Good morning, everyone. I'm Steve Ferazani, an analyst at Sidoti. I'm still waiting for the room to fill in a little bit, but we have an exciting half hour for you. Just to let you know that, there'll be some time after the presentation if you do have questions. I know you've heard this before. You press that Q&A button at the bottom of your screen and type them in, and we'll get to as many as we can, time permitting. So happy to be joined this morning by Brady Corporation. The ticker is BRC. We have CFO Ann Thornton with us. You know, one of the very few industrial companies that reported earnings that beat my estimate and raised guidance in what obviously is a challenging environment right now. So certainly want to hear what they're doing so right.
I know they're rolling out a lot of new products. I don't want to steal her thunder, but let me turn it over to Ann Thornton, CFO, Brady Corporation. Ann?
All right. Thanks so much, Steve, and morning, everybody. Thanks for joining today. I'll start off today by giving you some background on who we are, what we do, and then I'll share some financials, and then I'll leave some time at the end for Q&A. All right, so just a broad summary. Brady is a leader in the research, development, and manufacturing of high-performance specialty adhesives that are intended for a wide variety of uses within safety and identification, and with a particular specialty in applications in harsh environments where safety and precision is absolutely critical.
So I'll get into some of the products later, but broadly, we really have a vast product portfolio consisting of wire identification, specialty adhesives, labels, and printers, safety and facility identification, signage, floor marking, pipe marking, product identification labels, printers and scanners, healthcare identification, patient ID wristbands, and people identification, basically access badges and people-related items and access into buildings. There's a wide variety of applications and end markets where our products are ideal, and basically, the more specific the actual need for the adhesive product, the better for Brady, because that's where we really stand out. We're very diversified. We have a diversified customer base. No one individual customer comes close to 10% of sales. We sell thousands of products, and 46% of our revenue as of last fiscal year was generated outside of the U.S. At the same time, our competitive landscape is very fragmented.
We don't compete with one single company across all of our product offerings, not even close. In fact, our competition is often very specific to a particular type of product or products, and often also a specific geography, so product-specific and geographically specific. We're focused on producing long-term, sustainable financial results. We've really refocused our attention on innovation, and a little bit later, I'll show you that our R&D spend was up to 5% of sales through the first nine months of this fiscal year. And we just launched a couple of very new and exciting products last quarter, and we have some more planned for the future. Also, if you look back over the last seven years, we have reduced our SG&A as a percentage of sales by over 800 basis points, which has been absolutely fantastic for our bottom line.
We're coming off of three consecutive record years of EPS as well. 2021, 2022, and 2023 were record EPS years for us, with our 2023 EPS up by 21% over the prior year. So we're on a very nice run from an earnings standpoint. We're also very focused on cash generation, and we're always making cash-based decisions. Operating cash flow was up 32% in the first nine months of this year compared to the first nine months of last year. And then, as far as what we do with the cash that we generate, we're disciplined, and we're patient. We continue to invest in the organic business throughout the economic cycle.
So for us, that means adding salespeople when we can find people who are the right fit and in the right, the right locations, and, and basically with the background that we need. Investing in R&D, of course, and then geographic expansion, where we believe we have the opportunity, so that we can ultimately increase our rate of organic sales growth. Investments in our organic business typically do deliver the best ROIC for us. We also return funds to our shareholders through dividends, and at the beginning of this fiscal year, we announced our 38th consecutive annual dividend increase, which we're really proud of. We've increased our dividend every single year since we went public. We also take a very disciplined approach when it comes to acquisitions.
The opportunity needs to provide some level of technology or a product offering that we don't have, but that's also adjacent to what we do. The price needs to be right, it needs to fit, and it needs to help us drive our strategy forward. And if we don't find the right deal, then we have no problem stepping aside from a process, and just waiting. We also return funds to our shareholders in the form of share buybacks as well. In fiscal 2023, we returned $120 million to shareholders between buybacks and dividends, and the year before that, we returned $155 million between buybacks and dividends. And this current fiscal year, we've returned $106 million through buybacks and dividends through the first nine months.
So returning funds to our shareholders is definitely a focal point of our capital allocation approach. So overall, we believe we have a very well-balanced organization that's very diversified, which absolutely gives us some protection throughout the economic cycle. Okay, so the next slide here shows the geographic layout of Brady, and I did mention 46% of our revenue was generated outside of the U.S. in fiscal 2023, and 54% was generated within the U.S. So then internationally, 29% of our revenue is in Europe, which is mostly Western Europe, and then the remaining 9% makes up Australia and Asia. So we're very global for $1.3 billion in revenue. All right. We operate our business geographically within two regions.
