STANDEX INTERNATIONAL CORPDE

Unaudited Condensed Consolidated Statements of Operations

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

Unaudited Condensed Consolidated Statements of Stockholders' Equity

** Unaudited Condensed Consolidated Statements of Cash Flows**

S****TANDEX INTERNATIONAL CORPORATION

Notes to Unaudited** **Condensed Consolidated Financial Statements

1) Management Statement

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the results of operations for thethree months ended* September 30, 2024and2023*, the cash flows for thethree months ended* September 30, 2024and2023* and the financial position of Standex International Corporation (“Standex”, the “Company”, “we”, “us”, or “our”), at* September 30, 2024*. The interim results arenot necessarily indicative of results for a full year. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the informationnot misleading. The unaudited condensed consolidated financial statements and notes donot contain information which would substantially duplicate the disclosures contained in the audited annual consolidated financial statements and notes for the year ended* June 30, 2024*. The condensed consolidated balance sheet at* June 30, 2024* was derived from audited financial statements, but doesnot include all disclosures required by accounting principles generally accepted in the United States of America. The financial statements contained herein should be read in conjunction with the Annual Report on Form10-K and in particular the audited consolidated financial statements for the year ended* June 30, 2024*. Unless otherwise noted, references to years are to the Company’s fiscal years. Currently the fiscal year end is* June 30.For further clarity, the Company's fiscal year2025* includes thetwelve-month period from* July 1, 2024to June 30, 2025.*

The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. Estimates are based on historical experience, actuarial estimates, current conditions and various other assumptions that are believed to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when they arenot readily apparent from other sources. These estimates assist in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Actual results* maydiffer from these estimates under different assumptions or conditions. The estimates and assumptions used in the preparation of the consolidated financial statements have considered the implications on the Company as a result of ongoing global events and related economic impacts. As a result, there is heightened volatility and uncertainty around supply chain performance, labor availability, and customer demand. However, the magnitude of such impact on the Company’s business and its duration is uncertain. The Company isnot* aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of* September 30, 2024* and the issuance date of the quarterly report on Form10-Q.

The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated subsequent events through the date and time its unaudited condensed consolidated financial statements were issued.** **

Research and development expenditures are expensed as incurred. Total research and development costs, which are classified under selling, general, and administrative expenses, were $4.8 million and $5.3 million for thethree months ended* September 30, 2024* and2023, respectively.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company doesnot believe that the adoption of recently issued standards had or* may*have a material impact on its unaudited condensed consolidated financial statements or disclosures.

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280) ("ASU2023-07"). This update provides, among other things, enhanced segment disclosure requirements including disclosures about significant segment expenses. ASU2023-07 is effective for fiscal years beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024.The Company will review the extent of new disclosures necessary in the coming quarters, prior to implementation during fiscal year2025.* Other than additional disclosure, the Company doesnot expect a change to its condensed consolidated financial statements upon adoption.

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In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740) - Improvements to Income Tax Disclosures. This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. This ASU is effective for fiscal years beginning after* December 15, 2024.The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance, which would be applicable to fiscal year2026.*

2) Acquisitions

At the time of the acquisition and as of* September 30, 2024*, the Company evaluated the significance of each acquisition on a standalone basis and in aggregate, considering both qualitative and quantitative factors.

On* October 29, 2024the Company announced the acquisition, in separate transactions, of privately-held US-based Amran Instrument Transformers and India-based Narayan Powertech Pvt. Ltd. (going forward referred to as "Amran/Narayan Group") in cash and stock transactions. These transactions represent a combined enterprise value of approximately $462 million, comprised of 85% cash and 15% in Standex common stock for Amran Instrument Transformers and 90% cash and 10% in Standex common stock for Narayan Powertech Pvt. Ltd. The10%* share exchange related to Narayan Powertech Pvt. Ltd. is subject to India regulatory approval, which is expected to take up tosix months. The cash consideration of the transactions was financed using cash-on-hand, existing credit facilities, and a $250 million364-day term loan with existing lenders. Its results will be reported in the Electronics segment beginning in thesecond quarter of fiscal year2025.

Sanyu

On* February 19, 2024,the Company completed the purchase of all the issued and outstanding equity interests of Sanyu Switch Co., Ltd ("Sanyu"), a privately held company for $20.9 million, net of cash acquired. Sanyu designs and manufactures reed relays for test and measurement and other switching applications. Products include surface mount relays, high current relays, high insulation relays, high density relays for test boards, and RF relays which are used in semi-conductors, other electronics manufacturing and other switching applications. Sanyu's results are reported within the Company's Electronics segment. The Company paid $22.2 million in cash in thethird* quarter of fiscal year2024 and recorded $2.5 million as holdback amounts. Holdback amounts are used to withhold a portion of the initial purchase price payment until certain post-closing conditions are satisfied and are expected to be settled within24 months from the date of acquisition.

