SXI

Image source: The Motley Fool. Friday, July 31, 2026 at 8:30 a.m. ET Director of Investor Relations - Christopher Howe Chairman, President and Chief Executive Officer - David Dunbar Chief Financial Officer and Treasurer - Ademir Sarcevic Operator: Good morning, ladies and gentlemen, and welcome to the Standex International Fourth Quarter 2026 Financial Results Conference Call. [Operator Instructions] This call is being recorded on Friday, July 31, 2026. I would now like to turn the conference over to Christopher Howe, Director of Investor Relations. Please go ahead. Huang Howe: Thank you, operator, and good morning. Please note that the presentation accompanying management's remarks can be found on the Investor Relations portion of the company's website at www.standex.com. Please refer to Standex's safe harbor statement on Slide 2. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's most recent annual report on Form 10-K as well as other SEC filings and public announcements for a detailed list of risk factors. In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBIT, which is earnings before interest and taxes, adjusted EBIT, EBITDA, which is earnings before interest, taxes, depreciation and amortization, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin. We will also refer to other non-GAAP measures, including adjusted net income, adjusted operating income, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow and pro forma net debt to EBITDA. Adjusted measures exclude the impact of restructuring, purchase accounting, amortization from acquired intangible assets, acquisition-related expenses and one-time items. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measurement and consistent historical comparison of the company's financial performance. On the call today is Standex's Chairman, President and Chief Executive Officer, David Dunbar; and Chief Financial Officer and Treasurer, Ademir Sarcevic. David Dunbar: Thank you, Chris. Good morning, and welcome to our fourth quarter and fiscal year 2026 conference call. A year ago, we made the claim that we are at an inflection point as a company and that our results in fiscal year 2026 would show that. I'm happy to look back on the year and see that it has indeed played out. We have demonstrated we are a growing engineered components company. Total sales grew 5.5% organically in the year, propelled by our growth initiatives. In our fourth quarter, 73% of our sales were delivered by our Engineered Components businesses. These businesses serve large end markets, providing a long runway of organic and inorganic growth opportunities. Our new product development efforts are now contributing meaningfully to sales, growing from $40 million to $67 million in the year. The $27 million increase contributed 300 basis points to sales growth. Our sales to fast-growth markets increased $80 million to $264 million, contributing 30% of sales. On July 2, we acquired the remaining 9.9% interest in Narayan, completing the acquisition of the Amran and Narayan Group, now known as Standex Grid. Together with our new colleagues in Standex Grid, we are completely focused on meeting the rapidly growing needs of customers building out the world's power infrastructure to support increasing living standards, electrification, replacement of an aging Western grid and the current rapid build-out of data centers. I would like to thank our employees, our executives and the Board of Directors for their efforts and continued dedication and support that drove our record in fiscal 2026. I also want to take a moment to thank Alan Glass for his many contributions these past 10 years. Alan has recently decided to retire, and I will soon be announcing his replacement as we bring in a new Chief Legal Officer to help power Standex through the next leg of our journey. Now let's look at the results beginning on Slide 3. In the fourth quarter, sales of $228.3 million increased 7.7% organically. Electronics grew 12.9% organically. New product sales grew approximately 43% to approximately $23 million. Sales in the fast-growth markets were approximately $72 million or more than 30% of sales. We had a record quarterly order intake of approximately $270 million. We are pleased with the momentum in the business reflected in an overall book-to-bill ratio of 1.18 and within electronics of 1.27. In fiscal year 2026, sales increased by more than $100 million and 5.5% organically. Electronics grew 7.5% organically. Q4 adjusted earnings per share were a record $2.45 per share, and we generated record free cash flow of $35 million. Following record profitability in fiscal 2025, we again achieved record milestones with adjusted gross margin of 42%, adjusted operating income margin of 19.4% and adjusted earnings per share of $8.74. On a sequential basis, we expect slightly higher revenue driven by higher contributions from fast-growth end markets and new product sales and similar adjusted operating margin. On a year-on-year basis, in fiscal first quarter 2027, we expect moderately higher revenue, driven by high single-digit to low double-digit organic growth from growing backlog in fast-growth markets and increased new product sales, partially offset by the revenue impact from the Federal Industries divestiture. We expect slightly to moderately higher adjusted operating margin as organic growth and realization of productivity actions are partially offset by growth investments. For fiscal year 2027, we expect mid- to high single-digit sales growth with high single-digit to low double-digit organic growth and continued adjusted operating margin expansion. I'm pleased with the momentum that we are building and launching new products. We expect to launch more than 20 new products in fiscal 2027 on top of more than 15 new products this past fiscal year. We expect new product sales pro forma for the federal divestiture to grow by $23 million to $90 million, adding nearly 300 basis points of organic growth in the year. Our sales into the fast-growing markets such as space, defense and grid are expected to increase approximately 20% to greater than $310 million, constituting more than 30% of our total sales. We are looking forward to Ademir transitioning into the Electronics business as President of Electronics. This is a natural step to be a CFO at a company like Standex is, in fact, to be a Chief Operating Officer. Our consistent performance these past 7 years owes a lot to Ademir having stayed close to the businesses. When there were early signs of issues to address or opportunities to expand, he would get into the details of the business, address the pricing, sourcing or operating issues to help get things back on track. I will now turn the call over to Ademir to provide more insight as to how we will approach the single biggest opportunity in our business, the expansion of capacity in our grid business. Ademir Sarcevic: Thank you, David, and good morning, everyone. I am very excited to take on the role of Electronics President as we enter this new chapter in Standex's transformation to high-growth and high-performance company. Our electronics business is exposed to several very robust and fast-growing end markets such as grid, defense and automation, and we are well positioned to capture market opportunities through continued targeted investments in R&D and new products, capacity expansion in grid while serving customers utilizing our customer intimacy approach. Our team is dedicated and accountable. Our products and solutions are robust. Our partnership with customers is strong, and I believe we have significant organic growth and margin expansion opportunities in years to come. Let's turn to Slide 4, which highlights our focus on capacity expansion within our Electronics grid business. One of my top priorities as Electronics President is expanding capacity within our Standex Grid business. Since I joined Standex as CFO, we never have had such an incredible opportunity for organic growth. When we acquired Amran and Narayan, their sales were approximately $100 million on an annual basis. We just closed FY '26 with approximately $148 million in sales. And by fiscal 2030, we expect Grid sales to grow to between $340 million and $440 million. To get there, we have identified 6 capacity expansion objectives and have dedicated teams driving these important workstreams. Key pieces of our capacity expansion efforts include Productivity and Automation, greenfield facility in Croatia, new lines in Mexico, expanding our footprint in Texas and additional shifts and footprint in India. Starting with Productivity and Automation, we are expecting capacity within existing facilities, adding up to $40 million in full year capacity by fiscal 2030. This May, we opened our new facility in Croatia, built as a direct response