- Record GAAP Operating Margin of 14.8%; Record Adjusted
Operating Margin of 15.2%, up 20 bps sequentially and 160 bps year
on year; Seventh Consecutive Quarter of Record Adjusted Operating
Margin
- 5.5% Organic Revenue Growth Year on Year; Three of
the Five Business Segments with >10% Organic Growth
- Fast Growth Market Sales Increased ~35% Year on Year to
~$19 million; Fast Growth Market
Sales in Fiscal 2023 Expected to Increase ~40% Versus Prior
Year
- Generated $24 million in Free
Cash Flow with Conversion of ~120% of GAAP Net Income
- Announced Sale of Procon Business Unit for ~$75 million; Divestiture Supports
Continued Portfolio Simplification and Focus on Fast Growth
Markets
SALEM,
N.H., Feb. 2, 2023 /PRNewswire/ -- Standex
International Corporation (NYSE: SXI) today reported
financial results for the second quarter of fiscal year 2023 ended
December 31, 2022.
Summary Financial
Results - Total Standex
|
|
|
|
|
|
($M except EPS and
Dividends)
|
2Q23
|
2Q22
|
1Q23
|
Y/Y
|
Q/Q
|
Net Sales
|
$187.8
|
$185.7
|
$180.6
|
1.1 %
|
4.0 %
|
Operating Income -
GAAP
|
$27.8
|
$21.8
|
$26.3
|
27.7 %
|
5.8 %
|
Operating Income -
Adjusted
|
$28.6
|
$25.2
|
$27.2
|
13.3 %
|
5.3 %
|
Operating Margin -
GAAP
|
14.8 %
|
11.7 %
|
14.6 %
|
+ 310 bps
|
+ 20 bps
|
Operating Margin -
Adjusted
|
15.2 %
|
13.6 %
|
15.0 %
|
+ 160 bps
|
+ 20 bps
|
Net Income from
Continuing Ops - GAAP
|
$20.1
|
$15.0
|
$18.3
|
33.6 %
|
9.7 %
|
Net Income from
Continuing Ops - Adjusted
|
$20.7
|
$17.6
|
$19.1
|
17.3 %
|
8.4 %
|
|
|
|
|
|
|
EBITDA
|
$34.8
|
$29.0
|
$32.3
|
20.2 %
|
7.9 %
|
EBITDA
margin
|
18.5 %
|
15.6 %
|
17.9 %
|
+ 290
bps
|
+ 60 bps
|
Adjusted
EBITDA
|
$35.6
|
$32.5
|
$33.2
|
9.8 %
|
7.5 %
|
Adjusted EBITDA
margin
|
19.0 %
|
17.5 %
|
18.4 %
|
+ 150 bps
|
+60
bps
|
|
|
|
|
|
|
Diluted EPS -
GAAP
|
$1.69
|
$1.24
|
$1.53
|
36.3 %
|
10.5 %
|
Diluted EPS -
Adjusted
|
$1.74
|
$1.45
|
$1.60
|
20.0 %
|
8.7 %
|
Dividends per
Share
|
$0.28
|
$0.26
|
$0.26
|
7.7 %
|
7.7 %
|
|
|
|
|
|
|
Free Cash
Flow
|
$24.0
|
$18.9
|
($8.0)
|
27.1 %
|
NM
|
Net Debt to
EBITDA
|
0.6x
|
0.4x
|
0.7x
|
31.0 %
|
-25.7 %
|
Second Quarter Fiscal 2023 Results
Commenting on the quarter's results, President and Chief
Executive Officer David Dunbar said, "We are proud of the
second fiscal quarter performance that came in ahead of our
expectations. We posted 5.5% organic revenue growth year on
year which was mostly offset by foreign currency headwinds, while
operating in a challenging global environment. We achieved record
gross margin of 38.5%, up 150 bps year on year and 80 bps
sequentially. We also achieved record consolidated adjusted
operating margin of 15.2% in fiscal second quarter 2023 - our
seventh consecutive quarter setting a record. The sustainability of
this achievement reflects our successful transformation to a high
performing operating company that's able to adapt quickly to
economic opportunities and challenges. We delivered year on year
improvement in operating margin across four of our five business
segments, while the Scientific segment margin remained strong at
greater than 20% despite a tough year on year volume comparison
related to COVID vaccine storage sales in prior year. Sales from
fast growth markets such as electric vehicles, renewable energy,
smart grid, and the commercialization of space increased
approximately 35% year on year to $19
million in fiscal second quarter 2023, and we anticipate our
fast growth market sales in fiscal 2023 to increase approximately
40% versus prior year."