The purchase price was allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on a valuation of their fair values on the closing date. Goodwill recorded from this transaction is attributable to Sanyu's technical and applications expertise, which is highly complementary to the Company's existing business.

Identifiable intangible assets of $2.6 million consist primarily of $0.7 million for indefinite lived tradenames and $1.9 million of customer relationships to be amortized over 12 years. The goodwill of $9.2 million created by the transaction isnot deductible for income tax purposes. The accounting for business combinations requires estimates and judgments regarding expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets, in determining the assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management's best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

The components of the fair value of the Sanyu acquisition, including the preliminary allocation of the purchase price are as follows (in thousands):

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Minntronix

On* July 31, 2023,*the Company paid $29.2 million in cash for the purchase of all the issued and outstanding equity interests of Minntronix, a privately held company. Minntronix designs and manufactures customized as well as standard magnetics components and products including transformers, inductors, current sensors, coils, chokes, and filters. The products are used in applications across cable fiber, smart meters, industrial control and lighting, electric vehicles, and home security markets. Minntronix' results are reported within the Company's Electronics segment.

The purchase price was allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on a valuation of their fair values on the closing date. Goodwill recorded from this transaction is attributable to Minntronix's technical and applications expertise, which is highly complementary to the Company's existing business.

Identifiable intangible assets of $10.7 million consist primarily of $3.2 million for indefinite lived tradenames and $7.5 million of customer relationships to be amortized over 15 years. The goodwill of $13.9 million created by the transaction isnot deductible for income tax purposes. The accounting for business combinations requires estimates and judgments regarding expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets, in determining the assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management's best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

The components of the fair value of the Minntronix acquisition, including the final allocation of the purchase price are as follows (in thousands):

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SEPL

On* May 3, 2024**,* the Company purchased all of the issued and outstanding equity interests of Sanyu Electric Pte Ltd, or SEPL, a privately held company for $3.5 million. Its results are reported within the Company's Electronics segment. The Company paid $1.1 million, net of cash acquired, in thefourth quarter of fiscal year2024. The goodwill of $1.9 million created by the transaction isnot deductible for income tax purposes.

Acquisition Related Costs

Acquisition related costs include costs related to acquired businesses and other pending acquisitions. These costs consist of (i) deferred compensation arrangements and (ii) acquisition related professional service fees and expenses, including financial advisory, legal, accounting, and other outside services incurred in connection with acquisition activities, and regulatory matters related to acquired entities. These costs donot include purchase accounting expenses, which we define as acquired backlog and the step-up of inventory to fair value, or the amortization of the acquired intangible assets.

Acquisition related costs for thethree months ended* September 30, 2024* and2023 were $1.8 million and $0.5 million, respectively.

3) Revenue From Contracts With Customers

Most of the Company’s contracts have a single performance obligation which represents the product or service being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation and/or extended warranty. Additionally, most of the Company’s contracts offer assurance type warranties in connection with the sale of a product to customers. Assurance type warranties provide a customer with assurance that the product complies with agreed-upon specifications. Assurance type warranties donot represent a separate performance obligation.

In general, the Company recognizes revenue at the point in time control transfers to its customer based on predetermined shipping terms. Revenue is recognized over time under certain long-term contracts within the Engineering Technologies and Engraving segments for highly customized customer products that haveno alternative use and in which the contract specifies the Company has a right to payment for its costs, plus a reasonable margin. For products manufactured over time, the transfer of control is measured pro rata, based upon current estimates of costs to complete such contracts. Losses on contracts are fully recognized in the period in which the losses become determinable. Revisions in profit estimates are reflected on a cumulative basis in the period in which the basis for such revision becomes known.

Disaggregation of Revenue from Contracts with Customers

The following table presents revenue from disaggregated by product line and segment (in thousands):

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The following table presents revenue from continuing operations disaggregated by geography based on the Company’s locations (in thousands):

(1) EMEA consists primarily of Europe, Middle East and S. Africa.

