Brady Corp: Form 10-K for the period ended Jul 31, 2026

General Development of Business

Brady was incorporated under the laws of the state of Wisconsin in 1914. Brady is a global manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. 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.

The Company is organized and managed on a geographic basis with two reportable segments: Americas & Asia and Europe & Australia. The Americas & Asia segment is comprised of our operations in North America, South America and Asia, while the Europe & Australia segment is comprised of our operations in Europe, the Middle East, Africa and Australia. This regional operating structure provides a framework to align local execution with global scale and supports consistent integration of acquired businesses.

The Company’s primary objective is to build upon its market position and increase shareholder value by enabling a highly competent and experienced organization to focus on the following key competencies:

• Innovative products — Technologically-advanced, proprietary products that drive revenue growth and sustain gross profit margins through continuous research and development (“R&D”) investment and close collaboration with customers on application-specific needs
• Customer experience — Understanding customer needs and providing a high level of service through dedicated account support, localized technical expertise, and integrated tools that enhance responsiveness and ease of doing business
• Global leadership position in niche markets — Leveraging strong distribution networks, application knowledge, and long-standing relationships to maintain leadership in specialized identification and safety markets, while expanding scale and reach through targeted investments and acquisitions
• Digital capabilities — Enhancing transactional websites, product content, and customer portals to provide easy-to-find solutions and seamless transactions, supported by digital tools that improve execution and reach
• Compliance expertise — Leveraging regulatory knowledge to provide innovative solutions that support customer compliance, enabling confidence and growth in regulated industries
• Operational excellence — Driving productivity through lean manufacturing, automation, and supply chain optimization, while expanding customization capabilities to deliver tailored solutions efficiently and at scale

The Company’s strategy is to apply these core competencies to drive long-term growth, improve profitability, and strengthen its competitive position. Key initiatives in fiscal 2026 included:

• Investing in organic growth by enhancing our R&D 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, including the acquisition of the PSS business from Honeywell International Inc. (“Honeywell”), 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.

Recent Development

Acquisition of Honeywell’s PSS business

Subsequent to the end of fiscal year 2026, on August 3, 2026, the Company acquired Honeywell’s PSS business for a cash purchase price of $1.4 billion, subject to customary post-closing adjustments. PSS is a global manufacturer and provider of integrated mobile computing, scanning, printing, and software solutions.

The acquisition is expected to significantly expand the Company’s product portfolio and capabilities within product identification and track-and-trace applications. The acquisition is also expected to substantially increase the Company’s scale, expand its addressable market within the retail, transportation, warehousing, and logistics verticals, and complement its existing specialty identification offerings.

The purchase price, related transaction fees and expenses were funded through a combination of cash on hand, $800 million of borrowings under the Company’s $1.0 billion aggregate credit agreement entered into on June 12, 2026 (the “new credit agreement”), and proceeds from the private placement of $800 million aggregate principal amount of senior notes completed on August 3, 2026. The excess proceeds were designated for general corporate purposes.

The financial results of the PSS business will be integrated into the Company’s consolidated financial statements starting from August 3, 2026 and will be included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended

October 31, 2026. Refer to Item 8, Note 6, “Debt” and Note 17, “Subsequent Events”, for additional information regarding the financing structures and accounting considerations related to this transaction.

Narrative Description of Business

Overview

The Company is organized and managed on a geographic basis with two reportable segments: Americas & Asia and Europe & Australia. Below is a summary of sales by reportable segment during the years ended July 31:

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 and protection, 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 Company markets and sells its products through multiple channels, including distributors, value-added resellers (“VARs”), a direct sales force, and digital channels. Brady has long-standing relationships with a broad range of electrical, safety, industrial and other domestic and international distributors and channel partners. The direct sales force within each region works with end-users, VARs and distributors by providing technical application and product expertise. The Company provides access to its products through brand-specific websites and catalogs.

The Company markets its products under a variety of brand names:

• Brady: product identification labels, wire identification products, printers, software, safety and facility identification products, lock-out/tag-out products, brand protection labels, people identification products, microfluidic solutions products, and specialty materials
• Seton, Emedco, Signals, Safety Signs Service, and Pervaco: Safety and facility identification products
• PDC, PDC Healthcare, MAGiCARD, and Promovision: People and healthcare identification products
• Gravotech: Laser and mechanical engraving machines
• SPC: Spill control products
• Code: Barcode scanners
• Securimed, Accidental Health and Safety and Trafalgar: First aid products
• Electromark: Identification products for the utility industry
• Nordic ID: RFID products
• Carroll: Wire identification products

The Company manufactures differentiated, proprietary products, most of which have been internally developed. These internally developed products include materials, printing and identification systems, tracking systems, and software. Materials manufactured by the Company generally require a high degree of precision and the application of adhesives with chemical and physical properties suited for specific uses. The Company’s manufacturing processes include compounding, coating, converting, printing, melt-blown operations, software development and printer design and assembly.

Competition is based upon several factors, including product innovation, customer service, breadth of product offering, product quality, price, expertise, production capabilities, and for multinational customers, our global footprint. Competition is highly fragmented, ranging from smaller companies offering minimal product variety, to some of the world’s largest adhesive and electrical product companies offering competing products as part of their overall product lines.

These products serve customers in many industries within each reportable segment, of which those industries include industrial manufacturing, electronic manufacturing, healthcare, chemical, oil, gas, alternative energy, automotive, aerospace, governments, mass transit, mechanical contractors, construction, utilities, education, leisure and entertainment, retail and telecommunications, among others.

Research and Development

The Company focuses its R&D efforts on identification and printing systems, pressure sensitive materials, engraving systems, microfluidic technologies, scanners and software. The Company incurred $94.0 million, $79.9 million, and $67.7 million of expense on its R&D activities during the years ended July 31, 2026, 2025, and 2024, respectively. The majority of R&D spend supports the Company’s identification products. Material development involves the application of surface chemistry concepts for top coatings and adhesives applied to a variety of base materials. The design of our identification and printing systems integrates materials, embedded software, a variety of printing technologies and product scanning and identification technologies to form a complete solution for customer applications. In addition, R&D supports production and marketing efforts by providing application and technical expertise.

The Company owns patents and tradenames relating to certain products in the United States and internationally. Although the Company believes patents are a significant driver in maintaining its position for certain products, technology in the areas covered by many of the patents continues to evolve and may limit the value of such patents. The Company’s business is not dependent on any single patent or group of patents. Patents applicable to specific products extend for up to 20 years according to the date of patent application filing or patent grant, depending upon the legal term of patents in the various countries where patent protection is obtained. The Company’s tradenames are generally valid ten years from the date of registration, and are typically renewed on an ongoing basis.

Operations

The materials used in the products manufactured by the Company consist of a variety of plastic and synthetic films, paper, metal and metal foil, cloth, fiberglass, inks, dyes, adhesives, pigments, natural and synthetic rubber, organic chemicals, polymers, and solvents for consumable identification products in addition to molded parts, electronic components, chips, and sub-assemblies for identification and printing systems. The Company operates coating facilities that manufacture bulk rolls of label stock for internal and external customers. In addition, the Company purchases finished products for resale.

The Company purchases raw materials, components and finished products from many suppliers. Overall, we are not dependent upon any single supplier for our most critical base materials or components. However, we have chosen in certain situations to sole source, or limit the sources of materials, components, or finished items for design or cost reasons. As a result, disruptions in supply could have an impact on results for a period of time, but we believe most disruptions would simply require qualification of new suppliers and the disruption would be modest. In certain instances, the qualification process could be more costly or take a longer period of time and in certain situations, such as a global shortage of critical materials or components, the financial impact could be material.

The Company carries working capital mainly related to accounts receivable and inventory. Inventory consists of raw materials, work in process and finished goods. Generally, custom products are made to order while an on-hand quantity of stock product is maintained to provide customers with timely delivery. Average time to fulfill customer orders varies from same-day to one month, depending on the type of product, customer request, and whether the product is stock or custom-designed and manufactured. Normal and customary payment terms primarily range from net 10 to 90 days from date of invoice and vary by geography.

