Good day, and thank you for standing by. Welcome to the Brady Corporation Acquisition Announcement 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 this session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 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, CFO. Ma'am, please go ahead. Thank you. Good morning, and thanks, everyone, for joining us. This morning, we would like to take the opportunity to explain an exciting moment for Brady, which is our announcement of our planned acquisition of Honeywell's Productivity Solutions and Services business. The slides for this morning's call are located on our website at www.bradycorp.com/investors. 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 identified in our press release regarding the transaction issued today and in our investor deck, each of which are included on our website and in Brady's fiscal 2025 Form 10-K, which was filed with the SEC in September of 2025. 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, for some prepared remarks before opening up the floor to questions. Russell? Thank you, Ann. Thank you all for joining us today. As you know, this morning we announced an exciting transformative move to acquire Honeywell's Productivity Solutions and Services business or PSS. The transaction will significantly expand our portfolio with data capture and workforce solutions. At its core, this transaction brings together two highly complementary organizations that are uniquely positioned to help our customers operate smarter, safer, and more efficiently through our full suite of products from our highly engineered durable labels to the data powering an entire supply chain. With the combined strengths of our business, we will be able to offer our customers a one-of-a-kind solution, a more comprehensive portfolio of hardware and software solutions across critical workflows for companies in a wide variety of industries and markets. This transaction is the culmination of our board and management team's thoughtful and opportunistic approach to M&A that complements our existing businesses, advances our strategy, and delivers significant value for our shareholders. We remain committed to our disciplined capital allocation approach to capitalize on the highest return opportunities that fit squarely within our strategic and financial criteria. We view this acquisition as a unique opportunity that fits within Brady incredibly well. PSS provides mobile computers, barcode scanners, and printing solutions with nearly 3,000 employees globally and 2025 revenues of approximately $1.1 billion for the 12 months ending in December 31st, 2025. Importantly, PSS also shares our focus on talent with a particular expertise across R&D with deep technical knowledge and a strong record of product innovation. PSS serves some of the largest transportation, warehousing, and logistics companies in the world, which expands the enterprise customer channel for Brady, as well as our total addressable market with fast-growing verticals. Geographically, approximately half of PSS's revenue is generated in the U.S. and Canada, about a quarter from Europe, and the remainder is equally split among the rest of the regions. By vertical, the largest end markets are retail, industrial, transportation, and logistics, with smaller positions in healthcare and other industries. This is truly a fantastic complement to our existing base of business. PSS has a broad global manufacturing and distribution footprint across 40 facilities. Their global footprint unlocks cost-efficient scale while maintaining the ability to meet shifting global needs. With nearly 4,000 patents and almost 4 million service contracts, PSS is focused on the development of products and solutions that empower worker productivity for millions of frontline workers around the world in applications in which data accuracy is critical. We believe that the addition of PSS gives the opportunity to drive incremental growth and earnings from actionable near-term investments, its R&D focus, and an active new customer pipeline. Nearly 70% of PSS's revenue was generated from products launched within the last 3 years, demonstrating the effectiveness of their R&D engine. This, combined with our operational efficiency, compelling secular tailwinds within the productivity solutions market, and PSS's growth and margin outlook, makes us confident in the value creation opportunity presented by this transaction. I think our strategic rationale in four primary categories. First is the expansion of our portfolio into adjacent workflows to provide a more comprehensive offering for our customers. Second is the expansion of our customer base into enterprise accounts where we may not play a large role today. Third is our entry into much larger total addressable market, and fourth is creating a new platform, including high-margin recurring software revenue. When we put all this together, it translates into compelling financial benefits that Ann will walk through in more detail. Walking through this one by one, starting with the portfolio, we're proud of leading position in high durability, high-quality printers and our specialty adhesive materials designed to withstand the harshest environments and comply with stringent safety and regulatory standards. PSS brings mobile computing, barcode scanning, RFID, and workflow software, which is incredibly strong complement to our existing portfolio. PSS's products are purpose-built to perform reliably in high-volume operations where accuracy and uptime are critical. We'll be able to offer our customers