STANDEX INTERNATIONAL CORPDE
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
SXI$228.36-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0001437749-24-014596
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001437749-24-032878
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 90 current paragraphs.
47 unchanged; 34 reworded; 9 added; 24 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Forward-Looking Statements
Current report
Gross Profit
Current report
In the second quarter of fiscal year 2025, on a sequential basis, we expect significantly higher revenue, primarily driven by our recent Amran/Narayan Group acquisition and higher sales into fast growth end markets, and slightly to moderately higher operating margin, as the recent acquisition and pricing and productivity initiatives are partially offset by increased investments in selling, marketing, and research and development.
Current report
Income from operations in the first quarter of fiscal year 2025 decreased by $1.8 million, or 23.3%, when compared to the prior year quarter. The operating income decrease was driven by lower demand in North America and Europe, partially offset by productivity initiatives.
Current report
Scientific Group
Current report
Net sales in the first quarter of fiscal year 2025 decreased by $0.5 million, or 2.7%, when compared to the prior year quarter, reflecting lower demand from retail pharmacies, partially offset by higher volume from new product sales.
Current report
Income from operations in the first quarter of fiscal year 2025 decreased $0.2 million, or 3.7%, when compared to the prior year quarter. The decrease is driven by lower sales volume and higher freight costs, partially offset by productivity initiatives.
Current report
Net sales in the first quarter of fiscal year 2025 increased by $2.3 million, or 12.7%, when compared to the prior year quarter. The organic sales increase of $2.4 million, or 13.3%, was driven by more favorable project timing in the space end market which helped to drive growth in new product development and new applications. Foreign currency negative impacts on net sales were $0.1 million, or 0.6%.
Current report
Corporate expenses in the first quarter of fiscal year 2025 decreased slightly when compared to the prior year quarter due to a reduction in professional service fees.
Removed paragraphs (24)
Previous report
Net sales decreased in the nine months ended March 31, 2024 by $12.3 million or 2.2%, when compared to the prior year period. Organic sales decreased $20.1 million, or 3.6%, due to transitory headwinds in several of our end markets, primarily from lower demand in our Electronics, Specialty and Scientific segments and project timing in our Engineering Technologies group, partially offset by strong demand in the Engraving segment and pricing actions in the Engineering Technologies group. Organic sales included $66.4 million in the period attributed to fast growth markets. Foreign currency positively impacted sales by $0.3 million. The acquisitions of Minntronix and Sanyu positively impacted sales by $28.8 million, or 5.2%, offset by the impact on sales associated with the divestiture of Procon of $21.3 million, or 3.8%.
Previous report
Gross Profit Margin
Previous report
Gross profit in the nine months ended March 31, 2024 increased to $212.6 million, or a gross margin of 39.3% as compared to $211.5 million, or a gross margin of 38.3%, in the prior year period. The gross profit margin increase was a result of pricing actions, productivity initiatives and contribution from the Minntronix acquisition, partially offset by the divestiture of the Procon business and organic sales decreases.
Previous report
Selling, General, and Administrative (“SG&A”) expenses for the nine months ended March 31, 2024 were $128.6 million, or 23.8% of sales, compared to $127.8 million, or 23.1% of sales, during the prior year period. SG&A expenses during the period were primarily impacted by a one-time stock-based compensation charge in the third quarter of the fiscal year 2024 and increased research and development spending and partially offset by a reduction in selling and marketing expenses.
Previous report
Income from operations for the nine months ended March 31, 2024 was $74.6 million, compared to $142.6 million during the prior year period. The decrease of $68.0 million, or 47.7%, is primarily due to the gain on the divestiture of Procon in the third quarter of the fiscal year 2023, organic sales decreases and increased investment in research and development spending, restructuring and acquisition related costs. The decreases are partially offset by cost reduction activities and productivity improvement initiatives.
Previous report
On July 31, 2023, we completed our acquisition of Minntronix, Inc. (“Minntronix”). We accounted for the Minntronix purchase under the acquisition method in accordance with ASC Topic 805, Business Combinations. Accordingly, the preliminary purchase price was allocated to the fair value of the assets acquired, including identifiable intangible assets, and the liabilities assumed as of the closing date. Goodwill resulting from the difference between the fair value of the assets acquired and the fair value of the liabilities assumed is not amortizable for book or tax purposes. Although the acquisition was nontaxable, the transaction gave rise to certain temporary differences for which deferred taxes have been recognized. The results of operations for the Minntronix acquisition have been included in our consolidated financial results beginning on the closing date.
