- Fast Growth Market Sales Increased ~14% Year-On-Year to ~$21 Million
- Organic Sales Decline of 7.4% Year-on-Year Due to Project Timing in the Engineering Technologies Segment and Transitory Market Softness; Partially offset by Contributions from Minntronix Acquisition and Favorable FX
- Record GAAP Gross Margin of 40.2% and Adjusted Gross Margin of 40.3%
- GAAP Operating Margin of 14.5%; Record Adjusted Operating Margin of 16.1%, up 90 bps Year-On-Year; 11th Consecutive Quarter of Record Level Adjusted Operating Margin
- Record Year-to-Date Free Cash Flow of $31.6 Million
- Expect to Complete Acquisition of Japanese-Based Sanyu Switch Co., Ltd During Fiscal Third Quarter 2024
SALEM, N.H., Feb. 1, 2024 /PRNewswire/ -- Standex International Corporation (NYSE: SXI) today reported financial results for the second quarter of fiscal year 2024 ended December 31, 2023 .
Summary Financial Results - Total | |||||
($M except EPS and Dividends) | 2Q24 | 2Q23 | 1Q24 | Y/Y | Q/Q |
Net Sales | $178.4 | $187.8 | $184.8 | -5.0 % | -3.4 % |
Operating Income - GAAP | $25.8 | $27.8 | $26.9 | -7.1 % | -4.0 % |
Operating Income - Adjusted | $28.7 | $28.6 | $29.4 | 0.3 % | -2.4 % |
Operating Margin % - GAAP | 14.5 % | 14.8 % | 14.6 % | - 30 bps | - 10 bps |
Operating Margin % - Adjusted | 16.1 % | 15.2 % | 15.9 % | + 90 bps | + 20 bps |
Net Income from Continuing Ops - GAAP | $19.1 | $20.1 | $18.9 | -5.0 % | 1.0 % |
Net Income from Continuing Ops - Adjusted | $21.1 | $20.7 | $20.8 | 1.9 % | 1.3 % |
EBITDA | $32.4 | $34.8 | $33.2 | -7.0 % | -2.3 % |
EBITDA margin | 18.2 % | 18.5 % | 17.9 % | - 30 bps | + 30 bps |
Adjusted EBITDA | $35.0 | $35.6 | $35.6 | -1.9 % | -1.9 % |
Adjusted EBITDA margin | 19.6 % | 19.0 % | 19.3 % | + 60 bps | + 30 bps |
Diluted EPS - GAAP | $1.61 | $1.69 | $1.58 | -4.7 % | 1.9 % |
Diluted EPS - Adjusted | $1.78 | $1.74 | $1.74 | 2.3 % | 2.3 % |
Dividends per Share | $0.30 | $0.28 | $0.28 | 7.1 % | 7.1 % |
Free Cash Flow | $19.5 | $24.0 | $12.1 | -18.8 % | 61.6 % |
Net Debt to EBITDA | 0.0x | 0.6x | 0.2x | NM | NM |
Second Quarter Fiscal 2024 Results
Commenting on the quarter's results, President and Chief Executive Officer David Dunbar said, "I am pleased with our second quarter operating performance. Despite the softer top line, we achieved record adjusted gross margin of 40.3%, up 180 bps year on year, and record adjusted operating margin of 16.1%, up 90 bps year on year - our eleventh consecutive quarter of record level adjusted operating margin performance. This margin growth reflects the continued solid execution of our pricing and productivity initiatives, while continuing to prioritize investments in high-growth opportunities. In addition, we generated free operating cash flow of $19.5 million in fiscal second quarter 2024 and record free operating cash flow of $31.6 million year-to-date."
"I am also pleased with the progress of our fast growth market sales which grew 14% year on year to $21 million and R&D investments which grew to 2.9% of sales in fiscal second quarter 2024. These activities position us well to achieve our long-term growth objectives. Nevertheless, as we highlighted last quarter as part of our outlook, we did see the effect of transitory headwinds in several of our end markets which led to a 7.4% organic decline year on year, primarily from unfavorable project timing in our Engineering Technologies segment and softer demand in our Specialty segment. We expect these market conditions to improve in the fiscal fourth quarter 2024."