something new and truly differentiated. A complete portfolio that takes them from printing and identification through to data capture, workflow execution, and real-time operating intelligence. Our second strategic pillar is customer expansion. PSS expands our customer base within enterprise customers. These customers provide an excellent opportunity to cultivate long-term partnerships that we fully intend to grow with an opportunity to expand wallet share as we fully integrate PSS. We're also greatly expanding our presence in new verticals through PSS's customer set, particularly retail, logistics, and warehouse environments. The third strategic pillar is our entry into much larger total addressable market. This transaction moves us into technology-enabled data capture and workflow solutions markets, which is a $9 billion productivity solutions market. The core verticals in which PSS has a strong foothold have extremely compelling secular tailwinds that we can benefit from. Think of automation, digitization, and asset tracking. Global organizations are constantly pushing for efficiencies, and in order to achieve this year in and year out, they need high-quality products that are easy to use, and most importantly, that allow employees to do their jobs accurately. This is exactly where PSS products excel. To take one example within retail, which is PSS's largest vertical. Retailers have dozens of touchpoints with a single customer from in-store assistance and checkout to inventory management, customer service, picking orders, and packaging and shipping. Large global retailers can require tens of thousands of devices to serve high volume of customers, improve customer service, and increase dollars per transaction. The same concept applies to logistics applications, healthcare environments, and many others. Our fourth strategic point, we're creating a new platform of high-margin recurring revenue and software service and voice penetration. PSS generates over $200 million in recurring software service and voice revenue today, which is meaningful. PSS's installed base is significant with over 3 million devices with active service contracts and millions more deployed. Products have a 3- to 5-year refresh cycle, which drives repeat demand with an opportunity to add service contracts as well. We see an opportunity to leverage PSS lifecycle service, software, and voice opportunities across our existing platform of high-performance products. Overall, we see a compelling story that should immediately result in financial upside with increased recurring revenue. Now I'll hand it over to Ann to provide additional details on the financials. Ann? Thanks, Russell. This exciting transaction represents an important next step to grow the earnings power of Brady and to provide attractive opportunities to grow revenue in the future. We expect the acquisition of PSS to be double-digit accretive to adjusted diluted EPS within the first year following close. This will allow us to maintain balance sheet flexibility as well as our disciplined capital allocation approach, both of which are core to Brady's fundamentals. We expect to achieve a minimum of $25 million in annual run rate cost synergies within three years of closing the acquisition through primarily improved operational efficiencies. Over time, we expect that these synergies and other scale benefits, such as commercial execution and manufacturing efficiencies, will ensure that our margin profile remains within our historical levels. While we will see a short-term dip in EBITDA margins upon closing, we fully expect to bring that back up to our historic levels within 2 years post-close. Operational excellence has been a priority for us for years, and you can see this in our financial results. We've improved our gross profit margin to above 50%, despite the impact of incremental tariffs compared to last year. We've reduced SG&A as a percentage of sales while increasing our investment in research and development from just over 3% of sales several years ago to more than 5% of sales as of last year. All of this in combination has resulted in five straight years of record adjusted diluted earnings per share, starting in fiscal year 2021 through fiscal year 2025. Finally, we always focus on cash generation and cash-based decision-making. You can see this through our cash generation often being in excess of our net income, along with our incredibly strong balance sheet, all of which gives us the ability to capture opportunities like the acquisition of PSS. In terms of transaction financing, it will be funded with cash on hand and new debt. This acquisition is expected to increase our net debt-to-EBITDA ratio to approximately 2.5x at close, and we expect that our pro forma revenues and cash flow will support rapid de-leveraging to below 2x EBITDA within two years post-close. While we will immediately prioritize debt reduction, we believe that we will have ample capital on our balance sheet to maintain our robust shareholder return programs, including the increase in our annual dividend and opportunistic share repurchases, while always investing in our organic business. As we think about transaction next steps, we anticipate completing the transaction in the second half of calendar year 2026, subject to regulatory approvals and other customary closing conditions. We believe the compelling deal economics of the transaction will result in long-term shareholder value and enable profitable growth into the future, and we're looking forward to bringing PSS into Brady. With that, we'd like to turn it over for Q&A. Operator, would you please provide instructions to our listeners? Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for our first question. Our first question is going to come from the line of Keith Housum with Northcoast Research. Your line is open. Please go ahead. Great. Thanks. Good morning, guys. Also congratulations on a massive deal and definitely a game changer for you guys. How do you understand in terms of looking at Honeywell? Now Honeywell's actually been declining in market share and revenue over the past 5, maybe 10 years. What are your thoughts in terms of how you're going to be able to turn that around from this organization? Yeah. We obviously spent a great deal of time looking at the business and looking at where they were strong, and how it would best fit into Brady. First I would probably correct what you've said. They haven't been declining for quite that long. There are definitely some strong pockets and there's some weaker pockets. If you look at their business, their mobile computer business is actually doing very well, as are their enterprise-level customers. That traditionally is an area that Brady has no expertise. The part of the business that is doing well will continue to perform. The part where we think we're best able to help them is in the printers and in some of the weaker areas, where we know we've got a very strong position. Not necessarily all of Honeywell's customers, but if you look at this and you look at their struggles with, I think, the small and medium-sized businesses, which is actually a tremendous strength of Brady. I think putting the two businesses together makes a lot of sense and really will turn their trajectory around. Great. Russell, if I could ask a few more here. Sure. You hit the nail on the head. My understanding is their channel program efforts have been really lacking over the past several years, and I'm not sure how deep Brady is into the channel, but any thoughts, and maybe it's premature, but any thoughts on how you guys are going to try to address some of the channel relationships that they have and how you can perhaps support them to grow more? Well, I think, I'm not going to get into details at this juncture because we don't actually own them. I think we're going to bring a level of stability to their business that they probably haven't enjoyed in the past. As you're well aware, Brady has had very consistent and methodical performance for the last decade. We're not the flavor of the month or whatever, but we can pretty much consistently expand market share and expand operating margins as we've done for years. We're looking to bring that same set of discipline to Honeywell. Okay. In terms of their R&D efforts, is it anticipated that you're going to have to increase their spending on R&D, or are you satisfied with the level they're currently at? I'm satisfied with where they're going to be by the end of the year. They went through a period of R&D reduction that was pretty significant. I think they even realized that that was too big of a cut. They've been building back R&D over the last couple of years. Still not quite where it needs to be. Again, this is where you're going to get the dovetail of Brady and Honeywell. We have a pretty significant portfolio of RFID products. We've done some things in machine vision and optics that we believe will be complementary. Then, of course, our printers will build out their portfolio in a better shape. Those things we think are additive, and so we'll be able to redeploy some of the R&D resources into different areas. I do think the combination of Brady's R&D team and Honeywell's R&D team, which will now be roughly a $200 million spend, will get us where we need to be. Okay, great. Maybe if I can get one more. In terms of the cultures of the two companies, perhaps you can talk about how the cultures they are and any thoughts in terms of how you're going to merge those together. Yeah. I think, Brady, I would say, one of our outside people called us scrappy, and I think that's a fair characterization. We're quick to make decisions. We don't have a lot of bureaucracy. We're definitely going to be bringing that to Honeywell. I think that will be a pleasant surprise to some. It will probably be confusing to others, but our ability to make decisions at very low levels, I think is a tremendous strength to Brady and something that we expect to translate into Honeywell. Okay. Maybe if I can get one for Ann. Ann, you say double-digit accretive to Brady's earnings. Can you give us a little bit more context? Are we thinking 12% or are we thinking 40%? I mean, any idea that we can kind of conceptualize that? Yeah. I mean, it partially does. It will depend on when we do actually close. I fully recognize second half of the fiscal year is broad. We just would expect in the more likely kind of third calendar quarter, but we'll see how things go. Beyond that, with the multiple that we're buying the business at and financing with all cash, the incremental number will depend on a number of factors. We do expect it to be meaningful, double digit for sure. We'll give more specifics as we get closer to closing. I appreciate the question, Keith. It'll be immediately accretive for sure. All right. Thanks, guys. I'll give others a chance. Thank you. Thanks, Keith. Thank you. One moment for our next question. Our next question will come from the line of Steve Ferazani with Sidoti. Your line is open. Please go ahead. Morning, Russell. Morning, Ann. Thanks for taking the questions. I just wanted to follow up the last question, Ann, in terms of