BRC

Brady Corporation is a global manufacturer and supplier of identification and direct part marking solutions, high-performance materials and workplace safety products that identify and protect premises, products and people. The Company is organized and managed on a geographic basis with two reportable segments: Americas & Asia and Europe & Australia. This regional operating structure allows the Company to further integrate its businesses, support continued growth through the application of the best go-to-market strategies in key geographies, facilitate new product development within recent acquisitions and further simplify and scale the global business. Within each of the reportable segments, the Company markets, sells and distributes a broad range of identification and safety products and solutions across the following primary product categories: •Safety and facility identification, which includes safety signs, traffic signs and control products, floor-marking tape, pipe markers, labeling systems, spill control products, lockout/tagout devices, personal protection equipment, first aid products, and software and services for safety compliance auditing, procedures writing and training. •Product identification, which includes materials, printing systems, radio frequency identification (“RFID”) and barcode scanners for product identification, direct part marking, engraving equipment, brand protection labeling, work in process labeling, finished product identification, asset tracking labels, asset tags and industrial track and trace applications. •Wire identification, which includes handheld printers, wire markers, sleeves, and tags. •Healthcare identification, which includes wristbands, labels, printing systems, and other products used in hospital, laboratory, and other healthcare settings for tracking and improving the safety of patients. •People identification, which includes name tags, badges, lanyards, rigid card printing systems, and access control software. The ability to provide customers with a broad range of proprietary, customized and diverse products for use in various applications across multiple industries and geographies, along with a commitment to quality and service, have made Brady a leader in many of its markets. Brady’s long-term sales growth and profitability will depend not only on the overall economic environment and our ability to successfully navigate changes in the macro environment, but also on our ability to develop and market innovative products, deliver a high level of customer service, advance our digital capabilities, and continuously improve the efficiency of our global operations. Our strategy for growth includes an increased focus on certain industries and products, streamlining our product offerings, expanding into higher growth end-markets, intensifying efforts to leverage our diverse product portfolio and synergies across our business, improving the overall customer experience, developing technologically advanced, innovative, and proprietary products, and improving our digital capabilities. The following are key initiatives supporting our strategy in fiscal 2026: •Investing in organic growth by enhancing our research and development process and utilizing customer feedback and observations to develop innovative new products that solve customer needs and improve environmental sustainability. •Delivering a high-quality customer experience by aligning with customers’ preferred communications channels and leveraging technology to strengthen engagement. •Expanding and enhancing sales capabilities through an improved digital presence and the use of data-driven marketing automation tools. •Maintaining profitability through pricing mechanisms to mitigate the impacts of ongoing supply chain disruptions and inflationary pressures while ensuring prices remain competitive. •Integrating recent acquisitions and advancing the pending acquisition of PSS business to enhance our strategic position and accelerate long-term sales growth. •Advancing operational excellence by executing sustainable efficiency gains within our selling, general and administrative structures and within our global operations, including cost reduction initiatives, insourcing of critical products and manufacturing activities, and reducing the Company’s environmental footprint. •Continuing to build a high-performance culture, which rewards execution, fosters inclusion, and strengthens employee engagement, recruitment, and retention. Pending Acquisition of the PSS Business On April 20, 2026, the Company entered into an Equity Purchase Agreement with Honeywell International Inc. (“Honeywell”) to acquire Honeywell’s Productivity Solutions and Services (“PSS”) business, a global manufacturer and provider of mobile computers, barcode scanners and printing solutions, for a base purchase price of $1.4 billion in cash, subject to customary adjustments related to cash, indebtedness, working capital and transaction expenses. We believe the pending 18 Table of Contents