Standex(SXI) - 2025 Q4 - Annual Results

Fiscal Fourth Quarter and Fiscal Year 2025 Financial Results Overview Standex International Corporation reported strong Q4 FY25 results with significant growth in sales, adjusted operating income, and EPS, achieving record adjusted operating margin and substantial debt reduction Summary Financial Results Standex International Corporation reported strong financial results for Q4 FY25, with significant year-over-year growth in net sales, adjusted operating income, and adjusted EPS, achieving record adjusted operating margin and making substantial debt payments Summary Financial Results | ($M except EPS and Dividends) | 4Q25 | 4Q24 | Y/Y | Q/Q | | :---------------------------- | :--- | :--- | :--- | :--- | | Net Sales | $222.0 | $180.2 | 23.2% | 6.9% | | Operating Income – GAAP | $34.7 | $27.1 | 27.9% | 32.3% | | Operating Income – Adjusted | $45.8 | $30.8 | 48.7% | 13.4% | | Operating Margin % - GAAP | 15.6% | 15.1% | + 50 bps | + 300 bps | | Operating Margin % - Adjusted | 20.6% | 17.1% | + 350 bps | + 120 bps | | Net Income from Continuing Ops – GAAP | $15.5 | $19.7 | -21.4% | -32.1% | | Net Income from Continuing Ops – Adjusted | $27.5 | $22.4 | 22.8% | 17.1% | | Diluted EPS – GAAP | $1.23 | $1.66 | -25.9% | -32.0% | | Diluted EPS – Adjusted | $2.28 | $1.89 | 20.6% | 16.9% | | Dividends per Share | $0.32 | $0.30 | 6.7% | 0.0% | | Free Cash Flow | $24.9 | $22.2 | 11.9% | 614.2% | | Net Debt to EBITDA | 2.6x | 0.0x | NM | -13.3% | Key Performance Highlights The company achieved significant sales growth in Q4 FY25, driven by new products and fast-growth markets, alongside record adjusted operating margins, and reduced its net debt, with FY25 also seeing record operating performance across several adjusted metrics - Q4 FY25 Sales Increased 23.2% YOY to $222.0 Million, driven by new products and fast growth markets[4] - Record Adjusted Operating Margin of 20.6% in Q4 FY25, up 350 bps YOY[4] - Paid Down $27 Million of Debt in Q4 FY25, lowering Net Debt to EBITDA Ratio to 2.6x[4] - Record Operating Performance in FY25: Adjusted Gross Margin of 41.7% (up 230 bps YOY), Adjusted EBIT Margin of 19.1% (up 210 bps YOY), and Record Adjusted EPS of $7.98 (up 5.8% YOY)[4] CEO Commentary and Strategic Highlights CEO David Dunbar highlighted a strong Q4 FY25 performance with record adjusted operating margin and EPS, attributing success to portfolio evolution, the Amran/Narayan Group acquisition, and operational efficiency, while maintaining confidence in secular growth trends and strategic investments - Adjusted operating margin expanded 350 basis points year-on-year to a record 20.6%, and adjusted earnings per share grew more than 20% to a record $2.28 in Q4 FY25[5] - Fast growth market sales totaled $61 million (approximately 28% of total sales) in FY25, exceeding expectations, with a long-term target of $340 million plus by FY28[5] - Launched three additional new products in Q4 FY25, totaling 16 in FY25, contributing 2.5% of incremental sales[5] - Expanded capacity in Houston and India for Amran/Narayan Group and began commissioning a greenfield site in Croatia[5] Outlook Standex provides a positive outlook for Q1 and full fiscal year 2026, projecting significant revenue growth, continued margin expansion, and strategic investments in new products and acquisitions Fiscal First Quarter 2026 Outlook For Q1 FY26, Standex anticipates significantly higher year-over-year revenue driven by recent acquisitions and low-single-digit organic growth, along with significant adjusted operating margin expansion, though sequentially revenue is expected to be slightly lower due to project timing and seasonality - Expects significantly higher revenue year-on-year in Q1 FY26, driven by acquisitions and low-single-digit organic growth[6] - Anticipates significant adjusted operating margin expansion year-on-year in Q1 FY26[6] - Expects slightly lower revenue and adjusted operating margin sequentially in Q1 FY26 due to project timing in Engineering Technologies and seasonality in Europe[6] Fiscal Year 2026 Outlook Standex projects revenue growth of over $100 million for fiscal year 2026, with continued adjusted operating margin expansion, fueled by organic growth in Electronics and Engineering Technologies, contributions from recent acquisitions, and plans for new product launches and further debt reduction - Expects revenue to grow by