Good day, and welcome to the Brady Corporation Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ann Thornton, Chief Financial Officer. Please go ahead. Thank you. Good morning, and welcome to the Brady Corporation Fiscal 2023 Fourth Quarter Earnings Conference Call. The slides for this morning's call are located on our website at www.bradycorp.com/investors. We will begin our prepared remarks on slide number three. Please note that during this call, we may make comments about forward-looking information. Words such as expect, will, may, believe, forecast, and anticipate are just a few examples of words identifying a forward-looking statement. It's important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected results. Risk factors were noted in our news release this morning and in Brady's fiscal 2023 Form 10-K, which was filed with the SEC this morning. Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. We will be recording this call and broadcasting it on the Internet. As such, your participation in the Q&A session will constitute your consent to being recorded. I'll now turn the call over to Brady's President and Chief Executive Officer, Russell Shaller. Russell? Thank you, Ann, and thank you for joining us today. We released our fiscal 2023 fourth quarter results this morning, which represented another company record earnings per share result. Our organic sales growth grew 6.9% this quarter due to strong results throughout our global business. We increased our GAAP earnings per share 23.5%, and we grew our non-GAAP earnings per share by 19.5%. This quarter represented an excellent finish to another great year. Our full year 2023 GAAP EPS of $3.51 was another all-time record high, following two consecutive years of all-time record EPS. Our non-GAAP EPS of $3.64 was also an all-time record high. This year, we grew organic sales 5.5%, with growth driven by both regions throughout all of our major businesses, and we returned $120 million to our shareholders through dividends and share buybacks while still finishing the year in a net cash position. I'm proud of our results this year. This is a direct result of the hard work and dedication of the entire company. We continue to improve profitability while increasing our investment in R&D, expanding our sales force, and investing in our digital capabilities. Our focus on new products and sales-generating investments positions us to continue to generate consistent organic sales growth into the future. Our cash generation this quarter was excellent, with operating cash flow of 161% of net income and free cash flow of 148% of net income. Our priorities for the next year are consistent, which are: to generate top-line growth in excess of GDP and continue our evolution into a faster-growing company, to develop our product offering to support our customers' automation initiatives, which we believe is a growth opportunity for years to come, to execute operational effectiveness opportunities to ensure we continue to improve profitability as we grow, to effectively deploy our capital in order to drive long-term shareholder value, which includes organic investments, acquisitions, and returning funds to our shareholders through dividends and share buybacks. We demonstrated our commitment to returning funds to our shareholders this year as we repurchased more than 3% of our diluted share count by nearly exhausting our existing buyback authorization. We announced a new $100 million share buyback authorization, and yesterday, we announced an increase in our dividend, which represents the 38th consecutive year of annual dividend increases. We're committed to consistently return cash to our shareholders while delivering a strong shareholder return. I'll now turn the call over to Ann to provide more details on our financial results. Ann? Thank you, Russell. This quarter, we had strong organic sales growth of 6.9% while improving our gross profit margins and reducing our SG&A expense as a percentage of sales, resulting in earnings growth and a quarterly record GAAP EPS of $1 per share, which was up 23.5% compared to the fourth quarter of last year. Non-GAAP EPS, which is calculated as our GAAP EPS less the after-tax impact of amortization expense, was $1.04 per share this quarter, which was up 19.5% over the fourth quarter of last year. Both regions performed extremely well, with strong sales and profit growth. Compared to last year's fourth quarter, our Americas and Asia region grew organic sales 5.6% and increased segment profit by 17.2%, and our Europe and Australia region grew organic sales 9.5% and increased segment profit by 9.1%. Our teams are executing extremely well throughout our global businesses. So the key financial takeaways this quarter are strong revenue growth, record EPS, excellent performance within both of our regions, and a continued commitment to return funds to our shareholders.... Let's move to slide number four for our quarterly sales trends. Organic sales grew 6.9%, and foreign currency translation increased sales 0.6% this quarter, while the impact of our premises divestiture that we closed in the third quarter reduced sales by 0.7%, resulting in total sales growth of 6.8%. The recent weakening of the U.S. dollar versus other major currencies resulted in a slight positive to our total sales growth this quarter, which follows 6 consecutive quarters of the opposite FX impact due to the strengthening U.S. dollar. On slide number five, you'll find our quarterly gross margin trending. Our gross