"We remain confident in our ability to continue to deliver
sustained growth driven by secular trends in our fast growth
markets and continued differentiation with our customer intimacy
model. As a result, we expect all our segments, except Scientific,
to contribute to organic growth for the fiscal year."
"In addition, Standex's consistent cash generation and
substantial financial flexibility continue to position us well to
pursue an active pipeline of organic and inorganic growth
opportunities. We rebounded from first quarter challenges and
achieved free cash flow conversion above our target level of 100%
in the fiscal second quarter and expect continued execution in the
second half of the fiscal year. We have approximately $324 million in available liquidity and a net
debt to adjusted EBITDA ratio of approximately 0.6x."
"Prior to our earnings release, we announced that we previously
signed an agreement to divest our Procon business for $75 million, subject to customary post-closing
adjustments. This transaction reflects the continued simplification
of our portfolio and enables greater focus on larger platforms and
fast growth market opportunities. Proceeds will be deployed towards
organic and inorganic initiatives and returning capital to
shareholders."
Outlook
In fiscal third quarter 2023, on a sequential
basis, the Company expects a slight to moderate revenue
decrease primarily due to unfavorable foreign exchange and the
impact of the Procon divestiture. The Company expects slightly
lower to similar adjusted operating margin, on a sequential basis,
as price and productivity actions mostly offset the impact of a
sales decrease. The Company expects higher adjusted operating
margin compared to the same period a year ago.
By fiscal year 2028, the Company targets organic revenue growth
at a high-single-digit compounded annual rate, adjusted operating
margin above 19%, a return on invested capital above 15%, and a
free cash flow conversion target ratio at approximately 100% of
GAAP net income. Return on invested capital applies to the
current portfolio of businesses and excludes the impact of
potential acquisitions. Finally, with its substantial financial
flexibility, the Company plans to continue to execute on an active
pipeline of organic and inorganic growth opportunities.
Second Quarter Segment Operating Performance
Electronics (39% of sales; 46% of segment operating
income)
|
2Q23
|
2Q22
|
%
Change
|
Electronics
($M)
|
|
|
|
Revenue
|
$72.6
|
$76.6
|
-5.3 %
|
Operating
Income
|
17.0
|
17.2
|
-1.1 %
|
Operating
Margin
|
23.4 %
|
22.4 %
|
|
Revenue decreased approximately $4.1
million or 5.3% year-over-year reflecting a 6.1% impact
from foreign exchange, organic decline of 0.2%, partially offset by
a 1.0% contribution from acquisitions. On a sequential basis,
revenue decreased 3.5% primarily driven by softness in the
appliances end market in Europe
and the China slowdown. The
segment is seeing positive trends in end markets like industrial
applications, power management, renewable energy technologies, and
EV-related applications.
Electronics segment backlog realizable in under one year of
approximately $154 million increased
7% year-over-year. The segment had a book to bill ratio of 0.99 at
the end of the fiscal second quarter.
Operating income decreased approximately $0.2 million or 1.1% year-over-year due to lower
sales, labor and materials inflation, and unfavorable currency
impact, mostly offset by pricing and productivity initiatives. On a
sequential basis, operating margin decreased approximately 70
bps.