The Company has a broad customer base, and no individual customer represents 10% or more of total net sales.

Human Capital Management

As of July 31, 2026, the Company employed approximately 6,325 individuals worldwide, of which approximately 1,750 were employed in the United States and approximately 4,575 were employed outside the United States.

The Company’s Vice President of Human Resources is responsible for developing the Company’s human capital strategy, which includes the attraction, acquisition, development, engagement and retention of talent to deliver on the Company’s strategy as well as the design of employee compensation and benefits programs. Management is responsible for executing the

Company’s human capital strategy. The Vice President of Human Resources is also responsible for enhancing the Company’s high-performance culture, which rewards execution and fosters inclusion, to drive differential performance and execute our strategy for the organization. The Company’s Board of Directors and its committees receive regular updates on the operation and status of these initiatives and human capital trends and activities from the Vice President of Human Resources, the CEO and others within senior management.

Key areas of focus with respect to human capital include:

Health and Safety: The Company’s health and safety programs are designed around global standards with appropriate variations addressing the multiple jurisdictions and regulations, specific hazards and unique working environments of the Company’s manufacturing, distribution and headquarter operations. The Company requires each of its locations to perform regular safety audits to ensure proper safety policies, program procedures, analyses and trainings are in place. The Company utilizes a mixture of leading and lagging indicators to assess the health and safety performance of its operations. Lagging indicators include the OSHA Total Recordable Incident Rate (“TRIR”) and the Lost Time Case Rate (“LTCR”) based upon the number of incidents per 100 employees. Leading indicators include reporting and closure of all near miss events. The Company also utilizes trainings such as Environmental, Health and Safety (“EHS”) coaching and engagement conversations as preventative measures. During the year ended July 31, 2026, the Company had a TRIR of 0.53, a LTCR of 0.31 and no work-related fatalities.

Inclusive Workplace: The Company prioritizes fostering an inclusive workplace where employees feel valued and heard. This commitment is central to our ability to leverage the full strengths of our workforce, aiming to exceed customer expectations and achieve growth objectives. To support this, the Company engages employees through various employee resource groups. These groups bring together employees to share common interests in personal and professional development, while improving corporate culture and delivering business results. Senior leaders throughout the organization sponsor and support each employee resource group.

The Company also strives to build a robust talent pipeline by partnering with its business units in their workforce planning to develop initiatives and goals to recruit talent across all defined organizational levels and skill areas. The Company trains its recruiting workforce in sourcing strategies aimed at broadening its talent pool and partners with external organizations that develop and supply a wide range of talent. As a commitment to an inclusive workplace, the Company supports the unique input of individuals at all levels within the organization.

Training and Talent Development: The Company is committed to the continued development of its people. Strategic talent reviews and succession planning occur on a planned cadence annually. The CEO and the Vice President of Human Resources convene meetings with senior Company leadership and the Board of Directors to review top enterprise talent and discuss succession planning for key leadership roles. The Company also emphasizes career development planning to support employee growth and progression across a wide range of roles and functions.

The Company provides technical training to employees, customers and suppliers who work for or with the Company’s products. Training is provided in a variety of formats to accommodate the respective learner’s style, pace, location, technical knowledge and access.

Compensation and Benefits: The Company values its people and strives to deliver compensation and benefit programs and plans that are competitive with the external market. The Company provides subsidized health and welfare benefits, as well as postretirement, incentive and equity-based compensation plans and programs to eligible employees. Refer to the Compensation Discussion & Analysis for additional information regarding the Company’s compensation and benefits programs.

Information Available on the Internet

The Company’s Corporate Internet address is www.bradyid.com (http://www.bradyid.com). The Company makes available, free of charge, on or through its website, copies of its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to all such reports as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The Company is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Annual Report on Form 10-K.

Investors should carefully consider the risks set forth below and all other information contained in this report and other documents we file with the SEC. The risks and uncertainties described below are those that we have identified as material, but are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, geopolitical events, changes in laws or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected economic or business conditions. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business and financial results.

Business Risks

The acquisition of Honeywell’s PSS business is subject to significant integration risks that may impact the combined company’s financial results.

On August 3, 2026, we completed the acquisition of PSS. The transaction significantly increases the size and complexity of our current operations and exposes us to operational, financial, and other risks associated with integrating a large global business, and there can be no assurance that the business cultures of the two businesses will prove to be compatible. In addition, in connection with the closing of the transaction, Honeywell completed a global internal reorganization to separate the PSS business from its other operations. Despite completion of this reorganization, we may identify operational, financial, tax, legal or other issues arising from the separation that were not anticipated before closing, which could result in additional costs, liabilities or delays in the integration of the acquired business.

The integration of the PSS business requires significant management attention, resources and expenditures. We may experience difficulties in integrating or coordinating systems, processes, internal controls, product portfolios, operations, sales channels and go-to-market activities, as well as retaining employees and maintaining relationships with customers, distributors, other channel partners and suppliers. The ongoing integration process is subject to a number of uncertainties, and it is possible that the ongoing integration process could take longer than anticipated. Our results of operations could also be adversely affected by any issues attributable to the PSS business’s operations that arose or are based on events or actions that occurred prior to the closing of the transaction. These challenges could disrupt our operations, adversely impact customer or channel partner relationships, or prevent us from realizing the anticipated benefits of the acquisition.

We may not realize the anticipated benefits of the acquisition, including expected growth opportunities and cost synergies, within the anticipated time periods or at all. These expected benefits and cost synergies are based on estimates and assumptions made by us that are inherently uncertain, and are subject to significant business, economic, and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control. We cannot guarantee that we will achieve the full amount of expected benefits and cost synergies on the schedule anticipated, or at all, that the actual expenses required to achieve these benefits and cost synergies will not materially exceed our current estimates, or that these benefits and cost synergies will not have other adverse effects on our business. If we are unable to successfully integrate PSS or realize the expected benefits of the acquisition, our business, financial condition and results of operations could be adversely affected.

We have incurred and expect to continue to incur a number of non-recurring costs associated with combining the operations of the two businesses, which cannot be fully estimated accurately at this time. We may also incur additional costs to attract, motivate or retain management personnel and other key employees. We have incurred and will continue to incur acquisition fees and costs related to formulating integration plans for the combined business, and the execution of these plans may lead to additional unanticipated costs.

Our increased indebtedness could limit our financial flexibility and adversely affect our business and financial results.

To fund the acquisition of the PSS business, we incurred indebtedness consisting of $800 million aggregate principal amount of borrowings under our new credit agreement and $800 million aggregate principal amount of senior notes issued in a private placement. The use of debt financing to fund the acquisition increases our indebtedness and creates additional financial risks for our business.

Our increased leverage could have adverse consequences, including reducing our financial flexibility to respond to changing business and market conditions, limiting our ability to pursue strategic opportunities, and requiring us to dedicate a greater portion of our operating cash flows to principal and interest payments. If our cash flows from operations are insufficient to satisfy our debt service requirements, or we are unable to reduce our indebtedness as anticipated, our ability to fund organic growth initiatives, R&D, capital expenditures, acquisitions and other strategic priorities could be limited.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to fund our day-to-day operations or to pay the principal, premium, if any, and interest on our indebtedness. Rising interest rates may also reduce our ability to access the capital markets and/or increase our cost of capital either of which could adversely affect our business, financial condition and results of operations.

Our debt agreements also contain financial and other covenants that may restrict our ability to take certain actions, and failure to comply with these covenants could result in an event of default and accelerate our repayment obligations. In addition, borrowings under our new credit agreement bear interest at variable rates, which exposes us to increases in interest expense if market interest rates rise. These factors could adversely affect our business, financial condition and results of operations.

Raw material, component and other cost inflation, as well as supply shortages, could adversely affect our business and financial results.

We manufacture certain parts and components of our products and rely on third-party suppliers for raw materials, components and finished goods. The availability, pricing and lead times of these inputs may be affected by a variety of factors, including supply and demand imbalances, supplier capacity constraints, tariffs and other trade restrictions, geopolitical developments, transportation disruptions and other supply chain constraints. Certain materials and components may be available from a limited number of suppliers, and qualifying alternative suppliers may require significant time and expense.