over $100 million in FY26[7] - Anticipates continued adjusted operating margin expansion in FY26[7] - Plans to release over fifteen new products in FY26, contributing approximately 300 bps of incremental growth[7] - Sales from fast growth markets are expected to grow approximately 45% year-on-year and exceed $265 million in FY26[7] - On track to further reduce its net debt to EBITDA ratio in FY26[7] Fourth Quarter Segment Operating Performance This section details the Q4 FY25 operating performance across Standex's five segments, highlighting revenue and income changes, and key drivers such as acquisitions, organic growth, and market conditions Electronics The Electronics segment demonstrated strong performance in Q4 FY25, with revenue increasing 43.2% year-on-year, primarily driven by acquisitions and modest organic growth, while adjusted operating income surged 84.7% due to the Amran/Narayan Group acquisition, pricing, and product mix, maintaining a healthy book-to-bill ratio Electronics Segment Performance | Electronics ($M) | 4Q25 | 4Q24 | % Change | | :----------------- | :--- | :--- | :------- | | Revenue | 115.2 | 80.4 | 43.2% | | GAAP Operating Income | 28.0 | 16.1 | 73.5% | | GAAP Operating Margin % | 24.3 | 20.1 | | | Adjusted Operating Income* | 32.9 | 17.8 | 84.7% | | Adjusted Operating Margin %* | 28.5 | 22.1 | | - Revenue increase of 43.2% year-on-year, reflecting a 41.0% benefit from acquisitions, 0.3% organic growth, and 1.9% from foreign currency[9] - Adjusted operating income increased 84.7% year-on-year due to the Amran/Narayan Group acquisition, pricing, and product mix[9] - Book-to-bill ratio of approximately 1.03 in Q4 FY25, with orders of approximately $118 million[10] Engineering Technologies The Engineering Technologies segment saw a 26.8% year-on-year revenue increase in Q4 FY25, largely due to the McStarlite acquisition and new product sales, with adjusted operating income also growing by 11.8%, though slightly lower sequential revenue and adjusted operating margin are anticipated in Q1 FY26 due to project timing Engineering Technologies Segment Performance | Engineering Technologies ($M) | 4Q25 | 4Q24 | % Change | | :---------------------------- | :--- | :--- | :------- | | Revenue | 32.0 | 25.3 | 26.8% | | GAAP Operating Income | 4.3 | 5.3 | -18.3% | | GAAP Operating Margin % | 13.5 | 20.9 | | | Adjusted Operating Income* | 5.9 | 5.3 | 11.8% | | Adjusted Operating Margin %* | 18.4 | 20.9 | | - Revenue increased 26.8% year-on-year, reflecting a 25.0% benefit from the McStarlite acquisition and 0.9% organic growth, primarily from new products[12] - Adjusted operating income increased 11.8% year-on-year due to the recent acquisition and higher volume[12] - Expects slightly lower revenue and adjusted operating margin sequentially in Q1 FY26 due to project timing[13] Scientific The Scientific segment experienced a modest 2.3% year-on-year revenue increase in Q4 FY25, primarily from the Custom Biogenic Systems acquisition, which largely offset an organic decline due to NIH funding cuts, leading to a 16.1% decrease in adjusted operating income, with Q1 FY26 forecasting slightly higher revenue and similar adjusted operating margins Scientific Segment Performance | Scientific ($M) | 4Q25 | 4Q24 | % Change | | :---------------- | :--- | :--- | :------- | | Revenue | 17.9 | 17.5 | 2.3% | | GAAP Operating Income | 4.1 | 4.9 | -16.6% | | GAAP Operating Margin % | 22.9 | 28.1 | | | Adjusted Operating Income* | 4.3 | 5.2 | -16.1% | | Adjusted Operating Margin %* | 24.3 | 29.6 | | - Revenue increased 2.3% year-on-year, reflecting a 16.1% benefit from the Custom Biogenic Systems acquisition, mostly offset by a 13.9% organic decline from lower demand at academic and research institutions due to NIH funding cuts[16] - Adjusted operating income decreased 16.1% year-on-year due to organic decline partially offset by acquisition contribution[16] - Expects slightly higher revenue and similar adjusted operating margin sequentially in Q1 FY26[17] Engraving The Engraving segment reported a slight 0.6% year-on-year revenue increase in Q4 FY25, benefiting from foreign currency but partially offset by organic decline due to softness in North America, while adjusted operating income grew 14.9% due to productivity initiatives and restructuring actions, with Q1 FY26 anticipating similar revenue and slightly higher adjusted operating margin Engraving