profit margin increased 40 basis points to 50.8%, compared to 50.4% in the fourth quarter of last year. Consistent with the third quarter, we were able to offset the majority of our input cost increases through reduced freight charges and other efficiency gains. Slide six details our SG&A expense trending. SG&A was $97.5 million this quarter, compared to $94.5 million in the fourth quarter of last year. As a percent of sales, SG&A declined to 28.2%, compared to 29.2% of sales in the fourth quarter of last year. If you exclude amortization expense from each of the periods presented, then SG&A would have decreased from 28% of sales in the fourth quarter of last year to 27.5% of sales this quarter. So overall, we're making nice progress with our cost structure. We've reduced our SG&A expense from over 36% of sales seven years ago to 27.8% in the full year fiscal 2023. Meanwhile, we're still investing in sales-generating resources by growing our sales force while identifying ongoing efficiency opportunities throughout our sales and other support functions. Slide number seven details the trending of our investments in research and development. This quarter, we once again increased our investment in R&D to $16.3 million, which was 4% of sales. We believe that the investments with the best ROI are almost always organic investments, in particular, research and development. We're committed to new product development, and we have an exciting pipeline of new products set to launch in fiscal 2024. On slide number eight, pretax earnings increased 18.2% on a GAAP basis from $54 million to $63.8 million. If you exclude amortization from both periods, pretax earnings increased 14.8% on a non-GAAP basis from $57.7 million to $66.2 million. Slide nine details the trending of earnings and EPS. You can see a clear trend of increasing earnings, and you can also see that the fourth quarter is our strongest quarter on record. On both a GAAP and non-GAAP basis, our fourth quarter EPS was an all-time record high. This quarter's GAAP EPS increased by 23.5%, and if you exclude the after-tax impact of amortization from both periods, our fourth quarter non-GAAP EPS increased by 19.5% compared to last year. On slide ten, you'll find a summary of our cash generation. Operating cash flow increased substantially this quarter from $53.2 million in Q4 of last year to $79.3 million this quarter. Free cash flow increased as well from $32.2 million in last year's fourth quarter to $73 million this quarter. Operating cash flow was 161% of net income, and free cash flow was 148% of net income this quarter. Turning to slide eleven, you can see the impact that Brady's historical cash generation has had on our balance sheet. We're currently in a net cash position of $101.8 million. To put this in perspective, even with returning more than $56 million to our shareholders in the form of dividends and buybacks this quarter, we still increased our net cash position by more than $17 million. Our approach to capital allocation is to first use our cash to fully fund organic sales and efficiency opportunities. This includes investing in new product development, sales-generating resources, capability-enhancing capital expenditures, and automation-focused CapEx. Despite the economic and any economic uncertainty, we'll continue to deploy capital to drive productivity and sales growth. And second, we focus on consistently increasing our dividends. We've now increased our dividends annually for 38 consecutive years, which is a streak that we're very proud of. After fully funding organic investments and dividends, we then deploy our cash in a disciplined manner for either acquisitions where we have clear synergies, or for opportunistic buybacks when we see a disconnect between intrinsic value and Brady's trading price. Our strong balance sheet positions us to be able to execute additional value-enhancing activities such as R&D investments and other organic sales opportunities, to acquire companies strategically when the price is right and the synergies are clear, and to return funds to our shareholders through dividends and share buybacks. Slide number twelve provides an overview of our financial results for the full year ended July 31, 2023. Overall, sales increased 2.3%, and organic sales grew 5.5%. This organic sales growth was partially offset by the negative impact of foreign currency translation of 3% and a decline of 0.2% due to the sale of our premises business in the third quarter. We finished fiscal 2023 with all-time high GAAP and non-GAAP EPS. These strong earnings results were even after increasing our investment in R&D by nearly 5% this year. Fiscal 2023 was another record EPS year, and our fourth quarter was another record quarter as well. We're confident that our actions this year and our consistent priorities will set us up for success in the future. So this takes us to our guidance for next year on slide thirteen. We're forecasting GAAP EPS to range from $3.70- $3.95 per share in fiscal 2024, which would represent an increase of 5.4%-12.5% next year. We also anticipate organic sales growth in the mid-single-digit% for the year ending July 31, 2024, and based on foreign currency exchange rates as of July 31, we expect the weakening of the U.S. dollar to increase fiscal 2024 sales by an additional approximately 2%. Other elements of our guidance include an income tax rate of approximately 22%, depreciation and amortization expense of approximately $32 million-$34 million, and capital expenditures