STANDEX INTERNATIONAL CORP/DE/

Previous wording

It is our objective to grow larger and more profitable business units through a commitment to both organic and inorganic initiatives. We have a particular focus on identifying and investing in businesses, new products and new applications that complement our existing products and will increase our overall scale, global presence and capabilities. We continue to execute on acquisitions where strategically aligned with our businesses and where the opportunity meets our investment metrics. We have divested, and likely will continue to divest, businesses that we feel are not strategic or do not meet our growth and return expectations.

Current wording

It is our objective to grow larger and more profitable business units through a commitment to both organic and inorganic initiatives. We have a particular focus on identifying and investing in businesses, new products and new applications that complement our existing products and will increase our overall scale, global presence and capabilities. We continue to execute on acquisitions that are strategically aligned with our businesses and where the opportunity meets our investment metrics. We have divested, and likely will continue to divest, businesses that are not strategic or do not meet our growth and return expectations.

Previous wording

Net sales increased in the first quarter of fiscal year 2026 by $47.0 million or 27.6%, when compared to the prior year quarter. Acquisitions accounted for increased sales of $45.3 million or 26.6%. Foreign currency positively impacted sales by $0.6 million, or 0.4%. Organic sales increased $1.0 million, or 0.6%, primarily due to strong demand across space, defense and aviation end markets.

Current wording

Net sales increased in the second quarter of fiscal year 2026 by $31.5 million or 16.6%, when compared to the prior year quarter. Acquisitions accounted for increased sales of $17.8 million or 9.4%. Foreign currency positively impacted sales by $1.6 million, or 0.8%. Organic sales increased $12.2 million, or 6.4%, primarily due to increased sales into fast growth markets and contributions from new products.

Previous wording

Gross profit in the first quarter of fiscal year 2026 increased to $90.4 million, or a gross margin of 41.6% as compared to $70.1 million, or a gross margin of 41.1%, in the first quarter of fiscal year 2025. The increase was a result of the continued evolution of our portfolio and continued focus on pricing disciplines and productivity actions.

Current wording

Gross profit in the second quarter of fiscal year 2026 increased to $92.2 million, or a gross margin of 41.7% as compared to $71.4 million, or a gross margin of 37.6%, in the second quarter of fiscal year 2025. The margin increase was a result of the continued focus on pricing disciplines and productivity actions.

Previous wording

Selling, General, and Administrative (“SG&A”) expenses for the first quarter of fiscal year 2026 increased to $54.4 million, or 25.0% of sales as compared to $43.0 million, or 25.3% of sales during the prior year quarter. SG&A expenses during the first quarter of fiscal year 2026 were primarily impacted by increased expenses due to the recent acquisitions and increased administrative and research and development expenses as compared to the prior year quarter.

Current wording

Selling, General, and Administrative (“SG&A”) expenses for the second quarter of fiscal year 2026 increased to $55.6 million, or 25.1% of sales as compared to $45.7 million, or 24.1% of sales during the prior year quarter. SG&A expenses during the second quarter of fiscal year 2026 were primarily impacted by increased expenses due to the recent acquisitions, research and development initiatives, and U.S. medical costs as compared to the prior year quarter.

Previous wording

We incurred restructuring expenses of $6.0 million in the first quarter of fiscal year 2026 primarily related to facility rationalization activities and announced closure of four sites in our Engraving segment. We have now substantially completed our restructuring activities in Engraving and are well positioned to better serve our customers.

Current wording

We incurred restructuring expenses of $0.4 million in the second quarter of fiscal year 2026, and $6.4 million in the first six months of fiscal year 2026 primarily related to facility rationalization activities and announced closure of four sites in our Engraving segment. We have substantially completed our restructuring activities in Engraving and are well positioned to better serve our customers.

Previous wording

We incurred acquisition related expenses of $0.4 million in the first quarter of fiscal year 2026. Acquisition related expenses typically consist of due diligence, advisory, legal, integration, and valuation expenses incurred in connection with recent or pending acquisitions.

Current wording

We incurred acquisition related expenses of $0.6 million in the second quarter of fiscal year 2026 and $1.0 million in the first six months of fiscal year 2026. Acquisition related expenses typically consist of due diligence, advisory, legal, integration, and valuation expenses incurred in connection with recent or pending acquisitions.

Previous wording

Income from operations for the first quarter of fiscal year 2026 was $29.6 million, compared to $24.1 million during the prior year quarter. The increase of $5.5 million, or 23.0%, is primarily due to the contributions from recent acquisitions and productivity improvement initiatives partially offset by increase in administrative and research and development expenses.

Current wording

Income from operations for the second quarter of fiscal year 2026 was $35.6 million, compared to $8.5 million during the prior year quarter. The increase of $27.1 million, or 320.3%, is primarily due to the contributions from recent acquisitions, productivity improvement initiatives, and lower purchase accounting and acquisition related costs, partially offset by increase in administrative and research and development expenses.

Previous wording

Interest expense for the first quarter of fiscal year 2026 was $8.9 million, an increase from interest expense of $7.9 million from the prior year quarter. Our effective interest rate for the three months ended September 30, 2025 was 6.10%.

Current wording

Interest expense for the second quarter of fiscal year 2026 was $7.9 million, an increase of $2.3 million from the prior year quarter. Interest expense for the six months ended December 31, 2025 was $16.8 million, an increase of $10.3 million from the prior year period. Our effective interest rate for the six months ended December 31, 2025 was 6.03%.

Previous wording

The Company's effective tax rate from continuing operations for the first quarter of fiscal year 2026 and 2025 was 24.6% and 21.4%, respectively.

Current wording

The Company's effective tax rate from continuing operations for the second quarter of fiscal year 2026 and for the six months ended December 31, 2025 was 24.1% and 24.3%, respectively, compared with 35.5% and 22.6% for the prior year quarter and prior year period, respectively.