Segment Performance | Engraving ($M) | 4Q25 | 4Q24 | % Change | | :--------------- | :--- | :--- | :------- | | Revenue | 33.0 | 32.7 | 0.6% | | GAAP Operating Income | 4.6 | 3.9 | 17.8% | | GAAP Operating Margin % | 14.1 | 12.0 | | | Adjusted Operating Income* | 5.0 | 4.4 | 14.9% | | Adjusted Operating Margin %* | 15.2 | 13.3 | | - Revenue increased 0.6% year-on-year, reflecting a 1.2% foreign currency benefit, partially offset by a 0.6% organic decline due to continued softness in North America[18] - Adjusted operating income increased 14.9% year-on-year due to the realization of productivity initiatives and restructuring actions[18] - Secured a source award from a major OEM in North America to supply soft trim parts for a calendar year 2026 program[19] Specialty Solutions The Specialty Solutions segment experienced a 1.2% year-on-year revenue decrease in Q4 FY25, attributed to general market softness in the Display Merchandising and Hydraulics businesses, with operating income declining by 17.2% due to lower volume, and Q1 FY26 expecting similar revenue and slightly higher operating margins Specialty Solutions Segment Performance | Specialty Solutions ($M) | 4Q25 | 4Q24 | % Change | | :----------------------- | :--- | :--- | :------- | | Revenue | 23.9 | 24.2 | -1.2% | | Operating Income | 4.5 | 5.4 | -17.2% | | Operating Margin % | 18.6 | 22.2 | | - Revenue decreased 1.2% year-on-year, reflecting general market softness in the Display Merchandising and Hydraulics businesses[20] - Operating income decreased 17.2% year-on-year due to lower volume[20] - Expects similar revenue and slightly higher operating margin sequentially in Q1 FY26[21] Capital Allocation and Financial Position This section outlines Standex's balance sheet and cash flow, detailing net debt, dividend payments, capital expenditures, and share repurchase authorization Balance Sheet and Cash Flow Highlights Standex reported a net debt of $448.0 million as of June 30, 2025, a significant increase from the prior year, primarily due to long-term debt, while declaring a quarterly cash dividend of $0.32 per share, and outlining capital expenditures for FY25 and FY26, with net cash provided by operating activities and free cash flow both increasing in Q4 FY25 - Net debt was $448.0 million on June 30, 2025, compared to ($5.3) million at the end of Q4 FY24, consisting primarily of $552.5 million long-term debt and $104.5 million cash and equivalents[27] - Declared a quarterly cash dividend of $0.32 per share, an approximately 6.7% year-on-year increase[27] Capital Expenditures | Metric | FY25 ($M) | FY24 ($M) | FY26 Outlook ($M) | | :-------------------- | :-------- | :-------- | :---------------- | | Capital Expenditures | 28.3 | 20.298 | 33 - 38 | Cash Flow Metrics | Cash Flow Metric (3 months ended June 30) | 2025 ($M) | 2024 ($M) | | :---------------------------------------- | :-------- | :-------- | | Net cash provided by continuing operating activities | 33.4 | 28.7 | | Free cash flow after capital expenditures | 24.9 | 22.2 | - Approximately $28 million remained on the Company's current share repurchase authorization at the end of Q4 FY25[27] Additional Information This section provides details on the upcoming conference call, the company's use of non-GAAP financial measures, an overview of Standex International Corporation, forward-looking statement disclaimers, and investor contact information Conference Call Details Standex will host a conference call on August 1, 2025, at 8:30 a.m. ET to discuss financial results and business highlights, with investors able to access the webcast and slide presentation via the company's website, and replays available online and via teleconference - Conference call for investors scheduled for August 1, 2025, at 8:30 a.m. ET[24] - Webcast and slide presentation available on Standex's website under 'Investors' section[24] - Replay of webcast available online through August 1, 2026, and audio playback via phone through August 8, 2025[25] Use of Non-GAAP Financial Measures Standex utilizes various non-GAAP financial measures, such as adjusted operating income, adjusted net income, free operating cash flow, EBITDA, and adjusted EPS, to provide investors with a clearer understanding of its core operating results and performance trends, with these measures excluding specific items and reconciled to comparable GAAP measures - Company uses non-GAAP