acquisition of the PSS business, if completed, will provide a complementary product portfolio that will add scale and extend the Company’s reach into adjacent workflows and large enterprise customers. We intend to fund the acquisition and related transaction costs through a combination of cash on hand and new debt financing. In connection with the pending acquisition, we entered into a debt commitment letter that provides for 364-day bridge facilities with aggregate commitments of up to $1.8 billion, subject to customary closing conditions. We expect to replace or reduce the commitments under the bridge facilities contemplated by the debt commitment letter with permanent financing prior to closing. The transaction is not subject to a financing condition. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second half of calendar year 2026. Macroeconomic Conditions and Trends The Company’s operations and financial performance are subject to the risks and uncertainties inherent in the global economic environment, including inflationary pressures, supply chain disruptions, changes in trade policy, and other macroeconomic and geopolitical challenges. These conditions may impact the Company’s business, financial condition and results of operations as the global economic outlook remains uncertain. The global trade environment remains complex and continues to evolve, driven by the imposition of tariffs on goods entering the U.S. and countermeasures from other nations. Our business has incurred additional costs related to these incremental tariffs and countermeasures, and future impacts will depend on changes in trade policy and the timing, availability and amount of potential refunds of tariffs previously paid. We also continue to face broader macroeconomic pressures impacting the cost and availability of certain raw materials, components, freight and other inputs. The Company has taken and will continue to take action to mitigate these pressures through a combination of targeted price increase, strategic sourcing adjustments, product portfolio optimization, as well as our ongoing efforts to drive sustainable efficiency gains in our operations and administrative structures. However, these actions may not fully offset the impact of tariffs, inflationary pressures or other macroeconomic pressures on our results. The Company continues to evaluate developments related to tariff policy, including the timing, availability and amount of potential refunds of tariffs previously paid. Any such refunds remain subject to ongoing administrative processes and uncertainty. Notwithstanding the uncertain macroeconomic environment, we believe our financial strength positions us well to continue investing in acquisitions and organic growth opportunities, such as expanded sales channels, marketing programs, and research and development (“R&D”). We remain focused on driving sustainable efficiency gains and automation across our operations and selling, general and administrative (“SG&A”) functions, while also returning capital to our shareholders through dividends and opportunistic share repurchases. We believe that our financial resources and liquidity levels, including the undrawn portion of our credit agreement and available financing commitments are sufficient to support the execution of our growth strategy and to manage the impact of economic or geopolitical events that could potentially reduce sales, net income, or cash provided by operating activities. In addition, in connection with the pending acquisition of the PSS business, we entered into a debt commitment letter that provides for 364-day bridge facilities with aggregate commitments of up to $1.8 billion, subject to customary closing conditions, including completion of the acquisition. Refer to Risk Factors, included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2025, and Part II, Item 1A of this Quarterly Report on Form 10-Q, for further discussion of the possible impact of global economic or geopolitical events on our business and additional risks relating to our acquisition of the PSS business. 19 Table of Contents Results of Operations The comparability of the operating results for the three and nine months ended April 30, 2026 compared to the same periods in the prior year have been impacted by the acquisitions of Microfluidic Solutions business unit of Funai Electric Co., Ltd. (“Microfluidic Solutions”) on April 1, 2025 and MECCO Partners LLC (“Mecco”) on August 4, 2025. The comparability of the operating results for the nine months ended April 30, 2026 compared to the same period in the prior year has also been impacted by the acquisition of American Barcode and RFID Incorporated (“AB&R”) on October 1, 2024. All three entities have been included in the Americas & Asia reportable segment since their respective acquisition dates. A comparison of results of operating income for the three and nine months ended April 30, 2026 and 2025, is as follows: Three months ended April 30, Nine months ended April 30, (Dollars