In fiscal third quarter 2023, on a sequential basis, the Company
expects a slight to moderate revenue increase primarily due to
strong demand across end markets in North
America and increased sales into fast growth markets. The
Company expects slightly lower to similar operating margin, on a
sequential basis, due to unfavorable product mix and plant moves in
China and Germany which were completed in early
January.
Engraving (20% of sales; 17% of segment operating
income)
|
2Q23
|
2Q22
|
%
Change
|
Engraving
($M)
|
|
|
|
Revenue
|
$37.7
|
$36.6
|
2.8 %
|
Operating
Income
|
6.4
|
5.2
|
22.5 %
|
Operating
Margin
|
16.9 %
|
14.2 %
|
|
Revenue increased approximately $1.0
million or 2.8% year-over-year reflecting 12% organic
growth, partially offset by a 9.2% impact from currency. On a
sequential basis, revenue increased 7.6%, exceeding internal
expectations due primarily to higher project work in Asia. Operating income increased $1.2 million or 22.5% year-over-year, primarily
driven by realization of previously announced productivity actions
in North America and Europe, which more than offset the currency
impact. On a sequential basis, operating margin increased
approximately 20 bps, primarily driven by incremental volume. The
segment had a book to bill ratio of 1.08, indicating continued end
market stability.
In fiscal third quarter 2023, on a sequential basis, the Company
expects revenue to decrease slightly and operating margin to
decrease moderately due to unfavorable project mix.
Scientific (10% of sales; 11% of segment
operating income)
|
2Q23
|
2Q22
|
%
Change
|
Scientific
($M)
|
|
|
|
Revenue
|
$19.3
|
$24.6
|
-21.7 %
|
Operating
Income
|
4.2
|
5.5
|
-24.1 %
|
Operating
Margin
|
21.6 %
|
22.3 %
|
|
Revenue decreased approximately $5.3
million or 21.7% year-over-year reflecting lower demand for
COVID vaccine storage units. On a sequential basis, revenue
increased 4.5%, primarily from higher sales into the clinical end
market. Operating income decreased approximately $1.3 million or 24.1% year-over-year due to the
lower volume, partially offset by price, realization of
productivity actions, and lower freight cost. On a sequential
basis, operating margin increased approximately 140 bps, primarily
driven by higher volume and lower oceanic freight cost.
In fiscal third quarter 2023, on a sequential basis, the Company
expects a slight revenue decrease and a similar operating margin as
productivity actions and lower freight cost offset volume
decline.
Engineering Technologies (13% of sales; 10% of segment
operating income)
|
2Q23
|
2Q22
|
%
Change
|
Engineering
Technologies ($M)
|
|
|
|
Revenue
|
$24.2
|
$18.1
|
33.7 %
|
Operating
Income
|
3.7
|
2.3
|
61.7 %
|
Operating
Margin
|
15.5 %
|
12.8 %
|
|
Revenue increased approximately $6.1
million or 33.7% year-over-year reflecting 36.2% organic
growth, partially offset by a 2.5% impact from currency. On a
sequential basis, revenue increased 42.3% due to project activity
in the space and aviation end markets. Operating income increased
approximately $1.4 million or 61.7%
year-over-year reflecting higher volume and the impact of
productivity and efficiency initiatives. On a sequential basis,
operating margin increased approximately 450 bps, primarily driven
by the sequential revenue increase.
We continue to expect a healthy backlog in the Engineering
Technologies Group. In fiscal third quarter 2023, on a sequential
basis, the Company expects a significant decrease in revenue
reflecting timing of projects and a slight decrease in operating
margin, as productivity actions mostly offset volume decline. We
expect more favorable timing of projects in the fiscal fourth
quarter of 2023.