"Three years ago in February 2021, we communicated a set of long term (three to five years) financial targets. These targets included mid-single-digit organic growth, EBITDA margin above 20%, and return on invested capital above 12%. We are proud to have reached these targets within three years. As such, we remain confident in achieving our updated long-term financial targets by fiscal 2028, which include organic revenue growth at a high-single-digit compounded annual rate, adjusted operating margin above 19%, and a return on invested capital above 15%."
"We anticipate completing our acquisition of Japanese-based Sanyu Switch Company in the fiscal third quarter 2024. Sanyu will enable us to expand our position in the test and measurement market, where the proliferation of consumer electronics, semiconductor devices, and IoT technologies are driving growth. We expect the acquisition to be accretive to earnings and to achieve a double-digit return on invested capital in the first year of ownership. We look forward to welcoming the entire Sanyu team to our company."
Outlook
In the fiscal third quarter 2024, on a sequential basis, the Company expects slightly higher revenue due to a slight recovery in the Electronics and Specialty segments and contribution from the pending acquisition of Sanyu, partially offset by lower sales in the Engraving segment. The Company expects slightly lower adjusted operating margin, primarily resulting from one-time charge due to the CEO reaching retirement eligibility under the stock compensation plan. In the fiscal fourth quarter 2024, on a sequential basis, the company expects meaningfully higher revenue and continued improvement in adjusted operating margin.
Second Quarter Segment Operating Performance
Electronics (45% of sales; 44% of segment operating income)
2Q24 | 2Q23 | % Change | |
Electronics ($M) | |||
Revenue | 79.4 | 72.6 | 9.5 % |
GAAP Operating Income | 15.9 | 17.0 | -6.6 % |
GAAP Operating Margin % | 20.0 | 23.4 | |
Adjusted Operating Income | 16.2 | 17.0 | -4.8 % |
Adjusted Operating Margin % | 20.3 | 23.4 |
*Excludes purchase accounting expenses of $0.3M associated with Minntronix in Q2 FY24 |
Revenue increased approximately $6.9 million or 9.5% year-on-year reflecting a 14.7% benefit from the recent Minntronix acquisition and a 0.5% benefit from foreign currency, partially offset by an organic decline of 5.7% due continued softness in the appliances and general industrial end markets in China and Europe . Adjusted operating income decreased approximately $0.8 million or 4.8% year-on-year due to lower organic sales and product mix, partially offset by contribution from the Minntronix acquisition and realization of pricing and productivity initiatives.
Electronics segment backlog realizable in under one year of approximately $112 million decreased 27% year-on-year. The segment's book to bill ratio of 0.78 represented a 15% improvement from the prior quarter.
In fiscal third quarter 2024, on a sequential basis, the Company expects slightly to moderately higher revenue and slightly higher operating margin due to higher volume and contribution from the pending acquisition of Sanyu.
Revenue attributable to fast growth end markets is expected to grow throughout the remainder of the fiscal year in markets like industrial automation, power management, renewable energy technologies, and EV-related applications.
Engraving (23% of sales; 24% of segment operating income)
2Q24 | 2Q23 | % Change | |
Engraving ($M) | |||
Revenue | 40.8 | 37.7 | 8.4 % |
Operating Income | 8.9 | 6.4 | 39.8 % |
Operating Margin % | 21.8 | 16.9 |
Revenue increased approximately $3.2 million or 8.4% year-on-year reflecting 6.7% organic growth, primarily due to strong demand in Europe, and a 1.7% benefit from foreign currency. Operating income increased approximately $2.5 million or 39.8% year-on-year due to higher volume and realization of previously announced productivity initiatives.
In fiscal third quarter 2024, on a sequential basis, the Company expects meaningfully lower revenue and operating margin due to the seasonal impact of the Chinese New Year on project timing and fewer new platform rollouts in North America .