to customer demand for local capacity, giving us visibility into 2030 and a shot at a meaningful share of the $1.2 billion Europe market. By fiscal 2030, we believe Croatia will add approximately $75 million in annual capacity, well above our original 3- to 5-year estimate of $60 million. Croatia isn't just a new facility, it's a platform for our next phase of growth in Europe. In Mexico, we have freed up space in our existing facility to produce low-voltage instrument transformers, adding approximately $25 million in annual capacity by fiscal 2030. In Texas, we signed a lease to triple our footprint to over 200,000 square feet with machinery on order and production on track to start in fiscal 2028. This expansion is expected to add over $60 million in annual capacity by fiscal 2030. Finally, in India, additional shifts and footprint expansion would add $45 million and $50 million of annual capacity, respectively. These expansions will strengthen our positions in North America, India and Middle East markets for low to medium voltage transformers. Now I would like to discuss our financial performance in greater detail. Let's turn to Slide 5, fourth quarter 2026 summary. On a consolidated basis, total revenue increased approximately 2.8% year-on-year to $228.3 million. This reflected organic growth of 7.7%, partially offset by 4.5% impact from Federal Industries divestiture and 0.4% impact from foreign currency. Fourth quarter 2026 adjusted operating margin decreased 70 basis points year-on-year to 19.9%. Adjusted earnings per share increased 7.4% year-on-year to a record $2.45. Net cash provided by operating activities was $40.5 million in the fourth quarter of fiscal 2026 compared to $33.4 million a year ago. Capital expenditures were $5.5 million compared to $8.6 million a year ago. As a result, we generated fiscal fourth quarter free cash flow of $35 million compared to $24.9 million a year ago. Now please turn to Slide 6, and I will begin to discuss our segment performance and outlook, beginning with our Engineered Components segments. Electronics revenue increased 12.1% year-on-year to a record $129.1 million, driven by organic growth of 12.9%, partially offset by 0.8% impact from foreign currency. Organic growth was driven by sales into fast-growth markets and increased new product sales. Adjusted operating margin of 27.2% in fiscal fourth quarter 2026 decreased 140 basis points year-on-year due to growth investments and transitory operational issues in the Edge business, partially offset by higher volume and pricing initiatives. Excluding Edge operational issues and other one-time items, adjusted operating margin would have increased year-on-year. Our book-to-bill in fiscal fourth quarter was 1.27 with orders of approximately $165 million. Sequentially, in fiscal first quarter 2027, we expect slightly higher revenue, reflecting higher sales into fast-growth end markets and increased new product sales. We expect moderately higher adjusted operating margin. On a year-on-year basis, we expect double-digit organic growth. Aerospace and Defense revenue increased 18.3% to $37.9 million, driven by organic growth of 18.4%. Organic growth was driven by increased project activity in the defense end market. Adjusted operating margin of 22.5% increased 410 basis points year-on-year, primarily due to higher volume and project mix. Sequentially, we expect moderately lower revenue due to less favorable project timing and moderately lower adjusted operating margin. On a year-on-year basis, we expect double-digit organic growth. Now turn to Slide 7 for a discussion of the Scientific and Engraving and Hydraulics segments. Scientific revenue increased 5% to $18.8 million due to organic growth. Organic growth was driven by pricing initiatives and a slight market recovery. Adjusted operating margin of 28.6% increased 440 basis points year-on-year, reflecting higher sales and tariff refunds. Sequentially, we expect moderately higher revenue and similar adjusted operating margin. Engraving and Hydraulics revenue decreased 9.7% to $42.4 million, driven by organic decline of 9.6% and 0.1% impact from foreign currency. Adjusted operating margin of 15.9% in fiscal fourth quarter 2026 increased 20 basis points year-on-year. In the next fiscal quarter, on a sequential basis, we expect slightly to moderately higher revenue and slightly higher adjusted operating margin. Now please turn to Slide 8 for a summary of Standex's liquidity statistics and capitalization structure. Our current available liquidity is approximately $148 million. At the end of the fourth quarter, Standex had net debt of $339.2 million compared to net debt of $448 million at the end of fiscal fourth quarter 2025. Our net leverage ratio currently stands at 1.8. In fiscal first quarter 2027, we expect interest expense of approximately $7 million. Standex's long-term debt at the end of fiscal quarter 2026 was $518 million. Cash and cash equivalents totaled $178.7 million. We declared our 248th consecutive quarterly cash dividend of $0.34 a share, an approximately 6.3% increase year-on-year. In fiscal 2027, we expect capital expenditures between $45 million and $55 million, primarily due to grid growth investments. I will now turn the call over to David for concluding remarks. David Dunbar: Thank you, Ademir. Before I move into concluding remarks, I would like to comment about the recent events in Japan. This past week, an earthquake struck Southern Kumamoto, the location of our Sanyu Relay facility. No employees were injured, and there was very minimal impact on our site, though some of our colleagues had damage to their homes. Our hearts are with our employees and their families as they recover from this natural disaster. Please turn to Slide 9. To summarize, I'm very pleased to see the continued organic growth in the fourth quarter with a book-to-bill of 1.18. Organic growth was driven by our Electronics and Aerospace and Defense segments, which grew 12.9% and 18.4%, respectively. We will continue to align our organic and inorganic growth investments around secular end markets and new products that expand our presence in engineered components and deepen our customer relationships. Our acquisition strategy will continue to focus on businesses with accretive margins, exposure to fast-growth markets and delivery of custom solutions. We expect fiscal 2027 sales to increase mid- to high single digits over fiscal 2026, driven by high single to low double-digit organic growth with continued margin expansion. We anticipate margin progression as we move through the year. Considering the Federal Industries divestiture, we expect to be on track to achieve greater than $1.1 billion in sales and greater than 23% adjusted operating margin by the end of fiscal year 2028. We will now open the line for questions. Operator: Your first question comes from Mike with D.A. Davidson. Michael Shlisky: I'm going to give you a little bit of electronics-related questions, grid-related questions. First, I really like the waterfall chart you put out there about your plan to expand capacity. It is across different continents. It's across at least I don't know, 4 or 5 countries. And I assume that's just the capacity, not necessarily the sales organization, supply chain, et cetera. It sounds like a lot going on over a couple of years. Give us a little more detail as to -- is there a sequential process here? Do you have kind of one team doing all the work and they're going from place to place? Just a little bit kind of more about how spread is the segment's leadership here. Ademir Sarcevic: Mike, I expected drilling, so that's okay. Look, I mean, the grid expansion, as we said on the call, and I think, as you know, is our top priority for the company in the years to come because the market opportunities are phenomenal and our opportunity to penetrate that market is significant. So we do have -- we call it kind of maybe a tiger team. We do have a team that's solely focused on grid expansion kind of across these different sites. And this, Mike, is kind of a multi-year project, multi-year projection. So if I kind of walk you through this waterfall, in terms of productivity and automation, that's primarily around lean transformation, Kaizen events, primarily focused on our key lines in India. We have a team that's in India right now dedicated to work with our local management in order to get it accomplished. David and I have weekly updates on progress on that transformation. And frankly, out of this $40 million that we have identified, we feel that we can achieve a significant portion of that or maybe half within FY '27. Then if you think about kind of Croatia and Mexico, there is a separate team that's working on those 2 specific sites. The Croatia site is up and running. Mexico, we freed up