Following the acquisition of PSS, our exposure to the cost and availability of electronic components, including memory and other semiconductor components, has increased. Significant increases in input costs, shortages of key components or extended lead times could increase our costs, disrupt production, limit our ability to meet customer demand and adversely affect our profit margins and results of operations.

We may take actions to mitigate supply shortages and disruptions, including increasing inventory levels or purchasing components in advance of anticipated demand. These actions may increase our working capital requirements and expose us to greater risk of excess or obsolete inventory, particularly if customer demand, component pricing or technology trends differ from our expectations.

In addition, labor shortages or increases in the cost of labor could adversely affect our profit margins and results of operations. Due to competitive pressures, contractual arrangements or other factors, we may not be able to pass increased raw material, component, labor or other costs to our customers through price increases, or our ability to do so may be delayed. Changes in input costs may occur more rapidly than we are able to adjust customer pricing, which could result in periods of reduced profitability.

While we have implemented cost containment measures, selective price increases and other actions intended to mitigate inflationary and supply chain pressures, these actions may not be sufficient to offset increases in our costs or the effects of supply shortages and disruptions. If we are unable to obtain necessary materials and components on acceptable terms or recover increased costs through pricing, our business, financial condition and results of operations could be adversely affected.

Demand for our products may be adversely affected by numerous factors, some of which we cannot predict or control. This could adversely affect our business and financial results.

Numerous factors may affect the demand for our products, including:

• Deterioration of economic conditions in major markets served
• Catastrophic events, including epidemics, major health concerns, or natural disasters
• Economic and operational impact of the war between Russia and Ukraine and conflict in the Middle East or other wars
• Consolidation in the marketplace allowing competitors to be more efficient and more price competitive
• Competitors entering the marketplace
• Decreasing product life cycles
• Changes in customer preferences
• Ability to achieve strong operational performance, including the manufacture and sale of high-quality products and the ability to meet customer delivery expectations

If any of these factors occur, the demand for our products could suffer, and this could adversely impact our business and financial results.

Our global operations are subject to the impact of regional conflict and geopolitical developments, which could adversely affect our business and financial results.

As a global company with approximately 50% of our sales derived outside of the United States, we are subject to risks associated with political and economic instability, regional conflicts and other geopolitical developments in the markets in which we operate. Such developments may result in disruptions to our commercial operations in affected markets.

Current geopolitical conditions have resulted in disruptions within certain global shipping and distribution channels, including extended lead times and reductions in global freight capacity. These disruptions may increase our transportation costs, extend lead times and adversely affect our operational efficiency.

Geopolitical instability and the resulting economic uncertainty may also adversely impact our customers’ demand for our products, including the interruption of established procurement cycles and the deferral of project timelines across our global customer base. Regional conflicts may result in broader economic downturns or currency devaluations in certain markets, which could diminish the purchasing power of our customers or delay operational investments. These factors could reduce or delay customer demand and result in increased volatility in our sales and results of operations.

Additionally, our business is subject to an increasingly complex global trade environment characterized by shifting trade policies and regulatory requirements. This includes the imposition of new tariffs or changes in existing duties, tariffs, and trade agreements. Our business has incurred, and we expect to continue to occur, additional costs related to the imposition of incremental tariffs and related countermeasures. Since the second half of fiscal 2025, we have incurred tariff costs that have remained above historical levels. We are also subject to evolving governmental policies, import and export controls, trade restrictions and economic sanction laws, which may change rapidly in response to global events. Changes in these requirements, or our inability to comply with them, could increase our costs, restrict our ability to conduct business in certain markets, result in competitive disadvantages or subject us to monetary or non-monetary penalties, which could adversely affect our results of operations.

With the acquisition of PSS, our operational risks are subject to PSS’s global manufacturing operations and footprint. PSS has significant manufacturing operations in China, and a substantial portion of its global inventory is physically located within China and the surrounding regions. As a result, our operations are subject to potential changes in U.S.-China trade relations, shifting regulatory requirements, and local economic or political conditions. Additional tariffs, expanded export controls, trade restrictions, or regulatory shifts by either the U.S. or Chinese governments could increase production and transportation costs, impact output, or restrict our ability to transfer inventory from China to other markets. Additionally, holding a significant level of inventory in the region subjects us to potential customs delays, localized operational disruptions, or logistics constraints, which could disrupt our global shipping and distribution channels. If PSS experiences manufacturing interruptions or delays in distributing inventory internationally, our results of operations could be adversely affected.

Failure to compete effectively or to successfully execute our strategy may have a negative impact on our business and financial results.

We actively compete with companies that produce and market the same or similar products, and in some instances, with companies that sell different products that are designed for the same target markets. Competition may force us to reduce prices or incur additional costs to remain competitive in an environment in which business models, including the development and use of AI technologies, are changing rapidly. We compete on the basis of several factors, including customer support, product innovation, product offering, product quality, price, expertise, digital capabilities, production capabilities, and for multinational customers, our global footprint. Present or future competitors may develop and introduce new and enhanced products, offer products based on alternative technologies and processes, accept lower profit, have greater financial, technical or other resources, or have lower production costs or other pricing advantages. Any of these could put us at a disadvantage by threatening our share of sales or reducing our profit margins, which could adversely impact our business and financial results.

Additionally, throughout our global business, distributors and customers may not accept our price increases or may seek lower cost sourcing opportunities, which could result in a loss of business that may adversely impact our business and financial results.

Our strategy is to expand into higher-growth adjacent product categories and markets with technologically advanced new products, as well as to grow our sales generated through the digital channel. While traditional direct marketing channels such as catalogs are an important means of advertising and selling our products, an increasing number of customers are purchasing products online. Our strategy to increase sales through the digital channel is an investment in our e-commerce sales capabilities. There is a risk that we may not continue to successfully implement this strategy, or if successfully implemented, we may not realize its expected benefits due to increased competition and pricing pressure brought about by other e-commerce businesses. Our failure to successfully implement our strategy could adversely impact our business and financial results.

Furthermore, our recent acquisition of the PSS business is a central component of our strategy to create a comprehensive technology portfolio, complementing Brady’s leading position in printers and specialty adhesive materials portfolio. The success of this strategy is highly dependent on our ability to effectively integrate PSS. As we dedicate significant management attention and resources to product portfolios and go-to-market activities, there is a risk of operational disruption. Present or future competitors may attempt to capitalize on any such disruptions or delays in our integration process to target our customer and channel partner relationships. If we are unable to seamlessly integrate PSS, or if we fail to realize the expected growth opportunities and cost synergies in a timely manner, our ability to execute our broader strategic goals and compete effectively may be compromised, which could adversely impact our business and financial results.

Failure to develop or acquire technologically advanced products that meet customer demands, including price expectations, could adversely impact our business and financial results.

We develop technologically advanced new products to promote our organic growth and profitability. Technology is changing rapidly and our competitors are innovating quickly. If we do not keep pace with developing technologically advanced products, we risk product commoditization, deterioration of the value of our brand, and reduced ability to effectively compete. We must continue to develop innovative products, as well as acquire and retain the necessary intellectual property rights in these products. If we fail to innovate, or we launch products with quality problems, or if customers do not accept our products, then our business and financial results could be adversely affected.

The failure to effectively manage acquisitions, divestitures and other portfolio management activities could adversely affect our business and financial results.

Our historical growth has included acquisitions, including, for instance, the acquisition of the PSS business, and acquisitions may continue to be part of our growth strategy. Acquisitions place significant demands on management, operational, and financial resources and may require the integration of operations, sales and marketing, finance and administrative functions, and information technology, which could decrease the time and resources available to focus on our existing businesses and other growth strategies. We cannot guarantee that we will be able to successfully identify and integrate acquisitions, that acquired businesses will operate profitably, or that we will be able to achieve the anticipated sales growth, synergies or other benefits from acquisitions. Our sales, results of operations, cash flow, and liquidity could be adversely affected if we do not successfully integrate acquired businesses, including realizing synergies, or if our existing businesses are adversely affected by the increased focus on acquired businesses.