Specialty Solutions (18% of sales; 16% of segment
operating income)
|
2Q23
|
2Q22
|
%
Change
|
Specialty Solutions
($M)
|
|
|
|
Revenue
|
$34.1
|
$29.7
|
14.6 %
|
Operating
Income
|
5.7
|
3.7
|
52.9 %
|
Operating
Margin
|
16.8 %
|
12.6 %
|
|
Specialty Solutions revenue increased approximately $4.4 million or 14.6% year-over-year, reflecting
healthy organic growth in Hydraulics and Display Merchandising
businesses. On a sequential basis, revenue decreased 2.5% as
improved volume in Hydraulics was more than offset by seasonal
declines in the Pumps (Procon) and Display Merchandising businesses
that serve food service end markets. Operating income increased
approximately $2.0 million or 52.9%
year-over-year reflecting the price and volume increases and
realization of productivity actions. On a sequential basis,
operating margin decreased approximately 60 bps due to lower volume
in the Pumps business.
In fiscal third quarter 2023, on a sequential basis, the Company
expects revenue to decline moderately to significantly due to the
Procon divestiture and operating margin to increase slightly to
moderately due to ongoing pricing and productivity actions in the
remaining businesses.
Capital Allocation
- Share Repurchase: During the fiscal second quarter, the
Company repurchased approximately 50,000 shares for $5.1 million. There was $77.1 million remaining on the Company's current
share repurchase authorization at the end of the fiscal second
quarter 2023.
- Capital Expenditures: In fiscal second quarter 2023,
Standex's capital expenditures were $5.8
million compared to $4.7
million in the fiscal second quarter of 2022. The Company
expects fiscal year 2023 capital expenditures between $30 million and $35
million with key investments focused on growth initiatives
and capacity expansion. Capital expenditures were $23.9 million in fiscal 2022.
- Dividend: On January 27,
2023, the Company declared a quarterly cash dividend of
$0.28 per share, an approximately
7.7% year-over-year increase. The dividend is payable February 24, 2023, to shareholders of record on
February 9, 2023.
Balance Sheet and Cash Flow Highlights
- Net Debt: Standex had net debt of $74.0 million on December
31, 2022, compared to $70.0
million at the end of fiscal 2022 and $52.5 million at the end of fiscal second quarter
2022. Net debt for the second quarter of 2023 consisted primarily
of long-term debt of $187.5 million
and cash and equivalents of $113.5
million of which approximately $107
million was held by foreign subsidiaries.
Standex repatriated $4.3 million
in fiscal second quarter 2023. The Company expects to repatriate
between $25 million and $30 million in fiscal 2023.
- Cash Flow: Net cash provided by continuing
operating activities for the three months ended December 31, 2022, was $29.8
million compared to $23.6 million in the prior year's
quarter. Free cash flow after capital expenditures was $24.0
million compared to free cash flow after capital expenditures
of $18.9 million in the fiscal second quarter of
2022.
Conference Call Details
Standex will host a conference call for investors tomorrow,
February 3, 2023, 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 February 3, 2024. To listen
to the teleconference playback, please dial in the U.S. (877)
344-7529 or (412) 317-0088 internationally; the passcode is
1809372. The audio playback via phone will be available through
February 10, 2023. 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 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, Brazil, Turkey, South
Africa, 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 such as the current coronavirus 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; 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; and potential changes to future pension
funding requirements. 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.