in thousands) 2026 % Sales 2025 % Sales 2026 % Sales 2025 % Sales Net sales $ 435,237 $ 382,590 $ 1,224,661 $ 1,116,330 Gross margin 225,469 51.8 % 195,059 51.0 % 628,695 51.3 % 560,591 50.2 % Operating expenses: Research and development 23,531 5.4 % 19,191 5.0 % 71,132 5.8 % 56,835 5.1 % Selling, general and administrative 128,732 29.6 % 108,678 28.4 % 354,195 28.9 % 326,410 29.2 % Total operating expenses 152,263 35.0 % 127,869 33.4 % 425,327 34.7 % 383,245 34.3 % Operating income $ 73,206 16.8 % $ 67,190 17.6 % $ 203,368 16.6 % $ 177,346 15.9 % References in this Quarterly Report on Form 10-Q to “organic sales” refer to sales calculated in accordance with GAAP, excluding the impact of foreign currency translation, sales recorded from acquired companies prior to the first anniversary date of their acquisition, and sales recorded from divested companies up to the first anniversary of their divestiture. The Company’s organic sales disclosures exclude the effects of foreign currency translation as foreign currency translation is subject to volatility that can obscure underlying business trends. Management believes that the non-GAAP financial measure of organic sales is meaningful to investors as it provides them with useful information to aid in identifying underlying sales trends in our businesses and facilitating comparisons of our sales performance with prior periods. Net sales for the three months ended April 30, 2026 increased 13.8% to $435.2 million compared to $382.6 million in the same period in the prior year. The increase consisted of organic sales growth of 8.2%, sales growth from acquisitions of 2.1%, and a 3.5% increase from foreign currency translation. Organic sales grew 10.1% in the Americas & Asia segment and 4.5% in the Europe & Australia segment during the three months ended April 30, 2026 compared to the same period in the prior year. Net sales for the nine months ended April 30, 2026 increased 9.7% to $1,224.7 million compared to $1,116.3 million in the same period in the prior year. The increase consisted of organic sales growth of 4.3%, sales growth from acquisitions of 2.5%, and a 2.9% increase from foreign currency translation. Organic sales grew 6.0% in the Americas & Asia segment sales and 0.9% in the Europe & Australia segment during the nine months ended April 30, 2026 compared to the same period in the prior year. Gross margin increased 15.6% to $225.5 million in the three months ended April 30, 2026 compared to $195.1 million in the same period in the prior year. As a percentage of net sales, gross margin increased to 51.8% from 51.0% in the three-month period. Gross margin increased 12.1% to $628.7 million in the nine months ended April 30, 2026 compared to $560.6 million in the same period in the prior year. As a percentage of net sales, gross margin increased to 51.3% from 50.2% in the nine-month period. The increase in gross margin as a percentage of net sales was primarily driven by organic sales growth in higher gross margin products lines during both the three and nine-month periods compared to the same periods in the prior year. The absence of a $4.1 million non-recurring fair value adjustment related to acquisition inventory, as well as facility closure and other reorganization costs recorded in the prior-year period also contributed to the increase in the nine-month period. R&D expenses increased 22.6% to $23.5 million in the three months ended April 30, 2026 compared to $19.2 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 5.4% in the three-month period compared to 5.0% in the same period in the prior year. R&D expenses increased 25.2% to $71.1 million in the nine months ended April 30, 2026 compared to $56.8 million in the same period in the prior year. As a percentage of net sales, R&D expenses increased to 5.8% from 5.1% in the nine-month period. The increase in R&D spending was primarily due to the acquisitions of Microfluidic Solutions and Mecco, and, to a lesser extent, an increase in R&D headcount within the Company’s organic business. The Company remains committed to investing in innovative product development to drive long-term organic sales growth. Investments in new printing systems, pressure sensitive materials, engraving systems, microfluidic technologies, scanners and software remain the primary focus of R&D expenditures in fiscal 2026. 