SXI - Earnings call transcript Q1 2025 | Standex International Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the Standex International Fiscal First Quarter 2025 Financial Results Conference Call. [Operator Instructions]. This call is being recorded on Tuesday, October 29, 2024. I would now like to turn the conference over to Christopher Howe, Director of Investor Relations. Please go ahead.

Huang Howe

good and operator, you, morning. Thank the Please be website management's can accompanying on note at the company's that found the Investor remarks of presentation Relations www.standex.com. portion statement refer Slide Please safe harbor Standex's X. to on estimates, management will today's include forward-looking Matters that expectations, discuss other Standex and conference on call predictions, statements. cause are subject could and differ to uncertainties risks statements results materially. These that to actual

factors. and You list well as as on Form should XX-K detailed refer to a SEC Standex's public filings most of for recent risk annual report announcements other

is and like margin. you earnings of is margin before EBIT, remind discussion and EBITDA, purchase include I'd acquisition-related today's addition, expenses measures EBITDA In accounting, depreciation items; adjusted onetime and non-GAAP and references to purchase adjusted interest, earnings restructuring, EBIT, onetime will accounting, acquisition-related excluding items; that EBITDA which EBIT taxes; restructuring, to before EBITDA, EBITDA excluding expenses and which the is is which which taxes, amortization; adjusted interest

in other free measures, debt adjusted per These flow, generally operations, We EBITDA. Standex will a income adjusted adjusted non-GAAP to of company's with intended continuing measures pro and historical information measurement forma including results consistent that financial and accepted adjusted financial principles comparison provides cash also non-GAAP margin, net the operating operating adjusted share, are complement from earnings to net income, operating to such net refer to income, accounting in provided believes the serve performance. States. as accordance United an additional

Sarcevic. the Executive Treasurer, Chief and Officer Officer, Chief today David Chairman, Ademir and Standex's Financial President, On Dunbar; and call is

David Dunbar

our share first as exciting our earlier day recent details we acquisition morning. quarter is XXXX Thank you, report us for an and Chris. at Good of this announced most results This Standex fiscal on morning.

First, summary results. our a of quarterly brief

night Behind the that challenging cash near generation market we conditions with year first above gross our continue or record this to the XXXX. margin and and on scenes, achieved Amran second XX% product and year strengthen markets general based in marketing Following order low-voltage margin stabilize line. Transformers XX% XXXX, in fiscal interaction, despite leading are expect medium-voltage separate $XXX continue up a second of fiscal Instrument morning, transactions approximately instrument product to fiscal the XXXX, in top transformers to we combined half. rates a on Narayan and Last in quarter profit with our we end quarter acquired releases for record customer value operating fiscal sales, manufacturers in track and new In and teams pressured of the million. we new ramp our and recent engineering, the development, enterprise Powertech, in

to margin, forward be free EBITDA cash to flow. expected on this accretive entities collectively transactions as will earnings these share, immediately call, Going These to Group. margin, operating are we Amran/Narayan growth, revenue Standex's per the refer and

XX%. high-margin rising last in acquisition the calendar sales of adjusted into expansion, of in This of at expertise our market, increased the X acquisition we years, cumulative are Standex's increases It Over the million Furthermore, driven our XX%. approximately XXXX. fast-growth the electrical year has expects $XXX strengthening on later basis technical exposure our to low capacity XX% pro reach revenue Group EBITDA upgrades, technologies. margin medium-voltage will call. to share and total growth demand. in center more market rate this to an revenue domestic data forma fiscal Indian markets of the in with grid presence by approximately annual a XXXX details for extending enhances and infrastructure average fast-growing north Amran/Narayan I on geographic

sales acquisitions partially decreased everyone the are in quarter, with in decline. strategy Though and first can In sales end orders demand industrial to that contributions an is improving commercial to declined strengthen, markets continue messages. X.X% to due key in our Europe, if indicating hold. taking turn Electronics markets continued from soft Now organic X, general Slide offsetting that

continue new impact delays of vehicle our from to North slowdown softness America segment. Europe, and an in experience also introductions market in Engraving a in We affecting general

grew Engraving We improve the expect at conditions fast-growth affecting electric segment. offset half first vehicles, flat the but primarily to into XXXX. Sales markets our demand by quarter. year-on-year, trim were of end million Sales defense the and enter were of as applications, continue in fiscal to commercialization we year-on-year second in into demand business soft space respectively, $XX

as markets fast-growth and fiscal end sequentially year-on-year improve sales in expect the We defined here, to quarter. into second

XX% approximately the to million increased first sales product $XX fiscal in New year-on-year quarter.