Standex
International Corporation
|
Consolidated
Statement of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
(In thousands, except
per share data)
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
187,789
|
|
|
185,709
|
|
$
|
368,389
|
|
$
|
361,319
|
Cost of
sales
|
|
|
115,469
|
|
|
116,937
|
|
|
227,816
|
|
|
226,310
|
Gross profit
|
|
|
72,320
|
|
|
68,772
|
|
|
140,573
|
|
|
135,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
43,713
|
|
|
43,531
|
|
|
84,802
|
|
|
86,283
|
Restructuring
costs
|
|
|
511
|
|
|
843
|
|
|
1,093
|
|
|
1,283
|
Acquisition related
costs
|
|
|
174
|
|
|
925
|
|
|
466
|
|
|
1,142
|
Other operating
(income) expense, net
|
|
|
116
|
|
|
1,700
|
|
|
116
|
|
|
1,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
27,806
|
|
|
21,773
|
|
|
54,096
|
|
|
44,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
1,566
|
|
|
1,526
|
|
|
2,753
|
|
|
3,246
|
Other non-operating
(income) expense, net
|
|
|
(70)
|
|
|
288
|
|
|
948
|
|
|
311
|
Total
|
|
|
1,496
|
|
|
1,814
|
|
|
3,701
|
|
|
3,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations before income taxes
|
|
|
26,310
|
|
|
19,959
|
|
|
50,395
|
|
|
41,044
|
Provision for income
taxes
|
|
|
6,226
|
|
|
4,929
|
|
|
11,995
|
|
|
10,193
|
Net income from
continuing operations
|
|
|
20,084
|
|
|
15,030
|
|
|
38,400
|
|
|
30,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations, net of tax
|
|
|
(41)
|
|
|
(46)
|
|
|
(87)
|
|
|
(49)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
20,043
|
|
$
|
14,984
|
|
$
|
38,313
|
|
$
|
30,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
1.69
|
|
$
|
1.25
|
|
$
|
3.25
|
|
$
|
2.56
|
Income (loss) from
discontinued operations
|
|
|
-
|
|
|
-
|
|
|
(0.01)
|
|
|
-
|
Total
|
|
$
|
1.69
|
|
$
|
1.25
|
|
$
|
3.24
|
|
$
|
2.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
1.69
|
|
$
|
1.24
|
|
$
|
3.22
|
|
$
|
2.54
|
Income (loss) from
discontinued operations
|
|
|
-
|
|
|
-
|
|
|
(0.01)
|
|
|
-
|
Total
|
|
$
|
1.69
|
|
$
|
1.24
|
|
$
|
3.21
|
|
$
|
2.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,852
|
|
|
12,033
|
|
|
11,833
|
|
|
12,028
|
Diluted
|
|
|
11,917
|
|
|
12,138
|
|
|
11,930
|
|
|
12,144
|
Standex
International Corporation
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
June
30,
|
(In
thousands)
|
|
|
2022
|
|
|
2022
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
113,494
|
|
$
|
104,844
|
Accounts
receivable, net
|
|
|
119,907
|
|
|
117,075
|
Inventories
|
|
|
105,698
|
|
|
105,339
|
Prepaid expenses
and other current assets
|
|
|
48,656
|
|
|
45,210
|
Income taxes
receivable
|
|
|
2,938
|
|
|
6,530
|
Current assets
held for sale
|
|
|
10,232
|
|
|
-
|
Total current assets
|
|
|
400,925
|
|
|
378,998
|
|
|
|
|
|
|
|
Property, plant,
equipment, net
|
|
|
129,960
|
|
|
128,584
|
Intangible assets,
net
|
|
|
82,012
|
|
|
85,770
|
Goodwill
|
|
|
269,666
|
|
|
267,906
|
Deferred tax
asset
|
|
|
7,400
|
|
|
8,186
|