The first geography is the Americas and Asia, which represents two-thirds of our total revenue, and then Europe and Australia, which represents the remaining one-third of our total revenue. We sell the full suite of Brady products throughout each of our geographies. So this breaks down further into five major product categories. The first would be safety and facility identification, and you can see a few examples of products in the upper-left side of the slide. So, kind of an easy way to describe this fairly broad product category would be to think of all of the signage, safety, and identification products that exist throughout a manufacturing facility. So safety signs, floor marking tape, pipe markers, Lockout/Tagout type products.
We offer a full suite of hardware, which would be our printers, software to go along with that, and then the high-performance specialty label materials and adhesives that are to be run through the printers, which we manufacture ourselves at a coating facility here in Milwaukee, and then we sell that throughout our global businesses. The next category on this slide, in the upper right, with some examples, basically, is wire identification. So this consists of another wide variety of materials that can be printed upon and then applied to a wide variety of different types of wires throughout many different applications and industries. And then the printers you see here, and throughout all of our product categories, are the razor/razor blade model. We manufacture both our printers and the consumables.
The cartridges are keyed, and they're all intended for and ideal for harsh environments where safety is absolutely critical. Like, applications for these types of products, think of what an electrician would use every single day to label a panel, or wires, or wire harnesses, other OEM applications such as aerospace, mass transit, things like that. Product identification primarily consists of barcode labels and other brand protection type of labels and products. We manufacture RFID-enabled labels, the label design software, 1D/2D barcoding software, along with the RFID readers and the barcode readers, which came along with 2 acquisitions that we made in 2021.
Healthcare identification mostly consists of patient identification wristbands and other labels that are intended to ensure that all of the care that a patient receives in a healthcare setting is accurate and what's intended. So we source and resell a variety of other healthcare supply types of products within this product line as well. And then our last major product category would be product ID, people identification. So some of these products that we would manufacture and sell here would be employee badges, building access badges, some lanyards, things like that. And we also offer a full printer lineup that's designed for this product category, which came along with another acquisition from a few years ago.
So overall, the common themes between our product categories are that we manufacture high-quality, long-lasting products that are intended for a wide variety of end markets. And particularly, where we really shine are those products that are used in harsh environments, where the cost of failure or the cost of non-compliance, it can be very high. All right, so what you'll see on this slide are some of our printer offerings on the left-hand side, which we then supplemented a little over two years ago with the acquisitions of Nordic ID and Code. Nordic ID brought RFID reading technology, and Code brought 1D and 2D barcode reading technology to our portfolio, which we intended to help build out our track-and-trace product offering. Because what we didn't offer prior to these acquisitions were the actual readers.
Our printers have the full capability of printing barcodes, but we did not have the optics that went along with that. So our view here is efficiency throughout manufacturing processes is more important every single day. It always has been, but it is every single day, in particular, as companies are looking to potentially nearshore or reshore in an effort to better supply control supply chain and just overall have better control. But in order to do this successfully, companies just have to become more efficient. Labor's still tough to find, and it's much more expensive, and then that's where Brady's solutions can really add a lot of value, and do add a lot of value for our customers to help with automation and tracking throughout that, the manufacturing process.
So we're pleased with these acquisitions and what they've added to our portfolio. All right, I'll touch on one slide related to ESG. We look at ESG as simply the right way to conduct business. Well, thinking, I guess a couple of thoughts on the environmental component of ESG, it's not just about making our products more environmentally friendly, which we're always trying to do, but it's also about making our manufacturing processes more environmentally friendly and our customers' manufacturing processes more environmentally friendly... This would of course translate into reduced cost of goods sold, because we'll use less energy, we'll waste fewer materials, and then we'll ultimately send less waste to the landfill, but on and on from there. Ultimately, we're driving benefits for our shareholders, along with the environment.
All companies have to have a strong system of governance in place, of course. And then from a social standpoint, it's we view it as it's all about ensuring that we have a diverse, engaged workforce. It allows for more creative thought. It'll hopefully result. Which will hopefully result in less turnover, and then that in turn means that we'll be more productive, and we'll be able to drive more value. So a lot of what we do and what we focus on in ESG ties straight back to improving our profitability, improving what we do every day, improving cash generation, and then it's also just the right way to do business. Okay, so just a couple of summary comments. Quick conclusion, I guess, before I move to the financials. Where we are today, we're highly focused on organic sales growth.