of demonstrate We price execution productivity performance and operating to resilient the from initiatives. continue

adjusted reported As segments points development. XX.X%, margin achieved of Research of margin basis of expenses of our and record margin we invest XX% up were approximately Three a result, sequential product a basis continue in adjusted we near adjusted new development to X or as on X.X% gross and XXX higher. operating operating sales XX%.

on impact expect Looking Amran/Narayan to XXXX, the quarter Specialty. higher second of ahead moderately a significantly fiscal recent demand in Electronics revenue and acquisition, more and Group basis, overall in the project of driven we timing improving favorable in sequential Engraving, by the

in partially benefiting marketing, by R&D. sales, slightly margin, selling, higher offset We expect moderately increased investments from adjusted higher operating and

per acquisition Group slightly to to in share expect second accretive Amran/Narayan earnings adjusted the fiscal also the We quarter. be

my be financial in comments, fast-growth to expected metrics. in to of the Group revenue resides immediately markets. its is all mentioned Amran/Narayan acquisition key accretive beginning entirety The As

In comprised to its of business a Amran basis fiscal a fiscal a headquartered a leader customization, of year growing India. the business. look Amran/Narayan As and our instrument release transformers, our sales over of to customer revenue and delivery, footprint fast-growth has fast earnings XXXX, market It new focused is products growth. instrument basis Limited three of a one nearly dozen has It utility fastest The in the Group transformers X economies. new India Group, Group. of acquisition. remain serve incremental Group XXXX of year vertically over reliability, we second-quarter a in Amran/Narayan welcome calendar In customer our rate am approximately average world's manufacturing in growth mission-critical We Notably, pro of development, Amran/Narayan in integrated exposure long-term has products employees million. the products products. last revenue markets over prior XXX is increases impressive long-term grown processes forma leading overview delighted launched Please approximately to relationships. of on greater and medium-voltage an The anticipate we and quarter, will OEMs custom talent. to expects new low- the Sugarland, Amran/Narayan and Narayan Standex. is creating help Considering the and XX%. is at result, presence years. Texas; on proprietary to expands on to turn engineering I our and it It points EBITDA prototype updated intimacy in global Powertech headquartered to $XXX in an generate on developed Gujarat, Amran/Narayan's first rapid sales providing XX% year of XXX sustainable products XXXX than model classic XX% that track Amran/Narayan margins acquisition and fiscal fiscal from of released to XX% engineered an Amran/Narayan customers. X, the the call. provide financial Slide Group contribute

strong Amran/Narayan's power experienced in Amran/Narayan's not we a chain. products existing combined a fills team critical areas exciting the forging turn offering and a are value exposure. the gaining look power distribution presence are X, across power Slide natural presence in transmission and of products markets to It a power markets. today. distribution has critical capable are into chain future transmission in strong unique which is position very in Please the high-growth forward compatible highlights complementary value custom-engineered to We presence broad Its has service power power an Standex strong where with components and a culture, where does applications. together. and limited to and extension have the Standex and Standex's portfolio very

the tailwinds expand has is Standex markets. well-positioned trends. commercial capacity in to position residential To Slide growth. across to kilometers kilometers to the entity help consumption is a in the the turn X, achieve nations of existing the The entire that the combined The fund recent grid climate to transmission Please deepens other of the stages and power and Amran/Narayan which million have other of total On coverage goals, the and energy inflection XXX% grid the all that driving three hand, The global capitalize grid world construction secular several electrical national market growing market need million XX highlights on next XXX secular transformer U.S. point. is to are at an XX country's intended with around must expansion. passed existing XX or grid sweeping legislation years. years from kilometers of a expand replaced be grid to million in market.

to demand living in need infrastructure, is across centers, centers. of continue the across for project old by announcements, electricity significantly, utility rapid including and growth sources and which new demand, especially world, standards new We data multiple renewables, demand data applications, The increased upgrades. see to current driven increased large-scale the upgrade

expansion Finally, the exciting depends success market energy of of tailwinds global grid. the on rapid potential. long-term the transition growth These provide

complementary compelling power unite This turn acquisition our capabilities of Slide of manufacturing to could to leverage management Amran/Narayan. X, a custom our which unique the leader combined to components. offerings create stronger in everyone if highlights and Now complementary a capabilities presents opportunity the

extensive combined technologies customer strengthens new our brings Amran/Narayan footprint manufacturing knowledge suite electrical and our go-to-market product and proposition global capabilities. market portfolio. grid Our value and product to our enhances

network. we will As Standex, growth Amran/Narayan Amran/Narayan to distribution accelerate part capacity one their of fastest the global resources particularly of our expansion access also presence provide growing India, in and of plans adds business, through the the world. that expect important in economies with an to

transaction help Europe. accelerate profile. growth call in Additionally, will who discuss and their will Ademir, will Standex's details the over this the combined financial presence turn to now of our I