Operating lease
right-of-use asset
|
|
|
36,711
|
|
|
39,119
|
Non-current assets held
for sale
|
|
|
3,731
|
|
|
-
|
Other non-current
assets
|
|
|
26,280
|
|
|
25,876
|
Total non-current assets
|
|
|
555,760
|
|
|
555,441
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
956,685
|
|
$
|
934,439
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
66,322
|
|
$
|
74,520
|
Accrued
liabilities
|
|
|
53,407
|
|
|
67,773
|
Current
liabilities held for sale
|
|
|
2,910
|
|
|
-
|
Income taxes
payable
|
|
|
9,776
|
|
|
8,475
|
Total current liabilities
|
|
|
132,415
|
|
|
150,768
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
187,500
|
|
|
174,830
|
Operating lease
long-term liabilities
|
|
|
29,428
|
|
|
31,357
|
Accrued pension and
other non-current liabilities
|
|
|
77,693
|
|
|
78,141
|
Non-current liabilities
held for sale
|
|
|
232
|
|
|
-
|
Total non-current liabilities
|
|
|
294,853
|
|
|
284,328
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common
stock
|
|
|
41,976
|
|
|
41,976
|
Additional
paid-in capital
|
|
|
93,359
|
|
|
91,200
|
Retained
earnings
|
|
|
933,233
|
|
|
901,421
|
Accumulated
other comprehensive loss
|
|
|
(147,226)
|
|
|
(153,312)
|
Treasury
shares
|
|
|
(391,925)
|
|
|
(381,942)
|
Total stockholders'
equity
|
|
|
529,417
|
|
|
499,343
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
956,685
|
|
$
|
934,439
|
Standex
International Corporation and Subsidiaries
|
Statements of
Consolidated Cash Flows
|
(unaudited)
|
|
|
|
Six Months
Ended
|
|
|
|
December
31,
|
(In
thousands)
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
38,313
|
|
$
|
30,802
|
Income (loss) from
discontinued operations
|
|
|
(87)
|
|
|
(49)
|
Income from continuing
operations
|
|
|
38,400
|
|
|
30,851
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
13,966
|
|
|
15,222
|
Stock-based
compensation
|
|
|
4,699
|
|
|
4,625
|
Non-cash portion of
restructuring charge
|
|
|
(1,183)
|
|
|
337
|
Contributions to
defined benefit plans
|
|
|
(101)
|
|
|
(104)
|
Net changes in
operating assets and liabilities
|
|
|
(28,690)
|
|
|
(14,232)
|
Net cash provided by
operating activities - continuing operations
|
|
|
27,091
|
|
|
36,699
|
Net cash provided by
(used in) operating activities - discontinued operations
|
|
|
(51)
|
|
|
(364)
|
Net cash provided by
(used in) operating activities
|
|
|
27,040
|
|
|
36,335
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
|
(11,028)
|
|
|
(9,721)
|
Other investing activities
|
|
|
98
|
|
|
1,646
|
Net cash (used in)
investing activities
|
|
|
(10,930)
|
|
|
(8,075)
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Proceeds from borrowings
|
|
|
28,500
|
|
|
-
|
Payments of debt
|
|
|
(16,000)
|
|
|
-
|
Contingent consideration payment
|
|
|
(1,167)
|
|
|
(1,167)
|
Activity under share-based payment plans
|
|
|
994
|
|
|
1,147
|
Purchase of treasury stock
|
|
|
(13,517)
|
|
|
(9,546)
|
Cash
dividends paid
|
|
|
(6,399)
|
|
|
(6,019)
|
