Form 8-K - Current report

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 29, 2024

 

STANDEX INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware		1-7233		31-0596149
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

 

23 Keewaydin Drive, Salem, New Hampshire		03079
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $1.50 Per Share	SXI	New York Stock Exchange

 

Not applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Emerging growth company  ☐

 

If an emerging growth company, indicates by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

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Standex International Corporation

 

SECTION 2 – FINANCIAL INFORMATION

ITEM 2.02 – RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS

 

On October 29, 2024, the registrant issued a press release announcing earnings for the first quarter ended September 30, 2024. A copy of the release is furnished herewith as Exhibit 99 and is incorporated herein by reference. This Current Report on Form 8-K and the press release attached hereto are being furnished by Standex International Corporation pursuant to item 2.02 of Form 8-K.

 

ITEM 7.01         Regulation FD Disclosure.

 

On October 28, 2024, the Company acquired, in separate transactions, U.S.-based Amran Instrument Transformers and India-based Narayan Powertech Pvt. Ltd, in cash and stock transactions representing a combined enterprise value of approximately $462 million. The cash consideration of the transactions was financed using cash-on-hand, existing credit facilities, and a new $250 million 364-day term loan with existing lenders.

 

On October 29, 2024, the Company issued a press release addressing the matters described in the immediately preceding paragraph of this Current Report on Form 8-K. A copy of the release is furnished as Exhibit 99.1 hereto and incorporated by reference herein.

 

The information contained in Item 7.01 of this Current Report and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

(d)	Exhibits – The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K.

 

Exhibit No.

Description

 

99

Press Release of Standex International Corporation dated October 29, 2024 regarding First Quarter Financial Results

 

99.1

Press Release of Standex International Corporation dated October 29, 2024 regarding Acquisition, in separate transactions, of Amran Instrument Transformers and Narayan Powertech Pvt. Ltd.

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

FORWORD-LOOKING STATEMENTS

 

This current report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995 (the “Act”) that are intended to come within the safe harbor protection provided by the Act. By their nature, all forward-looking statements involve risks and uncertainties, and actual results may differ materially from those contemplated by the forward-looking statements. Several factors that could materially effect the Corporation’s actual results are identified in the press release as well as in the Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

 

 

 

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

STANDEX INTERNATIONAL CORPORATION

(Registrant)

 

 

/s/ Ademir Sarcevic

Ademir Sarcevic Chief Financial Officer

Date: October 29, 2024

Signing on behalf of the registrant and as principal financial officer

 

 

Exhibit 99

 

 

NEWS RELEASE

 

STANDEX INTERNATIONAL CORPORATION ■ SALEM, NH 03079 ■ TEL [phone] ■ WEB www.standex.com

 

STANDEX REPORTS FISCAL FIRST QUARTER 2025 FINANCIAL RESULTS

 

●

Sales Declined 7.7% with Contributions from Acquisitions Partially Offsetting Organic Decline

●

Record GAAP and Adjusted Gross Margin of 41.1%; Up 240 bps Sequentially and 160 bps YOY

●

GAAP Operating Margin of 14.1%; Adjusted Operating Margin of 15.9%

●

Acquired Amran Instrument Transformers & Narayan Powertech Pvt., Ltd., Largest Acquisition in Company’s History; Significantly Expands Presence in Fast-Growing, High-Margin Electrical Grid End Market; Expected to be Immediately Accretive to Revenue Growth, Margins, and EPS

 

SALEM, NH – October 29, 2024 – Standex International Corporation (NYSE: SXI) today reported financial results for the first quarter of fiscal year 2025 ended September 30, 2024.

 

Summary Financial Results - Total
($M except EPS and Dividends)		1Q25				1Q24				4Q24				Y/Y				Q/Q
Net Sales		$	170.5			$	184.8			$	180.2				-7.7	%			-5.4	%
Operating Income – GAAP		$	24.1			$	26.9			$	27.1				-10.5	%			-11.2	%
Operating Income – Adjusted		$	27.0			$	29.4			$	28.7				-8.0	%			-6.0	%
Operating Margin % - GAAP			14.1	%			14.6	%			15.1	%		- 50		bps		- 100		bps
Operating Margin % - Adjusted			15.9	%			15.9	%			16.0	%		0		bps		- 10		bps
Net Income from Continuing Ops – GAAP		$	18.2			$	18.9			$	19.7				-3.7	%			-7.6	%
Net Income from Continuing Ops – Adjusted		$	20.3			$	20.8			$	20.9				-2.3	%			-2.6	%
EBITDA		$	31.2			$	33.2			$	33.9				-5.9	%			-7.9	%
EBITDA margin			18.3	%			17.9	%			18.8	%		+ 40		bps		- 50		bps
Adjusted EBITDA		$	34.1			$	35.6			$	35.5				-4.2	%			-3.8	%
Adjusted EBITDA margin			20.0	%			19.3	%			19.7	%		+ 70		bps		+ 30		bps
Diluted EPS – GAAP		$	1.53			$	1.58			$	1.66				-3.2	%			-7.8	%
Diluted EPS – Adjusted		$	1.71			$	1.74			$	1.76				-1.7	%			-2.8	%
Dividends per Share		$	0.30			$	0.28			$	0.30				7.1	%			0.0	%
Free Cash Flow		$	10.8			$	12.1			$	22.2				-10.3	%			-51.3	%
Net Debt to EBITDA		-0.1		x		0.2		x		0.0		x			NM				NM