Ademir Sarcevic

X, summary. turn Thank you, and detailed David, Slide everyone. morning, transaction Please good to

for has combination markets. XX% Narayan and come debt-free a accelerate in million fits next to cash Amran committed our repayment allocation a growth debt to million and entity. the end from basis a The to intend focus perfectly million $XX cash or mix stock. hand XX% enterprise This investment-grade cash facilities. Group and The our comprised consideration and a David on sheet of million for As fast acquired in or using cash or entity Standex on priorities or stock $XXX for Amran/Narayan strong growth $XX remain credit and secular capital X balance strategy the our the We acquisition within of will years. maintaining XX% of was XX% million combined and consideration of cash stock mentioned, $XXX mix $XXX on a value cash-free,

We a achieve expect below months. within ratio of net XX to leverage X

can exposure points expand Standex's over will XXX the profile if profile X, to represent highlights a market Now Slide the enhanced which Standex's in immediately our exposure. The largest division. EBITDA the first addition business fast-growth In our financial markets opportunity Amran/Narayan and everyone while significantly margin enhance turn financial end the and market end combined Group full company, margin. as will year profile stand-alone growing basis expansion versus of

segment definition our of now our our markets to of of Group total Electronics the from over markets increases existing addition pro forma a will approximately In sales on In XX%. Standex's to year XX% end of XX% fiscal represent revenue. Amran/Narayan fast-growth basis, fast-growth XXXX, exposure addition, to

acquisition. summarize David transformative this Let call highly strategic me turn to and the to back

David Dunbar

business. Standex's with you, growth. Thank high-growth market market customer to opportunity our continued the technical partner relationships, will we of Please billion portfolio, and accelerate represents the design turn the that $X expertise and for our XX. addressable enable capabilities, strategic perfectly of in strategic a to as The and grid Standex Ademir. Standex. markets identifying up fit in right company's aligns see ourselves Amran/Narayan goals growth Slide Amran/Narayan electric a the opens for new future highly

successfully and acquisition electronics on largest in Standex's key creating this history, the history our business our for of As builds the space. value milestone in is a

XXXX discuss to our turn results. I quarter back fiscal the will first call Ademir Now to

Ademir Sarcevic

Thank you, David.

and On total basis, consolidated from impact approximately turn a by partially quarter XX, Let's benefit to acquisitions. X.X% year-on-year X.X% XXXX decreased exchange, million. This to reflected XX.X% recent offset summary. X.X% foreign organic $XXX.X an a of from revenue Slide first revenue decline

a X.X% was cash million the fiscal ago. margin operating at provided on income Adjusted year compared by and quarter of revenue $XX.X first $X.XX. consolidated adjusted expenditure ago. million compared $X.X was operating million Net in XXXX activities year-on-year. was operating to per year-on-year decreased X% XXXX year-on-year earnings X.X% quarter decrease decreased a a to $X.X share to $XX.X flat First adjusted XX.X% million Capital year

free to million we of flow million quarter $XX.X a year compared generated As ago. $XX.X a result, first cash fiscal

I revenue turn million from discuss decline to from Slide XX, an performance recent acquisitions to mix year-on-year year-on-year and benefit than outlook, lower please organic our Now and of X.X% XX.X% Segment with in offset benefit begin quarter of $XX.X and X.X% X.X% will from as XXX product were Electronics. by basis were foreign recent beginning acquisitions, segment exchange partially of XX.X%. offset XXXX operating initiatives, and more by fiscal Adjusted increased contribution as the productivity points volume. first decreased margin

funnel XX% million. at currently is approximately increased and Our new approximately year-on-year business $XX opportunity

demand a segments. in Scientific sequentially quarter the markets in expect exchange. of acquisition revenue margin and encouraging supported of XXX and David slower partially marketing, fiscal due demand and fast-growth pricing on XX.X% in in to by basis year-on-year turn to North In recent our productivity is by revenue Europe, by margin quarter see revenue points initiatives, highest quarter operating first As higher decreased the actions. fiscal costs XXXX points quarter, higher America into highlighted in offset offset impact initiatives. higher decreased and Engraving of XX.X% R&D next and Asia decreased moderately pharmacies, partially the from more lower Sequentially, are in volume basis margin investments order Operating increased timing and slightly product million more operating foreign new markets we offset to Scientific freight productivity and and expect Slide Europe basis, costs. to higher driven retail $XX.X fiscal margin sales acquisition to investments to and Orders million, to by volume sequential driven in productivity offset decreased higher due Engraving than XX% XX selling, partially similar productivity slightly and moderately end Group Please to further XX million, signs XX.X% $XX X.X% significantly recent to discussion higher R&D. to slightly from in for positive continue XX.X% of and trends. the adjusted due that organic from by continued in initiatives. and higher and as a by revenue $XX.X X.X% decline second operating starting which impact lower expect freight Sequentially, we year. we the recover, revenue a favorable over we to his higher comments, a XXXX, higher due due of Amran/Narayan approximately orders Electronics Operating to and margin lower sales. project year-on-year

