one quarter.
Speaker Change: Particularly surprise me, but you know our goal year over year is to continue to drive out costs.
Speaker Change: Brady looks at their footprints and how we serve our customers.
Speaker Change: Continuously looking for ways to be more efficient and it really spread our G&A over a much larger organization. So.
Speaker Change: The goal is absolutely continue.
Speaker Change: Understanding that there will be a little bit of noise on a quarter to quarter, but if you. If you look at the multiyear trend, yes, we absolutely are driving down SG&A.
Speaker Change: Great Great and then finally I guess last question for me you went through the acquisition that you guys did in April pretty quick do you mind, just kind of walk us through again like the opportunity there is.
Speaker Change: Chris will provide you guys.
Speaker Change: Already a supplier for you guys.
Speaker Change: Yeah. So <unk> already has a very long history.
Speaker Change: Stretching back to the original inventions that IBM and then.
Speaker Change: Took a turn at lexmark before it became Funai and now it's part of Brady, where I hope, it's going to be forever.
So what they do is youre very familiar I'm sure with our commercial inkjet cartridge that might sit in your office printer.
Speaker Change: They make the industrial version of that which is more tailored towards high performance inks.
Speaker Change: Any particular use cases.
Speaker Change: We've known them and worked with them for at least a half dozen years on their product is integrated into our inkjet printer, which is how we originally came to us to know them.
Speaker Change: They also sell inkjet cartridges to other companies in a host of I'll call it very niche applications for industrial.
Speaker Change: Hint on demand applications. So we see this technology.
Speaker Change: Great group of guys in.
Speaker Change: In Lexington, very very smart.
Speaker Change: Number of Phds and people who have been doing this for years. So we.
Speaker Change: We see this as a huge opportunity for our growth factor for Brady.
Speaker Change: Round out along with lasers, our ability to do direct part market, which has always been a little bit of a gap.
Speaker Change: Of course labels for an eternity.
Speaker Change: Now we have a laser and inkjet that we can control. So we can go to customers with a complete solution basically providing the ability to mark the part how they want to market and.
Speaker Change: Again, it's going to take a couple of years to get.
Speaker Change: Fully integrated and everything up and running but I'm Super happy that we were able to make this acquisition.
Speaker Change: Great. Thanks, guys I appreciate it.
Speaker Change: Thank you.
Speaker Change: Our next question goes from Steve, Arizona with Sidoti You May proceed.
Steve: Good morning, Russell morning, and appreciate the detail on the call.
Speaker Change: Russell I did want to ask about the <unk> guide, if Americas, and Asia was up 5% year over year in <unk>.
Speaker Change: Europe was down 5%, but your guide is for Americas, and Asia to grow only low single digit in Q4.
And Europe to be flat I'm, just trying to figure out why these two are going in opposite directions and <unk>.
Speaker Change: Yeah, So we're still anticipating a bit of a headwind due to tariffs in America. It says yet we havent seen it but at some point when you feel like this is going to be a little bit of a headwind in the Americas.
Speaker Change: And so we're estimating the magnitude of that.
Speaker Change: Yeah.
Speaker Change: Your guess is as good as mine, where we're going to wind up.
Speaker Change: Sure sure.
Speaker Change: And then on Europe, if you look at Europe. The first two quarters in Europe were essentially flat year over year, the third quarter definitely saw deterioration what we're we're hoping and we actually expect as we look through our business forecast is that we're going to see enough of a recovery in Q4 that were basically.
Speaker Change: Get back to flat so.
Speaker Change: That's where you see the mix I know, there's a lot of moving pieces in there to pick apart but.
Speaker Change: We're hoping that Europe doesn't get any worse. It actually has a moderate recovery and that the U S probably will experience a bit of headwinds in the coming quarter.
Speaker Change: How much of that is the impact from the old WPS I know thats still a pretty significant part of Europe less so in the Americas that is typically used to be when you had reported a lot more volatile for you how much is that impacting your purchase so.
Speaker Change: A couple of things so the WPS in America.
Speaker Change: It's almost down to.
Speaker Change: Nothing, but it's getting there.
Speaker Change: So the WPS factor in America is is minor and not really part of it which is again, probably why they grew 5%.
Speaker Change: In Europe, the WPS business with the exception of the U K has always been pretty strong so.
Speaker Change: If you remember in years back, it's a very fragmented market and some of the dynamics that exist in the U S that makes the WPS business model top doesn't really exist as much in Europe, but I think youre seeing in the European numbers and if you look at industrial production, particularly in Germany.
Speaker Change: We're seeing some.
Speaker Change: Staggering year over year declines.
Speaker Change: Started in 2019 and continue to go down so we're tracking some of that because of course, we're in we're in the heavy industrial sector as well as automotive and some other areas.
Speaker Change: And I think the epicenter of the problem really is is Germany with some collateral damage to some of the other industrialized countries.
Speaker Change: In Europe so.
Speaker Change: Ken.