 

First Quarter Fiscal 2025 Results

 

Commenting on the quarter’s results, President and Chief Executive Officer David Dunbar said, “Following record profit and cash generation in fiscal year 2024, we delivered another solid operational performance in the fiscal first quarter with record gross margin. Sales from fast growth markets in electric vehicles, defense applications, and commercialization of space improved year-on-year, respectively, but were offset primarily by demand conditions affecting the soft trim business in our Engraving segment. In the fiscal first quarter, we achieved record gross margin of 41.1% and maintained adjusted operating margin near 16.0%, while continuing to support our growth initiatives. We remain optimistic about leading market indicators across most of our businesses.”

 

 

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“We also announced the acquisitions of Amran Instrument Transformers and Narayan Powertech Pvt., Ltd. (“Amran/Narayan Group”), together a leading US and India based manufacturer of low to medium voltage transformers. This acquisition significantly expands our presence in the fast-growing, high-margin electrical grid end market, which will benefit from infrastructure upgrades, capacity expansion and data center demand. We anticipate this acquisition to be immediately accretive to revenue growth, EBITDA margin, operating margin, earnings per share and free cash flow. We are excited about our combined resources potential to accelerate growth in the electrical grid market.”

 

“We remain confident about the secular trends in our defined fast growth end markets and for the added potential in the electrical grid market with the acquisition of the Amran/Narayan Group. In fiscal year 2024, our fast growth market sales grew 13% year-on-year to $94 million. In the fiscal first quarter 2025, sales from fast growth markets were relatively flat year-on-year, but we anticipate sequential and year-on-year improvement in the fiscal second quarter.”

 

“In fiscal year 2025, based on recent order rates and customer interaction, we continue to expect our end markets to stabilize in the second quarter and strengthen in the second half. In the fiscal first quarter, we launched three new products and remain on track to release over a dozen new products in fiscal year 2025.”

 

“Overall, we remain in a strong position for continued improvements in financial performance as market conditions improve. In terms of our balance sheet, we are confident in our ability to pay down debt and expect to reduce our net leverage ratio below 1.0x within the first 24 months from the closing of the Amran/Narayan Group.”

 

Outlook

 

In the fiscal second quarter 2025, on a sequential basis, the Company expects moderately to significantly higher revenue, driven by the impact of the recent Amran/Narayan Group acquisition, more favorable project timing in Engraving, and improving overall demand in Electronics and Specialty. On a sequential basis, the Company expects slightly to moderately higher adjusted operating margin, benefiting from higher sales partially offset by increased investments in selling, marketing, and R&D. The Company also expects the Amran/Narayan Group acquisition to be slightly accretive to adjusted earnings per share in the fiscal second quarter 2025.

 

First Quarter Segment Operating Performance

 

Electronics (46% of sales; 48% of segment operating income)

 

		1Q25				1Q24				% Change
Electronics ($M)
Revenue			77.7				81.7				-4.8	%
GAAP Operating Income			17.0				16.3				4.2	%
GAAP Operating Margin %			21.9				20.0
Adjusted Operating Income*			17.0				16.6				2.3	%
Adjusted Operating Margin %*			21.9				20.4

* Excludes purchase accounting expenses of $0.3M associated with Minntronix in Q1 FY24

 

 

Revenue decreased approximately $4.0 million or 4.8% year-on-year reflecting an 8.5% benefit from recent acquisitions and a 0.3% benefit from foreign currency, more than offset by an organic decline of 13.7%. The organic decline was due to continued softness in general industrial end markets in Europe, along with the effects of delays and prior overstocking related to certain large customer accounts. Adjusted operating income increased approximately $0.4 million or 2.3% year-on-year due to the contributions from recent acquisitions, productivity initiatives and product mix, partially offset by lower volume.