We're investing in innovation, we're investing in automation, and we're making investments that we believe will pay off for our shareholders in the long term. And then we're also driving profit improvement. I mentioned this before, our EPS was up 21% in fiscal 2023. Process improvements are constantly being tackled throughout our businesses. SG&A is down significantly from seven years ago. The key to all of this is that the reductions are sustainable. Everything that we focus on are sustainable improvements, truly fixing the front end as best we can, so that we ultimately remove the problems on the back end. We're always about simplifying what we do, how we do it, and it's absolutely paying benefits, and we're returning cash to our shareholders. So we believe that we're positioned so really well for the future.
We have a really diverse product portfolio, and we believe that when you combine that with our niche product offerings, that we're in a great spot for the long term. All right, so let me just touch on a couple of our financial trends here. So from a revenue standpoint, just immediately pre-pandemic, we grew organic revenue 2.8% in fiscal 2019. Then, of course, the pandemic hit in fiscal 2020, and we dropped, like many companies. We were actually down 5.4% that year organically, and then we recovered in fiscal 2021 and fiscal 2022. One item to keep in mind is that Brady has a July 31st fiscal year end, so the pandemic year, if you call it a year, was basically the second half of fiscal 2020, and then the first half of fiscal 2021 for us.
So, 2022 had a little bit of additional COVID recovery, but in fiscal 2023, we grew sales 5.5% organically to finish at $1.3 billion globally. Through the first nine months of fiscal 2024, organic sales are up 3%. All right, so we have very strong gross profit margins. Historically, pre-pandemic, we were pretty much around 50% annually, which you can see on this slide. Then, during the inflationary period and the logistics challenges in 2022, we did drop below this level slightly to 48.5%. But then in fiscal 2023, we recovered to nearly 50%. And then through the first nine months of this fiscal year, 2024, our gross margin has continued to improve to 51.2%, compared to 48.8% in the first nine months of last year.
We've worked really hard to continue to execute operational efficiencies throughout our global businesses, along with putting through strategic price increases, so our impact on gross profit margin has been a really nice result. Next, you can see on this slide that research and development has steadily increased for the last seven years, which absolutely shows our commitment and our belief in the return from our investment in R&D. In 2023, we were at 4.6% of sales, which was our highest year ever, and for the first nine months of 2024, we've exceeded that, and we're at 5% of sales. We know that the benefits we gain from our R&D investments deliver the best return, and it's really paying off.
This is an area that we expect to continue to invest in, because it, it results in a nice, very long-term benefit to the organization overall. All right, so moving to SG&A expense. We have reduced SG&A as a percentage of sales by 800 basis points over the last 7 years. The chart on the left side of this page really does bring that to light. In fiscal 2016, SG&A was over $400 million, and last fiscal year, it was down to $371 million, and that includes 3 acquisitions that we made in 2021. So SG&A is down in absolute dollars, even with the 3 acquisitions and 8 years of inflation, and it's also down as a percentage of sales from 36%-28% last year.
So basically, we've been reducing SG&A by about 100 basis points per year for the last 8 years, which is a really nice trend. So then, if you look following this through to pre-tax income, the key to focus on is we're going up and to the right, which is absolutely what we want. Every year, with the exception of the pandemic year, we've shown very nice improvements in pre-tax income. We also like to show pre-tax income here rather than net income, just due to tax rate fluctuations over the years, in particular, when the tax laws changed in the U.S. in 2017. So this just gives a better indication of the true underlying trends and our results. But so the story continues into earnings per share. Fiscal 2021, as you can see, was $2.47 of EPS.
That was an all-time record high. Last year, we were at $2.90, another record high, and 2023 was at $3.46, which was another record high. So we're extremely focused on converting our organic sales growth into bottom line growth, and doing whatever we can and whatever we need to, to offset inflation. All right, so then moving along to cash flow from operating activities, I wanna point out a couple of things here. First would be if you look at our fiscal 2022 cash generation of $118 million, that's a big drop from fiscal 2021, and the primary driver of this was inventory. So as we went through the pandemic, we took the approach of just making sure that we had the inventory to serve our customers, and this absolutely benefited us. So this carried through the logistics challenges in 2022.
