Standex International Corporation — Fiscal First Quarter 2027 Earnings Summary

Financial Performance:

• Net sales reached a record $232.6 million, up 7.0% year-over-year (YOY) and 1.9% sequentially; organic sales growth was 12.4%.
• GAAP operating income was $40.4 million, up 36.4% YOY, with an operating margin of 17.4% (up 380 basis points YOY).
• Adjusted operating income was $47.0 million, up 13.1% YOY, with an adjusted operating margin of 20.2% (up 110 basis points YOY).
• GAAP net income from continuing operations was $24.2 million, up 53.1% YOY; diluted EPS was $1.99, up 59.6% YOY.
• Adjusted net income from continuing operations was $29.3 million, up 21.8% YOY; adjusted diluted EPS was $2.41, up 21.1% YOY.
• EBITDA was $48.9 million, up 23.2% YOY, with an EBITDA margin of 21.0% (up 270 basis points YOY).
• Adjusted EBITDA was $51.2 million, up 8.7% YOY, with an adjusted EBITDA margin of 22.0% (up 30 basis points YOY).
• Free cash flow was $9.1 million, down 12.3% YOY and 74.1% sequentially.
• Net debt was $401.2 million as of September 30, 2026, down from $446.0 million in the prior year quarter; net debt to EBITDA ratio was 2.0x.
• Gross margin (GAAP) was 44.4%, up 240 basis points YOY on an adjusted basis.

Guidance and Future Outlook:

• Fiscal Year 2027 total sales growth outlook raised to high-single digits from mid-to-high single digits; organic sales growth now anticipated to exceed $100 million.
• Fiscal Year 2027 adjusted earnings per share growth outlook raised to the high teens.
• Fiscal Year 2027 sales from fast growth markets expected to grow >20% YOY to exceed $315 million.
• Fiscal Year 2027 outlook includes >20 new product launches expected to contribute >300 basis points of incremental growth.
• Fiscal Second Quarter 2027 outlook expects moderately higher revenue and adjusted operating margin on a YOY basis, and slightly higher revenue with similar adjusted operating margin on a sequential basis.
• Fiscal Year 2027 capital expenditures expected between $45 million and $55 million.
• Fiscal Second Quarter 2027 interest expense expected between $7.0 million and $7.5 million.

Business Segments and Product Lines:

• Electronics: Revenue of $140.5 million, up 27.1% YOY (29.5% organic growth); adjusted operating margin was 29.4%. Book-to-bill was 1.23 with record orders of ~$173 million.
• Aerospace & Defense: Revenue of $31.4 million, up 5.1% YOY; adjusted operating margin was 19.9%. Growth driven by space and defense project activity.
• Scientific: Revenue of $19.8 million, up 1.8% YOY; adjusted operating margin was 29.5%. Growth driven by pricing initiatives and slight market recovery.
• Engraving & Hydraulics: Revenue of $40.9 million, down 14.9% YOY (15.7% organic decline); adjusted operating margin was 16.4%. Decline attributed to softness in the North American automotive market.
• New product sales grew 56% YOY.
• Sales into fast growth markets grew 25% YOY, totaling approximately $78 million in the quarter.

Market and Competitive Landscape:

• End market demand drivers include electrification, data centers, and defense needs.
• General industrial market showed signs of recovery.
• North American automotive market experienced softness impacting the Engraving & Hydraulics segment.
• Foreign currency impacts included a 2.4% headwind for Electronics and a 0.7% benefit for Engraving & Hydraulics.

Risks and Challenges:

• The Engraving & Hydraulics segment faced organic revenue decline due to automotive market softness.
• Growth investments and higher variable compensation expenses partially offset volume and pricing gains in the Electronics segment.
• Project timing partially offset organic growth in the Aerospace & Defense segment.

Management Commentary and Tone:

• CEO David Dunbar described the start to fiscal 2027 as "strong," citing accelerating growth and expanding margins driven by a strategy with multiple independent growth drivers.
• Management expressed confidence in the "multiple growth engines" and the ability to exceed the $315 million target for fast growth market sales in FY27.
• The tone emphasized record sales, record order intake, and record margins across GAAP and adjusted bases.

Other Key Points:

• The Board of Directors authorized a new $100 million share repurchase program on October 27, 2026, replacing the remaining ~$23.5 million from the prior authorization.
• No shares were repurchased during the first quarter of fiscal 2027.
• A quarterly cash dividend of $0.36 per share was declared on October 22, 2026, representing a 5.9% YOY increase; payable November 20, 2026.
• Capital expenditures for the quarter were $6.6 million, primarily for capacity expansion within Standex Electronics Grid.
• Net cash provided by operating activities was $15.7 million.
• The company operates in four segments: Electronics, Aerospace & Defense, Scientific, and Engraving & Hydraulics, with global operations in the US, Europe, Canada, Japan, Singapore, Mexico, Turkey, India, and China.