In This Article:
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Total Revenue: Decreased by 3.8% year-on-year to $177.3 million.
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Adjusted Operating Margin: Increased by 20 basis points year-on-year to 15.4%.
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Adjusted Earnings Per Share (EPS): Grew 6.1% year-on-year to $1.75.
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Net Cash from Operating Activities: Was $24.4 million in the fiscal third quarter.
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Free Cash Flow: Record $19.3 million for the fiscal third quarter.
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Capital Expenditures: Were $5.2 million, down from $5.6 million a year ago.
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Organic Revenue Decline: Reported at 5.7%.
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Adjusted Gross Margin: Nearly 40%, consistent with previous high performance.
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Annualized Return on Invested Capital (ROIC): Over 12%.
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Long-term Financial Targets by Fiscal Year 2028: Include over $1 billion in sales, adjusted operating margin greater than 19%, ROIC over 15%, and free cash flow conversion approximately 100% of GAAP net income.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Standex International Corp (NYSE:SXI) reported strong margin performance, achieving an adjusted gross margin of nearly 40%.
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Record fiscal third quarter free cash flow of $19.3 million was achieved, maintaining strong year-to-date performance.
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Sales into fast growth end markets grew by 9% year-on-year, contributing to a long-term target of $200 million annual sales by fiscal year 2028.
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Recent acquisitions, such as Sanyu Switch Company, expanded product offerings and contributed positively to financial results.
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Standex International Corp (NYSE:SXI) demonstrated resilience and adaptability in operating improvements despite challenging macro conditions.
Negative Points
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Organic revenue declined by 5.7% due to market softness, particularly in appliances and general industrial end markets in China and Europe.
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The electronics segment faced continued challenges with a 9.3% organic decline and softness in key markets like Europe and Asia.
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A one-time stock compensation charge related to the CEO's 10th anniversary impacted adjusted operating margin by approximately 70 basis points.
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Foreign exchange negatively impacted revenue, with a 0.9% effect on the consolidated basis.
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The Specialty Solutions segment experienced a significant revenue decrease of 27.1% year-on-year, primarily due to the Procon divestiture and normalization in the display merchandising business.
Q & A Highlights
Q: Can you remind us what percentage of total electronics sales are in Europe and Asia? A: David Dunbar, President and CEO of Standex International, stated that electronics sales are roughly divided equally among the three regions: North America, Europe, and Asia, with each accounting for about one-third.