Previous report
On February 19, 2024, we completed our acquisition of Sanyu Switch Co., Ltd. (“Sanyu”). We accounted for the Sanyu purchase under the acquisition method in accordance with ASC Topic 805, Business Combinations. Accordingly, the preliminary purchase price was allocated to the fair value of the assets acquired, including identifiable intangible assets, and the liabilities assumed as of the closing date. Goodwill resulting from the difference between the fair value of the assets acquired and the fair value of the liabilities assumed is not amortizable for book or tax purposes. Although the acquisition was nontaxable, the transaction gave rise to certain temporary differences for which deferred taxes have been recognized. The results of operations for the Sanyu acquisition have been included in our consolidated financial results beginning on the closing date.
Previous report
Net sales in the nine months ended March 31, 2024 increased $15.6 million, or 6.9%, when compared to the prior year period. The acquisitions of Minntronix and Sanyu in the fiscal year 2024 added $28.8 million, or 12.7%, in sales for the nine months ended March 31, 2024. The organic sales decrease of $12.8 million, or 5.7%, and foreign currency impacts of $0.4 million, or 0.2% also negatively affected net sales compared to the prior year period. Organic sales were impacted by continued softness in China and Europe, primarily in appliances and general industrial end markets.
Previous report
Income from operations in the nine months ended March 31, 2024 decreased by $4.3 million, or 8.2%, when compared to the prior year period. The operating income decrease was the result of lower sales, a change in product mix and foreign currency impacts, partially offset by contributions from the recent acquisitions and productivity initiatives.
Previous report
Income from operations in the third quarter of fiscal year 2024 increased by $0.9 million, or 16.9%, when compared to the prior year quarter. The operating income increase was driven by organic sales increases and previously announced productivity initiatives.
Previous report
Net sales in the nine months ended March 31, 2024 increased by $8.3 million, or 7.6%, when compared to the prior year period. Organic sales increased by $7.9 million, or 7.2%, due to strong demand in Europe and growth in soft trim applications in Asia, partially offset by fewer platform rollouts in North America. Foreign currency positive impacts contributed $0.4 million, or 0.4%.
Previous report
Income from operations in the nine months ended March 31, 2024 increased by $5.2 million, or 29.5%, when compared to the prior year period. The operating income increase was driven by organic sales increases and ongoing productivity initiatives.
Previous report
Scientific
Previous report
Net sales in the third quarter of fiscal year 2024 decreased by $2.0 million, or 10.4%, when compared to the prior year quarter, reflecting general market softness, notably affecting purchases by retail pharmacies.
Previous report
Income from operations in the third quarter of fiscal year 2024 increased $0.3 million, or 7.3%, when compared to the prior year quarter. The increase is driven by lower freight costs and productivity initiatives offset by lower volume.
Previous report
Net sales in the nine months ended March 31, 2024 decreased by $5.2 million, or 9.2%, when compared to the prior year period, reflecting general market softness including purchases by retail pharmacies.
Previous report
Income from operations in the nine months ended March 31, 2024 increased $1.6 million, or 13.1%, when compared to the prior year period. The increase is primarily driven by productivity initiatives and lower freight costs, partially offset by lower volume.
Previous report
Net sales in the third quarter of fiscal year 2024 increased by $2.0 million, or 11.3%, when compared to the prior year quarter. The organic sales increase of $2.0 million was driven by improvement in the aviation end markets, offset by lower defense sales caused by delays in government funding.
Previous report
Net sales in the nine months ended March 31, 2024 decreased by $1.0 million, or 1.8%, when compared to the prior year period. Organic sales decreased by $1.3 million, or 2.2%, partially offset by foreign currency impacts of $0.3 million, or 0.4%, as compared to the prior year period. The net sales decrease was due to project timing partially offset by pricing actions, an increase in new product development in the fast growth commercial space market, and higher sales to the aviation and oil and gas markets.
Previous report
Income from operations in the nine months ended March 31, 2024 increased by $1.9 million, or 25.0%, when compared to the prior year period. The increase was due to the impact of pricing and productivity initiatives, partially offset by research and development and sales declines due to project timing.
Previous report
Net sales in the third quarter of fiscal year 2024 decreased by $8.7 million, or 27.1%, when compared to the prior year quarter. Organic sales for the group decreased $3.2 million, or 10.0%, as compared to the prior year quarter, reflecting a sales normalization in the Display Merchandising business partially offset by an increase in the Hydraulics business. The divestiture of Procon in the third quarter of fiscal year 2023 negatively impacted the group by $5.5 million, or 17.1%.
Previous report
Income from operations in the nine months ended March 31, 2024 decreased $4.7 million or 24.8%, when compared to the prior year period. The decrease is due to the Procon divestiture and lower volume in the Display Merchandising and Hydraulics business, partially offset by improved operating performance in the Display Merchandising business.