20 Table of Contents SG&A expenses include selling and administrative costs directly attributed to the Americas & Asia and Europe & Australia segments, as well as certain other corporate administrative expenses including finance, information technology, human resources and other administrative expenses. SG&A expenses increased 18.5% to $128.7 million in the three months ended April 30, 2026 compared to $108.7 million in the same period in the prior year. As a percentage of net sales, SG&A expenses increased to 29.6% from 28.4% in the three-month period. The increase in SG&A as a percentage of net sales for the three-month period is primarily due to costs incurred related to the pending acquisition of the PSS business of $13.5 million, partially offset by cost reductions from facility closures and other reorganization activities completed in the prior fiscal year, as well as the absence of charges related to those activities recorded in the prior-year period. SG&A expenses increased 8.5% to $354.2 million for the nine months ended April 30, 2026 compared to $326.4 million in the same period in the prior year. As a percentage of net sales, SG&A expenses decreased to 28.9% from 29.2% in the nine-month period. The increase in SG&A expenses during the nine months ended April 30, 2026 was primarily due to costs incurred related to the pending acquisition of the PSS business, as well as increased headcount and other costs from previous acquisitions. The decrease in SG&A as a percentage of net sales for the nine-month period is primarily due to cost reductions from facility closures and other reorganization activities completed in the prior fiscal year, as well as the absence of $6.6 million of charges related to those activities recorded in the prior-year period. Operating income increased 9.0% to $73.2 million and increased 14.7% to $203.4 million in the three and nine months ended April 30, 2026, respectively, compared to $67.2 million and $177.3 million in the same periods in the prior year. The increase in operating income in both the three and nine-month periods was driven by organic sales growth in both reportable segments, gross margin improvement across both reportable segments, and SG&A cost efficiencies in the Europe & Australia segment, which was partially offset by PSS transaction related costs of $13.5 million. Additionally, operating income for the three and nine months ended April 30, 2025 included facility closure and other reorganization costs of $3.9 million and $9.6 million, respectively. Operating income for the nine months ended April 30, 2025 also included non-recurring acquisition-related and other costs of $5.1 million. OPERATING INCOME TO NET INCOME Three months ended April 30, Nine months ended April 30, (Dollars in thousands) 2026 % Sales 2025 % Sales 2026 % Sales 2025 % Sales Operating income $ 73,206 16.8 % $ 67,190 17.6 % $ 203,368 16.6 % $ 177,346 15.9 % Other income (expense): Investment and other income (expense) 1,431 0.3 % (509) (0.1) % 3,948 0.3 % 2,850 0.3 % Interest expense (1,269) (0.3) % (936) (0.2) % (3,467) (0.3) % (3,604) (0.3) % Income before income taxes 73,368 16.9 % 65,745 17.2 % 203,849 16.6 % 176,592 15.8 % Income tax expense 15,568 3.6 % 13,482 3.5 % 44,062 3.6 % 37,212 3.3 % Net income $ 57,800 13.3 % $ 52,263 13.7 % $ 159,787 13.0 % $ 139,380 12.5 % The Company’s income tax rate was 21.2% and 20.5% for the three months ended April 30, 2026 and 2025, respectively, and the income tax rate was 21.6% and 21.1% for the nine months ended April 30, 2026 and 2025, respectively. 21 Table of Contents Business Segment Operating Results The Company evaluates short-term segment performance based on segment profit and customer sales. Interest expense, investment and other income, income tax expense, and certain corporate administrative expenses are excluded when evaluating segment performance. The following is a summary of segment information for the three and nine months ended April 30, 2026 and 2025: Three months ended April 30, Nine months ended April 30, 2026 2025 2026 2025 SALES GROWTH INFORMATION Americas & Asia Organic 10.1 % 5.4 % 6.0 % 5.0 % Acquisitions 3.1 % 8.6 % 3.9 % 7.9 % Currency 1.2 % (1.1) % 0.7 % (1.0) % Divestiture — % — % — % (0.5) % Total 14.4 % 12.9 % 10.6 % 11.4 % Europe & Australia Organic 4.5 % (5.4) % 0.9 % (1.9) % Acquisitions — % 14.2 % — % 14.8 % Currency 8.1 % (0.1) % 7.1 % (0.1) % Total 12.6 % 8.7 % 8.0 % 12.8 % Total Company Organic 8.2 % 1.6 % 4.3 % 2.6 % Acquisitions 2.1 % 10.5 % 2.5 % 10.2 % Currency 3.5 % (0.7) % 2.9 % (0.5) % Divestiture — % — % — % (0.4) % Total 13.8 % 11.4 % 9.7 % 11.9 % SEGMENT PROFIT Americas & Asia $ 68,730 $ 57,164 $ 182,344 $ 158,148 Europe & Australia 21,470 17,478 55,624 41,872 Total $ 90,200 $ 74,642 $ 237,968 $ 200,020 SEGMENT PROFIT AS A PERCENT OF NET SALES Americas & Asia 23.7 % 22.5 % 22.5 % 21.6 % Europe & Australia 14.8 % 13.6 % 13.4 % 10.9 % Total 20.7 % 19.5 % 19.4 % 17.9 % Americas & Asia Americas & Asia net sales increased 14.4% to $290.1 million in the three months ended April 30, 2026 compared to $253.7 million in the same period in the prior year, which consisted of organic sales growth of 10.1%, sales growth from acquisitions of 3.1%, and a 1.2% increase from foreign currency translation. Americas & Asia net sales increased 10.6% to $810.6 million in the nine months ended April 30, 2026 compared to $732.9 million in the same period in the prior year, which consisted of organic sales growth of 6.0%, sales growth from acquisitions of 3.9%, and a 0.7% increase from foreign currency translation. Organic sales in the Americas increased approximately 10% in the three months ended April 30, 2026 