from pricing margin. and lower Specialty to year-on-year. we margin to products slightly similar Sequentially, slightly and Solutions year-on-year, basis initiatives. $XX.X in Now of points turn revenue product leverage and segments. end reflecting XX.X% Technologies growth due and Solutions the basis increased the Technologies organic driven project new and of by productivity new XX.X%, development market new slightly million, drove the favorable year-on-year, business by we and was in markets revenue the to business. operating revenue a decreased to in and to expect strong points X.X% XX.X% to Hydraulics applications. This primarily decreased due sales million XXX in conditions of XX.X% margin XXX Specialty softness growth higher Slide Operating and due to of higher Display more slightly space operating mix. XX of increased timing new offset that higher due product in on Operating growth $XX.X Engineering a discussion exchange. revenue for margin XX.X% impact foreign general Merchandising applications segment Engineering Sequentially, organic expect

summary we capital totaled million Cash the end approximately the structure. for quarterly $X.XX of compared liquidity million our between the per share, $XXX.X net cash XXXX. debt of a Standex's capitalization X.X% XX $X.X fiscal cash of fiscal quarter, and and of $XXX the of quarter be quarter million. Group dividend $XX the the expenditures was and At Standex's million. excluding Slide end to equivalents We cash statistics net to $XX turn declared of Standex acquisition, year-on-year. In please XXXX expect at increase million. million had first Amran/Narayan consecutive Next, to XXXX, first cash at an fiscal XXXst end long-term $XX.X of

from our results Amran/Narayan available acquisition our million. approximately and the turn acquisition the and of X.Xx net Following the key liquidity leverage of greater our to the our quarter is Group, call than to our $XXX will Amran/Narayan over now ratio Group. takeaways is discuss David first I

David Dunbar

saw Thank XX. that in first especially continued to the record quarter. complex of the to And their you, of and also margin that our expands the team Amran/Narayan expansions, also the benefiting make and to creativity, collaboration fast-growing our demand. very a presence that for commitment The high-margin lot from us this of capacity Group. teams Amran/Narayan I'm we in significantly execution electrical proud very market, infrastructure turn and Ademir. creativity with we transaction I'm gross together. Please center going to execute the took operational reinforce team proud our led to acquisition fiscal grid-end Slide a data it great upgrades, are

basis continue released track by markets In pro new acquisition, products of of to to points markets one this fiscal effectively to potential. our which our development growth. support the doubled be future to capabilities our XXXX, new engineering with year team XXX across to growth, businesses, to our and are we and every welcoming we on to add applications our in on forma for continue company fiscal in drive new growth product invest basis. over incremental expected be with entire We fast-growth potential. Amran/Narayan Now To forward look exposure XXXX combined our are to has growth excited

Group, growth to we use flows of of growth. we cash and debt intend acquisition our that inorganic reduce assess an the the opportunities support active pipeline future Amran/Narayan continue to to With organic while

our to net first Xx We ratio the EBITDA below within leverage expect months post-transaction. reduce XX

added high-margin, market Amran/Narayan updated to fast-growth second-quarter earnings the company offset we've and exposure our to on an a conditions of capitalize challenging on our we financial better outlook call. long-term provide in never opportunities. as a With markets, Group, will acquisition the position been market Considering fiscal

We the line will for questions. open now

Operator

first Your Instructions] CJS Christopher [Operator Moore at Securities. comes question from

Christopher Moore

work of lot A for Congratulations. into one this sure. went

growth things organic organic to expecting you know that? of expectation Just slightly how of I QX kind 'XX. positive kind up. we growth in and in of year? at terms pick Are look for for reasonable a just for be Or stabilized the are should

Ademir Sarcevic

think we I and we is market is up. is electronics -- through now we obviously by as feel look recent and biggest order look our far. to pick at our segment stabilizing we QX rates, starting our the And