Previous report
In the fourth quarter of fiscal year 2024, on a sequential basis, we expect moderately higher revenue and operating margin due to improved end market demand and leverage on higher sales.
Previous report
Corporate expenses in the third quarter of fiscal year 2024 remained flat when compared to the prior year quarter. Corporate expenses in the nine months ended March 31, 2024 decreased by 1.7% when compared to the prior year period. Corporate expenses in fiscal year 2024 reflect the impact of a charge due to the CEO reaching retirement eligibility under the stock compensation plan largely offset by reductions in professional service fees and incentive compensation. We recorded a charge of $0.1 million in other operating income (expense), net for settlement of an environmental remediation claim in the third quarter of fiscal year 2024. In fiscal year 2023, we received a refund from our insurance provider as a recoupment related to a previously recorded litigation matter and incurred a $0.3 million charge related to environmental remediation.
Reworded paragraphs (34)
Previous wording
Statements contained in this Quarterly Report that are not based on historical facts are“forward-looking statements”* within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as*“should,”* “could,” “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company*’s business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. *These factors include, but are not limited to: the impact of pandemics and other global crises or catastrophic events on employees, our supply chain, and the demand for our products and services around the world; materially adverse or unanticipated legal judgments, fines, penalties or settlements; conditions in the financial and banking markets, including fluctuations in exchange rates and the inability to repatriate foreign cash; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, defense, transportation, food service equipment, consumer appliance, energy, oil and gas and general industrial markets; lower-cost competition; the relative mix of products which impact margins and operating efficiencies in certain of our businesses; the impact of higher raw material and component costs, particularly steel, certain materials used in electronics parts, petroleum based products, and refrigeration components; the impact of higher transportation and logistics costs, especially with respect to transportation of goods from Asia; the impact of inflation on the costs of providing our products and services; an inability to realize the expected cost savings from restructuring activities including effective completion of plant consolidations, cost reduction efforts including procurement savings and productivity enhancements, capital management improvements, strategic capital expenditures, and the implementation of lean enterprise manufacturing techniques; the potential for losses associated with the exit from or divestiture of businesses that are no longer strategic or no longer meet our growth and return expectations; the inability to achieve the savings expected from global sourcing of raw materials and diversification efforts in emerging markets; the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs; the inability to attain expected benefits from acquisitions and the inability to effectively consummate and integrate such acquisitions and achieve synergies envisioned by the Company; market acceptance of our products; our ability to desig…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Statements contained in this periodic report that are not based on historical facts are“forward-looking statements”* within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as*“should,”* “could,” “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company*’s business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include, but are not limited to: the impact of pandemics and other global crises or catastrophic events on employees, our supply chain, and the demand for our products and services around the world; materially adverse or unanticipated legal judgments, fines, penalties or settlements; conditions in the financial and banking markets, including fluctuations in exchange rates and the inability to repatriate foreign cash; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, defense, transportation, food service equipment, consumer appliance, energy, oil and gas and general industrial markets; lower-cost competition; the relative mix of products which impact margins and operating efficiencies in certain of our businesses; the impact of higher raw material and component costs, particularly steel, certain materials used in electronics parts, petroleum based products, and refrigeration components; the impact of higher transportation and logistics costs, especially with respect to transportation of goods from Asia; the impact of inflation on the costs of providing our products and services; an inability to realize the expected cost savings from restructuring activities including effective completion of plant consolidations, cost reduction efforts including procurement savings and productivity enhancements, capital management improvements, strategic capital expenditures, and the implementation of lean enterprise manufacturing techniques; the potential for losses associated with the exit from or divestiture of businesses that are no longer strategic or no longer meet our growth and return expectations; the inability to achieve the savings expected from global sourcing of raw materials and diversification efforts in emerging markets; the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs; the inability to attain expected benefits from acquisitions and the inability to effectively consummate and integrate such acquisitions and achieve synergies envisioned by the Company; increased costs from acquisitions to improve and coordina…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Net sales decreased in the third quarter of fiscal year 2024 by $7.1 million or 3.8%, when compared to the prior year quarter. Organic sales decreased $10.5 million, or 5.7%, due to transitory headwinds in several of our end markets, primarily from lower demand in our Electronics and Scientific segments, partially offset by project timing in our Engineering Technologies group and growth in the Hydraulics business. Organic sales included $25.5 million in the period attributed to fast growth markets. Foreign currency negatively impacted sales by $1.6 million, or 0.8%. The acquisitions of Minntronix and Sanyu positively impacted sales by $10.6 million, or 5.7%, partially offset by the impact on sales associated with the divestiture of Procon of $5.5 million, or 3.0%.