The following table presents revenue from continuing operations disaggregated by timing of recognition (in thousands):

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Contract Balances

Contract assets represent sales recognized in excess of billings related to work completed butnot yet shipped for which revenue is recognized over time. Contract assets are recorded as prepaid expenses and other current assets. Contract liabilities are customer deposits for which revenue hasnot been recognized. Current contract liabilities are recorded as accrued liabilities.

The timing of revenue recognition, invoicing and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets. When consideration is received from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the goods and services are transferred to the customer and all revenue recognition criteria have been met.

The following table provides information about contract assets and liability balances (in thousands):

We recognized the following revenue which was included in the contract liability beginning balances (in thousands):

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4) Fair Value Measurements

The financial instruments shown below are presented at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs arenot available, valuation models* may*be applied.

Assets and liabilities recorded at fair value in the consolidated balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities and the methodologies used in valuation are as follows:

Level1 – Quoted prices (unadjusted) in active markets for identical assets and liabilities. The Company’s deferred compensation plan assets consist of shares in various mutual funds (investments are participant-directed) which invest in a broad portfolio of debt and equity securities. These assets are valued based on publicly quoted market prices for the funds’ shares as of the balance sheet dates.

Level2 – Inputs, other than quoted prices in an active market, that are observable either directly or indirectly through correlation with market data. For foreign exchange forward contracts and interest rate swaps, the Company values the instruments based on the market price of instruments with similar terms, which are based on spot and forward rates as of the balance sheet dates. The Company has considered the creditworthiness of counterparties in valuing all assets and liabilities.

Level3 – Unobservable inputs based upon the Company’s best estimate of what market participants would use in pricing the asset or liability.

There wereno transfers of assets or liabilities between any levels of the fair value measurement hierarchy at* September 30, 2024* or* June 30, 2024*. The Company’s policy is to recognize transfers between levels as of the date they occur.

Cash and cash equivalents, accounts receivable, accounts payable, and debt are carried at cost, which approximates fair value.

The fair values of financial instruments were as follows (in thousands):

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(a) The fair value of our contingent consideration arrangement is determined based on our evaluation as to the probability and amount of any deferred compensation that has been earned to date.

The Company is obligated to pay contingent consideration to the sellers of SEPL in the event that certain financial targets are achieved during thetwo years following acquisition, which occurred in thefourth quarter of fiscal year2024. As of* September 30, 2024*, the maximum liability under this arrangement is $0.7 million.

The Company has determined the fair value of the liabilities for the contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant inputsnot observable in the market and thus represents a Level3 measurement within the fair value hierarchy. The fair value of the contingent consideration liability associated with future payments was based on several factors, the most significant of which are the financial performance of the acquired businesses and the risk-adjusted discount rate for the fair value measurement.

Additionally, the Company has financial assets based upon Level3 inputs, which represent investments in a privately held company.

The Company invested $2.1 million for equity securities of a company whose securities arenot publicly traded and where fair value isnot readily available. This was recorded as an investment within other non-current assets in the consolidated balance sheets to reflect the initial fair value of the stock acquired. These investments are recorded using either the equity method of accounting or the cost minus impairment adjusted for observable price changes, depending on ownership percentage and other factors that suggest significant influence. The Company concluded it doesnot have a significant ownership percentage or influence. The Company monitors this investment to evaluate whether any increase or decline in the value has occurred, based on the implied value of recent company financings, public market prices of comparable companies and general market conditions.

In thethird quarter of fiscal year2023, the Company also purchased $2.8 million of debt securities from the same privately held company. The available for sale asset was recorded as a current asset in the prepaid expenses and other current assets line of the consolidated balance sheet to reflect the initial fair value of the instrument acquired. This asset was originally due to matureone year from the date of issuance. In thefirst quarter of fiscal year2025, the maturity was extended to the end of thethird quarter of fiscal year2025. Available-for-sale debt securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income (loss) in equity, net of related tax effects. Realized gains and losses are reported in other non-operating (income) expense, net.

There have beenno changes in the fair value of the estimates for the Level3 assets in fiscal year2025 other than the impact of foreign exchange, which represents the increase in the fair values from the prior year.

The Company updates its assumptions each reporting period based on new developments and records such amounts at fair value based on the revised assumptions until the agreements expire.

5) Inventories

Inventories from continuing operations are comprised of the following (in thousands):

Distribution costs associated with the sale of inventory, which are recorded as a component of selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations were $2.4 million and $3.1 million for thethree months ended* September 30, 2024* and2023, respectively.