the space. We are starting to do some shipments out of there. we think within FY '27, we can probably get $10 million to $15 million out of those 2 sites. The other thing that we have done, we actually set up what we call a fourth shift in our Houston facility, in our current Amran, Houston facility. What that really means is that the plant is going to be running probably about 24/7 going forward. And that should probably give us another $5 million worth of additional capacity. And then as you kind of move forward to this India additional shifts, that's really putting a second shift in our plant in India. We think that's probably going to give us another $5 million to $10 million in FY '27. The Texas expansion is FY '28 event, followed with the India footprint expansion. So we do have teams dedicated on all of this. We have work streams that manage each one of these. And you kind of go from our starting point of FY '26 sales of $148 million and you kind of add what I just said, we feel pretty good we can get to that $180 million to $200 million range in sales in FY '27. And then we'll be set up really nicely as we get to FY '28 and '29 to execute on these additional things. But we've got to get it done. Michael Shlisky: Got it. Got it. That's great detail. And I also want to confirm that what was in those comments you just made on that slide, that is the current grid product lineup and customer base. I'm curious if you could share -- it's hard to imagine the entire Electronics segment not having more to add to the data center story. We've discussed this on previous calls. Are you working on any additional products, additional crossovers beyond test and measurement that can take your non-grid business into grid-related products? David Dunbar: Yes. So we actually... Michael Shlisky: And is that not part of the slide in all your projections? Sorry, go ahead. David Dunbar: It is not part of the slide. There is a -- we do a few million dollars from our legacy Edge business into grid. It supports basically diagnostic equipment and instrumentation that go into grid distribution and monitoring systems. We are exploring ways to combine our sales force so we can ramp that up. That is -- that's not on this page that Ademir showed you. Longer term, though, we're quite interested in this evolution and development of an 800-volt DC architecture, which will be not only in data centers, but just it will be an architecture across all electrification and intelligent systems. And so we're working on development of products to support that architecture. That's a few years away from making a penetration in the industry, but we're working on that. And long term, that's a big opportunity for us. Michael Shlisky: Got it. I also wanted to turn on the growth you've been seeing in the Aerospace and Defense segment. I think both Aerospace and Defense have quite a few tailwinds behind them coming up here. Maybe we just touch on the Defense part with global conflicts that are kind of burning out there, it's always sad to see it, but it is certainly happening. I know that some of your products serve the missile industry and certain military aircraft. I'd be curious as to if you could tell us a little bit about the portfolio of opportunities you've got going forward in fiscal '27, '28 and also whether any of that is included in some of your organic projections. Sometimes these things are ordered kind of quick turn or last minute and it'd be tough to put in there. I'm just kind of curious whether there's some upside if we start seeing even more defense spending going forward. David Dunbar: Yes. In our -- in the investor presentation that we started using a month or so ago, we showed a projection of our missile business, which I think last year was $9 million this year in the teens. We see that growing to between $40 million and $80 million over the next 4 years. We're confident in that $40 million number. We are getting increased levels of orders for the programs we're on, which is SM-3, PRSM. We do parts that go into Patriot systems as part of our legacy electronics business. We also are doing development on future generation missile programs. So yes, we do see upside to that, and it is quite active, as you say. Operator: Your next question comes from Chris with CJS Securities. Christopher Moore: Maybe just start with Electronics overall. So 12.9% organic growth Q4 looks like double-digit in fiscal '27. Can you provide a little more detail here? Is this all grid? Or are you seeing some kind of increasing contribution from kind of the core electronics business? Ademir Sarcevic: Chris, it's Ademir here. It's not just grid. Grid is extremely strong for us, been strong for us, but we are seeing a pretty nice uptick and increase in demand in kind of our core businesses, Detect and Edge. I mean if you kind of look at our book-to-bill in the last quarter, every single one of our business units was over 1.2 book-to-bill. So we are seeing a very nice tailwind kind of into the -- into this fiscal year. And then if you kind of look at our sales progression over the FY '26, we did, I think, $110 million in Q1 of '26, $115 million in Q2, $120 million in Q3, about $129 million in Q4. And we expect that to continue to increase gradually through FY '27. So when we say, for example, double-digit organic growth in electronics in Q1 of FY '27, that's more like high teens or low 20% if you compare it to the base of $110 million. So between these new products that launches between kind of a general economic strength we are seeing in APAC region right now and all the strength and demand in Grid, we feel pretty confident that we'll be -- we'll be able to achieve the double-digit organic growth in electronics in FY '27. And a few things work our way, could be higher than that. Christopher Moore: Got it. Very helpful. And Grid, at one point, you talked about EBITDA margins in the 40% range, suggesting that was likely not sustainable, but north of 30% was. Are we getting closer to that 30% range? Or just any color there? Ademir Sarcevic: Margins in Grid are continuing to be very strong, kind of in line to historical levels. They have not declined. Christopher Moore: Got it. And maybe just the last one for me. Can you talk a little bit about the early payment for the Narayan shares, which I am all for. Given the growth in grid all things being equal, I assume the holders would likely wait until year 4, allow the shares -- to value the shares keep increasing before your right to repurchase kick in. So I'm guessing there was some incentive payment to get the holders to make that early conversion. You paid $64 million for the remaining 9.9%. Can you just maybe walk through the math a little bit in a little more detail? Ademir Sarcevic: Yes. Sure, Chris. Great question. As you kind of know us for a while, whenever we look to do an acquisition, we always want to make sure there's a management continuity. We look at kind of a few things for every acquisition. We look at strategy. We look at, obviously, financially, it has to make sense and then culturally. And as part of that assessment, we always want management to stick around for a few years and kind of help us learn the business and help us grow the business to the next level. We have been working together now with Amran and Narayan and the leadership for almost 2 years, and the partnership and collaboration has been exceptional. Probably -- we always thought it's going to be strong and good, but it's been even better than we thought. I mean it's really a great relationship. And you're right, we didn't have the right to start repurchasing shares until year 4. So we reached out to the owners to see if we can renegotiate an early buy-in. And we did have to pay a little bit of a higher multiple based on the trailing 12-months EBITDA. We paid about 15x multiple to settle those shares. So -- and the reason, frankly, if you think about future growth and investments we have to make and in order to expedite some of these decisions and frankly, to remove some of the accounting complexities around tracking how these investments are made, who makes it, what adjustments to be made, we approach them and we settled it at the $64 million or about 15x trailing 12-month EBITDA. The other thing I will tell you, if you kind of add what we paid in October 2024 for the business and you add this additional $64 million and compare it to the trailing 12-month EBITDA of FY '26, the multiple would be about 7 to 8x. So it's a great deal for Standex. We feel also it's a great deal for Amran and Narayan and ownership and people because it's really one of those things where 1 to 1 -- 1 plus 1 makes 3, and we are very excited to continue working with them. So that's the story behind it. Operator: Your next question comes from Ross with William