of approximately $75 million. Our CapEx estimate is inclusive of the purchase of a previously leased facility and the build-out of a new facility, totaling approximately $55 million. Our capital allocation strategy remains unchanged, which are to continue to invest in our organic business through both research and development and our sales force. Continue to pay the dividend, which we just mentioned, increased for the 38th consecutive year. Continue to be opportunistic with share buybacks while identifying potential acquisitions where the price is right and the strategic fit is clear. We have a strong balance sheet, and we'll continue to use it to drive long-term shareholder value. Potential risks to our guidance, among others, include potential strengthening of the US dollar, inflationary pressures that we're unable to offset in a timely enough manner, or an overall slowdown in economic activity. I'll now turn the call back over to Russell to cover our regional results and to provide some closing thoughts before Q&A. Russell? Thanks, Ann. Slide fourteen details the financial results of our Americas and Asia region. Sales were $227.5 million this quarter, and organic sales growth was 5.6%. The divestiture of our premises business decreased sales by 1%, and foreign currency translation reduced sales by 0.2%, resulting in total sales growth of 4.4% this quarter. Segment profit increased by 17.2% to $50 million. Organic sales growth resulted in the significant increase in profit in the fourth quarter, while another contributing factor were freight rates returning to normal in fiscal 2023. Barring any drastic change in macro and logistics environment, we expect freight rates to remain at these normalized level, which will not provide the year-over-year benefit in fiscal 2024 that we realized this year. As we disclosed in the third quarter, our new regional structure became effective on February first, but this quarter will provide a few additional details regarding the sales performance of our previous segments. Our former Identification Solutions business in the Americas and Asia region grew sales in the mid-single digits, and our former Workplace Safety business declined in the mid-single digits in this quarter. Approximately 90% of the revenue in our Americas and Asia region represents the former IDS Solutions division, and the remaining 10% of the revenue in this region represents the former Workplace Safety division. We realized growth in most of our product lines and end markets, except for our healthcare identification product line. The healthcare industry has struggled to fully recover from a variety of challenges that have impacted it over the last several years, starting with the pandemic and then moving into supply chain and logistics challenges, and most recently, inflationary pressures. Also, our Asia business struggled in the fourth quarter, reporting a mid-single-digit decline, primarily due to weakness in China and in the consumer electronics industry in Southeast Asia. The exception in Asia is our business in India, which continues to grow organically between 15%-20% quarter over quarter. We're looking forward to our expansion in India and the additional growth potential in fiscal 2024. Moving to slide fourteen, you'll find a summary of the performance of our Europe and Australia region. Sales were $118.4 million this quarter. Organic sales growth was 9.5%, and foreign currency increased sales by 2%, for a total growth of 11.5%. As far as the sales performance of our previous segments, both our former Identification Solutions and Workplace Safety businesses grew sales organically in the high single digits in the quarter. Slightly more than half of the revenue in Europe and Australia region represents the former Identification Solutions division, and the remainder represents the former Workplace Safety division. Throughout Europe, we continue to realize organic growth across our major product lines, and we're benefiting from many similar trends that we're seeing in the U.S. Many companies are working to shorten their supply chain and find workers, resulting in real demand for our productivity solutions. Our Australian business grew sales organically by nearly 13% this quarter and contributed significant increase in segment profit. In total, Europe and Australia segment profit increased 9.1% to $18.4 million this quarter. Europe is realizing the impact of inflation as the impact has occurred slightly later than the impact of inflation in the U.S. This results in segment profit as a percentage of sales decreasing slightly from 15.9% to 15.6% this quarter. We're actively working to address these cost pressures through operational efficiencies and selective price increases. But near-term inflation expectations bring profitability challenges along with it. In total, our fourth quarter for our entire global business, our historical global ID Solutions business would have had organic sales growth of 7.3%, and our historic global Workplace safety business would have had organic sales growth of 5.1%. With that, we'd like to start the Q&A. Operator, would you please provide instructions to our listeners? Thank you. At this time, we'll conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. One moment for our first question. Our first question comes from Keith Housum with Northcoast Research. Your line is open. Good morning, guys, and congratulations on a great quarter. You know, Russell, perhaps you can touch on some of the growth initiatives that