[Logo]
STANDEX INTERNATIONAL CORPORATION {circle} SALEM, NH 03079 {circle} TEL (603)
893-9701 {circle} FAX (603) 893-7324 {circle} WEB www.standex.com
CONTACTS:
Christian Storch, CFO
InvestorRelations@Standex.com FOR IMMEDIATE RELEASE
(603) 893-9701
STANDEX POSTS DOUBLE-DIGIT INCREASE IN FIRST-QUARTER EARNINGS FROM CONTINUING
OPERATIONS
FOOD SERVICE GROUP IS STRONGEST PERFORMER; BENEFITS OF COMPANY'S REALIGNMENT AND
RESTRUCTURING PROGRAM CONTRIBUTE TO IMPROVED FINANCIAL RESULTS
SALEM, NH - OCTOBER 23, 2003 {ellipsis}. Standex International Corporation
(NYSE:SXI) today reported first-quarter net income from continuing operations
of $5.3 million, or $0.43 per diluted share, an increase of 16 percent from
prior-year net income of $4.6 million, or $0.38 per diluted share.
The company also reported net sales of $150.9 million for the first quarter of
fiscal 2004, an increase of four percent from $145.5 million during the first
quarter of 2003. Sales for the first quarter of fiscal 2003 included an extra
month of European revenue, totaling approximately $4.4 million that resulted
from Standex's decision to conform the accounting year of its European
operations to the corporate fiscal year ending June 30. Excluding the extra
month of European revenue, first-quarter 2003 sales were $141.1 million, and
the year-over-year increase in sales for the first quarter was seven percent.
First-quarter 2004 net income including discontinued operations was $4.4
million, or $0.35 per diluted share, a decrease of five percent compared to net
income including discontinued operations of $4.6 million, or $0.38 per diluted
share. A reconciliation of net income and earnings per share from continuing
operations to net income and earnings including discontinued operations is
included later in this release.
COMMENTS ON THE FIRST QUARTER
"We were very pleased by the strength demonstrated in the first quarter in both
incoming orders and shipments for a number of businesses in our Food Service
and Industrial Groups," said Roger Fix, President and CEO. "The top-line
growth and double-digit increases in net income and earnings per share Standex
achieved in the first quarter were the result of strong organic sales growth in
several divisions, the benefit of acquisitions made last year and the impact
that our realignment and restructuring program is having throughout Standex.
These positive results also included a decrease in net working capital and an
increase in working capital turns."
"The strongest performance, based on year-over-year first-quarter comparisons,
was delivered by our Food Service Group, where sales increased 12 percent to
$42.5 million from $38.1 million a year earlier. The increases were
attributable to market share gains and some improvement in market conditions.
Our Master-Bilt, BKI and USECO divisions each achieved double-digit top line
growth leading several other businesses in this group that also recorded
increased sales. Operating income for the group rose 57 percent to $5.0
million from $3.2 million while operating profit margin increased to 12 percent
from eight percent as compared to the same quarter in the prior year. All of
the businesses in the group reported improved profitability for the quarter,
with the improved profit performance at USECO clearly resulting from the
restructuring activities Standex completed during the past year. Overall,
bookings remained strong as the backlog for this group at the end of the
quarter was up slightly over the prior year even after strong shipments for the
quarter," said Fix.
First-quarter sales in Standex's Industrial Group increased two percent to
$87.7 million from $85.9 million for the fiscal 2003 first quarter. Operating
income for the group declined 17 percent to $8.6 million while operating profit
margin decreased to 10 percent from 12 percent as compared to the same quarter
in the prior year. The decline in operating income was mainly the result of
higher steel prices incurred by the Air Distribution Products Division. "The
strongest quarter-over-quarter revenue gains in the Industrial group were
posted by the Standex Engraving division, which benefited from increased
organic sales and from the acquisition and integration of I R International in
Richmond, Virginia and Dornbusch in Sao Paolo, Brazil," said Fix. "In
addition, Mold-Tech has made significant strides during the past year in
penetrating the OEM base of the automotive market at a time when the major auto
manufacturers are focused on bringing many newly designed autos to market.
Mold-Tech benefits from the number of new models being introduced, not the
number of vehicles that are sold. The performance of Mold-Tech is not tied to
cyclicality of new car sales and, as a result, we expect to see continued sales
strength from this business in the near term."1
Sales in Customs Hoists were up 10% versus the prior year quarter which is
encouraging as the construction and off road construction vehicle markets that
this business serves have been severely depressed for the past 2 years. Sales
in Standex Electronics and Air Distribution Products held strong for the
quarter as well. The overall backlog for the Industrial Group was up over 15%
at the end of the quarter as compared to prior year.
The Consumer Group posted a four percent decline in revenue for the first
quarter of fiscal 2004 with sales of $20.8 million compared with $21.5 million
for the year-earlier first quarter. "While we experienced a small decline in
sales for the Consumer Group in the first quarter, we are seeing the early
signs of some stabilizing in consumer demand," said Fix. "The positive news
about the Consumer Group is that we have been successful in implementing cost
reduction measures and rationalizing these businesses to the point that they
are able to generate profits at the lower sales volume we are currently
experiencing. These measures have included reducing headcount in our
publishing operation, closing two unprofitable stores in our Berean retail
chain and maintaining tight expense controls. As a result, first quarter
operating income for the group increased 200 percent to $412,000 from $204,000
from the first quarter of fiscal 2003. With improving operating profits, we
are able to invest selectively in new growth opportunities. For example, we
are looking to expand the Berean chain using an upgraded site selection
methodology. In September we opened one of two new stores that we plan to
open in the greater Chicago market this fiscal year."