Current wording
Net sales decreased in the first quarter of fiscal year 2025 by $14.3 million or 7.7%, when compared to the prior year quarter. Organic sales decreased $21.1 million, or 11.4%, due to customer project pushouts in our Engraving segment in North America and Europe, lower demand in our Specialty segment related to election uncertainty and continued softness in general industrial end markets in Europe in our Electronics segment. These decreases were partially offset by strong demand and favorable project timing in our Engineering Technologies segment. Organic sales in the first quarter of fiscal year 2025 included $19.8 million attributed to fast growth markets. The fiscal year 2024 acquisitions of Sanyu, Minntronix and SEPL positively impacted sales by $7.0 million, or 3.8%. Foreign currency negatively impacted sales by $0.2 million, or 0.1%.
Previous wording
Gross profit in the third quarter of fiscal year 2024 decreased to $68.3 million, or a gross margin of 38.5% as compared to $70.9 million, or a gross margin of 38.5%, in the third quarter of fiscal year 2023. Gross profit margin remained flat as productivity initiatives and contribution from the Minntronix acquisition were offset by the organic sales decreases and the impact of the divestiture of the Procon business.
Current wording
Gross profit in the first quarter of fiscal year 2025 decreased to $70.1 million, or a gross margin of 41.1% as compared to $72.6 million, or a gross margin of 39.3%, in the first quarter of fiscal year 2024. Gross profit was impacted by the organic sales decreases and approximately $1.5 million of net inflationary impacts in the areas of labor and materials, partially offset by productivity initiatives and contribution from the prior year acquisitions.
Previous wording
Selling, General, and Administrative (“SG&A”) expenses for the third quarter of fiscal year 2024 were $41.8 million, or 23.6% of sales, compared to $43.0 million, or 23.3% of sales, during the prior year quarter. SG&A expenses during the quarter were primarily impacted by a reduction in selling and marketing expenses partially offset by a one-time stock-based compensation charge and increased research and development spending to drive future product initiatives.
Current wording
Selling, General, and Administrative (“SG&A”) expenses for the first quarter of fiscal year 2025 were $43.0 million, or 25.3% of sales, compared to $43.6 million, or 23.6% of sales, during the prior year quarter. SG&A expenses during the quarter were primarily impacted by a reduction in selling and marketing expenses.
Previous wording
We incurred restructuring expenses of $4.0 million and $7.3 million in the third quarter of fiscal year 2024 and the nine months ended March 31, 2024, respectively, primarily related to facility closures and global headcount reductions within our Engraving, Electronics and Engineering Technologies segments as well as the Corporate headquarters.
Current wording
We incurred restructuring expenses of $1.1 million in the first quarter of fiscal year 2025, primarily related to facility closures and global headcount reductions within our Engraving segment.
Previous wording
We expect to incur restructuring costs of approximately $0.4 million throughout the remainder of fiscal year 2024, as we continue to focus our efforts to reduce cost and improve productivity across our businesses.
Current wording
We expect to incur restructuring costs of approximately $4.0 million throughout the remainder of fiscal year 2025, as we continue to focus our efforts to reduce costs and improve productivity across our businesses.
Previous wording
We incurred acquisition related expenses of $0.5 million and $2.2 million in the third quarter of fiscal year 2024 and the nine months ended March 31, 2024, respectively. Acquisition related expenses typically consist of due diligence, integration, and valuation expenses incurred in connection with recent or pending acquisitions.
Current wording
We incurred acquisition related expenses of $1.8 million in the first quarter of fiscal year 2025. Acquisition related expenses typically consist of due diligence, integration, and valuation expenses incurred in connection with recent or pending acquisitions.
Previous wording
Income from operations for the third quarter of fiscal year 2024 was $21.8 million, compared to $88.5 million during the prior year quarter. The decrease of $66.7 million, or 75.3%, is primarily due to the gain on the divestiture of Procon in the third quarter of fiscal year 2023, organic sales decreases and increased investment in research and development spending, restructuring and acquisition related costs. The decreases are partially offset by cost reduction activities and productivity improvement initiatives.
Current wording
Income from operations for the first quarter of fiscal year 2025 was $24.1 million, compared to $26.9 million during the prior year quarter. The decrease of $2.8 million, or 10.5%, is primarily due to lower organic sales and acquisition related costs. The decreases are partially offset by contributions from recent acquisitions and productivity improvement initiatives.
Previous wording
Interest expense for the third quarter of fiscal year 2024 was $0.9 million, a 32.9% decrease from interest expense of $1.4 million during the prior year quarter. Interest expense for the nine months ended March 31, 2024 was $3.2 million, a 22.2% decrease from interest expense of $4.2 million during the prior year period. Our effective interest rate for the nine months ended March 31, 2024 was 2.45%.