Scientific (9% of sales; 12% of segment operating income)
2Q24 | 2Q23 | % Change | |
Scientific ($M) | |||
Revenue | 16.3 | 19.3 | -15.6 % |
Operating Income | 4.2 | 4.2 | 2.0 % |
Operating Margin % | 26.1 | 21.6 |
Revenue decreased approximately $3.0 million or 15.6% year-on-year reflecting lower demand for COVID vaccine storage units from retail pharmacies, slightly offset by an increase in new product sales. Operating income remained relatively flat year-on-year as lower freight cost and productivity initiatives fully offset lower volume.
In fiscal third quarter 2024, on a sequential basis, the Company expects slightly higher revenue and similar to slightly higher operating margin.
Engineering Technologies (11% of sales; 9% of segment operating income)
2Q24 | 2Q23 | % Change | |
Engineering Technologies ($M) | |||
Revenue | 19.9 | 24.2 | -17.8 % |
Operating Income | 3.4 | 3.7 | -9.0 % |
Operating Margin % | 17.1 | 15.5 |
Revenue decreased approximately $4.3 million or 17.8% year-on-year reflecting 18.1% organic decline due to timing of projects and a 0.3% benefit from foreign currency. Operating income decreased approximately $0.3 million or 9.0% year-on-year reflecting lower volume and higher research and development expenses, mostly offset by pricing and productivity initiatives.
In fiscal third quarter 2024, on a sequential basis, the Company expects similar revenue reflecting improvement across most end markets, offset by lower defense sales caused by delays in government funding, and similar to slightly lower operating margin. The Company anticipates significant sequential growth in the fiscal fourth quarter reflecting more favorable project timing.
Specialty Solutions (12% of sales; 11% of segment operating income)
2Q24 | 2Q23 | % Change | |
Specialty Solutions ($M) | |||
Revenue | 22.0 | 34.1 | -35.5 % |
Operating Income | 4.0 | 5.7 | -30.6 % |
Operating Margin % | 18.1 | 16.8 |
Specialty Solutions revenue decreased approximately $12.1 million or 35.5% year-on-year, reflecting the impact of the Procon divestiture and an organic decline in the Hydraulics business from an industry-wide chassis shortage. Operating income decreased approximately $1.8 million or 30.6% year-on-year due to the Procon divestiture and lower volume in the Hydraulics business.
In fiscal third quarter 2024, on a sequential basis, the Company expects slightly to moderately higher revenue and operating margin due to improved demand in the Hydraulics business.
Capital Allocation
- Share Repurchase: During the fiscal second quarter 2024, the Company repurchased 33,500 shares for $4.5 million . There was $38.5 million remaining on the Company's current share repurchase authorization at the end of the fiscal second quarter 2024.
- Capital Expenditures: In fiscal second quarter 2024, Standex's capital expenditures were $4.3 million compared to $5.8 million in the fiscal second quarter of 2023. The Company now expects fiscal year 2024 capital expenditures between $25 million and $30 million . Capital expenditures were $24.3 million in fiscal 2023.
- Dividend: On January 26, 2024, the Company declared a quarterly cash dividend of $0.30 per share, an approximately 7.1% year-on-year increase. The dividend is payable February 26, 2024, to shareholders of record on February 12, 2024 .
Balance Sheet and Cash Flow Highlights
- Net Debt: Standex had net debt of $6.2 million on December 31, 2023, compared to $74.0 million at the end of fiscal second quarter 2023. Net debt for the second quarter of 2024 consisted primarily of long-term debt of $148.7 million and cash and equivalents of $142.4 million .
- Cash Flow: Net cash provided by (used in) continuing operating activities for the three months ended December 31, 2023, was $23.8 million compared to $29.8 million in the prior year's quarter. Free cash flow after capital expenditures was $19.5 million compared to free cash flow after capital expenditures of $24.0 million in the fiscal second quarter of 2023.