Blair. Ross Sparenblek: Just starting electronics on the margin front here. Can you maybe help us size the growth investments in the quarter and what the impact of this transitory operational issues are? David Dunbar: Yes. Let me start with that, and Ademir can pick up. So the transitory issues, let's just start with that. In our Edge, the business we used to call magnetics, we implemented an ERP system in a couple of large plants, complex plants in America right about -- like I think December, we went live. That created a lack of visibility for that team. It slowed down some problem solving. It impacted their ability to execute and drive the things they had to drive. At the same time, their backlog is growing and their book-to-bill is terrific in that business. And the impact on margins in that business was in like just a couple of million dollars just over in the quarter. We've got some new folks involved in driving the corrective actions there. We see that turning the corner. So it truly is transitory. We'll get our arms around it and get that back on track. Ademir Sarcevic: Yes. And then, Ross, as we kind of think about margin progression in electronics and in FY '27, we clearly see an opportunity to expand the margin even with some of these growth investments that we are making. So it is our objective to get to that 30% number it's pretty soon. Ross Sparenblek: Okay. I mean I guess I'm just trying to gather when these growth investments start to step down. Should they continue into this time next year as the new Texas facility stood up and is it going to be $1 million, $3 million a quarter? Ademir Sarcevic: Yes. I think most of the investments -- if you think about kind of investments, just to start up Croatia, there's a little bit of a cost that you have to have before you start production. I know we are starting to get that ramped up. So we think that's going to kind of normalize in the upcoming quarters. Mexico, we already have a facility. We have kind of a fixed cost base already. So we don't think that's going to give us a lot of margin. I don't think that's going to give us a margin compression. So there are some investments we have to make in people. But again, all in all, we feel as we kind of closed FY '26 that we have margin expansion opportunities in FY '27, and we'll continue driving productivity and price to offset some of those growth investments and get the margins up to where we think they should be. David Dunbar: I mean like we said, we see margin expansion in the year. At the same time, we're adding a handful of people to the grid expansion. We continue to grow selectively the engineering teams for new product development. So we're paying for that with leverage and gross margin improvements. Ross Sparenblek: Okay, that's helpful. For the legacy electronics, do you guys know where those orders shook out? I mean the consolidated was pretty strong. Ademir Sarcevic: Yes, yes. No, the overall book-to-bill was about 1.27, but the book-to-bill, Ross, for each of the -- even for the legacy businesses in the quarter was over 1.2. So strong book-to-bill kind of across the board. Ross Sparenblek: Okay. I mean it seems like you guys are clipping above what you noted the prior capacity was. I mean you put up $156 million of orders in the quarter. Our last discussion, you were doing around $50 million exiting the first quarter and saying that you're constrained on both businesses. So I guess the question really here is what's kind of changed? Is it an unlock on the grid side and just progress with Mexico and Croatia? Are you guys assessing the footprint in Japan as well? Ademir Sarcevic: Yes. As far as Japan, which is kind of a bread and butter, our reed switch business, we do have additional capacity in Japan to be able to service some of the higher demand. We probably think we can do about, call it, 20%, 25% more in terms of unit produced in Kofu in FY '27 versus what we did in FY '26. Capacity is there. David Dunbar: We have some new machines came online recently. We got a couple more coming online in the quarter. Ademir Sarcevic: That's right. That's right. So yes, I mean, the orders are strong. And as you know, it takes us a little while to convert from backlog to sales. We have a couple of quarters behind. But we feel good about book-to-bill. We feel good about where the orders are, and we're just going to continue to execute and get our sales up. David Dunbar: With the capacity. Ademir Sarcevic: With the capacity, right. Ross Sparenblek: And maybe just one more really quick. It looks like your grid orders shook out around, call it, $55 million. If that's the case, it seems a little light. I mean do you think you're moving fast enough on your capacity ramp here? You kind of called out $180 million to $200 million for FY '27. If this demand persists, which we expect it will, we're already above the high end of that range. Ademir Sarcevic: Look, we feel pretty good that we can hit that number that I just -- that I went through earlier on the call between $180 million to $200 million. We are moving as quickly as we can, Ross. Some of these things take time as far as getting the machinery in, but we are optimistic that we can capture the market opportunity. Operator: Your next question comes from Matt with ROTH Capital. Matt Koranda: Just wanted to go back to the Slide 4 that you guys were presenting on the capacity increase. And I guess the range of growth profiles that you highlighted are kind of in the low 20s to 30-plus percent in terms of the compounded annual rate of growth, if I look at it through fiscal '30. One, like how kind of stair step is that growth supposed to be? It sounds like it's relatively smooth based on what Ademir kind of highlighted for this year, which I'm gleaning is like probably in the low to mid-20s in terms of the growth rate for grid for '27. So maybe it's relatively smooth. But maybe just talk about how chunky is that growth that you expect over the next few years given the capacity increases that you're highlighting. And then there's this range that you give, I guess, the $100 million of upside. Maybe can you talk about where that's derived from and how we should think about the, I guess, the range of the $340 million to $440 million? David Dunbar: Well, let me say a word and then I'll let Ademir jump in. Recall, when we acquired the business in managing expectations, we said, "Plan on 15% growth." We've been growing faster than that, but we need to get to know them. They get to know us. We need to have confidence in our ability to add capacity and understand the certainty of demand. Well, now we're putting -- we're pretty confident in this 20-plus percent. And there may be upside to that as we execute. So we tried to reflect in here there's -- we have high confidence in that dark-shaded, that lower number, which is about $170 million increased $150 million to $340 million. And then the additional $100 million on there is there's a little upside to all of these if the demand continues and we execute well. So it's just to recognize that we live in a somewhat uncertain world. So we plan for a scenario of capacity expansion, and we're confident that within that range of $340 million to $440 million is where we'll end up. Ademir Sarcevic: Yes, that's right. I couldn't have said it better. Matt Koranda: Okay. And then just in terms of the smoothness of that growth rate, it sounds like it's relatively, I guess, smooth across the years is how we're thinking about it. David Dunbar: Yes, Ademir... Matt Koranda: Any long-pole-like items in that stair-step that you provide. David Dunbar: Ademir, you did a great job explaining it. Some of these things are adding -- are expanding right now. So we'll see a little more capacity every month from the lean efforts across the businesses. Mexico and Croatia are producing, so they're ramping up. Texas doesn't come online until next year. So that's maybe a long pole, but that comes in, in the later years of this as is the India footprint. Everything else will deliver capacity this year. Ademir Sarcevic: That's right. Matt Koranda: Okay. Great to hear. And then I guess shifting gears to the A&D segment. I guess there was a pretty big step-up in operating margins in the quarter. I just wanted to hear a little bit about sort of, I guess, it sounded like project mix that was the driver but how repeatable is that, I guess, over the next year or so? Are we reaching a new level in operating margins in A&D? Or is there a potential to reach a new level that's kind of similar to the fourth quarter rate that you did? Ademir Sarcevic: Yes. So Matt, we always said that A&D should be really around 20% plus adjusted operating margin, and we closed a little higher than that last quarter. The business is a little bit lumpy, as you know, depending