EPS of $1.15 increased by 14.9% from previous year
Gross margin of 51.6%
Net income of 55.46M
"This year, we grew organic sales by 2.6%, with growth driven by both of our regional segments. We improved our gross profit margin to 51.3% and increased from 49.4% last year." - Russell Shaller
Brady Corporation (BRC) QQ4 2024 Results: Record EPS, Margin Expansion, Gravotech Acquisition, and 2025 Outlook
Executive Summary
Brady Corporation delivered a strong QQ4 2024, finishing fiscal 2024 with record-high earnings per share and robust cash generation, underpinned by margin expansion and disciplined cost management. Revenue for Q4 2024 was $343.4 million, with gross margin of 51.6% and GAAP EPS of $1.15 (non-GAAP $1.19). Full-year organic sales grew 2.6%, supported by momentum in Americas and Asia (notably India), while Europe faced a more challenging macro backdrop. The Gravotech acquisition closed on August 1, 2023, and Brady signaled meaningful longer-term upside from direct marking capabilities, extended product offerings, and integration synergies, with Gravotech expected to contribute approximately $125 million in revenue and about $13 million of EBITDA in fiscal 2025 (excluding integration costs). Brady is guiding to GAAP EPS of $4.20-$4.45 and non-GAAP EPS of $4.40-$4.70 for fiscal 2025, with organic sales growth in the low-single digits. Management reaffirmed a disciplined capital-allocation framework: fund organic growth and R&D, reward shareholders via dividends and buybacks, and pursue M&A selectively when attractive.
Key Performance Indicators
Revenue
343.40M
QoQ: 0.01% | YoY:-0.73%
Gross Profit
177.06M
51.56% margin
QoQ: 0.11% | YoY:0.67%
Operating Income
66.22M
QoQ: 4.49% | YoY:6.72%
Net Income
55.46M
QoQ: 8.97% | YoY:12.31%
EPS
1.16
QoQ: 9.43% | YoY:14.85%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $343.402 million in Q4 2024; YoY change -0.73%; QoQ change +0.01% (Q4 vs Q3 2024: $343.384 million to $343.402 million).
Overview of Q4 2024 performance and year‑over‑year trends:
- Revenue: $343.402 million in Q4 2024; YoY change -0.73%; QoQ change +0.01% (Q4 vs Q3 2024: $343.384 million to $343.402 million).
- Gross profit: $177.055 million; gross margin 51.56%; YoY margin change +0.67 percentage points; QoQ +0.11 pp.
- Operating income: $66.215 million; operating margin 19.28%; YoY +6.72%; QoQ +4.49%.
- Net income: $55.456 million; net margin 16.15%; YoY +12.31%; QoQ +8.97%.
- EPS: GAAP $1.16; diluted $1.15; YoY EPS growth +14.85%; QoQ +9.43%.
- Cash flow: Operating cash flow $83.98 million; free cash flow $73.24 million; CFO/Net income ~151%; FCF/Net income ~132%.
- Balance sheet: Total assets $1.516 billion; total liabilities $448.911 million; total stockholders’ equity $1.0667 billion. Net debt: approximately -$120.5 million (net cash).
- Capital allocation: Buybacks authorized up to $100 million; Brady repurchased roughly 3% of diluted shares in FY2024; increased annual dividend for the 39th consecutive year.
- 2024 guidance highlights: Organic sales growth of 2.6% for the year; record GAAP and non-GAAP EPS; R&D investment rose >10% year over year; Gravotech acquisition added a new direct-marking capability footprint.
- Segment highlights: Americas & Asia organic sales +3.4% in Q4; Asia rebound with ~12.3% organic growth; India ~20% organic growth; Europe & Australia organic -1.8% with 4.6% increase in operating income, margin expansion to 16.8%.
- 2025 guidance: GAAP EPS $4.20–$4.45; non-GAAP EPS $4.40–$4.70; organic sales growth in low-single digits; capex ~ $35 million; tax rate ~20%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
343.40M
-0.73%
0.01%
Gross Profit
177.06M
0.67%
0.11%
Operating Income
66.22M
6.72%
4.49%
Net Income
55.46M
12.31%
8.97%
EPS
1.16
14.85%
9.43%
Key Financial Ratios
currentRatio
2.27
grossProfitMargin
51.6%
operatingProfitMargin
19.3%
netProfitMargin
16.1%
returnOnAssets
3.66%
returnOnEquity
5.2%
debtEquityRatio
0.12
operatingCashFlowPerShare
$1.76
freeCashFlowPerShare
$1.54
dividendPayoutRatio
20.1%
priceToBookRatio
3.2
priceEarningsRatio
15.39
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management themes from the QQ4 2024 earnings call:
- Strategy and growth: Russell Shaller and Ann Thornton emphasized meaningful organic gains, margin expansion, and a continued emphasis on R&D and digital capabilities to drive sustainable top-line growth. Shaller highlighted that Brady grew organic sales by 2.6% in 2024, with margin improvement and Gravotech integration as a strategic accelerator.
- Gravotech integration and opportunities: The Gravotech acquisition closed on August 1, 2023, delivering direct marking capabilities; in fiscal 2025 Brady projects Gravotech revenue around $125 million and EBITDA around $13 million (excluding integration costs), signaling a scalable platform for cross-sell and geographic expansion.
- Margin discipline and efficiency: The company achieved gross margin improvement to 51.6% in Q4 2024 from 50.8% last year and SG&A as a % of sales declined to 27.2% (down from 28.2%), underscoring continued cost discipline alongside R&D investment.