measures including adjusted income from operations, adjusted net income from continuing operations, free operating cash flow, EBITDA, adjusted EBITDA, and adjusted EPS[26] - Non-GAAP measures exclude impacts of restructuring charges, purchase accounting, amortization from acquired intangible assets, acquisition costs, and other specific gains/losses[26] - These measures are believed to help investors understand operating results and prospects, consistent with management's performance assessment, especially when comparing to previous periods[26] About Standex Standex International Corporation is a diversified multi-industry manufacturer operating across five key business segments: Electronics, Engineering Technologies, Scientific, Engraving, and Specialty Solutions, maintaining a global presence with operations spanning multiple countries - Standex International Corporation is a multi-industry manufacturer[28] - Operates in five business segments: Electronics, Engineering Technologies, Scientific, Engraving, and Specialty Solutions[28] - Has operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Turkey, India, and China[28] Forward-Looking Statements This press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially from expectations, including global crises, economic conditions, competition, raw material costs, inflation, integration of acquisitions, and cybersecurity risks, with the company disclaiming any obligation to update these statements - Statements not based on historical facts are 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995[29] - Many factors can affect the Company's business and results, causing actual outcomes to differ materially from expectations[29] - Risk factors include global crises, economic conditions, lower-cost competition, higher raw material and logistics costs, inflation, inability to realize cost savings, acquisition integration challenges, and cybersecurity attacks[29] Contact Information For investor inquiries, Christopher Howe, Director of Investor Relations, can be reached at (773) 754-5394 or InvestorRelations@Standex.com - Contact: Christopher Howe, Director of Investor Relations[30] - Phone: (773) 754-5394[30] - Email: InvestorRelations@Standex.com[30] Financial Statements This section presents Standex's condensed consolidated balance sheets, statements of operations, cash flows, selected segment data, and reconciliation of GAAP to non-GAAP financial measures for fiscal years 2024 and 2025 Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show a significant increase in total assets and liabilities from June 30, 2024, to June 30, 2025, primarily driven by substantial increases in goodwill, intangible assets, and long-term debt, reflecting recent acquisition activities, with stockholders' equity also increasing Condensed Consolidated Balance Sheets | (In thousands) | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Total assets | $1,566,880 | $1,005,057 | | Total current assets | 480,879 | 430,095 | | Goodwill | 610,338 | 281,283 | | Intangible assets, net | 225,757 | 78,673 | | Total liabilities | 827,290 | 383,554 | | Long-term debt | 552,515 | 148,876 | | Total stockholders' equity | 711,677 | 621,503 | Consolidated Statement of Operations The consolidated statement of operations for Q4 FY25 shows a 23.2% year-over-year increase in net sales, reaching $222.0 million, while gross profit and income from operations increased, net income from continuing operations and diluted EPS (GAAP) decreased due to higher interest expense, provision for income taxes, and acquisition-related costs, with full fiscal year 2025 net sales growing by 9.6% but GAAP net income and EPS declining Consolidated Statement of Operations | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------- | :----------------------- | | Net sales | $222,049 | $180,194 | $790,107 | $720,635 | | Gross profit | 91,298 | 69,413 | 315,248 | 282,001 | | Income from operations | 34,734 | 27,147 | 93,549 | 101,738 | | Interest expense | 9,016 | 1,300 | 23,931 | 4,544 | | Net income from continuing operations | 15,473 | 19,688 | 57,726 | 73,591 | | Net income attributable to Standex International | 14,826 | 19,591 | 55,760 | 73,074 | | Diluted earnings per share | $1.23 | $1.65 | $4.64 | $6.14 | Statements of Consolidated Cash Flows For fiscal year 2025, net cash provided by operating activities decreased to $69.6 million from $92.7 