and in the mid-single digits in the nine months ended April 30, 2026 compared to the same periods in the prior year. Organic sales growth in both the three and nine-month periods was driven by growth in the wire identification, product identification and safety and facility identification product lines, which was partially offset by an organic sales decline in the people identification product line in the nine-month period. Organic sales growth in the wire identification product line was supported by datacenter construction projects. Organic sales in Asia increased approximately 12% in the three months ended April 30, 2026, and increased approximately 13% in the nine months ended April 30, 2026 compared to the same periods in the prior year. The organic sales increase in both the three month and nine-month periods was realized throughout Asia with continued growth from electronics manufacturing services providers, technology companies, and industrial suppliers across the region. Organic sales growth in both the three and 22 Table of Contents nine-month periods was primarily driven by increased organic sales across Southeast Asia, India and China, as well as Japan in the nine-month period. Americas & Asia segment profit increased 20.2% to $68.7 million in the three months ended April 30, 2026 compared to $57.2 million in the same period in the prior year. Segment profit increased 15.3% to $182.3 million in the nine months ended April 30, 2026 compared to $158.1 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 23.7% from 22.5% in the three-month period and segment profit increased to 22.5% from 21.6% in the nine-month period ended April 30, 2026 compared to the same periods in the prior year. The increase in segment profit as a percentage of net sales was due to increased profit from organic sales growth in both the three and nine-month periods, as well as the absence of costs related to the closure of two facilities from both prior year periods and purchase accounting adjustments in the prior nine-month period. Europe & Australia Europe & Australia net sales increased 12.6% to $145.2 million in the three months ended April 30, 2026 compared to $128.9 million in the same period in the prior year, which consisted of organic sales growth of 4.5% and an 8.1% increase due to foreign currency translation. Europe & Australia net sales increased 8.0% to $414.1 million in the nine months ended April 30, 2026 compared to $383.4 million in the same period in the prior year, which consisted of organic sales growth of 0.9% and a 7.1% increase from foreign currency translation. Organic sales in Europe increased in the mid-single digits in the three months ended April 30, 2026 and in the low-single digits in the nine months ended April 30, 2026 compared to the same periods in the prior year. Organic sales increased across all major product lines during the three-month period with the wire identification and product identification product lines driving the organic sales growth in both the three and nine-month periods. Organic sales in Australia increased in the low-single digits in both the three and nine months ended April 30, 2026 compared to the same periods in the prior year. Organic sales growth in both the three and nine-month periods was driven by growth in the safety and facility identification and wire identification product lines, which was partially offset by an organic sales decline in the product identification product line. Europe & Australia segment profit increased 22.8% to $21.5 million in the three months ended April 30, 2026 compared to $17.5 million in the same period in the prior year. Segment profit increased 32.8% to $55.6 million in the nine months ended April 30, 2026 compared to $41.9 million in the same period in the prior year. As a percentage of net sales, segment profit increased to 14.8% from 13.6% for the three-month period and segment profit increased to 13.4% from 10.9% for the nine-month period ended April 30, 2026, compared to the same periods in the prior year. The increase in segment profit as a percentage of net sales was primarily driven by a more efficient cost structure following reorganization activities completed in the prior fiscal year. Additionally, segment profit for the three and nine months ended April 30, 2025 included reorganization costs and purchase accounting adjustments. Liquidity and Capital Resources The Company’s cash balances are generated and held in numerous locations throughout the world. At April 30, 2026, approximately 97% of the Company’s cash and cash equivalents were held outside the United States. The Company’s organic and inorganic growth has historically been funded by a combination of cash provided by operating activities and debt financing. The Company believes that its cash flow from operating activities and its borrowing capacity are sufficient to fund its anticipated requirements for working capital, capital expenditures, research and development, share repurchases, and dividend payments for the next 12 months. Although the Company believes these sources of cash are currently sufficient to fund domestic operations, annual cash needs could require repatriation of cash to the U.S. from foreign jurisdictions, which may result in additional tax payments. 