 

Electronics segment backlog realizable in under one year of approximately $93 million decreased 30% year-on-year. The segment had a book to bill ratio of 0.96 in the fiscal first quarter, with orders increasing 15% sequentially to approximately $75 million, the highest orders quarter in over a year.

 

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In fiscal second quarter 2025, on a sequential basis, the Company expects significantly higher revenue, primarily driven by the recent Amran/Narayan Group acquisition and higher sales into fast growth end markets, and slightly to moderately higher adjusted operating margin, as the recent acquisition and pricing and productivity initiatives are partially offset by higher investments in selling, marketing, and R&D.

 

Engraving (20% of sales; 17% of segment operating income)

 

		1Q25				1Q24				% Change
Engraving ($M)
Revenue			33.4				40.8				-18.2	%
Operating Income			5.8				7.6				-23.3	%
Operating Margin %			17.5				18.6

         

Revenue decreased approximately $7.4 million or 18.2% year-on-year reflecting a 17.5% organic decline, primarily due to delays in new platform rollouts in North America and delays and general market softness in Europe, and a foreign currency impact of 0.7%. Operating income decreased approximately $1.8 million or 23.3% year-on-year due to the slower demand in North America and Europe. Operating deleverage was partially offset from the realization of previously announced productivity initiatives and restructuring actions.

 

In fiscal second quarter 2025, on a sequential basis, the Company expects moderately higher revenue and slightly higher operating margin due to more favorable project timing in Asia and Europe and productivity initiatives.

 

Scientific (10% of sales; 14% of segment operating income)

 

		1Q25				1Q24				% Change
Scientific ($M)
Revenue			17.7				18.2				-2.7	%
Operating Income			4.7				4.9				-3.7	%
Operating Margin %			26.8				27.1

 

Revenue decreased approximately $0.5 million or 2.7% year-on-year reflecting lower demand from retail pharmacies, partially offset by higher volume from new product sales. Operating income decreased approximately $0.2 million or 3.7% year-on-year as the impact of lower volume and higher freight costs were partially offset by productivity actions.

 

In fiscal second quarter 2025, on a sequential basis, the Company expects similar revenue and slightly lower operating margin due to R&D investments and higher freight costs.

 

Engineering Technologies (12% of sales; 11% of segment operating income)

 

		1Q25				1Q24				% Change
Engineering Technologies ($M)
Revenue		20.5					18.2				12.7	%
Operating Income			4.0				3.0				32.9	%
Operating Margin %		19.5					16.6

 

Revenue increased approximately $2.3 million or 12.7% year-on-year primarily driven by more favorable project timing in the space end market which helped to drive growth in new product development and new applications. Operating income increased approximately $1.0 million or 32.9% year-on-year reflecting leverage on higher sales and pricing and productivity initiatives.

 

In fiscal second quarter 2025, on a sequential basis, the Company expects similar to slightly higher revenue due to new products and new applications and slightly lower operating margin due to product mix.

 

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Specialty Solutions (12% of sales; 10% of segment operating income)

 

		1Q25				1Q24				% Change
Specialty Solutions ($M)
Revenue			21.1				25.9				-18.3	%
Operating Income			3.5				5.6				-36.8	%
Operating Margin %			16.8				21.7

 

Specialty Solutions revenue decreased approximately $4.7 million or 18.3% year-on-year, reflecting softness in the general market conditions in the Display Merchandising business and in the Hydraulics business. Operating income decreased approximately $2.1 million or 36.8% year-on-year due to lower volume.

 

In fiscal second quarter 2025, on a sequential basis, the Company expects slightly higher revenue and operating margin.

 

Capital Allocation

 

●

Share Repurchase: During the fiscal first quarter 2025, the Company repurchased approximately 24,810 shares for $4.4 million. There was $28.9 million remaining on the Company’s current share repurchase authorization at the end of the fiscal first quarter 2025.

 

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Capital Expenditures: In fiscal first quarter 2025, Standex’s capital expenditures were $6.7 million compared to $4.3 million in the fiscal first quarter of 2024. The Company expects fiscal year 2025 capital expenditures between $35 million and $40 million. Capital expenditures were $20.3 million in fiscal 2024.

 

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Dividend: On October 24, 2024, the Company declared a quarterly cash dividend of $0.32 per share, an approximately 6.7% year-on-year increase. The dividend is payable November 22, 2024, to shareholders of record on November 8, 2024.