We continually assess the strategic fit of our existing businesses and may divest businesses that we determine do not align with our strategic plan or are not achieving the desired return on investment. Divestitures pose risks and challenges that could negatively impact our business. We may be unable to complete a divestiture on satisfactory terms or within our anticipated timeframe, and transactions may be subject to pre-closing conditions that may not be satisfied. Separating a business may also require significant management attention and resources and could result in operational disruptions, including challenges associated with separating systems, processes, personnel and other shared functions, providing or receiving transition services, retaining key employees and maintaining customer and supplier relationships. Divestitures may also result in stranded costs or other expenses that are greater than anticipated, and the impact of a divestiture on our revenue, earnings or cash flows may differ from our expectations. In addition, we may also retain responsibility for and agree to indemnify buyers against certain contingent liabilities related to businesses we sell and the resolution of any contingencies could have a material adverse impact on our financial results.

The use of AI and the failure to effectively integrate AI and automation into our business processes could hinder our operational efficiency and adversely affect our business and financial results.

We have made investments in developing and implementing AI to streamline internal workflows and enhance operational decision-making. We believe that the effective use of AI within our internal business processes, including supply chain management, administrative functions, and data analysis is critical to our ability to maintain a competitive cost structure and achieve long-term success.

Our R&D into these technologies is ongoing, and we are working to incorporate AI capabilities across our internal infrastructure. However, as with many developing innovations, the integration of AI presents significant risks and challenges. Our efforts integrating AI may not produce meaningful operational efficiency improvements or help maintain a competitive cost structure. If our internal AI initiatives fail to operate as intended, or if we are unable to implement these technologies as effectively or as quickly as our competitors, we may experience higher operating costs than our peers. Furthermore, failure to successfully modernize our internal operations through AI could result in a failure to recoup our investments in these technologies, adversely affecting our business and financial results. In addition, AI technologies may produce inaccurate outputs, cause or contribute to the violation of intellectual property rights, and may be prone to cybersecurity incidents or service interruptions. Furthermore, the use of AI by us and our employees could increase the risk of exposure of our proprietary, personal and confidential information.

Global Operating Risks

Our failure or the failure of third-party service providers to protect our sites, networks and systems against security breaches, to protect our confidential information, or to facilitate our digital strategy, could adversely affect our business and financial results.

Our business systems collect, transmit and store data about our customers, vendors and others, including credit card information and personally identifiable information. We also employ third-party service providers that store, process and transmit proprietary, personal and confidential information on our behalf. We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information, including credit card numbers. Our security measures, and those of our third-party service providers, may not detect or prevent all attempts to hack our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other similar disruptions and cybersecurity incidents that may jeopardize the security of information stored in or transmitted by our sites, networks and systems or that we or our third-party service providers otherwise maintain. We engage third-party service providers to assist with certain of our website and digital platform upgrades, which may result in a decline in sales when initially deployed, which could have an adverse effect on our business and financial results.

We and our service providers may not have the resources or technical sophistication to anticipate or prevent all types of attacks, and techniques used to obtain unauthorized access to or to sabotage systems change frequently and may not be known until launched against us or our third-party service providers. The increasing sophistication of cyberattacks requires us to continually evaluate the threat landscape and new technologies and processes intended to detect and prevent these attacks. There can be no assurance that the security measures and systems configurations we choose to implement will be sufficient to protect the data we manage. In addition, security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships. Although we maintain privacy, data breach and network security liability insurance, we cannot be certain that our coverage will be adequate or will cover liabilities actually incurred, or that insurance will continue to be available to us on economically reasonable terms, or at all. Any compromise or breach of our security measures, or those of our third-party service providers, could adversely impact our ability to conduct business, violate applicable privacy, data security and other laws, and cause significant legal and financial exposure, adverse publicity, and a loss of confidence in our security measures, which could have an adverse effect on our business and financial results.

Furthermore, use of AI by our service providers could increase the risk of exposure of our proprietary, personal and confidential information. The use of AI or machine learning technologies by our service providers in their business activities, whether or not known to us, could also expose us to risks, including use of AI tools in violation of agreements with us, use of unauthorized third-party data, inputting our valuable information into AI tools, or deployment of new AI tools without our approval, any of which may give rise to legal or regulatory violations, loss of intellectual property rights, reputational harm, or issues relating to data privacy and data protection.

We are a global company headquartered in the United States. We are subject to extensive regulations by U.S. and non-U.S. governmental and self-regulatory entities at various levels of the governing bodies. Failure to comply with laws and regulations could adversely affect our business and financial results.

Approximately 50% of our sales are derived outside of the United States. Our operations are subject to the risks of doing business domestically and globally, including the following:

• Imposition of new or changes in existing duties, tariffs and trade agreements, which could have a direct or indirect impact on our ability to manufacture products, on our customers' demand for our products, or on our suppliers' ability to deliver raw materials.
• Delays or disruptions in product deliveries and payments in connection with international manufacturing and sales.
• Regulations resulting from political and economic instability and disruptions.
• Import, export and economic sanction laws.
• Current and changing governmental policies, regulatory, and business environments.
• Disadvantages from competing against companies from countries that are not subject to U.S. laws and regulations including the Foreign Corrupt Practices Act.
• Local labor regulations.
• Regulations relating to climate change, air emissions, wastewater discharges, handling and disposal of hazardous materials and wastes.
• Regulations relating to product content, health, safety and the protection of the environment.
• Imposition of trade or travel restrictions as a result of any effects of pandemics or global health crises.
• Specific country regulations where our products are manufactured or sold.
• Regulations relating to compliance with data protection and privacy laws throughout our global business.
• Laws and regulations that apply to companies doing business with the government, including audit requirements of government contracts related to procurement integrity, export control, employment practices, and the accuracy of records and recording of costs.

Further, these laws and regulations are constantly evolving and it is difficult to accurately predict the effect they may have upon our business and financial results.

We cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by employees, agents or business partners that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, anti-kickback and false claims rules, competition, export and import compliance, money laundering and data privacy. Any such improper actions could subject us to civil or criminal investigations in the U.S. and in other jurisdictions, lead to substantial civil or criminal, monetary and non-monetary penalties and related lawsuits by shareholders and others, damage our reputation, and adversely impact our business and financial results.

We depend on key employees and the loss of these individuals could have an adverse effect on our business and financial results.

Our financial results could be adversely affected by increased competition for employees, difficulty in recruiting employees, higher employee turnover or increased compensation and benefit costs. Our employees are important to our success and we are dependent on our ability to retain the services of our employees in key roles. We have built our business on a set of core values, and we attempt to hire and retain employees who are committed to these values and our culture of providing exceptional service to our customers. In order to compete and to continue to grow, we must attract, retain and motivate our employees. We need qualified managers and skilled employees with technical and industry experience to operate our business successfully. If we are unable to attract and retain qualified individuals, or if our costs to do so increase significantly, or if internal realignment of responsibilities are not executed properly, our business and financial results could be adversely affected.

We are subject to litigation that could adversely impact our business, financial results, and reputation.

We are, or may become, a party to litigation that arises in the normal course of our business operations, including product liability and recall (strict liability and negligence) claims, patent and trademark matters, contract disputes and environmental, employment and other litigation matters. We face an inherent risk that our competitors will allege that aspects of our products infringe their intellectual property or that our intellectual property is invalid, such that we could be prevented from manufacturing and selling our products or prevented from stopping others from manufacturing and selling competing products. We face an inherent business risk of exposure to product liability claims in the event that the use of our products is alleged to have resulted in injury or other damage. To date, we have not incurred material costs related to these types of claims. However, while we currently maintain insurance coverage for certain types of claims that we believe is adequate, we cannot be certain that we will be able to maintain this insurance on acceptable terms or that this insurance will provide sufficient coverage against potential liabilities that may arise. Any claims brought against us, with or without merit, may have an adverse effect on our business, financial results and reputation as a result of potential adverse outcomes. The expenses associated with defending such claims and the diversion of our management’s resources and time may have an adverse effect on our business and financial results.

Global climate change and related emphasis on environmental matters by various stakeholders could negatively affect our business and financial results.