the double digit accretive. What kind of assumptions are you building in for financing? It's a pretty large transaction. You're going to be over 2.5x. I'm assuming not as attractive financing as you're used to, or what are you building in there? Yeah, we're building in, basically. You can kind of follow our EBITDA multiple. It will still be in that mid-2x range and expect financing at least our initial indication to be still decently favorable to Brady. Not at the low levels that we're currently enjoying with our minimal amount of borrowing. We still expect basically a favorable outcome from our financing. I'll be able to share more once we actually do get to that point and get closer to close. We'll absolutely provide a lot more color on that. Got it. Thanks. The $25 million in synergies over 3 years, that seems kind of low for a deal this size. Can you talk about where you think you'll realize it and what you're not including in that number? Because I would imagine there's other opportunities. Yeah, I think there is. We wanted to be conservative. There is not a tremendous amount of overlap between our organizations. This deal stands on itself with minimal synergies. We think we can get far more. In fact, we have very little baked in terms of those synergies and cross-selling, which we know money is there. As we get through this, and remember, this is a carve-out of a very large parent, so there's a lot of moving pieces, and we didn't want to, I guess, stick our neck out too far in the first year or two of the transaction, which I think is consistent with Brady. We have been a very conservative company, and we try to achieve or exceed what we say we're going to do. Got it. Can you talk about the competitive landscape you're entering here? Yeah. Obviously, Zebra and to a lesser extent, Datalogic. If you look at the small Chinese competitors, of which there are numerous ones, they don't really compete with Brady or Honeywell or Zebra at the larger level. If you're going to buy two readers or two scanners or a printer, yeah, there's a lot of different options that you might have. But if you're going to buy something for a retail environment where you have dozens of stores and you need to worry about data security and a host of other support issues, it really comes down to the three of us. It would be Honeywell, Zebra, and Datalogic, which is definitely stronger in Europe than in the United States. Once you get past that, there really is very little competition. Got it. That's helpful. I know it's a little early for this question, but given this is, you've been through a multi-year, transformative might be a little strong, but it's certainly coming close to being transformative where Brady is going. When you start looking at your overall business, clearly this transaction is going to take a lot of your attention. Do you start looking at pruning some of your other businesses or product lines that are not growing or are lower margin? Does this precipitate that? Yeah, I think everything's potentially on the table. Some of those businesses, though, are very steady. Actually have a great return on invested capital. Some of those businesses that I think people would look at and say, "Why are you doing that?" We're getting mid-high double digits return on invested capital because we invest very little in them for the amount of cash they generate. While anything's possible, we definitely like the stability and the profile of the cash those businesses generate. Over the last few years, we've de-emphasized investments. Actually, I've now disposed of two unaligned businesses. At this point, everything in our portfolio makes money. It's not a management distraction. We have a very decentralized organization with individual general managers running a host of these businesses. I'm going to say it's possible, but we're not looking to do that immediately, where all of our focus right now is going to be on integrating Honeywell and making sure that we hit the ground running once they get to become part of Brady. Got it. Thanks for that. Last one from me. I guess based on the timing of this deal, probably doesn't impact your fiscal year, but are you expecting any changes to your fiscal guidance? Are you still comfortable with it? Yeah, we're still comfortable with it. There's obviously a one-time fee associated with this deal that happened in the quarter, but they're one-timers and not big in the scheme of things. Got it. Thanks, Russell. Thanks, Ann. Thanks, Steve. Thank you. I'm showing no further questions at this time, and I would like to hand the conference back over to Russell Shaller for closing remarks. Okay. I'd like to leave you all with a few closing remarks. This is an exciting time for Brady. PSS allows us to expand our portfolio into adjacent workflows, which provides a more comprehensive offering for our customers. It expands our customer base into both enterprise accounts and much larger total addressable market. It creates a new platform which includes high-margin recurring software revenue. I'm incredibly excited about this opportunity. The PSS business has an incredible product portfolio, a talented R&D team with deep technical expertise, and critical sales and support functions who know their business extremely well. We're looking forward to bringing the PSS and Brady businesses together. We have a bright future ahead of us with a significant opportunity to drive long-term shareholder value. Thank you for your time this morning. Operator, you may disconnect the call. This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.