 

Balance Sheet and Cash Flow Highlights

 

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Net Debt: Standex had net (cash) debt of ($15.6) million on September 30, 2024, compared to $16.4 million at the end of fiscal first quarter 2024. Net (cash) debt for the first quarter of 2025 consisted primarily of long-term debt of $149.0 million and cash and equivalents of $164.6 million.

 

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Cash Flow: Net cash provided by continuing operating activities for the three months ended September 30, 2024, was $17.5 million compared to $16.4 million in the prior year’s quarter. Free cash flow after capital expenditures was $10.8 million compared to free cash flow after capital expenditures of $12.1 million in the fiscal first quarter of 2024.

 

Conference Call Details

 

Standex will host a conference call for investors today, October 29, 2024, at 10:00 a.m. ET. On the call, David Dunbar, President, and CEO, and Ademir Sarcevic, CFO, will review the Company’s financial results and business and operating highlights. Investors interested in listening to the webcast and viewing the slide presentation should log on to the “Investors” section of Standex’s website under the subheading, “Events and Presentations,” located at www.standex.com.

 

A replay of the webcast will also be available on the Company’s website shortly after the conclusion of the presentation online through October 29, 2025. To listen to the teleconference playback, please dial in the U.S. [phone] or [phone] internationally; the passcode is 60631#. The audio playback via phone will be available through November 5, 2024. The webcast replay can be accessed in the “Investor Relations” section of the Company’s website, located at www.standex.com.

 

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Use of Non-GAAP Financial Measures

 

In addition to the financial measures prepared in accordance with generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures, including non-GAAP adjusted income from operations, non-GAAP adjusted net income from continuing operations, free operating cash flow, EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted EBITDA, adjusted EBITDA to net debt, and adjusted earnings per share. The attached financial tables reconcile non-GAAP measures used in this press release to the most directly comparable GAAP measures. The Company believes that the use of non-GAAP measures which include the impact of restructuring charges, purchase accounting, insurance recoveries, discrete tax events, gain or loss on sale of a business unit, acquisition costs, and litigation costs help investors to obtain a better understanding of our operating results and prospects, consistent with how management measures and forecasts the Company's performance, especially when comparing such results to previous periods. An understanding of the impact in a particular quarter of specific restructuring costs, acquisition expenses, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Non-GAAP measures should be considered in addition to, and not as a replacement for, the corresponding GAAP measures, and may not be comparable to similarly titled measures reported by other companies.

 

 

About Standex

 

Standex International Corporation is a multi-industry manufacturer in five broad business segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Turkey, India, and China. For additional information, visit the Company's website at http://standex.com/.

 

Forward-Looking Statements

 

Statements contained in this Press Release that are not based on historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as “should,” “could,” “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company’s business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include, but are not limited to: the impact of pandemics and other global crises or catastrophic events on employees, our supply chain, and the demand for our products and services around the world; materially adverse or unanticipated legal judgments, fines, penalties or settlements; conditions in the financial and banking markets, including fluctuations in exchange rates and the inability to repatriate foreign cash; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, defense, transportation, food service equipment, consumer appliance, energy, oil and gas and general industrial markets; lower-cost competition; the relative mix of products which impact margins and operating efficiencies in certain of our businesses; the impact of higher raw material and component costs, particularly steel, certain materials used in electronics parts, petroleum based products, and refrigeration components; the impact of higher transportation and logistics costs, especially with respect to transportation of goods from Asia; the impact of inflation on the costs of providing our products and services; an inability to realize the expected cost savings from restructuring activities including effective completion of plant consolidations, cost reduction efforts including procurement savings and productivity enhancements, capital management improvements, strategic capital expenditures, and the implementation of lean enterprise manufacturing techniques; the potential for losses associated with the exit from or divestiture of businesses that are no longer strategic or no longer meet our growth and return expectations; the inability to achieve the savings expected from global sourcing of raw materials and diversification efforts in emerging markets; the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs; the inability to attain expected benefits from acquisitions and the inability to effectively consummate and integrate such acquisitions and achieve synergies envisioned by the Company; increased costs from acquisitions to improve and coordinate managerial, operational, financial, and administrative systems, including internal controls over financial reporting and compliance with the Sarbanes-Oxley Act of 2002, and other costs related to such systems in connection with acquired businesses; market acceptance of our products; our ability to design, introduce and sell new products and related product components; the ability to redesign certain of our products to continue meeting evolving regulatory requirements; the impact of delays initiated by our customers; our ability to increase manufacturing production to meet demand including as a result of labor shortages; the impact on our operations of any successful cybersecurity attacks; and potential changes to future pension funding requirements. For a more comprehensive discussion of these and other factors, see the “Risk Factors” section of the Company’s most recent annual report on Form 10-K filed with the SEC and available on the Company’s website. In addition, any forward-looking statements represent management's estimates only as of the day made and should not be relied upon as representing management's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company and management specifically disclaim any obligation to do so, even if management's estimates change.