million in FY24, with investing activities resulting in a significant net cash outflow of $503.4 million primarily due to expenditures for acquisitions, and financing activities generating a substantial net cash inflow of $380.5 million driven by proceeds from borrowings Statements of Consolidated Cash Flows | (In thousands) | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :---------------------------------------- | :----------------------- | :----------------------- | | Net cash provided by operating activities | $69,596 | $92,656 | | Net cash provided by (used in) investing activities | (503,433) | (61,629) | | Net cash (used in) financing activities | 380,490 | (69,201) | | Net change in cash and cash equivalents | (49,661) | (41,503) | | Cash and cash equivalents at end of period | $104,542 | $154,203 | - Expenditures for acquisitions, net of cash acquired, totaled $478.9 million in FY25[37] - Proceeds from borrowings were $792.3 million in FY25, while payments of debt were $389.1 million[37] Selected Segment Data The selected segment data for Q4 FY25 shows Electronics as the largest segment by net sales and income from operations, with significant year-over-year growth, and Engineering Technologies also reporting strong sales growth, while for the full fiscal year 2025, Electronics and Engineering Technologies demonstrated sales growth, but Engraving and Specialty Solutions experienced declines Net Sales by Segment | Net Sales (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------- | :----------------------- | | Electronics | $115,192 | $80,417 | $400,130 | $321,956 | | Engineering Technologies | 32,040 | 25,271 | 102,595 | 83,476 | | Scientific | 17,918 | 17,521 | 72,380 | 68,931 | | Engraving | 32,958 | 32,749 | 128,360 | 150,685 | | Specialty Solutions | 23,941 | 24,236 | 86,642 | 95,587 | | Total | $222,049 | $180,194 | $790,107 | $720,635 | Income from Operations by Segment | Income from operations (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------- | :----------------------- | | Electronics | $28,009 | $16,146 | $87,927 | $64,030 | | Engineering Technologies | 4,308 | 5,270 | 15,428 | 15,216 | | Scientific | 4,108 | 4,926 | 17,470 | 19,000 | | Engraving | 4,643 | 3,943 | 17,647 | 26,708 | | Specialty Solutions | 4,453 | 5,381 | 14,841 | 19,631 | | Total | $34,734 | $27,147 | $93,549 | $101,738 | Reconciliation of GAAP to Non-GAAP Financial Measures The reconciliation tables provide a detailed breakdown of adjustments made to GAAP figures to arrive at non-GAAP measures such as adjusted income from operations, adjusted net income from continuing operations, EBITDA, adjusted EBITDA, free operating cash flow, and adjusted EPS, with these adjustments primarily including restructuring charges, acquisition-related costs, amortization of acquired intangible assets, and purchase accounting expenses, which significantly impact the reported profitability and cash flow metrics Reconciliation of GAAP to Non-GAAP Financial Measures | (In thousands, except percentages) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------- | :----------------------- | | Income from operations, as reported | $34,734 | $27,147 | $93,549 | $101,738 | | Adjusted income from operations | $45,751 | $30,769 | $150,581 | $122,354 | | Net income from continuing operations, as reported | $15,473 | $19,688 | $57,726 | $73,591 | | Net income attributable to Standex International, as adjusted | $27,523 | $22,441 | $95,831 | $89,799 | | EBITDA | $45,226 | $33,875 | $128,179 | $127,807 | | Adjusted EBITDA | $51,596 | $35,472 | $170,599 | $140,548 | | Free cash flow from continuing operations | $24,855 | $22,204 | $41,306 | $73,048 | Adjusted Earnings Per Share from Continuing Operations | Adjusted earnings per share from continuing operations | June 30, 2025 | June 30, 2024 | % Change (Q4) | June 30, 2025 | June 30, 2024 | % Change (FY) | | :----------------------------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | :------------ | | Diluted earnings per share from net income attributable to Standex, as reported | $1.23 | $1.66 | -25.9% | $4.64 | $6.18 | -24.9% | | Diluted earnings per share from net income attributable to Standex, as adjusted | $2.28 | $1.89 | 20.7% | $7.98 | $7.54 | 5.8% | - Key adjustments include restructuring charges, acquisition-related costs, amortization of acquired intangible assets, and purchase accounting expenses[41][44]