you've put in place, I guess, over since your tenure as CEO has started, and perhaps provide a bit color in terms of how it's driving growth that we're seeing here and what we can expect next year. Hi, Keith. Yeah, sure. And thanks for joining the day after vacation. Yeah, so you know, traditionally, Brady has been very good at selectively targeting customers to both, you know, improve their overall plant safety as well as improve their automation initiatives in their plant. And really, by focusing in on those areas for the whole company rather than just IDS, we're starting to see the translation into growth for the company. So you know, if you were to look back at IDS over many years, you know, it enjoyed a pretty decent growth track record. Now, what you're seeing is the expansion of that across, you know, really the consolidated group of companies within Brady. So that's, that's helping it. A second part that's helping is the tailwind that, or excuse me, the drag that we had had by some of our traditional catalog businesses, becomes increasingly a smaller share of the overall corporation. And so, you know, while we're still seeing some of those businesses decline, in the low single digits, the effect it's having on the overall corporation is certainly less. So, you know, I'm gonna give it two things. The positive impact of really focusing on customers and some of the customer solutions we're delivering, that's giving us a great tailwind. And then on the, the flip side, having it increasingly smaller percentage of our dragging businesses, is helping us as well. So, you know, long-winded answer, but to give you guidance kind of into next year, you know, we've always felt that we can do GDP of our underlying countries, plus a couple of points. You know, what the total macro environment will be next year, I think, is anybody's guess. America seems very strong, Europe's okay, and China's not doing too well. Yep, gotcha. If I could just drill down on your one of your comments before about expanding the sales force. Can you perhaps provide a little bit more color in terms of how much you're expanding the sales force? Is it by, you know, several percentage points above revenue growth, or, or where is the sales force going in terms of the driver? Yeah, we continue. You know, sales for us is a great marginal investment. Unfortunately, though, salespeople are kind of granular, so if you hire 2 people in Texas, you know, is it worth hiring a third person in Texas, for instance? We look at that as we continue to invest in salespeople, as long as we're getting a marginal return on them. You know, is it an enormous increase in sales force? Absolutely not. But, you know, we continue to push the bounds of saying, you know, "Should we add another 5%-7% to our sales force as we continue to grow our business?" And it's something that we look at every month, because they're very granular decisions about whether we would add, say, a salesperson in India or whether we would invest in digital marketing in the UK, for instance. So you know, we have a great analytics team that is helping us tremendously in the resolution of where we are making our investments. Great. If I could squeak one more in here, and then I'll turn it over to others. In terms of the profitability of the segments, you know, the Europe and Australia segment obviously has a lower segment profit margin than the Americas and Asia. Can you perhaps help us reconcile why that's the case? You know, is there an opportunity to get into more of a balance going forward? Part of it is, it's just a little bit tougher environment in Europe. The cost structures are a little bit higher. I think both businesses are in a good place in terms of profit margins. You know, it's always the question, if you push profit margins, do you start destroying demand for some of our products? And we do see that. You know, if you push pricing too far, people will buy two printers instead of three, or they'll buy less consumables. So, you know, if you look at the European region, in particular, and how cut up it is by the different countries and the different languages and the logistics costs and what have you, it's just a slightly more expensive place to do business. We love them, and we love their growth opportunities. I mean, clearly did fantastic in the last quarter. But with that said, it's just slightly more difficult to do business there than you'd have in the U.S.... Great. I appreciate it, Russ. I'll turn it over. Thanks. One moment for our next question. Our next question comes from Steve Ferazani with Sidoti. Your line is open. Morning, Russell. Morning, Ann. Wanted to ask a little bit about cost management, SG&A. Obviously, you've continued to do a great job in reducing costs. I wanna go back to when you announced the resegmentation and talked about it adding $0.10-$0.20 in EPS to fiscal 2024. I'm assuming we've seen some of those benefits already in the second half of this year. Is it a $0.10-$0.20 benefit next year? And what other efforts are being made here? Do you see further reductions in SG&A going forward? Yeah. So you're absolutely right. We did capture more of that savings in 2023 than we had originally expected. So I think when I had said that $0.10-$0.20 in 2024, I was probably a bit pessimistic in how fast we were going to be able to realize the savings. So we certainly picked some of it up in 2023. The remainder will be in 2024. You know, I feel fantastic so far with how that has come together. In fact, it has absolutely