 

 

 

Contact:

Christopher Howe

Director of Investor Relations                           

[phone]

e-mail: [e-mail]

 

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Standex International Corporation

Consolidated Statement of Operations

(unaudited)

 

		Three Months Ended
		September 30,
(In thousands, except per share data)		2024				2023
Net sales		$	170,464				184,774
Cost of sales			100,391				112,139
Gross profit			70,073				72,635
Selling, general and administrative expenses			43,048				43,585
(Gain) loss on sale of business			-				(274	)
Restructuring costs			1,086				1,906
Acquisition related costs			1,840				501
Income from operations			24,099				26,917
Interest expense			977				1,276
Other non-operating (income) expense, net			(28	)			846
Total			949				2,122
Income from continuing operations before income taxes			23,150				24,795
Provision for income taxes			4,962				5,903
Net income from continuing operations			18,188				18,892
Income (loss) from discontinued operations, net of tax			9				(78	)
Net income		$	18,197			$	18,814
Basic earnings per share:
Income (loss) from continuing operations		$	1.54			$	1.61
Income (loss) from discontinued operations			-				(0.01	)
Total		$	1.54			$	1.60
Diluted earnings per share:
Income (loss) from continuing operations		$	1.53			$	1.58
Income (loss) from discontinued operations			-				-
Total		$	1.53			$	1.58
Average Shares Outstanding
Basic			11,787				11,742
Diluted			11,904				11,933

 

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Standex International Corporation

Condensed Consolidated Balance Sheets

(unaudited)

 

		September 30,				June 30,
(In thousands)		2024				2024
ASSETS
Current assets:
Cash and cash equivalents		$	164,584				154,203
Accounts receivable, net			118,697				121,365
Inventories			90,121				87,106
Prepaid expenses and other current assets			73,745				67,421
Total current assets			447,147				430,095
Property, plant, equipment, net			138,373				134,963
Intangible assets, net			78,957				78,673
Goodwill			292,180				281,283
Deferred tax asset			19,303				17,450
Operating lease right-of-use asset			36,128				37,078
Other non-current assets			25,794				25,515
Total non-current assets			590,735				574,962
Total assets		$	1,037,882			$	1,005,057
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	66,505				63,364
Accrued liabilities			52,885				56,698
Income taxes payable			6,607				7,503
Total current liabilities			125,997				127,565
Long-term debt			148,985				148,876
Operating lease long-term liabilities			29,722				30,725
Accrued pension and other non-current liabilities			75,157				76,388
Total non-current liabilities			253,864				255,989
Stockholders' equity:
Common stock			41,976				41,976
Additional paid-in capital			108,383				106,193
Retained earnings			1,100,924				1,086,277
Accumulated other comprehensive loss			(160,939	)			(182,956	)
Treasury shares			(432,323	)			(429,987	)
Total stockholders' equity			658,021				621,503
Total liabilities and stockholders' equity		$	1,037,882			$	1,005,057

 

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Standex International Corporation and Subsidiaries

Statements of Consolidated Cash Flows

(unaudited)

 

		Three Months Ended
		September 30,
(In thousands)		2024				2023
Cash Flows from Operating Activities
Net income		$	18,197				18,814
Income (loss) from discontinued operations			9				(78	)
Income from continuing operations			18,188				18,892
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			7,061				7,082
Stock-based compensation			2,568				2,193
Non-cash portion of restructuring charge			(143	)			397
(Gain) loss on sale of business			-				(274	)
Contributions to defined benefit plans			(3,379	)			(49	)
Net changes in operating assets and liabilities			(6,748	)			(11,834	)
Net cash provided by operating activities - continuing operations			17,547				16,407
Net cash provided by (used in) operating activities - discontinued operations			26				(227	)
Net cash provided by (used in) operating activities			17,573				16,180
Cash Flows from Investing Activities
Expenditures for property, plant and equipment			(6,725	)			(4,338	)
Expenditures for acquisitions, net of cash acquired			-				(29,229	)
Proceeds from the sale of business			-				274
Other investing activities			411				-
Net cash provided by (used in) investing activities			(6,314	)			(33,293	)
Cash Flows from Financing Activities
Payments of debt			-				(25,000	)
Activity under share-based payment plans			1,637				768
Purchase of treasury stock			(4,382	)			(22,158	)
Cash dividends paid			(3,528	)			(3,288	)
Net cash provided by (used in) financing activities			(6,273	)			(49,678	)
Effect of exchange rate changes on cash			5,395				(2,085	)
Net changes in cash and cash equivalents			10,381				(68,876	)
Cash and cash equivalents at beginning of year			154,203				195,706
Cash and cash equivalents at end of period		$	164,584			$	126,830