Current wording
Interest expense for the first quarter of fiscal year 2025 was $1.0 million, a 23.4% decrease from interest expense of $1.3 million during the prior year quarter. Our effective interest rate for the three months ended September 30, 2024 was 2.41%.
Previous wording
The Company's effective tax rate from continuing operations for the third quarter of fiscal year 2024 and for the nine months ended March 31, 2024 was 21.4% and 22.5%, respectively compared with 6.7% and 13.0% for the prior year quarter and prior year period, respectively. The tax rate was impacted in the current period by the following items: (i) a discrete tax expense related to a provision to return adjustments associated with federal research and development tax credits and the limitation on executive compensation, (ii) the jurisdictional mix of earnings and (iii) a discrete tax benefit related to foreign withholding taxes. The tax rate was impacted in the prior period by the following items: (i) a discrete tax benefit related to the partial release of a valuation allowance previously recorded against deferred tax assets and connected to capital loss carryforwards, resulting from the utilization of capital loss carryforward to offset capital gain from the sale of Procon (ii) a discrete tax expense related to provision to return adjustments as a result of a change in tax rate for the Company’s operations within China's tax jurisdiction, (iii) a discrete tax benefit related to provision to return adjustments associated with federal and state research and development tax credits, (iv) the jurisdictional mix of earnings and (v) foreign withholding taxes.
Current wording
The Company's effective tax rate from continuing operations for the first quarter of the fiscal year ending June 30, 2025 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.
Previous wording
Total backlog realizable under one year decreased $65.4 million, or 24.7%, to $199.2 million at March 31, 2024, from $264.5 million at March 31, 2023.
Current wording
Total backlog realizable under one year decreased $62.5 million, or 25.9%, to $178.7 million at September 30, 2024, from $241.2 million at September 30, 2023. The primary driver of the decrease is a $38.8 million reduction in the Electronics segment for the first quarter of fiscal year 2025, when compared to the prior year quarter.
Previous wording
Net sales in the third quarter of fiscal year 2024 increased $2.2 million, or 2.8%, when compared to the prior year quarter. The acquisition of Minntronix in the first quarter of fiscal year 2024 added $8.6 million, or 11.0%, in sales for the third quarter of fiscal year 2024. The acquisition of Sanyu in the third quarter of fiscal year 2024 added $2.0 million, or 2.5% in sales for the third quarter of fiscal year 2024. The organic sales decrease of $7.3 million, or 9.3%, and foreign currency impacts of $1.0 million, or 1.3% also negatively affected net sales compared to the prior year quarter. Organic sales were impacted by continued softness in China and Europe, primarily in the appliances and general industrial end markets.
Current wording
Net sales in the first quarter of fiscal year 2025 decreased $4.0 million, or 4.8%, when compared to the prior year quarter. The acquisitions of Sanyu, Minntronix and SEPL in fiscal year 2024 added $7.0 million, or 8.5%, in sales for the first quarter of fiscal year 2025. Foreign currency impacts of $0.2 million, or 0.4%, also positively affected net sales compared to the prior year quarter. The organic sales decrease of $11.2 million, or 13.7%, negatively affected net sales compared to the prior year quarter. Organic sales were impacted by continued softness in Europe, primarily in the general industrial end markets and the effect of prior overstocking related to certain large customer accounts.
Previous wording
Income from operations in the third quarter of fiscal year 2024 decreased by $1.3 million, or 7.9%, when compared to the prior year quarter. The operating income decrease was the result of lower organic sales and a change in product mix, partially offset by contribution from the recent acquisitions and productivity initiatives.
Current wording
Income from operations in the first quarter of fiscal year 2025 increased by $0.7 million, or 4.2%, when compared to the prior year quarter. The operating income increase was the result of contributions from the recent acquisitions, productivity initiatives and product mix, partially offset by lower organic sales.
Previous wording
Net sales in the third quarter of fiscal year 2024 decreased by $0.6 million, or 1.7%, when compared to the prior year quarter. Organic sales decreased by less than $0.1 million, or 0.2%, due to fewer new platform rollouts in North America. Foreign currency negative impacts on net sales were $0.5 million, or 1.5%.
Current wording
Net sales in the first quarter of fiscal year 2025 decreased by $7.4 million, or 18.2%, when compared to the prior year quarter. Organic sales decreased by $7.1 million, or 17.5%, due to delays in new platform rollouts in North America and delays and general market softness in Europe. Foreign currency negative impacts on net sales were $0.3 million, or 0.7%.
Previous wording
In the fourth quarter of fiscal year 2024, on a sequential basis, we expect moderately to significantly higher revenue and moderately higher operating margin due to favorable project timing.