- Regional dynamics and market tone: Americas & Asia delivered positive momentum, with Asia stabilizing and India delivering high single-digit to mid-teens growth on a year-over-year basis; Europe faced headwinds from macro conditions and energy costs, though management remains constructive on the long-term trajectory in Europe.
- Balance sheet and capital allocation: Brady maintained a strong balance sheet with a net cash position and a disciplined approach to capital deployment—prioritizing organic growth and dividends, with selective acquisitions when compelling valuations emerge.
This year, we grew organic sales by 2.6%, with growth driven by both of our regional segments. We improved our gross profit margin to 51.3% and increased from 49.4% last year.
— Russell Shaller
We had a strong quarter and an excellent finish to 2024. Our organic sales growth was 1.6% this quarter. Our gross profit margin improved to 51.6%.
— Ann Thornton
Forward Guidance
Outlook and assessment:
- Growth trajectory: Brady expects organic sales growth in the low-single digits for fiscal 2025, reflecting a more cautious macro backdrop in several regions but ongoing demand for Brady’s differentiated identification and automation solutions.
- Profitability and cash flow: The company targets a GAAP EPS range of $4.20-$4.45 and non-GAAP EPS of $4.40-$4.70 for FY2025, implying mid-to-high single-digit to low-teens percent EPS growth depending on mix and currency effects. D&A is projected at $38–$40 million and capex around $35 million; expected tax rate is ~20%. These inputs imply solid cash generation, with capex largely self-funding organic growth initiatives.
- Gravotech trajectory: Gravotech’s forecasted FY2025 revenue of roughly $125 million and ~$13 million EBITDA (excluding integration costs) provides an incremental growth vector and expands Brady’s direct-marking capabilities, potentially enabling higher attachment rates on industrial parts and broader addressable markets.
- Risks and watchpoints: Currency headwinds, inflationary pressures that can’t be offset timely, and potential macro slowdown are identified risks to guidance. The company also notes potential benefit from energy-cost relief in Europe as a key upside lever. Investors should monitor currency dynamics, integration progress, and the pace of adoption for Track & Trace and Label Sense-driven enhancements.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BRC Focus
51.56%
19.30%
5.20%
15.39%
ALLE
44.10%
19.50%
9.60%
19.66%
MSA
46.90%
23.50%
7.69%
18.55%
REZI
28.50%
7.75%
0.70%
36.83%
NL
28.80%
87.70%
4.17%
5.73%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Brady stands as a high-quality, cash-generative industrials name with a well-articulated growth plan. The QQ4 2024 results demonstrate margin resilience and accelerating earnings quality, aided by ongoing R&D investments and a disciplined cost structure. The Gravotech acquisition provides meaningful long-term upside through direct marking capabilities and a broader product ecosystem, with FY2025 revenue and EBITDA contributions expected to be accretive to Brady’s overall profitability. The company’s balance sheet and capital allocation framework allow for sustained dividends, modest buybacks, and selective acquisitions when value emerges. Investors should monitor the cadence of organic growth (low-single digits in FY2025), the integration trajectory for Gravotech, currency dynamics, and the evolution of Brady’s Track & Trace and Label Sense initiatives, which are positioned to underpin mid-to-long-term top-line expansion and margin stability.
Key Investment Factors
Growth Potential
Gravotech integration adds direct-marking capability, broadens Brady’s product portfolio, and enables cross-sell opportunities across GxP-compliant applications. Asia and India remain high-growth regions with durable demand for tracking/identification and automation solutions. Label Sense cartridges and voice-to-print capabilities support higher incumbent retention and improved customer stickiness; projected FY2025 Gravotech revenue of ~$125m and EBITDA ~$13m suggest meaningful incremental profitability potential.
Profitability Risk
Macro exposure to currency and energy costs (especially Europe); reliance on industrial capex cycles; integration risks associated with a recent acquisition; potential pacing of digital and automation investments amid macro uncertainty; concentration of growth in select regions (Asia/India) may increase regional sensitivity to policy shifts.
Financial Position
Solid balance sheet with net cash position and manageable leverage. Long runway for R&D investment, capex for automation, and selective M&A. Conservative capital allocation supports dividends and buybacks while preserving dry powder for strategic acquisitions when attractive opportunities arise.
SWOT Analysis
Strengths
Consistently strong cash flow generation and a solid net cash position.
All-time high quarterly and annual EPS records in FY2024.
Diversified business across Americas, Europe, and Asia with resilient demand for identification and safety solutions.
Strategic Gravotech acquisition expanding direct marking capabilities and product breadth.
Significant R&D investment driving new products and innovation (largest annual R&D spend in company history).
Discipline in capital allocation: dividends, buybacks, and selective M&A.
Weaknesses
Q4 2024 revenue declined modestly year over year (-0.73%) due to currency and divestitures, highlighting sensitivity to macro factors.
Europe remains economically challenged with energy-price headwinds and varied country dynamics.
Short-term volatility in macro environment could impact capex cycles across customers.
Opportunities
Expansion of Track & Trace ecosystem with new data scanners and lasers; cross-sell across Brady’s integrated portfolio.
Accelerated adoption of Label Sense, voice-to-print, and other automation enhancements to improve throughput and reduce waste.
Growth in high-potential markets (India and Southeast Asia) supported by manufacturing relocations from China.
Gravotech adds direct-marking capabilities, addressing a key market gap and enabling complete end-to-end identification solutions.
Threats
Currency volatility and inflation could erode margins or complicate pricing strategy.
Macro slowdown in key regions (US, Europe) could dampen industrial capex.
Competition in identification solutions and barcode/print technologies could pressure pricing and market share.