 

8

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Standex International Corporation

Selected Segment Data

(unaudited)

 

		Three Months Ended
		September 30,
(In thousands)		2024				2023
Net Sales
Electronics		$	77,733			$	81,688
Engraving			33,363				40,794
Scientific			17,693				18,193
Engineering Technologies			20,530				18,220
Specialty Solutions			21,145				25,879
Total		$	170,464			$	184,774
Income from operations
Electronics		$	17,027			$	16,334
Engraving			5,824				7,595
Scientific			4,749				4,930
Engineering Technologies			4,010				3,017
Specialty Solutions			3,548				5,617
Restructuring			(1,086	)			(1,906	)
Gain (loss) on sale of business			-				274
Acquisition related costs			(1,840	)			(501	)
Corporate			(8,133	)			(8,443	)
Total		$	24,099			$	26,917

 

9

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Standex International Corporation

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited)

 

		Three Months Ended
		September 30,
(In thousands, except percentages)		2024				2023				% Change
Adjusted income from operations and adjusted net income from continuing operations:
Net Sales		$	170,464			$	184,774				-7.7	%
Income from operations, as reported		$	24,099			$	26,917				-10.5	%
Income from operations margin			14.1	%			14.6	%
Adjustments:
Restructuring charges			1,086				1,906
Acquisition-related costs			1,840				501
(Gain) loss on sale of business			-				(274	)
Purchase accounting expenses			-				340
Adjusted income from operations		$	27,025			$	29,390				-8.0	%
Adjusted income from operations margin			15.9	%			15.9	%
Interest and other income (expense), net			(949	)			(2,122	)
Provision for income taxes			(4,962	)			(5,903	)
Discrete and other tax items			(72	)			100
Tax impact of above adjustments			(702	)			(654	)
Net income from continuing operations, as adjusted		$	20,340			$	20,811				-2.3	%
EBITDA and Adjusted EBITDA:
Net income (loss) from continuing operations, as reported		$	18,188			$	18,892				-3.7	%
Net income from continuing operations margin			10.7	%			10.2	%
Add back:
Provision for income taxes			4,962				5,903
Interest expense			977				1,276
Depreciation and amortization			7,061				7,082
EBITDA		$	31,188			$	33,153				-5.9	%
EBITDA Margin			18.3	%			17.9	%
Adjustments:
Restructuring charges			1,086				1,906
Acquisition-related costs			1,840				501
(Gain) loss on sale of business			-				(274	)
Purchase accounting expenses			-				340
Adjusted EBITDA		$	34,114			$	35,626				-4.2	%
Adjusted EBITDA Margin			20.0	%			19.3	%
Free operating cash flow:
Net cash provided by operating activities - continuing operations, as reported		$	17,547			$	16,407
Less: Capital expenditures			(6,725	)			(4,338	)
Free cash flow from continuing operations		$	10,822			$	12,069

 

10

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Standex International Corporation

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited)

 

		Three Months Ended
		September 30,
Adjusted earnings per share from continuing operations		2024				2023				% Change
Diluted earnings per share from continuing operations, as reported		$	1.53			$	1.58				-3.2	%
Adjustments:
Restructuring charges			0.07				0.12
Acquisition-related costs			0.12				0.03
(Gain) loss on sale of business			-				(0.02	)
Discrete tax items			(0.01	)			0.01
Purchase accounting expenses			-				0.02
Diluted earnings per share from continuing operations, as adjusted		$	1.71			$	1.74				-1.7	%

 

11

Exhibit 99.1

 

NEWS RELEASE

 

STANDEX INTERNATIONAL CORPORATION ■ SALEM, NH 03079 ■ TEL [phone] ■ WEB www.standex.com

 

STANDEX ACQUIRES AMRAN INSTRUMENT TRANSFORMERS AND NARAYAN POWERTECH PVT., LTD.