23 Table of Contents Cash Flows Cash and cash equivalents were $175.5 million at April 30, 2026, an increase of $1.1 million from July 31, 2025. The significant changes were as follows: Nine months ended April 30, (Dollars in thousands) 2026 2025 Net cash flow provided by (used in): Operating activities $ 164,899 $ 122,874 Investing activities (43,562) (165,079) Financing activities (125,469) (52,077) Effect of exchange rate changes on cash 5,274 (3,682) Net increase (decrease) in cash and cash equivalents $ 1,142 $ (97,964) Net cash provided by operating activities was $164.9 million in the nine months ended April 30, 2026 compared to $122.9 million in the same period of the prior year. The increase in cash provided by operating activities was primarily due to increased net income and higher non-cash adjustments, driven by changes in deferred taxes, in the current nine-month period. Net cash used in investing activities was $43.6 million in the nine months ended April 30, 2026 compared to $165.1 million in the same period of the prior year. The decrease in net cash used in investing activities was primarily due to the acquisition of Gravotech for $123.6 million in the prior nine-month period, compared to the acquisition of Mecco for $17.4 million in the current nine-month period. Net cash used in financing activities was $125.5 million compared to $52.1 million in the same period of the prior year. The increase in cash used in financing activities was primarily due to net repayments on the Company’s credit agreement in the current-year period, compared to net borrowings in the prior-year period, which included borrowings used to fund the Gravotech acquisition. Material Cash Requirements Our material cash requirements for known contractual obligations include capital expenditures, repayment of borrowings on our credit agreement and lease obligations. We believe that net cash provided by operating activities will continue to be adequate to meet our liquidity and capital needs for these items over the next 12 months and in the long-term beyond the next 12 months. We also have cash requirements for purchase orders and contracts for the purchase of inventory and other goods and services, which are based on current and anticipated customer needs and are fulfilled by our suppliers within short time horizons. We do not have significant agreements for the purchase of inventory or other goods or services specifying minimum order quantities. In addition, we may have liabilities for uncertain tax positions, but we do not believe that the cash requirements to meet any of these liabilities will be material. In connection with the pending acquisition of the PSS business, we entered into a debt commitment letter that provides for 364-day bridge facilities with aggregate commitments of up to $1.8 billion, subject to customary conditions, including completion of the acquisition. We expect to fund the acquisition with cash on hand and new debt financing, and we expect to replace or reduce the commitments under the bridge facilities contemplated by the debt commitment letter with permanent financing prior to closing. Following completion of the acquisition, we expect cash flows from operations of the combined company, together with available liquidity, to be sufficient to satisfy our currently anticipated debt service obligations and other cash requirements. Credit Agreement On August 1, 2019, the Company and certain of its subsidiaries entered into an unsecured $200 million multi-currency credit agreement with a group of five banks. On November 14, 2022, the Company and certain of its subsidiaries entered into a second amendment to the credit agreement to, among other items, (a) increase the lending commitments by $100 million for total lending commitments of $300 million, (b) extend the final maturity date to November 14, 2027, (c) increase the interest rate on certain borrowings by 0.125%, and (d) increase the available amount under the credit agreement, at the Company’s option and subject to certain conditions, from $300 million up to (i) an amount equal to the incremental borrowing necessary to bring the Company’s consolidated net debt-to-EBITDA ratio as defined in the credit agreement to 2.5 to 1.0 plus (ii) $200 million. 