on project mix. So you could have 1 quarter, 22%, next quarter, 18%. But we do believe, as you look at it over a 12-month period, that business should be over 20% operating margin. They do a really good job supporting their key customers. They're running some productivity initiatives in the plants to make them more efficient. And the market demand is there. So we are pretty excited about not only the margin opportunity in A&D, but also the organic growth opportunity as well. So we do feel that kind of a 20% operating margin for A&D is not an unreasonable expectation. Matt Koranda: Okay. Great. And then maybe just last one. The fiscal '28 target that you put out of $1.1 billion in sales. If I kind of plot that against the '27 outlook roughly, that would imply sort of mid-teens growth rate in '28. I guess, is that all organic that we're assuming? Or are we assuming any kind of tuck-ins or M&A activity that's embedded in the business? David Dunbar: Yes. No M&A. I think if we do 2 years at 12%, we get there. When we put that number out, it's about 18 months ago, we explained the contributions to that new product sales, fast-growth vectors. Those 2 parts of the business, they're doing their job. They're growing as we expect or even faster. But we also said there's a 3% general industry growth. That kind of lagged for the last 1.5 years. So that is starting to pick up. So we're confident about the things we control. In the range that we gave, looking forward to next year, upper single digit to low teens, we get in that range. That keeps us on track. And I'd say if you want to handicap, we said by fiscal year '28, we'll be at that range. Maybe it slides by a quarter or 2, but we're very confident about the progression of our growth initiatives and how they'll get us there. Ademir Sarcevic: Yes, Matt, if we just look at kind of the opportunities within electronics and A&D, we are pretty optimistic about our opportunity to capture some of this growth in the end markets as well as some of the new products we have coming up. So that's going to be a growth engine. Operator: Thank you, ladies and gentlemen. There are no questions. At this time, I will turn the call back over to David Dunbar, CEO. Please go ahead. David Dunbar: All right. Thank you. I want to thank everyone for joining us for this call. As I mentioned at the beginning of the remarks, we entered 2027 a new company. We are truly an engineered components company. We sell picks and shovels to a variety of industries where we work tightly with our customers. Our new product development engine is contributing meaningfully to growth. Our fast-growth markets are over 30% of our sales now. And we serve large markets that provide a long runway of growth, both organically and inorganically in these large attractive markets. It's so gratifying to see this play out for us. I want to thank all the employees, our Board of Directors, the shareholders who create an ecosystem of advice and input and reflection to keep us moving in the right direction. I also want to thank Alan Glass, who's here with us now. It's been like the 40th call or something you've been with us. Alan Glass: Something like that. David Dunbar: Been through many of the major events over the years. We appreciate Alan's contributions over the years. So with that, we thank you all, and we look forward to reporting to you at the end of this next quarter on our first quarter '27. Thank you. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Standex International, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Standex International wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Standex (SXI) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

In late July 2026, Standex International Corporation reported fourth-quarter sales of US$228.25 million and net income of US$20.48 million, capping a fiscal year in which sales rose to US$891.60 million and net income reached US$104.63 million. The company paired these record results with guidance for fiscal 2027 calling for mid- to high-single-digit sales growth and more than 20 new product launches, underscoring management’s confidence in demand across its fast growth end markets. We’ll now examine how this record fiscal 2026 performance and upbeat 2027 outlook may reshape Standex International’s existing investment narrative. Outshine the giants: these 16 early-stage AI stocks could fund your retirement. To own Standex International, you need to believe in its ability to convert demand for automation, electrification and grid-related solutions into steadily compounding, higher-margin earnings. The record fiscal 2026 results and fiscal 2027 guidance reinforce the near term growth catalyst in fast growth end markets, while also drawing attention to the quality and sustainability of that growth as a key risk. On balance, this latest update does not materially change the overarching thesis, but it sharpens the focus on organic versus acquisition-driven performance. The most relevant recent announcement here is the fiscal 2027 outlook, which calls for mid to high single digit sales growth and more than 20 new product launches, with fast growth markets expected to reach over US$310 million in sales. This directly ties into the catalyst of Standex using R&D and new products to deepen its presence in higher value applications, but it also interacts with the existing concern that prior revenue gains have leaned heavily on acquisitions rather than underlying momentum. Yet behind the strong guidance, investors should still be aware of the risk that... Read the full narrative on Standex International (it's free!) Standex International's narrative projects $1.1 billion revenue and $149.9 million earnings by 2029. Uncover how Standex International's forecasts yield a $290.80 fair value, in line with its current price. One member of the Simply Wall St Community currently pegs Standex’s fair value at US$290.80, reflecting just a single pre results viewpoint. You can weigh that against the recent guidance that leans heavily on organic growth and new products, and decide how much execution risk you think that introduces for future performance. Explore another fair value estimate on Standex International - why the stock might be worth as much as $290.80! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Standex International research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Our free Standex International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Standex International's overall financial health at a glance. Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped: Find 55 companies with promising cash flow potential yet trading below their fair value. Capitalize on the AI infrastructure supercycle with our selection of the 55 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. AI is about to change healthcare. These 41 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SXI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Standex International (SXI) is back in focus after reporting record fiscal 2026 results and issuing upbeat guidance for fiscal 2027, with the stock reacting to better than expected revenue and profit performance. See our latest analysis for Standex International. At a share price of $296.50, Standex International has given investors a 31.86% year to date share price return and a 64.60% total shareholder return over one year, even after a 14.91% share price decline over the past month. This suggests strong long term momentum despite recent profit taking around the record results and upbeat 2027 outlook. If strong execution at Standex International has you thinking about other potential opportunities, this is a good time to broaden your watchlist with the 18 top founder-led companies The sharp pullback after record results leaves Standex International caught between enthusiasm for its execution and suspicion that sentiment ran ahead of itself. To work out which is closer to the truth, the valuation needs a closer look. Standex International closed at $296.50, slightly above the most followed fair value estimate of $290.80. The gap is small, but the story behind it is detailed. Read the complete narrative. This valuation hinges on steady revenue expansion, rising margins, and a future earnings multiple that sits above the wider machinery industry. Curious which specific growth and profitability assumptions need to line up to support a fair value so close to today’s price? Result: Fair Value of $290.80 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there are still clear risks for Standex International if acquisitions contribute more than organic growth, and if higher leverage or trade and tariff pressures weigh on margins. Find out about the key risks to this Standex International narrative. With mixed sentiment around Standex International, this is the moment to look at the full picture yourself and act on your own judgment. To see both sides of the story in one place, review the 2 key rewards and 2 important warning signs If Standex International has sharpened your focus, now is the moment to widen your scope with a few high quality stock ideas that fit different investing styles. Target dependable income potential by reviewing companies in the 9 dividend fortresses that could suit a more cash flow focused portfolio. Zero in on value opportunities and see which stocks feature in the 55 high quality undervalued stocks before the market pays closer attention. Prioritise resilience by checking companies highlighted in the 81 resilient stocks with low risk scores so you are not caught off guard when conditions change. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SXI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Standex International Corporation? Here are five stocks we like better. Record fiscal 2026 performance: Fourth-quarter revenue rose 2.8% to $228.3 million, while adjusted EPS increased 7.4% to a record $2.45. Full-year adjusted EPS reached $8.74, supported by 7.7% quarterly organic growth and higher new-product sales. Positive fiscal 2027 outlook: Management expects mid- to high-single-digit sales growth, continued margin expansion and more than 20 new product launches. Sales to fast-growth markets such as grid infrastructure, defense and space are projected to rise about 20% to more than $310 million. Grid expansion is a major growth driver: Standex completed its acquisition of the remaining Narayan stake and plans significant capacity additions in Croatia, Mexico, Texas and India. Grid revenue is expected to reach $180 million–$200 million in fiscal 2027, with a longer-term target of $340 million–$440 million by fiscal 2030. Small Caps That Have Priced In A Hard Landing For Big Upside Standex International (NYSE:SXI) reported record fourth-quarter adjusted earnings per share and free cash flow for fiscal 2026, supported by growth in its engineered components businesses, new product sales and demand in fast-growth end markets including grid infrastructure, defense and space. Fourth-quarter revenue totaled $228.3 million, up 2.8% from a year earlier. Organic sales growth was 7.7%, partly offset by a 4.5% impact from the Federal Industries divestiture and a 0.4% foreign-currency impact. Adjusted earnings per share increased 7.4% year over year to a record $2.45. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Should You Ride the Bullish Wave with Standex? Technicals Say Yes Chairman, President and Chief Executive Officer David Dunbar said the company’s fiscal 2026 results reflected its shift toward engineered components. These businesses accounted for 73% of fourth-quarter sales, while sales to fast-growth markets reached about $72 million, or more than 30% of quarterly revenue. For the full fiscal year, Standex said sales increased by more than $100 million and grew 5.5% organically. Adjusted gross margin reached 42%, adjusted operating margin was 19.4%, and adjusted earnings per share was a record $8.74. New product sales rose to $67 million from $40 million in the prior year, contributing $27 million, or 300 basis points, to sales growth. → Microsoft Just Flipped the AI Spending Narrative Overnight Standex recorded approximately $270 million in fourth-quarter orders, producing a consolidated book-to-bill ratio of 1.18. Electronics orders were about $165 million, resulting in a 1.27 book-to-bill ratio for that segment. Management expects fiscal 2027 sales to increase at a mid- to high-single-digit rate, including high-single-digit to low-double-digit organic growth, and anticipates continued adjusted operating-margin expansion. For the fiscal first quarter, Standex forecast moderately higher revenue from a year earlier, driven by backlog in fast-growth markets and new products, partly offset by the Federal Industries divestiture. → Carrier Earnings Could Send the Stock to a New All-Time High Dunbar said the company expects to launch more than 20 new products in fiscal 2027, following more than 15 launches in fiscal 2026. Pro forma for the Federal divestiture, management expects new-product sales to rise by $23 million to $90 million and contribute nearly 300 basis points of organic growth during the year. Sales to fast-growth markets, including space, defense and grid infrastructure, are projected to increase about 20% to more than $310 million in fiscal 2027, representing more than 30% of total sales, according to the company. Standex completed its acquisition of the remaining 9.9% interest in Narayan on July 2, completing its acquisition of the Amran/Narayan Group, now called Standex Grid. The company paid $64 million for the remaining interest, which Chief Financial Officer and Treasurer Ademir Sarcevic said equated to about 15 times trailing-12-month EBITDA for those shares. Including the original acquisition, he said the total transaction value represented roughly seven to eight times fiscal 2026 trailing-12-month EBITDA. Sarcevic, who is transitioning to president of the electronics business, said Grid sales increased from roughly $100 million at the time of acquisition to approximately $148 million in fiscal 2026. Standex is targeting grid sales of $340 million to $440 million by fiscal 2030. To support that growth, the company identified several capacity initiatives: Productivity and automation efforts expected to add up to $40 million of annual capacity by fiscal 2030. A new Croatia facility, opened in May, expected to add about $75 million of annual capacity by fiscal 2030. Mexico production lines for low-voltage instrument transformers expected to add about $25 million of annual capacity by fiscal 2030. A Texas expansion that will triple the company’s footprint to more than 200,000 square feet and is expected to add more than $60 million of annual capacity by fiscal 2030. Additional shifts and footprint expansion in India expected to add $45 million and $50 million of annual capacity, respectively. Management said it expects Grid revenue to reach between $180 million and $200 million in fiscal 2027. The Texas expansion is expected to begin production in fiscal 2028, while other initiatives are already adding capacity or are ramping during fiscal 2027. Electronics revenue rose 12.1% to a record $129.1 million, with 12.9% organic growth. The segment’s adjusted operating margin declined 140 basis points to 27.2%, reflecting growth investments and temporary operational issues at the Edge business following implementation of an enterprise resource planning system at two large U.S. plants. Dunbar said the margin impact from those issues was just over $2 million in the quarter and that corrective actions were underway. Management expects electronics revenue to be slightly higher sequentially in the fiscal first quarter and forecasts double-digit organic growth from a year earlier. Sarcevic said demand was not limited to Grid, noting that each electronics business unit reported a book-to-bill ratio above 1.2 in the quarter. Aerospace & Defense revenue increased 18.3% to $37.9 million, driven by defense project activity. Adjusted operating margin expanded 410 basis points to 22.5%, aided by higher volume and project mix. Management expects revenue and margin to decline moderately on a sequential basis because of project timing, while maintaining an expectation for double-digit organic growth year over year. Scientific revenue increased 5% to $18.8 million, as pricing actions and a slight market recovery helped lift adjusted operating margin by 440 basis points to 28.6%. Engraving and Hydraulics revenue fell 9.7% to $42.4 million, though adjusted operating margin increased 20 basis points to 15.9%. Net cash from operating activities was $40.5 million in the fourth quarter, compared with $33.4 million a year earlier. Capital expenditures were $5.5 million, resulting in record free cash flow of $35 million. At quarter-end, Standex had approximately $148 million of available liquidity, $339.2 million of net debt and a net leverage ratio of 1.8. Cash and cash equivalents totaled $178.7 million. The company expects fiscal 2027 capital expenditures of $45 million to $55 million, primarily for Standex Grid growth investments. The board declared Standex’s 248th consecutive quarterly cash dividend of $0.34 per share, a roughly 6.3% increase from the prior year. Dunbar said the company remains on track, after considering the Federal Industries divestiture, to exceed $1.1 billion in sales and achieve an adjusted operating margin above 23% by the end of fiscal 2028. Standex International Corporation is a diversified global manufacturer specializing in food service equipment, engineered components, and