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**6)**Goodwill

Changes to goodwill by reportable segment during the period were as follows (in thousands):

7) Warranty Reserves

The expected cost associated with warranty obligations on our products is recorded as a component of cost of sales when the revenue is recognized. The Company’s estimate of warranty cost is based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Since warranty estimates are forecasts based on the best available information, claims costs* may*differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable.

The change in warranty reserves from continuing operations, which are recorded as a component of accrued liabilities were as follows (in thousands):

**8)**Debt

Long-term debt is comprised of the following (in thousands):

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Bank Credit Agreements

During thethird quarter of fiscal year2023, the Company entered into a Third Amended & Restated Credit Agreement which renewed the existing Credit Agreement for an additional five-year period (“Credit Facility”, or “Facility”). The Facility has a borrowing limit of $500 million, which can be increased by an amount of up to $250 million, in accordance with specified conditions contained in the agreement. The Facility also includes a $10 million sublimit for swing line loans and a $35 million sublimit for letters of credit.

At* September 30, 2024*, the Company had standby letters of credit outstanding, primarily for insurance purposes, of $3.1 million and had the ability to borrow $337.3 million under the facility. Funds borrowed under the Facility* maybe used for the repayment of debt, working capital, capital expenditures, acquisitions (so long as certain conditions, including a specified funded debt to EBITDA leverage ratio, are maintained), and other general corporate purposes. The Facility contains customary representations, warranties and restrictive covenants, as well as specific financial covenants which the Company was compliant with as of September 30, 2024*. At* September 30, 2024*, the carrying value of the current borrowings approximates fair value.

9) Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

10)** **Derivative Financial Instruments

The Company is exposed to market risks from changes in interest rates, commodity prices and changes in foreign currency rates. The Company selectively uses derivative financial instruments in order to manage certain of these risks. Information about the Company’s derivative financial instruments is as follows:

Interest Rate Swaps

From time to time as dictated by market opportunities, the Company enters into interest rate swap agreements designed to manage exposure to interest rates on the Company’s variable rate indebtedness. The Company recognizes all derivatives on its consolidated balance sheets at fair value. The Company has designated its interest rate swap agreements, including those that* may*be forward-dated, as cash flow hedges, and changes in the fair value of the swaps are recognized in accumulated other comprehensive income until the hedged items are recognized in earnings. Hedge ineffectiveness, if any, associated with the swaps is reported in earnings within interest expense.

The Company’s effective swap agreements convert the base borrowing rate on $150 million of debt due under our Facility from a variable rate equal to1 month Secured Overnight Financing Rate (SOFR) to a weighted average fixed rate of 0.85% at* September 30, 2024*. The fair value of the swaps, recognized in accumulated other comprehensive income, is as follows (in thousands, except percentages):

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The Company reportedno losses for thethree months ended* September 30, 2024*, as a result of hedge ineffectiveness. Future changes in these swap arrangements, including termination of the agreements,* may*result in a reclassification of any gain or loss reported in accumulated other comprehensive income (loss) into earnings as an adjustment to interest expense. Accumulated other comprehensive income (loss) related to these instruments is being amortized into interest expense concurrent with the hedged exposure.

Foreign Exchange Contracts

Forward foreign currency exchange contracts are used to limit the impact of currency fluctuations on certain anticipated foreign cash flows, such as collections from customers and loan payments between subsidiaries. The Company enters into such contracts for hedging purposes only. At* September 30, 2024* and* June 30, 2024*, the Company had outstanding forward contracts related to hedges of intercompany loans with net unrealized losses of $0.2 million and net unrealized gains of less than $0.1 million, respectively, which approximate the unrealized gains and losses on the related loans. The contracts have maturity dates through fiscal year2025, which correspond to the related intercompany loans.

The notional amounts of the Company’s forward contracts, by currency, are as follows (in thousands):

The table below presents the fair value of derivative financial instruments as well as their classification on the balance sheet (in thousands):

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The table below presents the amount of gain (loss) recognized in comprehensive income on our derivative financial instruments (effective portion) designated as hedging instruments and their classification within comprehensive income for the periods ended (in thousands):

The table below presents the amount reclassified from accumulated other comprehensive income (loss) to net income for the periods ended (in thousands):

11) Retirement Benefits

The Company has defined benefit pension plans covering certain current and former employees both inside and outside of the U.S. The Company’s pension plan for U.S. employees is frozen for substantially all participants and has been replaced with a defined contribution benefit plan.