We did whatever we could to have the products that we needed so we could fulfill orders as quickly as possible. This was a major competitive advantage for us, because not all of our competitors were in this situation. So now we've been in the process of strategically and thoughtfully reducing our inventory throughout 2023 and 2024, and you can see the impact on our cash flow from operating activities from this effort, with a strong improvement in 2023, and then building on that in the first nine months of 2024. And then the net result of all of this focus, our balance sheet, we are in a net cash position today of $97 million. We have total debt of $64 million, and cash of $161 million.
So we have a really strong balance sheet, which gives us many, many opportunities to deliver shareholder value over the long term. Okay, and then from a regional perspective, you can see really consistent results in terms of both growth in sales and profitability over the last three years. These are full annual views. We have definitely been executing extremely well in both regions. One item to point out in Europe and Australia, given the strong dollar in 2022 and 2023, you'll see that currency translation did have a pretty significant impact from the strengthening dollar when translating our results back to USD. So, but the underlying growth trajectory within Europe and Australia has been very strong, and we always focus on organic.
All right, so with that, I'll just add a couple of closing thoughts before turning it over to Q&A. We're financially strong, we're diverse, we're very, very focused on organic sales growth. Our profitability has improved. Our cash generation has been great. We consistently make cash-based decisions, which we do believe over the long term, I mean, it's absolutely the right way to go. We're returning funds to our shareholders, and as we sit here today, we believe we're in a great position with a strong balance sheet, an organization that's focused on execution. We have a great product line-up, with new products coming to market, planned in future quarters as well, and we really do believe that we're set up for a strong future. So now I'll turn it back over to Steve for any questions.
Thanks so much, Ann. We do have several questions coming in. Covered a lot of ground in that presentation. I do wanna start, though, and I know I ask this on every conference call to you and Russell, but it probably should be asked every quarter, because every quarter you set new record gross margins. SG&A as sales as a percentage of sales is still at record lows, so you're setting record profit margins in a period of global slow growth, where you're a global company. So I'll ask, is there room for more?
Great question. You know, from a gross profit margin standpoint, in particular this fiscal year, our improvement has come faster than even we anticipated. And it's not due to any one particular item. With you know, one-time items aren't impacting us greatly. Generally, within operations, we have a fantastic operations team. What ends up being the result are a variety of different projects all being worked on at the same time. In addition to that, our growth is coming from our highest gross profit margin products right now.
So the specialty materials, the new portable printers that we launched at the beginning of the year, have sold nicely, which then have a nice follow-through effect of selling the higher margin consumables, and that's absolutely what we want. We want everything to grow, of course, but that's been a big benefit. Do we expect this range, pushing beyond this point? We would generally expect basically this 50%-ish range, a low 50% range from a gross margin standpoint. But then moving along to SG&A, I hit that slide, I feel like repeatedly, the basis point reduction that we've been working on, and we're very proud of that, over time.
Seven straight years of reductions is great, and has had a huge impact. Whether that'll continue at this rate into the future, probably not to this degree, but there are absolutely still opportunities that we can continue to work on. Which is always a focus area. There are projects all over the place. Really, that adds up to we would expect continued profitability, and we're pushing ourselves for organic growth, and with that comes a tremendous amount of leverage, when we can hold that gross profit margin where we have been recently, for sure.
Excellent, as you had the slide on the free cash flow, and as you've worked inventory levels back down, you're back to being a very powerful cash flow generator. CapEx is always very low for a company your size. With that being said, your cash balance begins building again, so the question you get, and we got it here today, is: What's your plans with the cash? How are you thinking about M&A, and how do you evaluate targets?
Sure. Yeah, absolutely. I mean, we view M&A opportunistically. You know, much like our approach on share buybacks. We obviously run an intrinsic value or a DCF model on anything that we're doing. And then, as and when the opportunities present themselves, and we believe we can make it work as a strategic acquirer, we're here, and the timing is right on the other side as well. We're here, and we have the balance sheet to be able to do that. We're not afraid to lever up. We've absolutely been in net debt positions for sure in the past. It's so whether our current net cash position is optimal, you know, debatable, but it's also just an outcome of what we're doing.
We, you know, don't let the cash burn a hole in our pocket. We say that all the time, but it is true, and we try to make very, you know, thoughtful decisions and be as patient as we need to, to make sure that we're making the right decisions with the cash. As and when it builds in the meantime, so be it, but it just gives us more of an opportunity to do all of the above at the same time when the opportunities present themselves, which is obviously always invest organically through, you know, our sales force and R&D, and then be... And, clearly, we're very proud of our dividend streak as well. And then be opportunistic and strategic from a share buyback and an M&A standpoint.