 

●

Immediately Accretive to Revenue Growth, EBITDA Margin, Operating Margin, EPS and FCF

●

Amran/Narayan Grew Revenue at ~30% CAGR Over Last Three Years; Expects ~$100M of Revenue in CY 2024, with Adjusted EBITDA Margin Above 40%

●

Significantly Expands Presence in the Fast-Growing, High-Margin Electrical Grid End Market, Benefiting from Infrastructure Upgrades, Capacity Expansion and Data Center Demand

●

Standex’s Exposure to Fast Growth Markets Increases to ~25% of Sales on Pro-Forma FY 2024 Basis

●

Broadens Technology Platform and Capabilities to Expand Growth into Electronics’ Markets

●

Geographic Expansion with Engineering Expertise in India and Intellectual Property in Low to Medium Voltage Technologies

 

SALEM, N.H., October 29, 2024 /PRNewswire/ -- Standex International Corporation (NYSE:SXI) today announced that it has acquired, in separate transactions, privately-held US-based Amran Instrument Transformers and India-based Narayan Powertech Pvt. Ltd. (going forward referred to as “Amran/Narayan Group”) in cash and stock transactions. These transactions represent a combined enterprise value of approximately $462 million, comprised of 85% cash and 15% in Standex common stock for Amran Instrument Transformers and 90% cash and 10% in Standex common stock for Narayan Powertech Pvt. Ltd. The 10% share exchange related to Narayan Powertech Pvt. Ltd. is subject to India regulatory approval, which is expected to take up to six months. The cash consideration of the transactions was financed using cash-on-hand, existing credit facilities, and a $250 million 364-day term loan with existing lenders. The Company intends over the next several weeks to convert the 364-day term loan into exercise of the accordion feature under its existing credit facilities. Standex will remain committed to paying down debt and expects to reduce leverage below 1.0x net debt to EBITDA ratio within the first 24 months post-transaction.

 

With manufacturing locations in the United States and India, Amran/Narayan Group is a leading manufacturer of low voltage and medium voltage instrument transformers. Its custom product portfolio is specifically designed and developed in partnership with OEMs for their specific equipment related to electrical grid applications. Amran/Narayan Group’s products have been installed in over 50 countries around the world.

 

In calendar year 2024, Amran/Narayan Group estimates revenues of approximately $100 million with an adjusted EBITDA margin above 40%.

 

“As the largest acquisitions in the Company’s history, this is an exciting milestone for Standex,” said David Dunbar, President and Chief Executive Officer of Standex. “Amran/Narayan Group’s extensive low to medium voltage portfolio and engineering expertise fit within our strategy to accelerate growth in secular, fast growth end markets. The combination of Standex and Amran/Narayan Group continues Standex’s portfolio strategy of focusing our higher-margin business segments in faster-growing markets. With these acquisitions, Standex Electronics will now represent more than 50% of the Company, and we anticipate consolidated adjusted EBITDA margin expanding by over 200 basis points in the first full year as a combined company. We look forward to welcoming the entire Amran/Narayan Group team to our company.”

 

“Amran will operate as a key pillar of the combined companies’ low- to medium-voltage instrument transformers business,” said Bhargav Shah, Founder and President of Amran. “Both Standex and Amran have a centralized focus on long-term customer relationships and customer-specific new product development, and together, we are optimistic about our combined resources to accelerate growth in the electrical grid market.”

 

 

1

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“The combination of Narayan Powertech and Standex creates a strong player in the transformer industry, with the ability to leverage a larger global footprint and portfolio breadth to create increased value for our customers,” added Chirag Shah, Founder and Managing Director of Narayan Powertech. “As part of the Narayan founding team, I am thrilled to continue the journey with other key team members as part of a global leader like Standex. We believe the combination will allow for expanded growth opportunities, supported by a seamless cultural fit.”

 

Transaction Highlights

 

The transactions are expected to be immediately accretive to Standex’s revenue growth, EBITDA margin, operating margin, earnings per share and free cash flow in the first full year post closing of the transactions, excluding any acquisition and integration related costs. Longer term, the combination is expected to create cross-selling opportunities given the companies’ complementary offerings.

 

Moving forward, Amran/Narayan Group’s founders and leadership team will remain with the combined company. Their entrepreneurial know-how, technical skills, and extensive experience across the transformer industry will benefit the combined company with its integration efforts, innovation roadmap, and future growth.

 

Amran/Narayan Group will be reported as part of Standex’s Electronics business segment.

 

Guggenheim Securities LLC is serving as financial advisor and Foley Hoag LLP and Lexygen are serving as legal counsel to Standex. Northern Edge Capital Advisors, LLC is serving as financial advisor and Chamberlain, Hrdlicka, White, Williams & Aughtry, P.C., and Khaitan & Co. are serving as legal counsel to Amran and Narayan.