Net cash provided by
(used in) financing activities
|
|
|
(7,589)
|
|
|
(15,585)
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
|
|
129
|
|
|
(1,887)
|
|
|
|
|
|
|
|
Net changes in cash and
cash equivalents
|
|
|
8,650
|
|
|
10,788
|
Cash and cash
equivalents at beginning of year
|
|
|
104,844
|
|
|
136,367
|
Cash and cash
equivalents at end of period
|
|
$
|
113,494
|
|
$
|
147,155
|
Standex
International Corporation
|
Selected Segment
Data
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
(In
thousands)
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics
|
|
$
|
72,556
|
|
$
|
76,626
|
|
$
|
147,755
|
|
$
|
152,462
|
Engraving
|
|
|
37,689
|
|
|
36,644
|
|
|
72,713
|
|
|
71,814
|
Scientific
|
|
|
19,292
|
|
|
24,636
|
|
|
37,748
|
|
|
46,165
|
Engineering
Technologies
|
|
|
24,193
|
|
|
18,095
|
|
|
41,192
|
|
|
35,668
|
Specialty
Solutions
|
|
|
34,059
|
|
|
29,708
|
|
|
68,981
|
|
|
55,210
|
Total
|
|
$
|
187,789
|
|
$
|
185,709
|
|
$
|
368,389
|
|
$
|
361,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics
|
|
$
|
16,972
|
|
$
|
17,157
|
|
$
|
35,113
|
|
$
|
35,430
|
Engraving
|
|
|
6,373
|
|
|
5,204
|
|
|
12,227
|
|
|
10,078
|
Scientific
|
|
|
4,165
|
|
|
5,490
|
|
|
7,888
|
|
|
9,998
|
Engineering
Technologies
|
|
|
3,741
|
|
|
2,314
|
|
|
5,606
|
|
|
3,213
|
Specialty
Solutions
|
|
|
5,716
|
|
|
3,738
|
|
|
11,793
|
|
|
6,553
|
Restructuring
|
|
|
(511)
|
|
|
(843)
|
|
|
(1,093)
|
|
|
(1,283)
|
Acquisition related
costs
|
|
|
(174)
|
|
|
(925)
|
|
|
(466)
|
|
|
(1,142)
|
Corporate
|
|
|
(8,360)
|
|
|
(8,662)
|
|
|
(16,856)
|
|
|
(16,546)
|
Other operating income
(expense), net
|
|
|
(116)
|
|
|
(1,700)
|
|
|
(116)
|
|
|
(1,700)
|
Total
|
|
$
|
27,806
|
|
$
|
21,773
|
|
$
|
54,096
|
|
$
|
44,601
|
Standex
International Corporation
|
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
December
31,
|
|
|
(In thousands, except
percentages)
|
|
|
2022
|
|
|
2021
|
|
%
Change
|
|
|
2022
|
|
|
2021
|
|
%
Change
|
Adjusted income from
operations and adjusted net
income from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
$
|
187,789
|
|
$
|
185,709
|
|
1.1 %
|
|
$
|
368,389
|
|
$
|
361,319
|
|
2.0 %
|
Income from
operations, as reported
|
|
$
|
27,806
|
|
$
|
21,773
|
|
27.7 %
|
|
$
|
54,096
|
|
$
|
44,601
|
|
21.3 %
|
|
Income from operations
margin
|
|
|
14.8 %
|
|
|
11.7 %
|
|
|
|
|
14.7 %
|
|
|
12.3 %
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
511
|
|
|
843
|
|
|
|
|
1,093
|
|
|
1,283
|
|
|
|
Acquisition-related
costs
|
|
|
174
|
|
|
925
|
|
|
|
|
466
|
|
|
1,142
|
|
|
|
Litigation
charge
|
|
|
116
|
|
|
1,700
|
|
|
|
|
116
|
|
|
1,700
|
|
|
Adjusted income from
operations
|
|
$
|
28,607
|
|
$
|
25,241
|
|
13.3 %
|
|
$
|
55,771
|
|
$
|
48,726
|
|
14.5 %
|
|
Adjusted income from
operations margin
|
|
|
15.2 %
|
|
|
13.6 %
|
|
|
|
|
15.1 %
|
|
|
13.5 %
|
|
|
|
Interest and other
income (expense), net
|
|
|
(1,496)
|
|
|
(1,814)
|
|
|
|
|
(3,701)
|
|
|
(3,557)