So to single-digit in fiscal growth. growing expectations have then will pretty business pretty having not we the significant when Amran the of organic QX an of And business to growth and have move QX. we top unreasonable QX, expect business. high you CAGR, on it's Engraving QX as to core will for at OEMs. mid organic that But from some the with obviously, that a of kind pushouts electronics think not put acquisition that be and been the a challenged we high has

of growth for at they at So contributing rate, continue. we happen. uncertainties has probably mid-single-digit probably Scientific when of growth a at as little recover. growing the to the double-digit we would expect bit and U.S. move as this to going kind a you that I then being fiscal of And is the are in quarter, organic we elections pretty year. what's to rest a significantly specialty growth. Engraving look example, Technologies, kind been then you And look don't the and Engineering around starting organic to year, choppy, to to as significant tell

the monitoring more as of what that what that happens election. kind obviously we're segment, we'll happens and on a little bit we in So after see provide guide

don't know, that hopefully, helps. I So

Christopher Moore

I that. does. appreciate it No,

between -- does facility? happening of they what the what lot of Is do? I'm terms most a of out of to in companies? kind mean sister just understand a talk bit looks. that So can be overlap one to production more Is acquisition, how of it there you trying little

David Dunbar

supply separate Yes, 'XXs the its really the global in came was It we years, chain U.S. design look With last its Initially, in own the team, XX created been from the legal they the India. market. all there, at in In increasing India. Houston it founded the success a had U.S., has into expertise, then has business engineering technical the us company. the businesses. are expanded serve entity customize as to one grown in staff, U.S. it's U.S. family into entity entities. But -- we it's founded teams had two But has more separately, for and baseball business. ability the same culture the inside the global for but acquire transaction a they complicated Maybe to that's because at us the there legal have the similar effectively as it to designs across customers. because single some coming

Christopher Moore

you this over years, X last the X next is for Is target So years? there. thoughts reasonable that XX% a about any Or the to there? just of a for X growth business talked things couple

David Dunbar

as we'd we feet to that. ground on each see the love other, our get get know and to Well,

that a better to our the for better very mid-teens have you experience, business. look plan increase and as in planning would external of say And quarters be coming investment then with roll growth visibility. purposes, in number if I backlog, grid, there's at own If momentum around. would data, safe in lot we'll you their think out, the a the

Christopher Moore

a Obviously, is term fast-growing The data and is $XXX market a that's piece? trying data bit. or the kind end revenue, just splits center these hot to that of is Just center understand little of million it, the of a piece days. half

David Dunbar

The is Yes, actually what to as pulling products electricity. agnostic the make are they right.

their the drive that expansion of sales. anything So drives grid will

and on California replaced needs But the Hawaii aging living U.S., lot just around XX% world, simply and I by infrastructure what the and were incremental world. grid don't That Well, depends the the will the XX% more of investment for this Texas know there's upgraded. be the areas. rural drive much caused the in old I instruments. a to XX% XX% that standards grid, for in That in the of to to centers be and electricity to will drive data also in the think demand of of fires percent, business. they more in say, growth would growth

of So things product. the of data XX% is all drive these centers same top certainly, that. on growth XX%, But another

Operator

Next from Legg at question comes Michael Benchmark.

Michael Legg

on the acquisition. Congrats

to want Just there. Chris' up on follow questions

just growth Can growth So the that historically they've teens accelerate had growth. by say the of you you the heard you the just for joining that, Standex, XX% then on be just you on it acquisitions, explain call that growth, I I answered that thought conference the modeling should please? but could

David Dunbar

asking We're conservative. to you be

us the the know a under customers. to and quarter to business belt get or X our Let get

You number. We little dependable number, can that that's a with a us think the call very here conservative mid-teens.

Michael Legg

Then customer, any customer major concentration? just on is key the customer, there any

David Dunbar

equipment, the Europe in in and in all players serve and in both big OEM the They U.S., No. India. the

them been create really In a footprint fact, have their customers European pressuring Europe. to in

So Page you'll accelerate X but and we the see got help names. earnings customers. team, really serve listed They've of we our accelerate European deck can on that, plans made all step a the that. But X, they're with or those and can better familiar all really

Michael Legg

of it where business? strong very Is there for margin, opportunity this get is some EBITDA there Just ahead -- to leverage. to acquisitions an doing obviously on even increase you is EBITDA that the

David Dunbar

through opposed top I through synergies. to would as on would increase line it any growth, the say leverage they that cost

expand I more be think to we'll able cost-effectively.

growth into that got a team going should example, more Europe, the for So a be and and can little speedy. leverage we've efficient

Michael Legg

you little question. book-to-bill is little but than been a comment last extremely your more? that just a on strong. was bit Can pipeline The then it's And lighter just

Ademir Sarcevic

Mike, is about that electronics?

Michael Legg

Yes.