Increased public awareness and concern regarding global climate change may result in more regional and/or federal requirements to reduce or mitigate the effects of greenhouse gas emissions. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty. Further, our customers and the markets we serve may impose emissions or other environmental standards through regulation, market-based emissions policies or consumer preference that we may not be able to timely meet due to the required level of capital investment or technological advancement.

Additionally, the enhanced stakeholder focus on Environmental, Social and Governance (“ESG”) issues relating to our business requires the continuous monitoring of various and evolving standards and the associated reporting requirements. A failure to adequately meet stakeholder expectations may result in the loss of business, diluted market valuation, an inability to attract customers or an inability to attract and retain top talent.

Financial and Security Ownership Risks

The global nature of our business exposes us to foreign currency fluctuations that could adversely affect our business and financial results.

Because a significant portion of our business is conducted outside of the United States, our sales and purchases in currencies other than the U.S. dollar expose us to fluctuations in foreign currencies relative to the U.S. dollar, which may adversely affect our financial results. Increased strength of the U.S. dollar could increase the effective price of our products sold in currencies other than U.S. dollars into other countries. Decreased strength of the U.S. dollar could adversely affect the cost of materials, products, and services purchased overseas. Our sales and expenses are translated into U.S. dollars for reporting purposes, and strengthening of the U.S. dollar could result in unfavorable translation effects. In addition, certain of our subsidiaries may invoice customers in a currency other than its functional currency or may be invoiced by suppliers in a currency other than its functional currency, which could result in unfavorable translation effects on our business and financial results.

Changes in tax legislation or tax rates could adversely affect results of operations and financial statements. Additionally, audits by taxing authorities could result in tax payments for prior periods.

We are subject to income taxes in the U.S. and in many non-U.S. jurisdictions. As such, our income is subject to risk due to changing tax laws and tax rates around the world. Our tax filings are subject to audit by U.S. federal, state and local tax authorities and by non-U.S. tax authorities. If these audits result in payments or assessments that differ from our reserves, our future net income may be adversely impacted.

We review the probability of the realization of our deferred tax assets quarterly based on forecasts of taxable income in both the U.S. and foreign jurisdictions. As part of this review, we utilize historical results, projected future operating results, eligible carry-forward periods, tax planning opportunities, and other relevant considerations. Changes in profitability and financial outlook in both the U.S. and/or foreign jurisdictions, or changes in our geographic footprint may require modifications in the valuation allowance for deferred tax assets.

Globally, many countries have enacted, or plan to enact, legislation and other guidance to align with the Organisation for Economic Co-operation and Development’s (“OECD”) Inclusive Framework on Base Erosion and Profit Shifting Pillar Two (“Pillar Two”) model rules, which aim to establish a global minimum tax rate of 15 percent for large multinational enterprise groups. In January 2026, the OECD issued additional guidance, including a safe harbor framework for certain U.S. parented groups that is expected to largely reduce the impact of Pillar Two for the Company. Even with this safe harbor, the Company could still be subject to local minimum tax regimes in countries that have adopted these rules. As of July 31, 2026, Pillar Two has not had a material impact on the Company’s income tax liability, provision for income taxes, or effective tax rate, nor does the Company expect a material impact in the future.

Failure to execute our strategies could result in impairment of goodwill or other intangible assets, which may negatively impact income and profitability.

We have goodwill of $686.0 million and other intangible assets of $97.8 million as of July 31, 2026, which represent 42.3% of our total assets, and we have recognized impairment charges in the past. Additionally, we expect these balances and their percentage of our total assets to increase substantially as a result of the PSS acquisition completed on August 3, 2026. We evaluate goodwill and other intangible assets for impairment on an annual basis, or more frequently if impairment indicators are present, based upon the fair value of each respective asset. The valuations prepared for the required impairment test include management’s estimates of sales, profitability, cash flow generation, capital structure, cost of debt, interest rates, capital expenditures, and other assumptions. Significant negative industry or economic trends, disruptions to our business, inability to achieve sales projections or cost savings, inability to effectively integrate acquired businesses, unexpected changes in the use of the assets, and divestitures may adversely impact the assumptions used in the valuations. Given the substantial increase in our intangible assets, any failure to successfully integrate PSS or realize its expected benefits could heighten the risk of future impairment. If the estimated fair value of our goodwill or other intangible assets change in future periods, we may be required to record an impairment charge, which would reduce net income in such period.

Substantially all of our voting stock is controlled by two shareholders, while our public investors hold non-voting stock. The interests of the voting and non-voting shareholders could differ, potentially resulting in decisions that affect the value of the non-voting shares.

Substantially all of our voting stock is controlled by Elizabeth P. Bruno, one of our directors, and William H. Brady III, both of whom are descendants of the Company’s founder. All of our publicly traded shares are non-voting. Therefore, the voting shareholders have control in most matters requiring approval or acquiescence by shareholders, including the composition of our Board of Directors and many corporate actions, and their interests may not align with those of the non-voting shareholders. Such concentration of ownership may discourage a potential acquirer from making a purchase offer that our public shareholders may find favorable and it may adversely affect the trading price for our non-voting common stock because investors may perceive disadvantages in owning stock in companies whose voting stock is controlled by a limited number of shareholders. Additionally, certain private investors, mutual funds and index sponsors have implemented rules restricting ownership, or excluding from indices, companies with non-voting publicly traded shares. For example, the Company was removed from the Russell 2000 Index in the fourth quarter of fiscal year 2023 for not meeting the minimum voting rights hurdle.

Brady has strategically included cybersecurity risk management into our integrated Company-wide risk management framework, which consists of administrative, operational, physical, and technical processes that we believe are appropriate to the scope and nature of our business. We believe this integrated approach allows cybersecurity considerations to form an integral part of our corporate and strategic decision-making processes. Management works closely with our information technology security team to continuously evaluate and address cybersecurity risks in alignment with our business and operational needs. Our cybersecurity policies and practices follow the cybersecurity framework of the Center for Internet Security Controls.

Our cybersecurity strategy focuses on continued strengthening of our cybersecurity defense model, improvement of cybersecurity operational efficiencies, and preparedness for evolving business and technology needs including the detection, analysis, and response to known, anticipated and unexpected cybersecurity threats, management of material risks related to cybersecurity threats and resilience against cybersecurity incidents. We regularly assess potential threats and make investments to mitigate the risk of these threats against our critical information and assets by implementing a broad set of information security and cybersecurity measures, including comprehensive monitoring and enhancement of our networks and systems, intrusion prevention defense, rapid detection and response, and threat management capabilities. To supplement our internal resources, we engage external consultants to conduct independent assessments, perform penetration testing, and provide other cybersecurity-related services as needed. In addition, we engage external vendors to review and test key controls within our cybersecurity program.

Cybersecurity awareness training is provided to new employees and annually for current Brady employees, which is designed to educate employees on recognizing information security and cybersecurity concerns, how they can help protect the organization and how to inform the information technology security team of potential incidents. In addition, we implement processes to manage risks associated with our third-party providers, including security assessments prior to engagement and monitoring their compliance with our cybersecurity standards on an ongoing basis.

The Audit Committee of our Board of Directors is responsible for the oversight of risks from cybersecurity threats. Management updates the Audit Committee on a quarterly basis regarding our cybersecurity programs. As part of its oversight responsibilities, the Audit Committee regularly discusses and reviews with management, among other items, Brady’s compliance and cybersecurity programs, and any significant cybersecurity matters and related strategic risk management decisions are escalated to the Board of Directors.

Our information technology security team reports to our Chief Information Officer (the “CIO”) and is headed by our Information Technology Director (the “IT Director”). Our CIO is an experienced information technology professional with extensive cybersecurity and information technology risk management experience. The information technology security team regularly informs our CIO, General Counsel and Chief Financial Officer with regard to cybersecurity risks and incidents, and our executive management team evaluates cybersecurity issues quarterly or as needed.

Brady has a detailed incident response plan that provides the process and workflow of communication for escalation of cybersecurity incidents to executive leadership to determine if there is a breach warranting further action. The information technology security team, in conjunction with various departments, including finance, corporate communications, legal, regional presidents and the CIO, are charged with reviewing any incident under our materiality framework to assess whether further escalation and reporting is required and if an incident could constitute a material cybersecurity incident.