Current wording
In the second quarter of fiscal year 2025, on a sequential basis, we expect moderately higher revenue and slightly higher operating margin due to favorable project timing in Asia and Europe, as well as productivity initiatives.
Previous wording
In the fourth quarter of fiscal year 2024, on a sequential basis, we expect slightly lower revenue and slightly to moderately lower operating margin due to unfavorable project timing in North America and Europe.
Current wording
In the second quarter of fiscal year 2025, on a sequential basis, we expect similar revenue and slightly lower operating margin due to investments in research and development and higher freight costs.
Previous wording
Income from operations in the third quarter of fiscal year 2024 increased by $1.2 million, or 49.9%, when compared to the prior year quarter reflecting higher volume in aviation and pricing and productivity initiatives, partially offset by investments in research and development.
Current wording
Income from operations in the first quarter of fiscal year 2025 increased by $1.0 million, or 32.9%, when compared to the prior year quarter reflecting higher sales and pricing and productivity initiatives.
Previous wording
In the fourth quarter of fiscal year 2024, on a sequential basis, we expect similar revenue and slightly lower to similar adjusted operating margin due to unfavorable mix.
Current wording
In the second quarter of fiscal year 2025, on a sequential basis, we expect similar to slightly higher revenue from new products and new applications and slightly lower operating margin due to project mix.
Previous wording
Net sales in the nine months ended March 31, 2024 decreased by $29.9 million, or 29.5%, when compared to the prior year period. Organic sales for the group decreased $8.6 million, or 8.5%, as compared to the prior year period, reflecting organic growth decreases in the Display Merchandising business and the Hydraulics business, due to an ongoing industry-wide chassis shortage. The divestiture of Procon in the third quarter of fiscal year 2023 negatively impacted the group by $21.3 million, or 21.0%.
Current wording
Net sales in the first quarter of fiscal year 2025 decreased by $4.7 million, or 18.3%, when compared to the prior year quarter. Organic sales for the group decreased $4.7 million, or 18.3%, as compared to the prior year quarter, reflecting softness in general market conditions in the Display Merchandising business and in the Hydraulics business.
Previous wording
Income from operations in the third quarter of fiscal year 2024 decreased $2.5 million or 34.7%, when compared to the prior year quarter, due to the Procon divestiture and lower volume in the Display Merchandising business, partially offset by higher volume in the Hydraulics business.
Current wording
Income from operations in the first quarter of fiscal year 2025 decreased $2.1 million, or 36.8%, when compared to the prior year quarter, due to lower volume in the Display Merchandising business and in the Hydraulics business.
Previous wording
In the fourth quarter of fiscal year 2024, on a sequential basis, we expect slightly higher revenue and similar operating margin.
Current wording
In the second quarter of fiscal year 2025, on a sequential basis, we expect slightly higher revenue and operating margin.
Previous wording
In pursuing our business strategy, the Company may divest certain businesses. Future divestitures may be classified as discontinued operations based on their strategic significance to the Company. Net loss from discontinued operations was $0.1 million and $0.4 million for the three and nine months ended March 31, 2024, respectively. Net loss from discontinued operations was less than $0.1 million and $0.1 million for the three and nine months ended March 31, 2023, respectively.
Current wording
In pursuing our business strategy, the Company may divest certain businesses. Future divestitures may be classified as discontinued operations based on their strategic significance to the Company. Net income (loss) from discontinued operations was less than $0.1 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
At March 31, 2024, our total cash balance was $138.8 million, of which $110.5 million was held by foreign subsidiaries. The amount and timing of cash repatriation is dependent upon foreign exchange rates and each business unit’s operational needs including requirements to fund working capital, capital expenditure, and jurisdictional tax payments. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to capital controls; however, those balances are generally available without legal restrictions to fund ordinary business operations.
Current wording
At September 30, 2024, our total cash balance was $164.6 million, of which $118.0 million was held by foreign subsidiaries. The amount and timing of cash repatriation is dependent upon foreign exchange rates and each business unit’s operational needs including requirements to fund working capital, capital expenditure, and jurisdictional tax payments. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to capital controls; however, those balances are generally available without legal restrictions to fund ordinary business operations.
Previous wording
Net cash provided by continuing operating activities for the nine months ended March 31, 2024, was $64.6 million compared to net cash provided by continuing operating activities of $50.4 million in the prior year. We generated $84.2 million from income statement activities and used $11.1 million of cash to fund working capital and other balance sheet increases. Cash flow used in investing activities for the nine months ended March 31, 2024 totaled $54.0 million and primarily consisted of $29.2 million for the acquisition of Minntronix in the first quarter of fiscal year 2024, $18.5 million for the acquisition of Sanyu in the third quarter of fiscal year 2024, and $13.8 million used for capital expenditures offset by $7.8 million proceeds from the prior divestiture of the Procon business. Cash used for financing activities for the nine months ended March 31, 2024 totaled $65.8 million and consisted primarily purchases of stock of $31.8 million, repayments of debt of $25.0 million and cash paid for dividends of $10.4 million.