Ademir Sarcevic

I we million have No, our we're highest uptick. call be $XX the we obviously, on of in number, worth standpoint. look, that this that at and uptick at in said yes, a a is quarter daily little seen in look well orders have last an and fiscal fully higher we mean, That orders Yes. orders quarter has order an that expect conference we maybe electronics continued. over from to bit as quarter year the going we had

starting market to as of optimistic half cautiously the stabilizing, second the fiscal enter and see we we year. recover, So makes our that us

Operator

Shlisky comes at Davidson. The Mike next question from D.A.

Michael Shlisky

to Looking of at with revenue that see have I ask, do modeling post-deal kind EBITDA we argue margins, with the acquired of entities, the any numbers it's $XXX million should synergies those to you but do here? be hard

David Dunbar

synergies well. that them is The Indian running grow We Europe. described are help business we their better the other position they more think market our This relationships. into to cross-selling through into us products to so

things I think terms they have you us. organization. look they going course, their But in teach drive at cost of sourcing. can synergies We're not to will rapidly of

leverage. some very with got which sourcing can think they've is than chain, which exciting I to us, have better a relationships we position we do. They an India supply

in those the and The help say grow primary creation impacts lower them are thing on line. gain is near percentage top the on value I'd to So term. leverage

Michael Shlisky

as morning. not fired lot part is If Okay. priced there. sure yesterday's of There's I of filing. issued closing of being This missed as in shares I'm are it, apologize. The Standex? may for be deal, at this a that kind what the being some us to that assume I price

Ademir Sarcevic

XX-day average, Mike.

Michael Shlisky

and step what from Then just story seeing it's Engraving don't on here? up, sense the recall make the customers X on I even see to Given to first They being ongoing sales providing you're down, points right changing quarter. investment? up the the your if I quarter away returns Kind in margins you surprising now, to quarter for mix with I even ask over not previous to margins. an there? quite maybe of quarter. more what's from Engraving appropriate does any it bullish a they're the businesses. Was there or that the the from know, X the about being don't prior want were

Ademir Sarcevic

Yes.

I mix, the think, last actions taken bit Mike, but a has a over business productivity quarters. a of there's few that also little there's lot of

the some in we you Germany took States. actions recall, and If United restructuring

effectively. more continue look We to our base cost at leveraging

where of second we that's see some we And the where kind of as margins continue get them don't we'll what rest and when the So actions at today. expect year. we into And those how and customers with the we that far to and yes, to mean, operate. fiscal footprint our you as And the obviously us, we reconsider where of and drove as the quarter we make for operate operate then look sure. we things serve, consistently. sense I

Operator

comes Barrington The Gary at Prestopino next from question Research.

Gary Prestopino

Several here. questions

you regulatory you this have all, consolidate do to approval? until get immediately? Or this India can First of wait you

Ademir Sarcevic

mean signed acquisition and it's has I been been Gary. consummated. closed No, the and

we're So it's we'll going entity. that we that be the there case is X owners point, in to Narayan going into is by done. Narayan only expect The the convert of which the this of we're minority XX% regulatory current Narayan. approval to shares, in to about issue, months, and them at own And of held Indian owners going then next get X to the XXX% ownership

So they own XX%.

Gary Prestopino

brush, Okay. entity, South geographically break America, combined broad Can on Asia? Of about U.S., you down revenues, the a you million Europe, right? $XXX of it's that said

Ademir Sarcevic

be Asia. in I would probably the would you There's and United about States not XX%. much it's tell in the Europe. rest XX%, XX%

David Dunbar

XX% out Texas of the brands.

Gary Prestopino

have functional currency how rupee operations, to Indian given your is are here mean, are we with rupee? Or the a going risk the billing? over they Particularly there they-- I there, FX regarding

David Dunbar

for they're in country country. So basically

single-digit customers chain. to million European the a India India So from shipments into supply we their for a them. with chain from supply Europe. There's supply they want build is which will site, that We plant India, India supply their

Eurozone. the in be we'll So

because some cost And is basic goes in be American sourcing chain India the North the Our India. through will site There supply back in then is Texas. euros. from

of you footprint the an question. and that So answers I idea gives your hope

Gary Prestopino

Well, are they when entity a rupees understand. separate was I'm to billing is back Are this that done? dollars how you billing and just I in entity, trying then to no, mean, into billing? they convert once have

David Dunbar

dollar dollars. to No. XX% and in that's customers, And those the million dollar They but exports customers a bill are sales, All of Indian the costs. which few Europe are their is euros, U.S. transactions rupee. in the

Gary Prestopino

was you $XXX And trying this then up you? it. to write say did market for opens I billion a

David Dunbar

$X billion.