industrial products. Operating across multiple markets, the company designs and produces commercial cooking and warming solutions, precision-engraved nameplates and decorative products, fluid power hydraulics, and magnetics-based electronics. These offerings serve a broad array of end markets, including quick-service restaurants, automotive, aerospace, medical devices, and consumer appliances. With business organized into key segments—Food Service Equipment, Engraving & Decorating, Hydraulics, Industrial Electronics, and Technical Graphical Solutions—Standex delivers a combination of proprietary technology, automated manufacturing processes, and custom engineering services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Standex International Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management asserts the company has reached a strategic inflection point, transitioning into a high-growth engineered components firm with 73% of sales now coming from these segments. Organic growth of 5.5% for the fiscal year was propelled by new product development, which increased from $40 million to $67 million and contributed 300 basis points to total sales growth. The Standex Grid business is being positioned as the primary growth engine, targeting the build-out of global power infrastructure, data centers, and electrification trends. Electronics segment growth of 12.9% organically in Q4 was driven by robust demand in fast-growth markets, contributing to a total company record quarterly order intake of approximately $270 million. Aerospace and Defense performance was bolstered by increased project activity in the missile and defense end markets, leading to an 18.3% revenue increase. Operational margins in the Electronics segment faced temporary pressure due to transitory ERP implementation issues in the Edge business and ongoing growth investments. The company completed the acquisition of the remaining 9.9% interest in Standex Grid to streamline decision-making and eliminate accounting complexities during a period of rapid expansion. Fiscal 2027 guidance assumes mid- to high single-digit total sales growth, supported by high single-digit to low double-digit organic growth and continued margin expansion. Management expects to launch more than 20 new products in fiscal 2027, which is projected to add nearly 300 basis points of organic growth and reach $90 million in sales. The company is executing a multi-year capacity expansion for the Grid business, targeting sales between $340 million and $440 million by fiscal 2030 through six distinct workstreams. Guidance for Q1 2027 anticipates moderately higher year-on-year revenue, though partially offset by the divestiture of Federal Industries. Standex maintains its long-term fiscal 2028 target of greater than $1.1 billion in sales and an adjusted operating margin exceeding 23%. The divestiture of Federal Industries is expected to create a year-on-year revenue headwind in the first quarter of fiscal 2027. A recent earthquake in Japan impacted the Sanyu Relay facility, though management reported minimal site damage and no employee injuries. The company paid $64 million (approximately a 15x multiple) for the final 9.9% of Standex Grid to accelerate integration and capacity investments. Capital expenditures are projected to rise to between $45 million and $55 million in fiscal 2027, primarily to fund grid growth initiatives. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management utilizes a dedicated 'tiger team' to oversee six workstreams across India, Croatia, Mexico, and the U.S. to ensure local capacity meets regional demand. The expansion is sequenced with lean productivity gains and the Croatia facility providing immediate capacity in FY27, while the Texas expansion is slated for FY28. While current projections focus on transformers, Standex is developing products for 800-volt DC architectures to support future electrification and intelligent systems. Management is exploring ways to combine sales forces to leverage legacy diagnostic and instrumentation products into the broader grid and data center markets. Management confirmed that Grid margins remain very strong and in line with historical levels, dismissing concerns of significant near-term margin decay. The objective remains to drive the total Electronics segment toward a 30% operating margin through productivity and pricing initiatives. The missile business is projected to grow from the mid-teens to between $40 million and $80 million over the next four years based on existing program participation. While the segment is subject to quarterly lumpiness due to project timing, management expects a sustainable long-term operating margin of 20% or higher.

In Q4 FY26, Sales of $228.3 Million Increased 7.7% YOY Organically; Electronics Increased 12.9% YOY Organically New Products Sales Grew 43% and Sales into Fast Growth Markets Contributed 31% of Total Sales Record Order Intake of ~$270 Million; Book to Bill of 1.18: Electronics Book to Bill at 1.27 Q4 FY26 GAAP EPS of $1.69; Record Adjusted EPS of $2.45, Up 7.4% YOY In FY26, Sales Increased >$100 Million and 5.5% Organically; GAAP EPS of $8.68; Record Adjusted EPS of $8.74, up 9.6% YOY; Record Adjusted Gross Margin and Adjusted Operating Margin In FY27, Expect High Single-Digit to Low Double-Digit Organic Growth; Expect to Launch >20 New Products; Fast Growth Market Sales Expected to Grow ~20% SALEM, N.H., July 30, 2026 /PRNewswire/ -- Standex International Corporation (NYSE: SXI) today reported financial results for the fourth quarter of fiscal year 2026 ended June 30, 2026. Commenting on the quarter's results, President and Chief Executive Officer David Dunbar said, "We concluded our fiscal year with a strong performance in the fourth quarter. We delivered 7.7% organic growth with a book to bill of 1.18, led by our Electronics segment which grew 12.9% organically with a book to bill of 1.27. Sales from fast growth markets totaled approximately $72 million in the fiscal fourth quarter and approximately $264 million for the fiscal year. Adjusted earnings per share increased 7.4% to a record $2.45. Our net leverage ratio was reduced to 1.8x. In fiscal year 2026, sales increased by more than $100 million with organic growth of 5.5%. Building on record profitability in fiscal year 2025, we set several new records in fiscal year 2026 with adjusted gross margin of 42.0%, adjusted operating income of $173.3 million, adjusted operating margin of 19.4%, and adjusted earnings per share of $8.74. We remain confident in our long-term operating margin potential as we leverage organic growth, driven by our fast growth end markets and higher sales contribution from new products. On July 2nd, we acquired the remaining 9.9% interest in Narayan for approximately $64 million. The integration of Narayan and Amran continues to progress smoothly, and our internal teams remain fully focused on meeting customer demand now and in the future." Fiscal First Quarter 2027 Outlook In fiscal first quarter 2027, on a year-on-year basis, the Company expects moderately higher revenue, driven by high single-digit to low double-digit organic growth from higher sales into fast growth end markets and increased new product sales, partially offset by the divestiture of Federal Industries. The Company expects slightly to moderately higher adjusted operating margin as contributions from organic growth and realization of productivity actions are partially offset by growth investments. On a sequential basis, the Company expects slightly higher revenue, driven by increased contributions from fast growth end markets and new product sales, and similar adjusted operating margin. Fiscal Year 2027 Outlook For fiscal year 2027, the Company expects mid-to-high single digit sales growth driven by high-single digit to low-double digit organic growth, partially offset by the impact of the Federal Industries divestiture and unfavorable foreign exchange. The Company expects continued adjusted operating margin expansion. The Company plans to release more than 20 new products, which are expected to contribute approximately 300 bps of incremental growth. Sales from fast growth markets are on track to grow approximately 20% year-on-year to greater than $310 million. Fourth Quarter Segment Operating Performance Electronics (57% of sales; 63% of segment adjusted operating income) Revenue increased approximately $13.9 million or 12.1% year-on-year, reflecting organic growth of 12.9%, partially offset by a foreign currency impact of 0.8%. Organic growth was driven by higher sales into fast growth markets and increased new product sales. Adjusted operating income increased approximately $2.2 million or 6.7% year-on-year due to higher volume and pricing initiatives, partially offset by growth investments and unfavorable mix