Current wording
Net cash provided by continuing operating activities for the three months ended September 30, 2024, was $17.5 million compared to net cash provided by continuing operating activities of $16.4 million in the prior year. We generated $27.7 million from income statement activities and used $6.7 million of cash to fund working capital and other balance sheet increases. Cash flow used in investing activities for the three months ended September 30, 2024 totaled $6.3 million and consisted of $6.7 million used for capital expenditures offset by $0.4 million proceeds from sales of real estate and equipment. Cash used for financing activities for the three months ended September 30, 2024 totaled $6.3 million and consisted primarily of purchases of stock of $4.4 million and cash paid for dividends of $3.5 million.
Previous wording
Funds borrowed under the facility may be 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 is maintained), and other general corporate purposes. As of March 31, 2024, the Company used $2.7 million against the letter of credit sub-facility and had the ability to borrow $347.3 million under the facility based on our current trailing twelve-month EBITDA. The facility contains customary representations, warranties and restrictive covenants, as well as specific financial covenants. The Company’s current financial covenants under the facility are as follows:
Current wording
Funds borrowed under the facility may be 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. As of September 30, 2024, the Company used $3.1 million against the letter of credit sub-facility and had the ability to borrow $337.3 million under the facility based on our current trailing twelve-month EBITDA. The facility contains customary representations, warranties and restrictive covenants, as well as specific financial covenants. The Company’s current financial covenants under the facility are as follows:
Previous wording
Interest Coverage RatioThe Company is required to maintain a ratio of Earnings Before Interest and Taxes, as Adjusted (“Adjusted EBIT per the Credit Facility”), to interest expense for the trailing twelve months of at least 2.75:1. Adjusted EBIT per the Credit Facility specifically excludes extraordinary and certain other defined items such as cash restructuring and acquisition related charges up to the lower of $20.0 million or 10% of EBITDA. The facility also allows for unlimited non-cash purchase accounting and goodwill adjustments. At March 31, 2024, the Company’s Interest Coverage Ratio was 26.12:1.
Current wording
Interest Coverage RatioThe Company is required to maintain a ratio of Earnings Before Interest and Taxes, as Adjusted (“Adjusted EBIT per the Credit Facility”), to interest expense for the trailing twelve months of at least 2.75:1. Adjusted EBIT per the Credit Facility specifically excludes extraordinary and certain other defined items such as cash restructuring and acquisition related charges up to the lower of $20.0 million or 10% of EBITDA. The facility also allows for unlimited non-cash purchase accounting and goodwill adjustments. At September 30, 2024, the Company’s Interest Coverage Ratio was 26.31:1.
Previous wording
Leverage Ratio The Company’s ratio of funded debt to trailing twelve month Adjusted EBITDA per the Credit Facility, calculated as Adjusted EBIT per the Credit Facility plus depreciation and amortization, may not exceed 3.5:1. Under certain circumstances in connection with a Material Acquisition (as defined in the Facility), the Facility allows for the leverage ratio to go as high as 4.0:1 for a four-fiscal quarter period. At March 31, 2024, the Company’s leverage ratio was 0.63:1.
Current wording
Leverage Ratio The Company’s ratio of funded debt to trailing twelve month Adjusted EBITDA per the Credit Facility, calculated as Adjusted EBIT per the Credit Facility plus depreciation and amortization, may not exceed 3.5:1. Under certain circumstances in connection with a Material Acquisition (as defined in the Facility), the Facility allows for the leverage ratio to go as high as 4.0:1 for a four-fiscal quarter period. At September 30, 2024, the Company’s leverage ratio was 0.66:1.
Previous wording
As of March 31, 2024, we had borrowings under our facility of $150.0 million. In order to manage our interest rate exposure on these borrowings, we are party to $150.0 million of active floating to fixed rate swaps. These swaps convert our interest payments from SOFR to a weighted average fixed rate of 0.85%. The effective rate of interest for our outstanding borrowings, including the impact of the interest rate swaps, was 2.45%.
Current wording
As of September 30, 2024, we had borrowings under our facility of $150.0 million. In order to manage our interest rate exposure on these borrowings, we are party to $150.0 million of active floating to fixed rate swaps. These swaps convert our interest payments from SOFR to a weighted average fixed rate of 0.85%. The effective rate of interest for our outstanding borrowings, including the impact of the interest rate swaps, was 2.41%.