Gary Prestopino

million. $XXX was wish You it

David Dunbar

grid the on billion. $XXX in about transformer investments station cable, annual everything, distribution. are That's Total stations,

Agency to XXXX. the $X projects $X.X $XXX by The billion that Energy So to billion is million. billion, of this $X.X grow International

of instrument entire transmission So The that critical throughout but distribution hold. function part that, a a transformers, ratio and are smaller they ought perform system. very the they to

Gary Prestopino

you business custom say solutions. their Is Okay. it's

on with RFP. they're to involves their Is entity So It based involve on step whatever doesn't needs initial contract between-- an bid the products. working the business? it an Or direct RFP

David Dunbar

with an RFP it Once very execute a on through to partners first then though, business, to deepens. become other into successfully customer. compete way great similar intimacy. some invited we're is Often, it's we and question. application maybe is That's electronics first design, or we're the the application, customer, means. application a we the And relationship the our through progressively next formed, a the asked, customer This we

And so that's a growth effectively A new their set their what applications each they're customers. and lot doing. new of of just up within of is larger picking

Gary Prestopino

going be the that you for use million you now $XXX looks of both off. I'm It to rate of And majority those then cash, if or -- sorry, the lastly, assume borrowings? and I for it. What drop borrowings of on like consideration about are right It of cash stock the that's both like portion looks acquisitions. the just I'll kind paying which

Ademir Sarcevic

Yes.

I dollar we it I bit on that this interest what about think of the value, it's loan accordion. mentioned There's than back XXX-day took. terms having rate way a higher But and Gary. it a into little the we syndicate would we are just bit a little get you it, think loan less that of until back in

between full burden of in amount borrowed. money we the all of kind assume on can You

to in and to as come assume then a this south it accordion, we probably kind quarter, to of of expect and into the we loan a in kind we maybe little some this swaps X-ish, we can X% put X.X% X% XXX-day QX put move down and into look QX and than get You higher terminated as place. to

Operator

at Sparenblek Ross question next William comes from Blair. The

Ross Sparenblek

these sense to a to them sense like years fold. never existed. talking these got really mean sourced? mean genesis I came for into Were several X that here? you the opportunity of get I this acquisitions just the of I'd I how were the

David Dunbar

the asking for question. Thanks Yes.

in markets, we've that directed fast-growth the as applied last our opportunities for know teams internal years, been the we've you more opportunities acquisition So we've to funnel. in -- to on focus also few filter

We this year. became first started met the of we I so new them of ago. aware business a couple And years after -- just really

in leverage the also a the think February And They're could Standex. so like them. then was We've for to broader the since growth, had to point 'XXs. business I met was with too, use And regularity. work a organization they business the to grow have the And they time of the could first getting to partner them I it's founded world. meaningful a a family, lot around increasing in with -- meetings

businesses and X We So them deal, needs. our we of us and spent compatible know kind first and a very come in this about run February the to lot since to just of really coming respect compatible deal the about time terms gain on culture. a company both together the talking runs bilateral founded very company. that to just of that the It's a was has We're and comfort team We've a the it. excited that part, met ways.

done over years. but larger, of acquisitions very the kind it's for it's typical the So we've

Ross Sparenblek

Yes.

out stumble partner? see to So did guys? did wanted you they Or reach it wanted just they across you if to to and

David Dunbar

you." we'd they Chris You to up know our fantastic Chris to and Director the talk of And "Hey, called IR, him call. like Howe. took said,

Ademir Sarcevic

a here kind X. are years. or X And tell we I've this for we -- This you markets see been future that like the phenomenal. is transformational of from opportunity standpoint, will is the for we really Ross, at and XX you has here look of about. acquisition -- been being the what Dave potential are end is us. are opportunity The entities. most profile kind Obviously, for excited this great. the as The growth of We financial

things so can we together, some we can. think hopefully, we special and do And

Ross Sparenblek

remember And right the bonus about it of about unique market on market? guys Thinking these that. companies? kind No, of Hopefully, have share higher What win? the X% aspect, I a like X end they TAM, do Why globally. is time. is mean to looks to customized a congrats that you Chris truly Yes. absolutely. competitive landscape, billion $X

David Dunbar

organization. the market. years, prototype the competitors their in days they've a that turn Over have whereas a design to week, around. the OEMs. very model to developed embeds They on may the And them can business a months serves in cycle early integrated prototype an that take turn unique with around They weeks to

we is. suppliers. great partner on, about this we were fact, into Amran/Narayan. So who we in And specifically about they We asking are mentioned their with. And looking and some did voice-of-customer weren't they've what a asking trusted partner early were become these space, when Amran/Narayann with a work customers, specifically them just

the So confirmation great the they relationship from how we built the and got of trust. customers

model. the efficiency comes as from India it great they've transformers of the supply and designs very So innovative They've smaller got been And design new power the their cost chain. compressing from with requirements and the OEMs. innovative been a meeting spaces They've well. a complete It's a flexible business position. in instrument in increasing