Although we have not experienced any material cybersecurity incidents to date, cybersecurity threats could materially affect the implementation of our business strategy, results of operations, or financial condition, as further discussed in our risk factors in Part I, Item 1A of this report.

As of July 31, 2026, the Company operates 43 manufacturing and distribution facilities across the globe, which are split by reporting segment as follows:

Americas & Asia: Twenty-six manufacturing and distribution facilities are used for our Americas & Asia business. Nine facilities are located in the United States; four in China; two each in Brazil, India, and Mexico; and one each in Canada, Japan, Malaysia, Philippines, Singapore, Thailand and Vietnam.

Europe & Australia: Seventeen manufacturing and distribution facilities are used for our Europe & Australia business. Four facilities each are located in France and the United Kingdom, two each in Belgium and Australia; and one each in Austria, Germany, Norway, South Africa, and Turkey.

The Company believes that its equipment and facilities are modern, well maintained, and adequate for present needs.

The Company is, and may in the future be, named as a defendant in various legal proceedings and claims that arise in the normal course of business in which claims are asserted against the Company. The Company records a liability for these legal actions when a loss is known or considered probable and the amount can be reasonably estimated. The Company is not currently a party to any material pending legal proceedings in which management believes the ultimate resolution would have a material effect on the Company’s consolidated financial statements.

Overview

Brady Corporation is a global manufacturer and supplier of identification solutions 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. See “Item 1. Business—Recent Development” for a discussion of our acquisition of the PSS business. The financial results of the PSS business will be integrated into the Company’s consolidated financial statements starting from August 3, 2026 and are expected to be included in our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2026.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and the notes to those statements (Item 8) in this Annual Report on Form 10-K. The following discussion is intended to help the reader understand the results of operations and financial condition of the Company for the year ended July 31, 2026 compared to the year ended July 31, 2025.

A discussion regarding our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 can be found under Item 7 in our Annual Report on Form 10-K for the year ended July 31, 2025, filed with the SEC on September 4, 2025, which is available on the SEC’s website at www.sec.gov (http://www.sec.gov) and our corporate website at www.bradyid.com/corporate/investors (http://www.bradyid.com/corporate/investors) and such information is incorporated by reference herein.

References in this Annual Report on Form 10-K to “organic sales” refer to sales calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding the impact of foreign currency translation, sales recorded from divested companies up to the first anniversary of their divestiture and sales recorded from acquired companies prior to the first anniversary date of their acquisition. 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.

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, and other macroeconomic challenges. These pressures 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, and we expect will continue to incur additional costs related to these incremental tariffs and related countermeasures. While we have received some refunds for tariffs previously paid, we continue to incur tariff costs that have remained above historical levels since the second half of fiscal 2025. Future impacts will depend on changes in trade policy and the timing, availability and amount of these further potential refunds. 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 increases, strategic sourcing adjustments, product portfolio optimization, as well as our ongoing efforts to drive sustainable efficiency gains in our operations and administrative structures.

The Company continues to evaluate developments related to tariff policy and related administrative proceedings. While we have received certain refunds for tariffs previously paid, we expect to continue to incur ongoing tariff costs while actively pursuing additional refunds. Any such potential refunds of tariffs previously paid remain subject to ongoing administrative processes and uncertainty regarding their timing, availability, and ultimate amount.

Refer to Risk Factors, included in Part I, Item 1A of this Annual Report on Form 10-K for the year ended July 31, 2026, for further discussion of the possible impact of global economic or geopolitical events on our business.

Results of Operations

The comparability of the operating results for the year ended July 31, 2026 to the year ended July 31, 2025 has been impacted by the acquisition of MECCO Partners LLC (“Mecco”) on August 4, 2025. The operating results of Mecco have been included since the acquisition date and are reported within the Americas & Asia reportable segment. The comparability of the operating results for the year ended July 31, 2025 to the year ended July 31, 2024 has been impacted by the acquisitions of Gravotech Holding (“Gravotech”) on August 1, 2024, American Barcode and RFID Incorporated (“AB&R”) on October 1, 2024 and the Microfluidic Solutions business unit of Funai Electric Co., Ltd. (“Microfluidic Solutions”) on April 1, 2025. The operating results of Gravotech, AB&R and Microfluidic Solutions have been included since their acquisition dates. Gravotech has been included in both reportable segments, and AB&R and Microfluidic Solutions have been included in the Americas & Asia reportable segment.

A comparison of results of operating income for the years ended July 31, 2026, 2025, and 2024 is as follows:

(Dollars in thousands)

Net sales increased 9.8% to $1,661.6 million in fiscal 2026 compared to $1,513.6 million in fiscal 2025, which consisted of organic sales growth of 5.3%, an increase from foreign currency translation of 2.3%, and sales growth from acquisitions of 2.2%. Organic sales grew 7.5% in the Americas & Asia segment and organic sales grew 1.2% in the Europe & Australia segment.

Gross margin increased 13.0% to $859.8 million in fiscal 2026 compared to $760.8 million in fiscal 2025. As a percentage of net sales, gross margin increased to 51.7% in fiscal 2026 from 50.3% in fiscal 2025. The increase in gross margin as a percentage of net sales was primarily driven by organic sales growth in higher gross margin product lines, as well as the absence of a non-recurring fair value adjustment related to acquisition inventory and facility closure and other reorganization costs recorded in the prior-year period. The net impact of incremental tariffs and tariff refunds did not materially impact gross margin or gross margin as a percentage of net sales in fiscal 2026 compared to fiscal 2025.

R&D expenses increased 17.7% to $94.0 million in fiscal 2026 compared to $79.9 million in fiscal 2025. As a percentage of net sales, R&D expenses increased to 5.7% in fiscal 2026 compared to 5.3% in fiscal 2025. The increase in R&D spending in fiscal 2026 was primarily due to the acquisitions of Microfluidic Solutions and Mecco, and an increase in R&D headcount within the Company’s organic business. The Company remains committed to investing in new 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 are the primary focus of R&D expenditures in fiscal 2027.

Selling, general and administrative (“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 13.1% to $502.3 million in fiscal 2026 compared to $444.3 million in fiscal 2025. As a percentage of net sales, SG&A expense increased to 30.2% in fiscal 2026 compared to 29.4% in fiscal 2025 primarily due to costs incurred related to the acquisition of the PSS business of $35.7 million which were partially offset by cost reductions from facility closures and other reorganization activities completed in the prior fiscal year, as well as the absence of $13.6 million of charges related to those activities recorded in the prior year.

Operating income increased 11.3% to $263.5 million in fiscal 2026 compared to $236.6 million in fiscal 2025. As a percentage of sales, operating income increased to 15.9% in fiscal 2026 compared to 15.6% in fiscal 2025. The increase in operating income in fiscal 2026 was primarily due to organic sales growth in both reportable segments, gross margin improvements across both reportable segments, and SG&A cost efficiencies in the Europe & Australia segment, partially offset by PSS transaction-related costs of $35.7 million.

OPERATING INCOME TO NET INCOME

The following is a reconciliation of operating income to net income for the years ended July 31:

(Dollars in thousands)

Investment and other income was $5.6 million in fiscal 2026 compared to $5.2 million in fiscal 2025. The increase in investment and other income in fiscal 2026 was primarily due to an increase in the market value of securities held in deferred compensation plans.

Interest expense increased to $9.7 million in fiscal 2026 compared to $4.7 million in fiscal 2025. The increase in interest expense in fiscal 2026 was primarily due to increased financing costs related to the Company’s new credit agreement and bridge facilities to fund the PSS acquisition.

The Company’s income tax rate was 20.8% in fiscal 2026 compared to 20.2% in fiscal 2025. Refer to Item 8, Note 11, “Income Taxes” for additional information on the Company’s income tax rates.