Conference Call Details
Standex will host a conference call for investors tomorrow, February 2, 2024, 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 2, 2025 . To listen to the teleconference playback, please dial in the U.S. (888) 660-6345 or (646) 517-4150 internationally; the passcode is 83380#. The audio playback via phone will be available through February 9, 2024 . 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, 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 and other global crises or catastrophic events on employees, our supply chain, and the demand for our products and services around the world; materially adverse or unanticipated legal judgments, fines, penalties or settlements; conditions in the financial and banking markets, including fluctuations in exchange rates and the inability to repatriate foreign cash; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, defense, transportation, food service equipment, consumer appliance, energy, oil and gas and general industrial markets; lower-cost competition; the relative mix of products which impact margins and operating efficiencies in certain of our businesses; the impact of higher raw material and component costs, particularly steel, certain materials used in electronics parts, petroleum based products, and refrigeration components; the impact of higher transportation and logistics costs, especially with respect to transportation of goods from Asia ; the impact of inflation on the costs of providing our products and services; an inability to realize the expected cost savings from restructuring activities including effective completion of plant consolidations, cost reduction efforts including procurement savings and productivity enhancements, capital management improvements, strategic capital expenditures, and the implementation of lean enterprise manufacturing techniques; the potential for losses associated with the exit from or divestiture of businesses that are no longer strategic or no longer meet our growth and return expectations; the inability to achieve the savings expected from global sourcing of raw materials and diversification efforts in emerging markets; the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs; the inability to attain expected benefits from acquisitions and the inability to effectively consummate and integrate such acquisitions and achieve synergies envisioned by the Company; 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. 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) | 2023 | 2022 | 2023 | 2022 | ||||||||
Net sales | $ | 178,400 | 187,789 | $ | 363,174 | $ | 368,389 | |||||
Cost of sales | 106,737 | 115,469 | 218,876 | 227,816 | ||||||||
Gross profit | 71,663 | 72,320 | 144,298 | 140,573 | ||||||||
Selling, general and administrative expenses | 43,276 | 43,713 | 86,861 | 84,802 | ||||||||
(Gain) loss on sale of business | - | - | (274) | - | ||||||||
Restructuring costs | 1,360 | 511 | 3,266 | 1,093 | ||||||||
Acquisition related costs | 1,195 | 174 | 1,696 | 466 | ||||||||
Other operating (income) expense, net | - | 116 | - | 116 | ||||||||
Income from operations | 25,832 | 27,806 | 52,749 | 54,096 | ||||||||
Interest expense | 1,019 | 1,566 | 2,295 | 2,753 | ||||||||
Other non-operating (income) expense, net | 332 | (70) | 1,178 | 948 | ||||||||
Total | 1,351 | 1,496 | 3,473 | 3,701 | ||||||||
Income from continuing operations before income taxes | 24,481 | 26,310 | 49,276 | 50,395 | ||||||||
Provision for income taxes | 5,409 | 6,226 | 11,312 | 11,995 | ||||||||