Has the way you think about buybacks changed much? because you certainly have been more aggressive in the last couple of years than you were, say, over the last 4, the previous 4-5.
Yeah. No, you know, philosophically, you know, we're, we're absolutely view share buybacks as an incredible tool to, to, to drive value for our shareholders when, when we believe that we can, we can buy shares back at a, at a price below what we believe our intrinsic value is. So, so no real change in the philosophy. It's just where we've, where we've found the opportunity, perhaps it may appear that we've been a little bit more aggressive, and, and, that, that's great because we felt that, that the, the opportunity was there this last quarter. The opportunity was there, last year. Toward the end of the year, We had a, another larger quarter of share repurchases, and when we feel that it isn't as present, then we wait.
So still a main focus area for us, because we absolutely believe in that as a tool to deliver value to shareholders, for sure.
Very good. In terms of you sell so many different products to so many different customers in so many economies, how do you grow from here? How do you examine expansion of product offerings and expansion of markets?
It is a great question because it is. We are absolutely a collection of literally thousands of different products. So we're investing and focusing in as much of our highest value type of products as we possibly can. So, where we might be on the more commoditized end of the spectrum, because not everything is incredibly, you know, engineered, and to the degree that of our highest value products, but that's where we're trying to really focus our investment, because it is where we're seeing the growth, and that would be in the specialty materials. That's the core of what we do.
And our newest product launches, really the ones we're in particular from earlier this year, where we're adding a lot more Bluetooth connectivity and simplifying the overall ability to use our products and trying to get something out there that's not really offered or doesn't check as many of the boxes with our competition, is that really is where we're seeing the growth. And then geographically, we... I know we mentioned, we do tend to mention India every single quarter 'cause i t's been such a consistent grower for us. It's still a relatively small business in the scheme of things, but it's definitely growing, and we see certain geographic opportunities, such as in India, where just economically, from a macro standpoint, the country itself is growing tremendously, where we would look to expand and continue to add additional sites in a country like that, as an example.
So it's tough, because we are diverse, and we do sell into literally 72 different countries globally. But you know, it also, the good and the bad, the positive is it gives us a little more protection on the downside as well as the compliance element of a lot of the products that we sell as well. So, we're working on it.
We are running out of time, but I do wanna get to this last question, 'cause it goes to the performance this quarter and also goes to how people think about Brady, including myself, which is, we think about this as a company that, that moves with the economy. You know I think you've characterized it as GD P plus. We certainly have. This quarter, you had a very strong performance in Europe, where Europe has been not so great economically. Has anything changed there, and how would you typically expect to perform in a weaker environment? Have you figured any ways around it?
You know, we look at it as execution has been incredibly strong in Europe. So, because you're absolutely right. From an economic standpoint, the growth is not robust in general. But I think it's absolutely a testament to what the team is focusing on, really, the specialty applications, the niche aspect of what we do. We're really trying to, really, in the post-regional reorganization mindset that we have, our European business being pulled together and, you know, building a little bit more scale in each of our geographies within Europe is definitely helping.
I think, you know, combining the best marketing efforts among the teams, doing a little more thoughtful exercises around not necessarily a hardcore 80/20 by any means, but perhaps, you know, eliminating some products that are just not necessarily, you know, pulling their weight from a bottom line profit standpoint, but focusing on those products that do. And, you know, cross-selling from more of a customer standpoint. It's really been a strong case of execution, I think, following the regional reorganization, and that absolutely goes to the team. Now, whether that'll continue, I mean, Europe's definitely in a different spot this year than as we sit here at this moment this year, than as we sat here at this moment last year.
So the effort's always into the future. So it's absolutely looking... It is just a tougher environment, for sure. But we're working on it, and I think the team's doing an excellent job identifying opportunities and combining the best parts of our former global product lines.
Excellent. We are just... bunch more questions. Unfortunately, can't get to them all, and I certainly had plenty more. But we are just about out of time. Any closing thoughts for everyone, Ann?
I think fantastic questions from the group. I really appreciate everyone's participation today. Please follow up anytime with myself, with Steve. He does a tremendous job. And happy to answer any other additional questions and talk anytime. We're continuing to move forward and trying to keep everything moving.
Excellent. Thanks so much, Ann Thornton, CFO of Brady Corporation. Hope everyone enjoyed the presentation, enjoys the remainder of our virtual investor conference. Thanks, everyone.
Thank you.