Standex(US:SXI)2025-10-31 13:30Financial Data and Key Metrics Changes - Total revenue increased approximately 27.6% year-on-year to $217.4 million, reflecting a 26.6% benefit from recent acquisitions, organic growth of 0.6%, and a 0.4% benefit from foreign currency [11] - Adjusted operating margin increased 210 basis points year-on-year to 19.1% [11] - Adjusted earnings per share increased 8.2% year-on-year to $1.99 [11] - Net cash provided by operating activities was $16.8 million, compared to $17.5 million a year ago [11] - Free cash flow for the first quarter was $10.4 million compared to $10.8 million a year ago [11] Business Line Data and Key Metrics Changes - Electronics segment revenue increased 42.2% year-on-year to $110.6 million, driven by a 45.5% benefit from acquisitions, partially offset by an organic decline of 3.1% [12] - Engineering Technologies revenue increased 45.6% to $29.9 million, driven by a 32.4% benefit from the recent MechStarLite acquisition and organic growth of 12.7% [14] - Scientific revenue increased 9.9% to $19.5 million, due to an 18.6% benefit from a recent acquisition, partially offset by an organic decline of 8.7% [15] - Engraving revenue increased 7.4% to $35.8 million, driven by organic growth of 5.6% from improved demand in Europe [16] - Specialty Solution segment revenue increased 2.6% year-on-year to $21.7 million, primarily due to slightly improved demand in Hydraulics [16] Market Data and Key Metrics Changes - Sales into fast-growth markets were approximately $62 million, or 30% of total sales [5] - New product sales grew more than 35% to approximately $14.5 million [4] - Fast-growth markets are expected to grow over 45% year-on-year and exceed $270 million [7] Company Strategy and Development Direction - The company is raising its Fiscal Year 2026 sales outlook to over $110 million, driven by strong momentum from new product sales and fast-growth markets [6] - The Amran Narain Group, now renamed Standex Electronics Grid, is expected to grow more than 20% year-on-year in Fiscal 2026 [19] - The company plans to launch more than 15 new products in Fiscal 2026, with expectations of significant contributions to sales growth [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid to high single-digit organic growth in electronics for Fiscal 2026 despite a decline in the electronics segment [5] - The company is optimistic about the continued demand driven by electrification, grid modernization, and data center markets, with no signs of slowdown [26] - Management highlighted the importance of new product development and repositioning into faster-growing markets as key to future growth [21] Other Important Information - The company declared its 245th consecutive cash dividend of $0.34 per share, reflecting a 6.3% increase year-on-year [17] - The net leverage ratio currently stands at 2.4, with plans to continue paying down debt [17][18] Q&A Session Summary Question: Focus areas for optimization journey - Management indicated ongoing portfolio work and realizing the potential of organic growth initiatives as key focus areas [21] Question: Notable new products for the year - Management highlighted new products in Electronics for relays and test and measurement applications, as well as an ultra-low temperature freezer in Scientific [24] Question: Growth outlook for Amran Narain Group - Management confirmed no slowdown in growth and highlighted strong demand in electrification and grid modernization [26] Question: Momentum in legacy electronics business - Management noted strong bookings across various segments, including defense and test and measurement, with a positive outlook for organic growth [31][33] Question: Impact of government shutdown on business - Management stated no immediate changes in business prospects due to the government shutdown, but acknowledged some uncertainty in North American businesses [44] Question: Plans for cash repatriation and tax implications - Management clarified that there were no significant tax events related to cash repatriation [48]