 

Conference Call Details

 

Standex will host a conference call for investors today, October 29, 2024, at 10:00 a.m ET. On the call, David Dunbar, President, and CEO, and Ademir Sarcevic, CFO, will review these acquisitions together with the Company’s first quarter financial results and business and operating highlights. Investors interested in listening to the webcast and viewing the slide presentation should log on to the “Investors” section of Standex’s website under the subheading, “Events and Presentations,” located at www.standex.com.

 

A replay of the webcast will also be available on the Company’s website shortly after the conclusion of the presentation online through October 29, 2025. To listen to the teleconference playback, please dial in the U.S. [phone] or [phone] internationally; the passcode is 60631#. The audio playback via phone will be available through November 5, 2024. The webcast replay can be accessed in the “Investor Relations” section of the Company’s website, located at www.standex.com.

 

 

 

About Standex

 

Standex International Corporation is a global multi-industry manufacturer in five broad business segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Brazil, Turkey, India, and China. For additional information, visit the Company's website standex.com.

 

About Amran and Narayan

 

Amran Instrument Transformers and Narayan Powertech Pvt. Ltd design and manufacture low voltage and medium voltage instrument transformers for products focused on the electrical grid, smart grid technology, data centers, and renewable energy systems. For additional information, visit the Company’s related websites at amranit.com and narayanpowertech.com.

 

2

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Forward-Looking Statements

 

Statements contained in this Press Release that are not based on historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as “should,” “could,” “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company’s business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include, but are not limited to: the impact of pandemics and other global crises or catastrophic events on employees, our supply chain, and the demand for our products and services around the world; materially adverse or unanticipated legal judgments, fines, penalties or settlements; conditions in the financial and banking markets, including fluctuations in exchange rates and the inability to repatriate foreign cash; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, defense, transportation, food service equipment, consumer appliance, energy, oil and gas and general industrial markets; lower-cost competition; the relative mix of products which impact margins and operating efficiencies in certain of our businesses; the impact of higher raw material and component costs, particularly steel, certain materials used in electronics parts, petroleum based products, and refrigeration components; the impact of higher transportation and logistics costs, especially with respect to transportation of goods from Asia; the impact of inflation on the costs of providing our products and services; an inability to realize the expected cost savings from restructuring activities including effective completion of plant consolidations, cost reduction efforts including procurement savings and productivity enhancements, capital management improvements, strategic capital expenditures, and the implementation of lean enterprise manufacturing techniques; the potential for losses associated with the exit from or divestiture of businesses that are no longer strategic or no longer meet our growth and return expectations; the inability to achieve the savings expected from global sourcing of raw materials and diversification efforts in emerging markets; the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs; the inability to attain expected benefits from acquisitions and the inability to effectively consummate and integrate such acquisitions and achieve synergies envisioned by the Company; increased costs from acquisitions to improve and coordinate managerial, operational, financial, and administrative systems, including internal controls over financial reporting and compliance with the Sarbanes-Oxley Act of 2002, and other costs related to such systems in connection with acquired businesses; market acceptance of our products; our ability to design, introduce and sell new products and related product components; the ability to redesign certain of our products to continue meeting evolving regulatory requirements; the impact of delays initiated by our customers; our ability to increase manufacturing production to meet demand including as a result of labor shortages; the impact on our operations of any successful cybersecurity attacks; and potential changes to future pension funding requirements. For a more comprehensive discussion of these and other factors, see the “Risk Factors” section of the Company’s most recent annual report on Form 10-K filed with the SEC and available on the Company’s website. In addition, any forward-looking statements represent management's estimates only as of the day made and should not be relied upon as representing management's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company and management specifically disclaim any obligation to do so, even if management's estimates change.

 

 

SOURCE: Standex International Corporation

 

 

For further information:

Christopher Howe

Director of IR

[phone]

e-mail: [e-mail]

 

3

Document And Entity Information	Oct. 29, 2024
Document Information [Line Items]
Entity, Registrant Name	STANDEX INTERNATIONAL CORPORATION
Document, Type	8-K
Document, Period End Date	Oct. 29, 2024
Entity, Incorporation, State or Country Code	DE
Entity, File Number	1-7233
Entity, Tax Identification Number	31-0596149
Entity, Address, Address Line One	23 Keewaydin Drive
Entity, Address, City or Town	Salem
Entity, Address, State or Province	NH
Entity, Address, Postal Zip Code	03079
City Area Code	603
Local Phone Number	893-9701
Title of 12(b) Security	Common Stock
Trading Symbol	SXI
Security Exchange Name	NYSE
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000310354

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