Net income from continuing operations | 19,072 | 20,084 | 37,964 | 38,400 | ||||||||
Income (loss) from discontinued operations, net of tax | (201) | (41) | (279) | (87) | ||||||||
Net income | $ | 18,871 | $ | 20,043 | $ | 37,685 | $ | 38,313 | ||||
Basic earnings per share: | ||||||||||||
Income (loss) from continuing operations | $ | 1.62 | $ | 1.69 | $ | 3.22 | $ | 3.25 | ||||
Income (loss) from discontinued operations | (0.02) | - | (0.02) | (0.01) | ||||||||
Total | $ | 1.60 | $ | 1.69 | $ | 3.20 | $ | 3.24 | ||||
Diluted earnings per share: | ||||||||||||
Income (loss) from continuing operations | $ | 1.61 | $ | 1.69 | $ | 3.19 | $ | 3.22 | ||||
Income (loss) from discontinued operations | (0.02) | - | (0.02) | (0.01) | ||||||||
Total | $ | 1.59 | $ | 1.69 | $ | 3.17 | $ | 3.21 | ||||
Average Shares Outstanding | ||||||||||||
Basic | 11,791 | 11,852 | 11,762 | 11,833 | ||||||||
Diluted | 11,858 | 11,917 | 11,891 | 11,930 | ||||||||
Standex International Corporation | ||||||
Condensed Consolidated Balance Sheets | ||||||
(unaudited) | ||||||
December 31, | June 30, | |||||
(In thousands) | 2023 | 2023 | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 142,424 | $ | 195,706 | ||
Accounts receivable, net | 125,575 | 123,440 | ||||
Inventories | 98,592 | 98,537 | ||||
Prepaid expenses and other current assets | 65,572 | 64,739 | ||||
Income taxes receivable | 3,836 | 831 | ||||
Total current assets | 435,999 | 483,253 | ||||
Property, plant, equipment, net | 132,599 | 130,937 | ||||
Intangible assets, net | 82,726 | 75,651 | ||||
Goodwill | 280,337 | 264,821 | ||||
Deferred tax asset | 14,027 | 14,602 | ||||
Operating lease right-of-use asset | 34,026 | 33,273 | ||||
Other non-current assets | 25,347 | 22,392 | ||||
Total non-current assets | 569,062 | 541,676 | ||||
Total assets | $ | 1,005,061 | $ | 1,024,929 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 63,883 | $ | 68,601 | ||
Accrued liabilities | 56,062 | 62,031 | ||||
Income taxes payable | 10,597 | 10,335 | ||||
Total current liabilities | 130,542 | 140,967 | ||||
Long-term debt | 148,659 | 173,441 | ||||
Operating lease long-term liabilities | 26,080 | 25,774 | ||||
Accrued pension and other non-current liabilities | 79,209 | 77,298 | ||||
Total non-current liabilities | 253,948 | 276,513 | ||||
Stockholders' equity: | ||||||
Common stock | 41,976 | 41,976 | ||||
Additional paid-in capital | 101,198 | 100,555 | ||||
Retained earnings | 1,058,069 | 1,027,279 | ||||
Accumulated other comprehensive loss | (155,561) | (158,477) | ||||
Treasury shares | (425,111) | (403,884) | ||||
Total stockholders' equity | 620,571 | 607,449 | ||||
Total liabilities and stockholders' equity | $ | 1,005,061 | $ | 1,024,929 | ||
Standex International Corporation and Subsidiaries | ||||||
Statements of Consolidated Cash Flows | ||||||
(unaudited) | ||||||
Six Months Ended | ||||||
December 31, | ||||||
(In thousands) | 2023 | 2022 | ||||
Cash Flows from Operating Activities | ||||||
Net income | $ | 37,685 | $ | 38,313 | ||
Income (loss) from discontinued operations | (279) | (87) | ||||
Income from continuing operations | 37,964 | 38,400 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 13,969 | 13,966 | ||||
Stock-based compensation | 4,824 | 4,699 | ||||
Non-cash portion of restructuring charge | 346 | (1,183) | ||||
(Gain) loss on sale of business | (274) | - | ||||
Contributions to defined benefit plans | (1,541) | (101) | ||||
Net changes in operating assets and liabilities | (15,121) | (28,690) | ||||
Net cash provided by operating activities - continuing operations | 40,167 | 27,091 | ||||