COMMENTS ON STANDEX'S REALIGNMENT AND RESTRUCTURING PROGRAM
"Our recently announced decision to exit the European market for roll
technology engraving products and our closing of Berean stores while at the
same time we are opening new stores, point to a fundamental premise of our
restructuring and realignment program,"1 said Fix. "We are making strategic
decisions to consolidate operations in markets where we are large enough to
enhance or gain a leading market share and divesting of those businesses that
are too small or hold little opportunity for future growth and profitability.
For example, at BKI we have discontinued manufacturing activities in the U.K.,
transferring production to our South Carolina facility. With this
consolidation, we are not only reducing overhead costs, but we are also
increasing the utilization of the remaining plant. Similarly, in our
Electronics division we have transferred essentially all of the production from
one of our Canadian facilities to Mexico."
During the quarter Standex spent $.03 per share on restructuring expenses as
compared to $.04 per share in the prior year quarter. Also during the quarter
the Company completed the sale of two facilities and took an impairment charge
resulting in a net after tax expense of $68,000.
As recently announced, subsequent to the end of the first quarter, the
Company's Standard Publishing division announced the tentative decision to
close its printing operations and cease its commercial printing business. The
termination of operations is expected to be concluded by March 31, 2004.1
"To date, we have sold four facilities and realized approximately $12.0 million
in cash proceeds. With these proceeds and the gains in operating profit
achieved by selling under-performing businesses, we have more than offset all
of our restructuring expenses incurred to date. The progress we have made in
implementing our realignment and restructuring program has met or exceeded our
original expectations," said Fix.
EARNINGS RECONCILIATION
Net income and earnings per share data including the impact of discontinued
operations, restructuring and other special charges is summarized below (in
thousands, except per share data):
Three Months Ended
September 30
Change
2003 2002 %
Net income $4,372 $4,612 (5.2)
Discontinued operations 942 (42)
Income from continuing operations 5,314 4,570 16.3
Special items, net of tax:
Restructuring 351 530
Other operating expense, net 68 -
Income before special items $5,733 $5,100 12.4
Diluted earnings per share 0.35 0.38 (7.9)
Discontinued operations 0.08 -
Income from continuing operations 0.43 0.38 13.2
Special items, net of tax:
Restructuring 0.03 0.04
Other operating expense, net 0.01 -
Income before special items 0.47 0.42 11.9
CONFERENCE CALL INFORMATION
Standex invites you to attend a conference call with President and Chief
Executive Officer Roger Fix and Chief Financial Officer Christian Storch at:
10:00 a.m. ET, today. To join a live Webcast of the conference call, please
access the "Investor Relations" section of the Company's Web site, located at:
www.standex.com. For those unable to listen to the live broadcast of the
conference call, an audio playback will be available beginning at 1:30 p.m. ET
on October 23 through midnight ET on October 30. To listen to the audio
playback from the United States, please call (800) 475-6701; from outside the
United States, (320) 365-3844; access code is 700582. In addition, a replay
can also be accessed in the "Investor Relations" section of the Company's Web
site, located at www.standex.com.
ABOUT STANDEX
Standex International Corporation is a multi-industry manufacturer in three
broad business segments: Food Service, Industrial and Consumer with operations
in the United States, Europe, Canada, Australia, Singapore, Mexico, Brazil and
China. For additional information, visit the Company's Web site at
www.standex.com.
__________________________________
1 These statements are forward looking and involve certain risks, uncertainties
and assumptions. Factors affecting the outcome and results include failure to
achieve the Company's acquisition and restructuring goals, uncertainties in the
economy, competitor activities, changes in economic growth and demands in
domestic and international markets, pricing pressures and other market factors.
Actual results could differ materially from anticipated projected results.
CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share data)
<CATPION>
THREE MONTHS ENDING
SEPTEMBER 30
2003 2002
CONSOLIDATED SUMMARY OF INCOME
NET SALES $150,913 $145,498
Income Before Taxes $8,427 $7,367
Provision (Benefit) for Taxes 3,113 2,797
NET INCOME FROM CONTINUING OPERATIONS 5,314 4,570
Income (Loss) from discontinued (942) 42
operations net of tax
Net Income $4,372 $4,612
EARNINGS PER SHARE:
BASIC
Income/(Loss) from continuing operations $0.44 $0.38
Income/(Loss) from discontinued operations (0.08) -
Total $0.36 $0.38
DILUTED
Income/(Loss) from continuing operations $0.43 $0.38
Income/(Loss) from discontinued operations (0.08) -
Total $0.35 $0.38
SEGMENT DATA
NET SALES
Food Service $42,496 $38,100
Consumer 20,748 21,506
Industrial 87,669 85,892
TOTAL $150,913 $145,498
OPERATING INCOME
Food Service $4,962 $3,170
Consumer 412 204
Industrial 8,577 10,281
Restructuring (549) (914)
Other income, net 25 -
Corporate ( 3,554) (3,564)
TOTAL $9,873 $9,177
# # #