|
|
|
|
Provision for income
taxes
|
|
|
(6,226)
|
|
|
(4,929)
|
|
|
|
|
(11,995)
|
|
|
(10,193)
|
|
|
|
Discrete and other tax
items
|
|
|
-
|
|
|
-
|
|
|
|
|
100
|
|
|
-
|
|
|
|
Tax impact of above
adjustments
|
|
|
(190)
|
|
|
(857)
|
|
|
|
|
(398)
|
|
|
(1,021)
|
|
|
Net income from
continuing operations, as adjusted
|
|
$
|
20,695
|
|
$
|
17,641
|
|
17.3 %
|
|
$
|
39,777
|
|
$
|
33,955
|
|
17.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations, as reported
|
|
$
|
20,084
|
|
$
|
15,030
|
|
33.6 %
|
|
$
|
38,400
|
|
$
|
30,851
|
|
|
|
Net income from
continuing operations margin
|
|
|
10.7 %
|
|
|
8.1 %
|
|
|
|
|
10.4 %
|
|
|
8.5 %
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
6,226
|
|
|
4,929
|
|
|
|
|
11,995
|
|
|
10,193
|
|
|
|
Interest
expense
|
|
|
1,566
|
|
|
1,526
|
|
|
|
|
2,753
|
|
|
3,246
|
|
|
|
Depreciation and
amortization
|
|
|
6,958
|
|
|
7,497
|
|
|
|
|
13,966
|
|
|
15,222
|
|
|
EBITDA
|
|
$
|
34,834
|
|
$
|
28,982
|
|
20.2 %
|
|
$
|
67,114
|
|
$
|
59,512
|
|
12.8 %
|
|
EBITDA
Margin
|
|
|
18.5 %
|
|
|
15.6 %
|
|
|
|
|
18.2 %
|
|
|
16.5 %
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
511
|
|
|
843
|
|
|
|
|
1,093
|
|
|
1,283
|
|
|
|
Acquisition-related
costs
|
|
|
174
|
|
|
925
|
|
|
|
|
466
|
|
|
1,142
|
|
|
|
Litigation
charge
|
|
|
116
|
|
|
1,700
|
|
|
|
|
116
|
|
|
1,700
|
|
|
Adjusted
EBITDA
|
|
$
|
35,635
|
|
$
|
32,450
|
|
9.8 %
|
|
$
|
68,789
|
|
$
|
63,637
|
|
8.1 %
|
|
Adjusted EBITDA
Margin
|
|
|
19.0 %
|
|
|
17.5 %
|
|
|
|
|
18.7 %
|
|
|
17.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free operating cash
flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities -
continuing operations, as reported
|
|
$
|
29,796
|
|
$
|
23,613
|
|
|
|
$
|
27,091
|
|
$
|
36,699
|
|
|
Less: Capital
expenditures
|
|
|
(5,760)
|
|
|
(4,699)
|
|
|
|
|
(11,028)
|
|
|
(9,721)
|
|
|
Free cash flow from
continuing operations
|
|
$
|
24,036
|
|
$
|
18,914
|
|
|
|
$
|
16,063
|
|
$
|
26,978
|
|
|
Standex
International Corporation
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
Six Months
Ended
|
|
|
Adjusted earnings
per share from continuing operations
|
|
|
December
31,
|
|
|
|
|
December
31,
|
|
|
|
|
2022
|
|
|
2021
|
|
%
Change
|
|
|
2022
|
|
|
2021
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations, as reported
|
|
$
|
1.69
|
|
$
|
1.24
|
|
36.3 %
|
|
$
|
3.22
|
|
$
|
2.54
|
|
26.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
0.03
|
|
|
0.05
|
|
|
|
|
0.07
|
|
|
0.09
|
|
|
|
Acquisition-related
costs
|
|
|
0.01
|
|
|
0.06
|
|
|
|
|
0.03
|
|
|
0.07
|
|
|
|
Litigation
charge
|
|
|
0.01
|
|
|
0.10
|
|
|
|
|
0.01
|
|
|
0.10
|
|
|
|
Discrete tax
items
|
|
|
-
|
|
|
-
|
|
|
|
|
0.01
|
|
|
-
|
|
|
Diluted earnings per
share from continuing operations, as adjusted
|
|
$
|
1.74
|
|
$
|
1.45
|
|
20.0 %
|
|
$
|
3.34
|
|
$
|
2.80
|
|
19.3 %
|
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SOURCE Standex International Corporation