Net cash provided by (used in) operating activities - discontinued operations | (422) | (51) | ||||
Net cash provided by (used in) operating activities | 39,745 | 27,040 | ||||
Cash Flows from Investing Activities | ||||||
Expenditures for property, plant and equipment | (8,587) | (11,028) | ||||
Expenditures for acquisitions, net of cash acquired | (29,229) | - | ||||
Proceeds from the sale of business | 274 | - | ||||
Other investing activities | - | 98 | ||||
Net cash (used in) investing activities from continuing operations | (37,542) | (10,930) | ||||
Net cash provided by investing activities from discontinued operations | - | - | ||||
Net cash provided by (used in) investing activities | (37,543) | (10,930) | ||||
Cash Flows from Financing Activities | ||||||
Proceeds from borrowings | - | 28,500 | ||||
Payments of debt | (25,000) | (16,000) | ||||
Contingent consideration payment | - | (1,167) | ||||
Activity under share-based payment plans | 1,189 | 994 | ||||
Purchase of treasury stock | (26,650) | (13,517) | ||||
Cash dividends paid | (6,840) | (6,399) | ||||
Net cash provided by (used in) financing activities | (57,301) | (7,589) | ||||
Effect of exchange rate changes on cash | 1,816 | 129 | ||||
Net changes in cash and cash equivalents | (53,283) | 8,650 | ||||
Cash and cash equivalents at beginning of year | 195,706 | 104,844 | ||||
Cash and cash equivalents at end of period | $ | 142,424 | $ | 113,494 | ||
Standex International Corporation | ||||||||||||
Selected Segment Data | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
December 31, | December 31, | |||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
Net Sales | ||||||||||||
Electronics | $ | 79,419 | $ | 72,556 | $ | 161,107 | $ | 147,755 | ||||
Engraving | 40,845 | 37,689 | 81,639 | 72,713 | ||||||||
Scientific | 16,292 | 19,292 | 34,485 | 37,748 | ||||||||
Engineering Technologies | 19,887 | 24,193 | 38,107 | 41,192 | ||||||||
Specialty Solutions | 21,957 | 34,059 | 47,836 | 68,981 | ||||||||
Total | $ | 178,400 | $ | 187,789 | $ | 363,174 | $ | 368,389 | ||||
Income from operations | ||||||||||||
Electronics | $ | 15,850 | $ | 16,972 | $ | 32,184 | $ | 35,113 | ||||
Engraving | 8,910 | 6,373 | 16,505 | 12,227 | ||||||||
Scientific | 4,248 | 4,165 | 9,178 | 7,888 | ||||||||
Engineering Technologies | 3,405 | 3,741 | 6,422 | 5,606 | ||||||||
Specialty Solutions | 3,965 | 5,716 | 9,582 | 11,793 | ||||||||
Restructuring | (1,360) | (511) | (3,266) | (1,093) | ||||||||
(Gain) loss on sale of business | - | - | 274 | - | ||||||||
Acquisition related costs | (1,195) | (174) | (1,696) | (466) | ||||||||
Corporate | (7,991) | (8,360) | (16,434) | (16,856) | ||||||||
Other operating income (expense), net | - | (116) | - | (116) | ||||||||
Total | $ | 25,832 | $ | 27,806 | $ | 52,749 | $ | 54,096 | ||||
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) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||
Adjusted income from operations and adjusted net | |||||||||||||||||
Net Sales | $ | 178,400 | $ | 187,789 | -5.0 % | $ | 363,174 | $ | 368,389 | -1.4 % | |||||||
Income from operations, as reported | $ | 25,832 | $ | 27,806 | -7.1 % | $ | 52,749 | $ | 54,096 | -2.5 % | |||||||
Income from operations margin | 14.5 % | 14.8 % | 14.5 % | 14.7 % | |||||||||||||
Adjustments: | |||||||||||||||||
Restructuring charges | 1,360 | 511 | 3,266 | 1,093 | |||||||||||||
Acquisition-related costs | 1,195 | 174 | 1,696 | 466 | |||||||||||||
Litigation (settlement refund) charge | - | 116 | - | 116 | |||||||||||||
