1. SXI reported $189.8M in sales, up 6.4% YoY. 2. GAAP operating income dropped 67.2%, reflecting market challenges. 3. Acquisition of Amran/Narayan boosted sales and adjusted operating margin. 4. Electrical grid markets offer strong growth potential for future performance. 5. Adjusted EBITDA margin stood at 20.9%, indicating operational resilience.
Decline in GAAP income and significant drop in free cash flow indicate potential challenges ahead.
Earnings results are crucial for investor expectations and stock performance.
Current performance issues and low cash flow may affect short-term investor sentiment.
SALEM, N.H., Jan. 30, 2025 /PRNewswire/ -- Standex International Corporation (NYSE: SXI) today reported financial results for the second quarter of fiscal year 2025 ended December 31, 2024.
| Financial Metrics | 2Q25 | 2Q24 | 1Q25 | Y/Y | Q/Q |
|---|---|---|---|---|---|
| Net Sales | $189.8 | $178.4 | $170.5 | 6.4 % | 11.4 % |
| Operating Income – GAAP | $8.5 | $25.8 | $24.1 | -67.2 % | -64.9 % |
| Operating Income – Adjusted* | $35.5 | $30.7 | $29.0 | 15.4 % | 22.1 % |
| Operating Margin % - GAAP | 4.5 % | 14.5 % | 14.1 % | -1000 bps | -960 bps |
| Net Income from Continuing Ops – GAAP | $1.3 | $19.1 | $18.2 | -93.2 % | -92.9 % |
| EBITDA | $16.1 | $32.4 | $31.2 | -50.4 % | -48.4 % |
| Diluted EPS – GAAP | $0.07 | $1.61 | $1.53 | -95.7 % | -95.4 % |
*Adjusted operating income, adjusted operating margin, and adjusted EPS for all periods exclude amortization expense from acquired intangible assets.
Commenting on the quarter's results, President and Chief Executive Officer David Dunbar said, "Following solid operational performance in the fiscal first quarter, we delivered the highest sales since the divestment of the Refrigeration business in April 2020 and record adjusted operating margin in the fiscal second quarter. These improvements reflected solid operational performance from core businesses and contribution from the recent Amran/Narayan acquisition. Completed in the quarter, this was the largest acquisition in the history of the Company and its sales exceeded our expectations. The continued strength of the electrical grid end market positions us well for continued growth and margin improvement in the second half of fiscal 2025. In the fiscal second quarter, we achieved adjusted gross margin of approximately 40.9% and adjusted operating margin of 18.7%, while continuing to support our growth initiatives."
"We remain confident about the Company's exposure to many positive secular trends in the evolving global economy, such as the electrical grid, electric and hybrid vehicles, renewable energy, commercialization of space, and defense. As the global economy evolves, the Company remains nimble to pivot towards end markets with above average growth prospects. With two months of Amran/Narayan's sales into the electrical grid end market, our fiscal second quarter sales into fast growth markets were over 20% of total company sales."
"For the remainder of fiscal year 2025, based on recent order rates and customer interaction, we continue to expect our end markets to improve, with the recent Amran/Narayan Group acquisition providing an additional tailwind. In the fiscal second quarter, we launched seven new products and remain on track to release over a dozen new products in fiscal year 2025."
In the fiscal third quarter 2025, on a sequential basis, the Company expects moderately to significantly higher revenue, driven by the impact of the recent Amran/Narayan Group acquisition and improving overall demand in Electronics. On a sequential basis, the Company expects slightly to moderately higher adjusted operating margin, benefiting from improved revenue, partially offset by higher investments in selling, marketing, and R&D.
Standex will host a conference call for investors tomorrow, January 31, 2025, 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.
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, India, and China. For additional information, visit the Company's website.
SOURCE Standex International Corporation