exceeded our expectations and our business case in going through it. You know, we always said this was gonna be a pay-as-you-go event. We've digested all of the costs that were associated with making this change, and yet we've still been able to to churn out record profits. I think we're well-positioned in 2024, but to explicitly answer your question, some of that gain absolutely was seen in 2023. Great. The $55 million in CapEx related to the conversion and new facility, can you provide a little bit more detail on what you're funding? Yeah, sure. So, we always do the decision, I think as all companies do, of make versus buy. Or excuse me, lease versus buy on facilities, and we had the opportunity of converting a pretty significant plant lease to a purchasing decision. The return on capital, we thought was fantastic, and we're doing that, but it's still, it's a, it's a significant cash outlay. Approximately $37 million for the plant, which previously would have been a lease. We have another facility that we've been in the process of constructing for a little bit over a year, but the significant parts of the bills is due this year, and occupancy will happen towards the end of next year. So, you know, those two are one-time bites. They wouldn't be typical of our company. We, we tend to have plant purchases or significant investments, once every few years. It just coincidentally, these two lined up at the same time. Is that supporting any particular growth segment products? No, these are both ongoing operations. Now, they will certainly help us streamline a little bit of our activities, but both locations were previously occupied by Brady, and so it doesn't appreciably change our footprint. It just gives us a little bit more long-term control over the cost of doing business. Yep. Okay. Gotcha. Thank you. You talked about it still having a pretty good pipeline, new product launches coming in fiscal 2024. Can you, can you give us any kind of a preview? Also, if you can comment a little bit on products tied to the Code and Nordic ID acquisitions and where you are with industrial track and trace? Kind of a wide question there. Sure. You know, so obviously, we have a myriad of smaller products that we launch every month and throughout the year, from locks to safety devices and what have you. Our more significant launches are our printers and optical and RFID readers. We're having a few product launches this year in terms of printers. It's a combination of both new printers as well as some product refresh. One of the things that we're super excited is the capability to print from voice. You know, we're in prototyping right now, but by talking to some of our devices and allowing that print technology to occur, I personally am super excited about that. Also, this fiscal year, we'll be launching the industrial versions of our RFID and optical readers. You know, this is a long journey that started with the purchase of Code and Nordic. We knew it was gonna take a substantial amount of development effort to make them sufficiently rugged, that they were industrial use, contractor use case products, but you can look to see those in the coming year. Are you guys excited about track, industrial track and trace, that market, as you were, I guess, when the previous CEO announced the purchase? Yeah, we absolutely are. You know, for us, it's all part of our automation solutions. Now, it's important to recognize what that means for us. We're not really in distribution centers. That's not part of our business or freight shipping or what have you. We're very intimately involved in manufacturing environments and what I'll call niche manufacturing of parts. I think there is a tremendous opportunity for Brady in what I'll call the medium-sized corporations out there that manufacture things. So those would be the one to a couple billion-dollar companies. We're actively engaged with many of them, and I think, you know, the overall trends towards improving productivity, saving labor, is something that will help us for years to come. Thanks, Russell. Thank you. That concludes the question and answer session. At this time, I would like to turn it back to Russell Shaller for closing remarks. Sure. Thanks, everyone, for your time today and your questions. We performed very well this quarter, and we have positive momentum throughout the entire organization. We're also in an incredibly strong financial position. Fiscal 2021, 2022, and now 2023 were all record EPS years, and we're once again guiding to another record year in 2024. Like many other companies, we have to navigate through an uncertain and rapidly changing macro environment. We're focused on controlling what we can control and consistently delivering on our priorities, which are: to continue to invest and grow the top line and continue our evolution to a faster-growing company, to further develop our product offering to support our customers' automation initiatives, to execute operational efficiencies and ensure that we grow profitably, and to effectively deploy our capital to drive long-term shareholder value through organic investments, acquisitions, and returning funds to our shareholders through dividends and share buybacks. I'm looking forward to the future, and I know that our global team has the ability to overcome challenges and continue to deliver results. Thank you all for your time this morning, and for your interest in Brady. Operator, you may disconnect the call. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.