Ross Sparenblek

Okay.

globally? Do a of you other You have of there? guys, is are they this a larger sense competitors couple out #X

David Dunbar

market volume, have highest an they large also in #X they we transformers. more say outsourced They but some The do is the external not global would internally. on product The reputation. the instrument billion have they they're standard say partner. OEMs, become $X I'd spend that

the And them transformer a actually a transformers. business partners progressively of Amran/Narayan's of greater their in in higher-end, the most succeeded with larger intimacy is for much customer model, their the kind piece give it they've having market. So OEM success demanding

Ross Sparenblek

If maybe products, about that's first the overall quarter orders share just we new the overall like on looks be Electronics, we like of lines anything maybe on confidence XX%. can out difficult certain potential the a product we basis? on are quarter macrocycle trying of. in the you for to take is $XX assess million it And gauge your monthly like were how I'm Quickly through where try update idiosyncratic moved just us revenue aware down to should that just to versus losses second-half it maybe on recovery.

Ademir Sarcevic

Yes.

was our that if in Ross, you book-to-bill kind think, of order X at quarters, Electronics I X.X. look past the X.X, over intake

were And I we $XX think last $XX think million running I of or of X. quarter we some lower at in kind our flush through those about quarter orders. in sales orders seeing the million, are per

months of orders quarter. sales. into to if I look, get last So tell the would it kind you, it's magnetics, of it's business, X But kind to X the this if worth it's it of SSD sensors, had depends takes stuff we but probably -- million $XX if again bookings from on to

indications call, maybe up. earnings we we out way As you last fiscal we continue our think going is order our to on of thought. be customers up. And all to It about played optimistic QX slightly it. our pretty pick and is the quarter similar, QX, the And then this remember will were that from kind into intake

of we our on. assessment basing what that's So are kind

Ross Sparenblek

I channel point, destocking. distribution little a can not the pretty Yes. at balanced imagine is definitely this if

Ademir Sarcevic

right. right. Yes, exactly that's That's

Ross Sparenblek

I quarter. over business know want finding legacy have broader head going out. of the guys. you a electronic in But there new you a some one, last And we just funnel cost tailwind great done one for just Maybe to the I project should versus about forward? for New how guys margins here. Productivity division mix There's think acquisitions. that's

Ademir Sarcevic

No, that's a question. good

As this we also improvement get base continue into margins as on that would operating would to we slightly business, first the the and improve -- lead of of kind year, move of margin. improve fiscal expect gross the slightly to forward, grow QX to and all, operating of margins QX to we

performance the an through Amran/Narayan without quarters. from kind would operating slightly the think gross that modeling, of as top the line move Group, and of line you kind acquisition there and from a you improve business we standpoint would wasn't as about both if expect, and margin So

Ross Sparenblek

though, mid-XX Yes. of range have you've lot. a a I do of to mean you done getting there? back sense that Because kind [indiscernible] timeline the

Ademir Sarcevic

will that and be fits would quarter. better getting mean, we We'll margins how We terms a I XX% view to the on picture. kind yes, at we to we assume give range sequentially next have few really what that into some we into Ross, margins the But overall get improving to in as of in the point look kind and quarters. of of the that, at Amran/Narayan as and those you want second

David Dunbar

[indiscernible] you QX. the QX, But just off described volumes follow what

Ademir Sarcevic

just trying to exactly. Yes, be conservative. I'm

letting be me not You're conservative.

Operator

comments. for We David to Dunbar have no I further the will back closing over questions. call turn

David Dunbar

came it by you continued I that. of All all thank with to second right. to threw excited and also schedules. creativity We're and I curveball demonstrated today. and We a done. scheduling it the about the for to look you everybody were today. to for the all everybody call. thank again, quarter their call. in I XXXX has impact want really joining want forward, that And get at on across This thank for was want for go for and this the I to hope And and you'll the us our through adjusting Amran/Narayan was very our for thank people fiscal things of progress support really finally, forward Standex a then the and call. do We reporting enjoy business. you the talent, on our complicated for Standex. I rescheduling complicated. There employees, This commitment, new We that transaction speaking as Thank very again to connecting transaction, participated, and teams contributions. many, support old, and their your our continued contributions. we across shareholders see want both many

Operator

concludes for we ask you you this for disconnect your and thank gentlemen, please Ladies lines. conference today. that We participating, your and

Standex International (SXI) 29 Oct 242025 Q1 Earnings call transcript