(Gain) loss on sale of business | - | - | (274) | - | |||||||||||||
Purchase accounting expenses | 305 | - | 645 | - | |||||||||||||
Adjusted income from operations | $ | 28,692 | $ | 28,607 | 0.3 % | $ | 58,082 | $ | 55,771 | 4.1 % | |||||||
Adjusted income from operations margin | 16.1 % | 15.2 % | 16.0 % | 15.1 % | |||||||||||||
Interest and other income (expense), net | (1,351) | (1,496) | (3,473) | (3,701) | |||||||||||||
Foreign currency related (gain) loss on acquisition | (282) | - | (282) | - | |||||||||||||
Provision for income taxes | (5,409) | (6,226) | (11,312) | (11,995) | |||||||||||||
Discrete and other tax items | - | - | 100 | 100 | |||||||||||||
Tax impact of above adjustments | (569) | (190) | (1,223) | (398) | |||||||||||||
Net income from continuing operations, as adjusted | $ | 21,081 | $ | 20,695 | 1.9 % | $ | 41,892 | $ | 39,777 | 5.3 % | |||||||
EBITDA and Adjusted EBITDA: | |||||||||||||||||
Net income (loss) from continuing operations, as | $ | 19,072 | $ | 20,084 | -5.0 % | $ | 37,964 | $ | 38,400 | ||||||||
Net income from continuing operations margin | 10.7 % | 10.7 % | 10.5 % | 10.4 % | |||||||||||||
Add back: | |||||||||||||||||
Provision for income taxes | 5,409 | 6,226 | 11,312 | 11,995 | |||||||||||||
Interest expense | 1,019 | 1,566 | 2,295 | 2,753 | |||||||||||||
Depreciation and amortization | 6,887 | 6,958 | 13,969 | 13,966 | |||||||||||||
EBITDA | $ | 32,387 | $ | 34,834 | -7.0 % | $ | 65,540 | $ | 67,114 | -2.3 % | |||||||
EBITDA Margin | 18.2 % | 18.5 % | 18.0 % | 18.2 % | |||||||||||||
Adjustments: | |||||||||||||||||
Restructuring charges | 1,360 | 511 | 3,266 | 1,093 | |||||||||||||
Acquisition-related costs | 1,195 | 174 | 1,696 | 466 | |||||||||||||
Litigation (settlement refund) charge | - | 116 | - | 116 | |||||||||||||
(Gain) loss on sale of business | - | - | (274) | - | |||||||||||||
Foreign currency related (gain) loss on acquisition | (282) | - | (282) | - | |||||||||||||
Purchase accounting expenses | 305 | - | 645 | - | |||||||||||||
Adjusted EBITDA | $ | 34,965 | $ | 35,635 | -1.9 % | $ | 70,591 | $ | 68,789 | 2.6 % | |||||||
Adjusted EBITDA Margin | 19.6 % | 19.0 % | 19.4 % | 18.7 % | |||||||||||||
Free operating cash flow: | |||||||||||||||||
Net cash provided by operating activities - | $ | 23,760 | $ | 29,796 | $ | 40,167 | $ | 27,091 | |||||||||
Less: Capital expenditures | (4,249) | (5,760) | (8,587) | (11,028) | |||||||||||||
Free cash flow from continuing operations | $ | 19,511 | $ | 24,036 | $ | 31,580 | $ | 16,063 | |||||||||
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, | |||||||||||||||
2023 | 2022 | % | 2023 | 2022 | % Change | ||||||||||||
Diluted earnings per share from continuing operations, as reported | $ | 1.61 | $ | 1.69 | -4.7 % | $ | 3.19 | $ | 3.22 | -0.9 % | |||||||
Adjustments: | |||||||||||||||||
Restructuring charges | 0.09 | 0.03 | 0.21 | 0.07 | |||||||||||||
Acquisition-related costs | 0.08 | 0.01 | 0.11 | 0.03 | |||||||||||||
Litigation (settlement refund) charge | - | 0.01 | - | 0.01 | |||||||||||||
(Gain) loss on sale of business | - | - | (0.02) | - | |||||||||||||
Foreign currency related (gain) loss on acquisition and divestiture activities | (0.02) | - | (0.02) | - | |||||||||||||
Environmental remediation | - | - | - | - | |||||||||||||
Discrete tax items | - | - | 0.01 | 0.01 | |||||||||||||
Purchase accounting expenses | 0.02 | - | 0.04 | - | |||||||||||||
Diluted earnings per share from continuing operations, as adjusted | $ | 1.78 | $ | 1.74 | 2.3 % | $ | 3.52 | $ | 3.34 | 5.4 % | |||||||
SOURCE Standex International Corporation