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 years ended July 31:

Americas & Asia

Americas & Asia net sales increased 11.4% to $1,106.6 million in fiscal 2026 compared to $993.7 million in fiscal 2025, which consisted of organic sales growth of 7.5%, sales growth from acquisitions of 3.3%, and an increase from foreign currency translation of 0.6%. Organic sales growth reflected strong execution of our commercial strategies, supported by steady industrial demand in North America and increasing demand throughout Asia.

Organic sales in the Americas increased approximately 6% in fiscal 2026. The increase in organic sales was primarily due to growth in the wire identification, product identification, safety and facility identification, and healthcare identification product lines, which was partially offset by a decline in the people identification product line. Organic sales growth in the wire identification product line was driven by continued demand from datacenter construction projects.

Organic sales in Asia increased approximately 15% in fiscal 2026. The organic sales increase was realized throughout Asia with continued growth from electronics manufacturing services providers, technology companies, and industrial suppliers across the region. While organic growth was broad-based across the region, the most significant organic sales increases were driven by India, Singapore, and a return to growth in China.

Americas & Asia segment profit increased 22.3% to $256.6 million in fiscal 2026 from $209.8 million in fiscal 2025. As a percent of net sales, segment profit increased to 23.2% in fiscal 2026 from 21.1% in fiscal 2025. The increase in segment profit as a percentage of net sales was due to increased profitability from organic sales growth in higher margin product lines, as well as reductions in the cost structure resulting from facility closures and other actions in the prior fiscal year.

Europe & Australia

Europe & Australia sales increased 6.7% to $554.9 million in fiscal 2026 compared to $519.9 million in fiscal 2025. The increase consisted of organic sales growth of 1.2% and an increase from foreign currency translation of 5.5%.

Organic sales in Europe increased in the low-single digits in fiscal 2026. Organic sales increased across all major product lines with the wire identification, safety and facility identification, and people identification product lines driving the organic sales growth.

Organic sales in Australia increased in the low-single digits in fiscal 2026. Organic sales growth 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 30.5% to $74.3 million in fiscal 2026 compared to $56.9 million in fiscal 2025. As a percentage of net sales, segment profit increased to 13.4% in fiscal 2026 compared to 11.0% in fiscal 2025. 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, as well as organic sales growth in both regions in the current fiscal year. Additionally, segment profit for the prior fiscal year included reorganization costs and purchase accounting adjustments.

Financial Condition

Liquidity & Capital Resources

The Company’s cash balances are generated and held in numerous locations throughout the world. At July 31, 2026, approximately 93% 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, R&D, common stock repurchases, dividend payments, and strategic acquisitions for the next 12 months and beyond. 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.

Subsequent to the fiscal year-end, on August 3, 2026, the Company completed the acquisition of Honeywell’s PSS business for a cash purchase price of $1.4 billion, subject to customary post-closing adjustments. The transaction was funded through a combination of cash on hand, immediate borrowings under our new credit agreement, and private placement debt. This funding event included the full drawdown of the $500 million term loan facility alongside initial drawings of approximately $300 million under the revolving credit facility. Concurrently with the closing of the PSS acquisition, the available borrowing capacity under our revolving credit facility automatically expanded from an interim cap of $300 million to the full $500 million facility limit.

Cash Flows

Cash and cash equivalents were $187.1 million at July 31, 2026, an increase of $12.8 million from July 31, 2025. The following summarizes the cash flow statement for the years ended July 31:

(Dollars in thousands)

Net cash provided by operating activities was $244.1 million during fiscal 2026 compared to $181.2 million in fiscal 2025. The increase in cash provided by operating activities was primarily due to organic sales growth and improved working capital management in the current year.

Net cash used in investing activities was $59.0 million during fiscal 2026 compared to $171.3 million in fiscal 2025. The decrease in net cash used in investing activities was primarily due to acquisitions, with the acquisition of Mecco for $17.4 million in the current year, and the acquisition of Gravotech for $123.6 million in the prior year.

Net cash used in financing activities was $177.4 million during fiscal 2026 compared to $83.9 million in fiscal 2025. The increase in cash used in financing activities was primarily due to net repayments on the Company’s prior credit agreement in the current year, compared to net borrowings in the prior year, which included borrowings used to fund the Gravotech acquisition.

Material Cash Requirements

Our material cash requirements for known contractual obligations include capital expenditures, borrowings on our new 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. A discussion of income taxes is contained in Note 11 of the notes to consolidated financial statements.

Credit Agreements and Covenant Compliance

Refer to Item 8, Note 6, “Debt” for information regarding the Company’s new credit agreement, previous credit agreement and covenant compliance.

Inflation and Changing Prices

Essentially all of the Company’s revenue is derived from the sale of its products and services in competitive markets. Because prices are influenced by market conditions, it is not always possible to fully recover cost increases through pricing. Changes in product mix from year to year, timing differences in instituting price changes, and the large amount of custom products make it impracticable to accurately define the impact of inflation on profit margins.

Critical Accounting Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company bases these estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and judgments.

The Company believes the following accounting estimates are most critical to an understanding of its financial statements. Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) material changes in the estimates are reasonably likely from period to period. For a detailed discussion on the application of these and other accounting estimates, refer to Note 1 to the company’s consolidated financial statements.

Income Taxes

The Company operates in numerous taxing jurisdictions and is subject to regular examinations by U.S. federal, state and non-U.S. taxing authorities. Its income tax positions are based on research and interpretations of the income tax laws and rulings in each of the jurisdictions in which the Company does business. Due to the ambiguity of laws and rulings in each jurisdiction, the differences and interplay in tax laws between those jurisdictions, the uncertainty of how underlying facts may be construed and the inherent uncertainty in estimating the final resolution of complex tax audit matters, the Company's estimates of income tax liabilities may differ from actual payments or assessments.

While the Company has support for the positions it takes on tax returns, taxing authorities may assert different interpretations of laws and facts and may challenge cross-jurisdictional transactions. The Company generally re-evaluates the technical merits of its tax positions and recognizes an uncertain tax benefit when (i) there is completion of a tax audit; (ii) there is a change in applicable tax laws including a tax case ruling or legislative guidance; or (iii) there is an expiration of the statute of limitations. The liability for unrecognized tax benefits, excluding interest and penalties, was $19.5 million and $21.8 million as of July 31, 2026 and 2025, respectively. If recognized, $16.0 million of unrecognized tax benefits would reduce the Company’s income tax rate as of both July 31, 2026 and 2025. Accrued interest and penalties related to unrecognized tax benefits were $5.9 million and $6.6 million as of July 31, 2026 and 2025, respectively. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense on the consolidated statements of income. The Company believes it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $2.6 million in the next 12 months as a result of the resolution of worldwide tax matters, tax audit settlements, amended tax filings, and/or statute expirations, which would be the maximum amount that would be recognized as an income tax benefit in the consolidated statements of income.

The Company recognizes deferred tax assets and liabilities for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. The Company establishes valuation allowances for its deferred tax assets if it is more likely than not that some or all of the deferred tax asset will not be realized. This requires management to make judgments regarding: (i) the timing and amount of the reversal of taxable temporary differences, (ii) expected future taxable income or loss, and (iii) the impact of tax planning strategies. The Company recognized valuation allowances for its deferred tax assets of $84.0 million and $82.2 million as of July 31, 2026 and 2025, respectively, which were primarily related to foreign tax credit carryforwards and net operating loss carryforwards in its various tax jurisdictions.

Goodwill and Other Intangible Assets

The allocation of purchase price for business combinations requires management estimates and judgment as to expectations for future cash flows of the acquired business and the allocation of those cash flows to identifiable intangible assets in determining the estimated fair value. If the actual results differ from these estimates, it could result in an impairment of intangible assets and goodwill or require acceleration of the amortization expense of finite-lived intangible assets. In addition, goodwill and other indefinite-lived intangible assets must be tested for impairment at least annually. If circumstances or events prior to the date of the required annual assessment indicate that, in management’s judgment, it is more likely than not that there has been a reduction of fair value of a reporting unit below its carrying value, the Company performs an impairment analysis at the time of such circumstance or event. Changes in management’s estimates or judgments could result in an impairment charge, and such a charge could have an adverse effect on the Company’s financial condition and results of operations.