Speaker Change: We're expecting that to flatten out at this point versus the quarter over quarter declines we've seen for the last several quarters.
Speaker Change: But again.
Speaker Change: We're just cautious and this is another reason we took costs out of the European organization in particular because.
Speaker Change: If you look at it even with the decline in sales adjusting for a reward costs, we were able to improve profitability by three 8%. So I feel like our organization is absolutely.
Speaker Change: On the right size to service the market as it stands now and of course.
If anything happens in the future Brady has shown a.
Speaker Change: Our willingness and ability to act very quickly to respond to market dynamics, both up and down which I would expect in the future.
Speaker Change: Okay and can I ask about what youre seeing in China.
Speaker Change: Yeah.
Speaker Change: For us, particularly China.
Speaker Change: China has always been a tough market and has become more tough.
Speaker Change: You look at most of southeast Asia, our customers are multinationals, we never did a tremendous amount of business with indigenous Chinese companies.
Speaker Change: Very tough to crack, particularly from a safety and facility I'd.
Speaker Change: Business, but the multinationals on the other hand like the ability to have the same look and feel of their manufacturing worldwide and we benefit from that but.
Speaker Change: But if you look at the relative either Underinvestment are out now exited.
Speaker Change: China for multinationals.
Speaker Change: Basically following right along so on the.
The reason that is the reason, we shut down our Beijing facility, which we no longer felt with scale or even necessary. We do have three.
Speaker Change: Three plants still in China.
Speaker Change: Which I think is the right footprint for us for the foreseeable future. So we don't we're not planning on doing anything additional in China, but remember it's it's most all of our China business is is indigenous to China, So where we manufacture in China for Chinese customers and it now is only about 3% of our corporation's revenue.
Speaker Change: So pretty small on the flip side you know.
Speaker Change: Tremendous gains outside of China.
Speaker Change: Throughout the region I think youre seeing.
Speaker Change: Then some exited from China, which is why you're seeing such a pickup in some of the other countries that we serve.
Speaker Change: Yes pretty consistent over the last several quarters.
Speaker Change: If I could get in a couple of quick modeling questions.
Speaker Change: And can you break out that $3 9 million facility closure and reward costs to segments and the other question would be just on.
Speaker Change: The acquisition I know, it's very small, but any guess how that contributes to revenue just for our model.
Speaker Change: Sure sure yes.
Speaker Change: The.
Speaker Change: The rework costs were split basically pretty much evenly between the between the two regions you can just call it $3 9 million in the restructuring is the rate.
Speaker Change: Pretty much right down the middle part of the items that Robert.
Speaker Change: Okay.
Speaker Change: And then the acquisition is relatively small so powerful.
Speaker Change: Absolutely.
Speaker Change: The parents to night and so we're still in early stages, it's relatively immaterial, which is why you didn't see a press release regarding the acquisition of <unk>.
Speaker Change: $6 million in purchase price and were estimating first year sales within the realm of $15 million to $20 million.
Perfect Okay.
Speaker Change: Thanks, Russell Thanks, Ed.
Speaker Change: Thanks, Steve.
Thank you I would now like to turn the call back over to Russell shall or for any closing remarks.
Speaker Change: Perfect. Thanks, everyone for your time this morning.
Speaker Change: We delivered strong results I think it's a challenging environment and I am, particularly pleased with the performance of the teams here at Brady to do that so.
Speaker Change: We reported record adjusted earnings per share our financial position is excellent and our balance sheet gives us the ability to continue to invest in our organic business.
Speaker Change: We can close on strategic M&A, and still return funds to our shareholders through dividends and share buybacks.
Speaker Change: Meanwhile, our ability to generate cash allows us to fund all capital allocations priorities and generate shareholder return essentially simultaneously.
Speaker Change: The current tariff environment adds a new level of uncertainty for any global manufacturer as well as to the overall economy.
Speaker Change: And although we do expect to continue to be impacted by incremental tariffs, we believe that our global manufacturing presence and our <unk>.
Speaker Change: Geographic diversification helps to mitigate some of this potential impact the situation changes almost daily.
Speaker Change: If not hourly.
Speaker Change: And we're monitoring it closely like any other global manufacturer, but in the meantime, we're controlling what we can control. So that we can continue to deliver on our prior to it.
Speaker Change: Or to invest in our top line growth develop our product offering to support our customers' identification needs.
Speaker Change: Execute operational efficiencies to ensure profitable growth.
Speaker Change: And effectively deploy our capital to drive long term shareholder value through organic investments strategic acquisitions, and returning funds to our shareholders through dividends and share buybacks, although the current environment is uncertain.
Speaker Change: Super optimistic about our future and I know, we're making the right moves to day to overcome near term challenges in continuing to deliver long term results. Thank you for your time. This morning, operator, you may disconnect the call.
Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: So.
Speaker Change:
Speaker Change: [music].
Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: So.
Speaker Change:
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: <unk>.
Speaker Change: [music].
Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: So.
Speaker Change: Dan.
Speaker Change: [music].