from transitory operational issues in the Edge business. The segment had a book-to-bill ratio of approximately 1.27 in the fiscal fourth quarter, with orders of approximately $165 million. In fiscal first quarter 2027, on a sequential basis, the Company expects slightly higher revenue, reflecting higher sales into fast growth end markets and increased new product sales, and moderately higher adjusted operating margin. Aerospace & Defense (17% of sales; 15% of segment adjusted operating income) Revenue increased approximately $5.9 million or 18.3% year-on-year reflecting organic growth of 18.4% and a foreign currency impact of 0.1%. Organic growth was primarily driven by increased project activity in the defense end market. Adjusted operating income increased approximately $2.6 million or 44.8% year-on-year reflecting higher volume and project mix. In fiscal first quarter 2027, on a sequential basis, the Company expects moderately lower revenue due to less favorable project timing, and moderately lower adjusted operating margin. Scientific (8% of sales; 10% of segment adjusted operating income) Revenue increased approximately $0.9 million or 5.0% year-on-year reflecting organic growth of 5.0%. Organic growth was driven by pricing initiatives and a slight market recovery. Adjusted operating income increased approximately $1.1 million or 23.9% year-on-year reflecting higher sales and tariff refunds. In fiscal first quarter 2027, on a sequential basis, the Company expects moderately higher revenue and similar adjusted operating margin. Engraving & Hydraulics (19% of sales; 12% of segment adjusted operating income) Revenue decreased approximately $4.6 million or 9.7% year-on-year reflecting an organic decline of 9.6% from general market weakness and a foreign currency impact of 0.1%. Adjusted operating income decreased approximately $0.6 million or 8.5% year-on-year. In fiscal first quarter 2027, on a sequential basis, the Company expects slightly to moderately higher revenue and similar to slightly higher adjusted operating margin. Capital Allocation Interest: In fiscal first quarter 2027, the Company expects interest expense of approximately $7.0 million. Share Repurchase: During the fiscal fourth quarter of 2026, the Company did not repurchase shares. There was approximately $28 million remaining on the Company's current share repurchase authorization at the end of the fiscal fourth quarter 2026. Capital Expenditures: In fiscal fourth quarter 2026, the Company's capital expenditures were $5.5 million compared to $8.6 million in the fiscal fourth quarter of 2025. Capital expenditures were $28.6 million in fiscal year 2026. The Company expects fiscal year 2027 capital expenditures between $45 million and $55 million. The increase over fiscal year 2026 is primarily due to capacity expansion within Standex Electronics Grid. Dividend: On July 23, 2026, the Company declared a quarterly cash dividend of $0.34 per share, an approximately 6.3% year-on-year increase. The dividend is payable August 21, 2026, to shareholders of record on August 7, 2026. Balance Sheet and Cash Flow Highlights Net Debt: Standex had net (cash) debt of $339.2 million on June 30, 2026, compared to $448.0 million at the end of fiscal fourth quarter 2025. Net (cash) debt for the fourth quarter of 2026 consisted primarily of long-term debt of $518.0 million and cash and equivalents of $178.7 million. Cash Flow: Net cash provided by continuing operating activities for the three months ended June 30, 2026, was $40.5 million compared to $33.4 million in the prior year's quarter. Free cash flow after capital expenditures was $35.0 million compared to free cash flow after capital expenditures of $24.9 million in the fiscal fourth quarter of 2025. Conference Call Details Standex will host a conference call for investors tomorrow, July 31, 2026, at 8:30 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 July 31, 2027. To listen to the teleconference playback, please dial in the U.S. (888) 660-6345 or (646) 517-4150 internationally; the passcode is 98594#. The audio playback via phone will be available through August 7, 2026. The webcast replay can be accessed in the "Investor Relations" section of the Company's website, located at www.standex.com. 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 exclude the impact of restructuring charges, purchase accounting, amortization from acquired intangible assets, 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 four broad business segments: Electronics, Aerospace & Defense, Scientific, and Engraving & Hydraulics with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Turkey, India, and China. For additional information, visit the Company's website at https://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 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 electrical grid, 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. Activity under share-based payment plans 2,3472,226 Purchase of treasury stock and other(4,402)(9,906) Distributions to non-controlling interests(2,726)- Cash dividends paid(16,185)(15,033)Net cash provided by (used in) financing activities(56,627)380,490Effect of exchange rate changes on cash(1,839)3,686Net changes in cash and cash equivalents74,192(49,661)Cash and cash equivalents at beginning of year104,542154,203Cash and cash equivalents at end of period$178,734$104,542 View original content to download multimedia:https://www.prnewswire.com/news-releases/standex-reports-fiscal-fourth-quarter-and-fiscal-year-2026-financial-results-302839437.html

Standex International (SXI) came out with quarterly earnings of $2.45 per share, beating the Zacks Consensus Estimate of $2.35 per share. This compares to earnings of $2.28 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.26%. A quarter ago, it was expected that this equipment manufacturing company would post earnings of $2.22 per share when it actually produced earnings of $2.21, delivering a surprise of -0.45%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Standex, which belongs to the Zacks Manufacturing - General Industrial industry, posted revenues of $228.25 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.79%. This compares to year-ago revenues of $222.05 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Standex shares have added about 26.3% since the beginning of the year versus the S&P 500's gain of 6.9%. While Standex has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Standex was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.17 on $223.96 million in revenues for the coming quarter and $9.96 on $941.96 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - General Industrial is currently in the top 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Gates Industrial (GTES), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 31. This manufacturer of power transmission and fluid power systems is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +2.6%. The consensus EPS estimate for the quarter has been revised 2.4% lower over the last 30 days to the current level. Gates Industrial's revenues are expected to be $922.4 million, up 4.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Standex International Corporation (SXI) : Free Stock Analysis Report Gates Industrial Corporation PLC (GTES) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Industrial manufacturer Standex (NYSE:SXI) will be announcing earnings results this Thursday after market hours. Here’s what to look for. Standex met analysts’ revenue expectations last quarter, reporting revenues of $224.6 million, up 8.1% year on year. It was a slower quarter for the company, with a significant miss of analysts’ EBITDA estimates and EPS in line with analysts’ estimates. Is Standex a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Standex’s revenue to grow 1.8% year on year, slowing from the 23.2% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Standex has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Standex’s peers in the industrial machinery segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Gorman-Rupp delivered year-on-year revenue growth of 3.9%, missing analysts’ expectations by 1.5%, and Graco reported revenues up 3.3%, falling short of estimates by 3%. Gorman-Rupp traded up 1.2% following the results while Graco was also up 5.2%. Read our full analysis of Gorman-Rupp’s results here and Graco’s results here. In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the industrial machinery stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.3% on average over the last month. Standex is down 17.3% during the same time and is heading into earnings with an average analyst price target of $299.80 (compared to the current share price of $293.75). ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.