24 Table of Contents On October 10, 2024, the Company and certain of its subsidiaries entered into a third amendment to the credit agreement to, among other items, change the applicable benchmark rate for borrowings denominated in Canadian Dollars under the credit agreement. As of April 30, 2026, the outstanding balance on the Company’s credit agreement was $26.9 million. The maximum amount outstanding on the credit agreement during the nine months ended April 30, 2026 was $119.6 million. As of April 30, 2026, the outstanding balance consists of Euro-denominated borrowings of €23.0 million bearing interest at 2.9%. The Company had letters of credit outstanding under the credit agreement of $1.8 million as of April 30, 2026, and there was $271.3 million available for future borrowing, which can be increased to $1,306.3 million at the Company’s option, subject to certain conditions. The credit agreement has a final maturity date of November 14, 2027. As such, borrowings were classified as long-term on the condensed consolidated balance sheets. Covenant Compliance The Company’s credit agreement requires it to maintain certain financial covenants, including a ratio of debt to the trailing twelve months EBITDA, as defined in the debt agreements, of not more than a 3.5 to 1.0 ratio (leverage ratio) and the trailing twelve months EBITDA to interest expense of not less than a 3.0 to 1.0 ratio (interest expense coverage). As of April 30, 2026, the Company was in compliance with these financial covenants, with a ratio of debt to EBITDA, as defined by the agreements, equal to 0.1 to 1.0 and the interest expense coverage ratio equal to 75.2 to 1.0. Pending Acquisition Financing In connection with the pending acquisition of the PSS business, we entered into a debt commitment letter that provides for 364-day bridge facilities with aggregate commitments of up to $1.8 billion, subject to customary conditions, including completion of the acquisition. As of April 30, 2026, the acquisition had not been completed, the conditions to availability under the bridge facilities had not been satisfied and no amounts were drawn or outstanding. We expect to fund the acquisition with cash on hand and new debt financing, and we expect to replace or reduce the commitments under the bridge facilities contemplated by the debt commitment letter with permanent financing prior to closing. If the acquisition is completed, we expect our outstanding indebtedness, debt service obligations and interest expense to increase. Forward-Looking Statements In this Quarterly Report on Form 10-Q, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company’s future financial position, business strategy, targets, projected sales, costs, income, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations. The use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond Brady’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from: •Increased cost of raw materials, labor, material shortages and supply chain disruptions, including as a result of tariffs or other impacts of the global trade environment •Decreased demand for the Company’s products •Ability to compete effectively or to successfully execute the Company’s strategy •Ability to develop technologically advanced products that meet customer demands •Ability to identify, integrate, and grow acquired companies •Difficulties in protecting websites, networks, and systems against security breaches and difficulties in preventing phishing attacks, social engineering or malicious break-ins •Risks associated with the loss of key employees •Litigation, including product liability claims •Global climate change and environmental regulations •Foreign currency fluctuations •Changes in tax legislation and tax rates •Potential write-offs of goodwill and other intangible assets •Differing interests of voting and non-voting shareholders and changes in the regulatory and business environment around dual-class voting structures 25 Table of Contents •The possibility that events, changes or other circumstances could result in termination of the agreement to acquire the PSS business •The Company’s ability to complete the pending acquisition of the PSS business on the anticipated timeline or at all, including risks related to the timing, receipt and terms of required governmental and regulatory approvals and the satisfaction or waiver of other closing conditions •The potential effects of the pending acquisition and related integration planning on the Company’s and the PSS business’s relationships with customers, suppliers and other business partners, ability to retain and hire key personnel, operating results and businesses generally •The Company’s ability to realize the anticipated strategic and financial benefits of the pending acquisition of the PSS business, including expected synergies, within the anticipated timeframe or at all •Numerous other matters of national, regional and global scale, including major public health crises and government responses thereto and those of a political, economic, business, competitive, and regulatory nature contained from time to time in Brady’s U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, those factors listed in the “Risk Factors” section within Item 1A of Part I of Brady’s Form 10-K for the year ended July 31, 2025, and Part II, Item 1A of this Quarterly Report on Form 10-Q. These uncertainties may cause Brady’s actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements except as required by law.