Net periodic benefit cost for the Company’s U.S. and foreign pension benefit plans for the periods ended consisted of the following components (in thousands):

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The following table sets forth the amounts recognized for the Company's defined benefit pension plans (in thousands):

The contributions made to defined benefit plans are presented below along with remaining contributions to be made for fiscal year2025 (in thousands):

12**) Income Taxes**

The Company's effective tax rate from continuing operations for thefirst quarter of fiscal year2025 was 21.4% compared with 23.8% for the prior year quarter.

The tax rate was impacted in the current period by the following items: (i) a discrete tax benefit related to equity compensation, (ii) variations in the geographical mix of earnings; (iii) foreign withholding taxes and (iv) tax credits linked to federal research and development activities. The tax rate was impacted in the prior period by the following items: (i) a discrete tax benefit related to equity compensation, (ii) the jurisdictional mix of earnings, (iii) foreign withholding taxes, and (iv) federal research and development tax credits.

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**13)**Earnings Per Share

The Company uses shares acquired through treasury stock repurchases for the issuance of shares of common stock for the settlement of awards under its stock-based compensation plans, with the net effect of these transactions accounting for the change in common stock outstanding.

The following table sets forth a reconciliation of the number of shares (in thousands) used in the computation of basic and diluted earnings per share:

Earnings available to common stockholders are the same for computing both basic and diluted earnings per share. There wereno outstanding instruments that had an anti-dilutive effect at* September 30, 2024* or2023.

Performance stock units of 81,704 and 89,434 for thethree months ended* September 30, 2024* and2023, respectively, are excluded from the diluted earnings per share calculation as the performance criteria havenot been met.

14**)**** Accumulated OtherComprehensive Income (Loss) **

The components of the Company’s accumulated other comprehensive income (loss) are as follows (in thousands):

15**) Contingencies**

From time to time, the Company is subject to various claims and legal proceedings, including claims related to environmental remediation, either asserted or unasserted, that arise in the ordinary course of business. While the outcome of these proceedings and claims cannot be predicted with certainty, the Company’s management doesnot believe that the outcome of any of the currently existing legal matters will have a material impact on the Company’s consolidated financial position, results of operations or cash flow. The Company accrues for losses related to a claim or litigation when the Company’s management considers a potential loss probable and can reasonably estimate such potential loss.

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16) Industry Segment Information

The Company hasfive reportable segments organized around the types of products sold:

Net sales and income (loss) from continuing operations by segment were as follows (in thousands):

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Net sales include only transactions with unaffiliated customers and includeno intersegment sales. Income (loss) from operations by segment excludes interest expense and other non-operating (income) expense.

17) Restructuring

The Company has undertaken a number of initiatives that have resulted in severance, restructuring, and related charges. Related charges* mayincludethird* party assistance with analysis and implementation of these activities.

2025 Restructuring Initiatives

The Company continues to focus its efforts to reduce cost and improve productivity across its businesses. Restructuring expenses primarily related to facility rationalizations and consolidations. The Company expects the2025 restructuring activities to be completed by fiscal year2026.

Prior Year Restructuring Initiatives

Restructuring expenses primarily related to headcount reductions and other cost saving initiatives within our Engraving and Electronics segments. The Company expects the prior year restructuring activities to be completed by fiscal year2025.

A summary of charges by initiative is as follows (in thousands):

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Activity in the restructuring liability reserve related to the initiatives is as follows (in thousands):

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The Company’s total restructuring expenses by segment are as follows (in thousands):

Restructuring expense is expected to be approximately $4.0 million for the remainder of fiscal year2025.

18) Divestitures

On* February 28, 2023,the Company divested its Procon pumps business (“Procon”) to Investindustrial, a leading European investment and advisory group. Procon generated approximately $21.2 million in revenue in thefirst* eight months of fiscal year2023**. Procon which is reported within the Specialty Solutions Group, was divested in order to focus on the continued simplification of the Company’s portfolio and enable greater focus on managing larger platforms and pursuing growth opportunities.

The Company received $67.0 million cash consideration at closing, which is presented as an investing cash flow in fiscal year2023. Cash consideration received at closing excludes amounts held in escrow and is net of closing cash. The Company recorded a pre-tax gain on sale of the business of $62.1 million in fiscal year2023. The operating unit's goodwill balance of $0.2 million was written off as a part of the transaction in fiscal year2023. The sale transaction and financial results of Procon are classified as continuing operations in the Consolidated Financial Statements.

During thefirst quarter of fiscal year2024, the Company recorded an additional $0.3 million gain on the sale of the business due to cash received in the period related to closing cash adjustments.

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