Previous wording
Our primary cash requirements in addition to day-to-day operating needs include interest payments, capital expenditures, acquisitions, share repurchases, and dividends. Our primary sources of cash for these requirements are cash flows from continuing operations and borrowings under the facility. We expect fiscal year 2024 capital spending to be between $28.0 million and $32.0 million. We expect that fiscal year 2024 depreciation and amortization expense will be between $20.0 million and $22.0 million and $8.0 million and $9.0 million, respectively.
Current wording
Our primary cash requirements in addition to day-to-day operating needs include interest payments, capital expenditures, acquisitions, share repurchases, and dividends. Our primary sources of cash for these requirements are cash flows from continuing operations and borrowings under the facility. We expect fiscal year 2025 capital spending to be between $35.0 million and $40.0 million. We expect that fiscal year 2025 depreciation and amortization expense will be between $24.0 million and $28.0 million and $8.0 million and $10.0 million, respectively.
Previous wording
We sponsor a number of defined benefit and defined contribution retirement plans. The U.S. pension plan is frozen for substantially all participants. We have evaluated the current and long-term cash requirements of these plans, and our existing sources of liquidity are expected to be sufficient to cover required contributions under ERISA and other governing regulations. Obligations under the unfunded benefit plan operated by the Sanyu business in Japan have been transferred to us as of the date of acquisition in the third quarter of fiscal year 2024.
Current wording
We sponsor a number of defined benefit and defined contribution retirement plans. The U.S. pension plan is frozen for substantially all participants. We have evaluated the current and long-term cash requirements of these plans, and our existing sources of liquidity are expected to be sufficient to cover required contributions under ERISA and other governing regulations.
Previous wording
The fair value of the Company's U.S. defined benefit pension plan assets was $147.4 million at March 31, 2024, as compared to $142.1 million at the most recent measurement date, which occurred as of June 30, 2023. The next measurement date to determine plan assets and benefit obligations will be on June 30, 2024.
Current wording
The fair value of the Company's U.S. defined benefit pension plan assets was $151.9 million at September 30, 2024, as compared to $142.3 million at the most recent measurement date, which occurred as of June 30, 2024. The next measurement date to determine plan assets and benefit obligations will be on June 30, 2025.
Previous wording
The Company expects to pay $1.7 million in contributions to its defined benefit plans during the remainder of fiscal year 2024. Contributions of $7.0 million and less than $0.1 million were made during the nine months ended March 31, 2024 and 2023, respectively. There are required contributions of $9.8 million to the United States funded pension plan for fiscal year 2024. In the third quarter of fiscal year 2024, we contributed $6.9 million and the remaining $1.4 million will be contributed in the fourth quarter of fiscal year 2024. The Company expects to make contributions during the remainder of fiscal year 2024 of less than $0.1 million and $0.3 million to its unfunded defined benefit plans in the U.S. and Germany, respectively. There are no required contributions to the plans in Japan. Any subsequent plan contributions will depend on the results of future actuarial valuations.
Current wording
The Company expects to pay $2.9 million in contributions to its defined benefit plans during the remainder of fiscal year 2025. Contributions of $3.4 million and less than $0.1 million were made during the three months ended September 30, 2024 and 2023, respectively. There are required contributions of $2.5 million to the United States funded pension plan for the remainder of fiscal year 2025. The Company expects to make contributions during the remainder of fiscal year 2025 of less than $0.1 million and $0.3 million to its unfunded defined benefit plans in the U.S. and Germany, respectively. There are no required contributions to the plans in Japan or the U.K. Any subsequent plan contributions will depend on the results of future actuarial valuations.
Previous wording
We have an insurance program in place to fund supplemental retirement income benefits for three retired executives. Current executives and new hires are not eligible for this program. At March 31, 2024, the underlying policies had a cash surrender value of $11.7 million and are reported net of loans of $5.0 million for which we have the legal right of offset, these amounts are reported net on our balance sheet.
Current wording
We have an insurance program in place to fund supplemental retirement income benefits for three retired executives. Current executives and new hires are not eligible for this program. At September 30, 2024, the underlying policies had a cash surrender value of $12.1 million and are reported net of loans of $4.9 million for which we have the legal right of offset, these amounts are reported net on our balance sheet.
Previous wording
Foreign Currency Translation – Our primary functional currencies used by our non-U.S. subsidiaries are the Euro, British Pound Sterling (Pound), Japanese (Yen), and Chinese (Yuan).
Current wording
Foreign Currency Translation – Our primary functional currencies used by our non-U.S. subsidiaries are the Euro, British Pound Sterling (Pound), Japanese (Yen), Peso and Chinese (Yuan).