The Company has identified six reporting units within its two reportable segments, Americas & Asia and Europe & Australia, with the following goodwill balances as of July 31, 2026: North America, $501.0 million; Europe, $181.8 million; and Latin America, $3.2 million. The other three identified reporting units each have a goodwill balance of zero. The Company has the option to first assess qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is greater than its respective carrying value. If the qualitative assessment leads to a determination that the fair value of a reporting unit may be less than its carrying value, or if the Company elects to bypass the qualitative assessment altogether, the Company performs a quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with its associated carrying value. When the Company performs the quantitative test for goodwill, the Company establishes the fair value for the reporting unit based on the income approach, in which a discounted cash flow model is utilized, the market approach, in which market multiples of comparable companies are utilized, or a combination of both approaches. The income approach requires the use of significant estimates and assumptions, including forecasted sales growth, operating income projections, and discount rates and changes in these assumptions may adversely impact the fair value assessments. The market approach requires significant assumptions related to the selection of comparable publicly traded companies and the market multiples. Significant negative industry or macroeconomic trends, disruptions to the Company’s business, loss of significant customers, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets or in entity structure, and divestitures may adversely impact the assumptions used in the valuations.

The Company completes its annual goodwill impairment analysis on May 1 of each fiscal year and evaluates its reporting units for potential triggering events on a quarterly basis in accordance with ASC 350, “Intangibles - Goodwill and Other.” In addition to the metrics listed above, the Company considers multiple internal and external factors when evaluating its reporting units for potential impairment, including (i) GDP growth for the respective geography, (ii) industry and market factors such as competition and changes in the market for the reporting unit’s products, (iii) new product development, (iv) competing technologies, (v) overall financial performance such as cash flows, actual and planned revenue and profitability, and (vi) changes in the strategy of the reporting unit. In the event the fair value of a reporting unit is less than the carrying value, the Company would recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds the fair value. If necessary, the Company may consult valuation specialists to assist with the assessment of the estimated fair value of the reporting unit.

On May 1, 2026, the Company performed the qualitative assessment for all three reporting units with goodwill balances and determined that it was more likely than not that the fair value exceeds the carrying value for each reporting unit, and as such, goodwill was not considered impaired.

Business Combinations

The Company uses the acquisition method of accounting to allocate the purchase price of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the estimated fair value of assets and liabilities is recorded as goodwill. If the fair value of net assets acquired exceeds the purchase price, the Company records the excess as a bargain purchase gain in earnings after reassessing the estimated values. Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires knowledge of current market values and the values of assets in use and often requires the application of judgment regarding estimates and assumptions. While the ultimate responsibility resides with management, for material acquisitions, we retain the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets, including intangible assets and significant tangible long-lived assets. The valuation methods used to determine the estimated fair value of intangible assets included the multi-period excess earnings method for customer relationships using customer inputs and contributory charges, and the relief from royalty method for tradenames and technological know-how. Several assumptions and estimates were involved in the application of these valuation methods, including forecasted sales growth, margin, and cash flows attributable to existing customers, obsolescence factor, royalty rate, contributory asset charges, customer attrition rate, tax rates, and discount rates. Tangible long-lived assets are valued using a combination of the income, cost and market value approaches. While we believe expectations and assumptions utilized for historical business combinations have been reasonable, they are inherently uncertain and include significant management judgment.

New Accounting Standards

The information required by this Item is provided in Note 1 of the notes to consolidated financial statements contained in Item 8 — Financial Statements and Supplementary Data.

The Company’s business operations give rise to market risk exposure due to changes in foreign exchange rates. To manage that risk effectively, the Company enters into hedging transactions according to established guidelines and policies that enable it to mitigate the adverse effects of this financial market risk.

The global nature of the Company’s business requires active participation in the foreign exchange markets. The Company has manufacturing facilities and sells and distributes its products throughout the world and therefore has assets, liabilities and cash flows in currencies other than the U.S. dollar. As a result, the Company’s financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak macroeconomic conditions in the foreign markets in which the Company manufactures, distributes and sells its products. The Company’s operating results are principally exposed to changes in exchange rates between the U.S. dollar and the Euro, the British Pound, the Mexican Peso, the Canadian dollar, the Australian dollar, the Singapore dollar, the Malaysian Ringgit, and the Chinese Yuan.

The objective of the Company’s foreign currency exchange risk management is to minimize the impact of currency movements on non-functional currency transactions. To achieve this objective, the Company hedges a portion of known exposures using forward contracts. As of July 31, 2026, the notional amount of outstanding forward foreign exchange contracts designated as cash flow hedges was $55.1 million. The Company may designate portions of its foreign currency denominated debt as net investment hedges in its foreign operations. As of July 31, 2026, the Company did not have any of its foreign currency denominated debt designated as net investment hedges. The Company’s new credit agreement allows it to borrow up to $500 million in currencies other than U.S. dollars. Debt issued in currencies other than U.S. dollars acts as a natural hedge to the Company’s exposure to the associated currency.

The Company also faces exchange rate risk from transactions with customers in countries outside the United States and from intercompany transactions between affiliates. Although the Company has a U.S. dollar functional currency for reporting purposes, it has manufacturing sites throughout the world and a significant portion of its sales are generated in foreign currencies. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates in effect during the respective period. As a result, the Company is exposed to movements in the exchange rates of various currencies against the U.S. dollar. In particular, the Company has more sales in European currencies than it has expenses in those currencies. Therefore, when European currencies strengthen or weaken against the U.S. dollar, operating profits are increased or decreased, respectively. In fiscal 2026, the fluctuation in currency exchange rates had a negligible effect on sales; however, the effect was more pronounced in interim periods compared to fiscal 2025 as the U.S. dollar depreciated, on average, against other major currencies throughout the year.

Changes in foreign currency exchange rates for the Company’s foreign subsidiaries reporting in local currencies are generally reported as a component of stockholders’ equity. The Company’s currency translation adjustments recorded during the years ended July 31, 2026, 2025, and 2024, as a separate component of stockholders’ equity, were favorable by $16.6 million, favorable by $18.2 million, and unfavorable by $14.5 million, respectively. As of July 31, 2026 and 2025, the Company’s foreign subsidiaries had net current assets (defined as current assets less current liabilities) subject to foreign currency translation risk of $281.3 million and $259.2 million, respectively. The potential decrease in net current assets as of July 31, 2026, from a hypothetical 10 percent adverse change in quoted foreign currency exchange rates would be approximately $28.1 million. This sensitivity analysis assumes a parallel shift in all major foreign currency exchange rates versus the U.S. dollar. Exchange rates rarely move in the same direction relative to the U.S. dollar due to positive and negative correlations of the various global currencies. This assumption may overstate the impact of changing exchange rates on individual assets and liabilities denominated in a foreign currency.

The Company could be exposed to interest rate risk through its corporate borrowing activities. The objective of the Company’s interest rate risk management activities is to manage the levels of the Company’s fixed and floating interest rate exposure to be consistent with the Company’s preferred mix. The interest rate risk management program allows the Company to enter into approved interest rate derivatives if there is a desire to modify the Company’s exposure to interest rates. As of July 31, 2026, the Company had no interest rate derivatives and no fixed rate debt outstanding.

Disclosure Controls and Procedures:

Brady Corporation maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports the Company files under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of its management, including its President and Chief Executive Officer and its Chief Financial Officer and Treasurer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, the Company’s President and Chief Executive Officer and Chief Financial Officer and Treasurer concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this report.

Management’s Report on Internal Control Over Financial Reporting:

The management of Brady Corporation and its subsidiaries is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

With the participation of the President and Chief Executive Officer and Chief Financial Officer and Treasurer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of July 31, 2026, based on the framework and criteria established in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, management concluded that, as of July 31, 2026, the Company’s internal control over financial reporting is effective based on those criteria.

Because of the inherent limitations of internal control over financial reporting, misstatements may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s internal control over financial reporting, as of July 31, 2026, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

Changes in Internal Control Over Financial Reporting:

There were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Brady Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Brady Corporation and subsidiaries (the “Company”) as of July 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended July 31, 2026, of the Company and our report dated September 3, 2026 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

September 3, 2026