Standex International ((SXI)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Standex International’s recent earnings call conveyed a generally optimistic sentiment, despite facing some challenges. The company reported strong sales growth, particularly in new product sales and the Amran/Narayan Group, although it acknowledged organic declines in the Electronics and Scientific segments and restructuring costs. Overall, the sentiment was positive, with a promising sales outlook and strategic expansions on the horizon.
Record Sales Growth
Standex International reported a significant increase in sales, with a 27.6% year-on-year growth, reaching $217.4 million. New product sales contributed significantly, growing more than 35% to approximately $14.5 million. The company also achieved its highest quarterly order intake ever, with orders reaching approximately $226 million.
Strong Performance of Amran/Narayan Group
The Amran/Narayan Group delivered record sales of over $35 million and is expected to continue its impressive growth trajectory, with a projected year-on-year increase of more than 20% in fiscal 2026. The group’s sales have grown nearly 35% over the past 12 months compared to pre-acquisition levels.
Expanded Operations
Standex has expanded its operations with new facilities in Croatia and Mexico. These expansions are aimed at supporting the growing power requirements for data centers and grid expansion, aligning with the company’s strategic growth initiatives.
Increased Fiscal Year 2026 Sales Outlook
The company has raised its revenue expectations for fiscal year 2026, now anticipating growth of over $110 million, which is $10 million more than previously communicated. This optimistic outlook is driven by robust momentum from new product sales and fast-growth markets.
Improved Adjusted Operating Margin
Standex reported an improved adjusted operating margin, which increased by 210 basis points year-on-year to 19.1%. This improvement reflects the company’s focus on operational efficiency and cost management.
Electronics Organic Decline
The Electronics segment experienced an organic revenue decline of 3.1%, attributed to a facility closure and customer delays in approving alternate sites. Despite this, the company remains optimistic about future growth in this segment.
Scientific Segment Challenges
The Scientific segment faced an organic revenue decline of 8.7%, primarily due to reduced demand from academic and research institutions, which were impacted by cuts in NIH funding.
Restructuring Charges
Standex announced the closure of four sites within its Engraving segment, leading to approximately $5 million in restructuring charges. However, these closures are expected to yield similar annualized cost savings.
Increased Net Debt
The company reported an increase in net debt, amounting to $446 million at the end of the fiscal first quarter 2026, compared to net cash of $15.6 million a year ago.
Forward-Looking Guidance
Standex International provided an optimistic outlook for fiscal year 2026, expecting revenue growth of over $110 million, driven by new product sales and fast-growth market sales. The Amran/Narayan Group, now renamed Standex Electronics Grid, is projected to grow over 20% year-on-year. The company anticipates organic growth in the Electronics segment to reach mid- to high single-digits, with an adjusted operating margin of 19.1%.
In summary, Standex International’s earnings call reflected a positive sentiment, with strong sales growth and strategic expansions. Despite challenges in certain segments, the company remains optimistic about its future prospects, with increased revenue expectations and improved operational efficiencies.