Previous wording

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

Current wording

The tax rate was impacted in the three and six months ended December 31, 2025 by the following items: (i) changes in the geographic mix of earnings; (ii) the recognition of a discrete tax benefit related to equity compensation; (iii) foreign withholding taxes; and (iv) federal tax credits related to research and development activities.

Previous wording

The tax rate was impacted in the prior 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 related to federal research and development tax activities.

Current wording

The tax rate was impacted in the three and six months ended December 31, 2024 by the following items: (i) a discrete tax benefit related to equity compensation, (ii) a discrete tax expense related to the write-off of foreign deferred tax assets, (iii) the jurisdictional mix of earnings, (iv) foreign withholding taxes; and (v) federal research and development tax credits.

Previous wording

Total backlog realizable under one year increased $67.6 million, or 37.8%, to $246.3 million at September 30, 2025, from $178.7 million at September 30, 2024. The year over year increase is primarily driven by an additional $28.0 million and $25.4 million in backlog from the recent acquisitions in the Electronics and Engineering Technologies segments.

Current wording

Total backlog realizable under one year increased $43.2 million, or 18.1%, to $282.1 million at December 31, 2025, from $238.9 million at December 31, 2024. The year over year increase is primarily driven by $31.2 million in backlog from the recent acquisition in the Engineering Technologies segment.

Previous wording

Net sales in the first quarter of fiscal year 2026 increased $32.8 million, or 42.2%, when compared to the prior year quarter. The recent acquisitions added $35.3 million, or 45.5%, in sales for the first quarter of fiscal year 2026. Organic sales decreased by $2.4 million, or 3.1%, due to timing of backlog conversion in the Magnetics business in North America. The foreign currency impact decreased net sales by 0.1% as compared to the prior year quarter.

Current wording

Net sales in the second quarter of fiscal year 2026 increased $19.7 million, or 20.6%, when compared to the prior year quarter. The recent acquisitions added $8.7 million, or 9.1%, in sales for the second quarter of fiscal year 2026. Organic sales increased by $10.6 million, or 11.1%, due to sales into fast growth markets and increased new product sales. The foreign currency impact increased net sales by 0.4% as compared to the prior year quarter.

Previous wording

Income from operations in the first quarter of fiscal year 2026 increased by $11.3 million, or 66.1%, when compared to the prior year quarter. The operating income increase was the result of contributions from the recent acquisitions, pricing initiatives and product mix.

Current wording

Income from operations in the second quarter of fiscal year 2026 increased by $12.4 million, or 70.9%, when compared to the prior year quarter. The operating income increase was the result of higher volume, pricing initiatives and product mix.

Previous wording

In the second quarter of fiscal year 2026, on a sequential basis, we expect slightly higher revenue from core businesses partially offset by lower sales from the Amran/Narayan Group due to the holiday season in India. We expect similar operating margin sequentially, primarily driven by product mix and continued strategic growth investments.

Current wording

In the third quarter of fiscal year 2026, on a sequential basis, we expect slightly to moderately higher revenue, reflecting higher sales into fast growth end markets and from new products. The Company expects similar operating margin, primarily driven by product mix and continued strategic growth investments.

Previous wording

Income from operations in the first quarter of fiscal year 2026 decreased by $0.4 million, or 9.8%, when compared to the prior year quarter. The decrease in operating income was a result of purchase accounting expenses and project timing related to the Mcstarlite acquisition.

Current wording

Income from operations in the second quarter of fiscal year 2026 increased by $0.7 million, or 18.6%, when compared to the prior year quarter. The increase in operating income was a result of higher volume.

Previous wording

Net sales in the first quarter of fiscal year 2026 increased by $9.4 million, or 45.6%, when compared to the prior year quarter. Sales increase was attributable to the acquisition of McStarlite which added $6.6 million to revenue and an organic sales increase of $2.6 million or 12.7% driven by growth in the space and aviation end markets.

Current wording

Net sales in the six months ended December 31, 2025 increased by $17.4 million, or 40.2%, when compared to the prior year quarter. Sales increase was attributable to the acquisition of McStarlite which added $14.2 million to revenue and an organic sales increase of $2.9 million or 6.7% driven by growth in the space and aviation end markets.

Previous wording

In the second quarter of fiscal year 2026, on a sequential basis, we expect moderately higher revenue due to growth in new product sales and similar operating margin.

Current wording

In the third quarter of fiscal year 2026, on a sequential basis, we expect significantly higher revenue, due to growth in new product sales and more favorable project timing, and slightly to moderately higher operating margin due to higher volume.

Previous wording

Net sales in the first quarter of fiscal year 2026 increased by $1.8 million, or 9.9%, when compared to the prior year quarter due primarily to an 18.6% benefit from the Custom Biogenic Systems acquisition, partially offset by an organic decline of 8.7% from lower demand at academic and research institutions that were impacted by NIH funding cuts.

Current wording

Net sales in the second quarter of fiscal year 2026 increased by $1.0 million, or 5.5%, when compared to the prior year quarter due primarily to an 8.1% benefit from the Custom Biogenic Systems acquisition, partially offset by an organic decline of 2.6% from lower demand at academic and research institutions that were impacted by NIH funding cuts.

Previous wording

Income from operations in the first quarter of fiscal year 2026 decreased $0.1 million, or 1.5%, when compared to the prior year quarter due to organic decline partially offset by contribution from the acquisition.

Current wording

Income from operations in the second quarter of fiscal year 2026 decreased $0.2 million, or 4.9%, when compared to the prior year quarter due to organic decline partially offset by contribution from the acquisition.

Previous wording

In the second quarter of fiscal year 2026, on a sequential basis, we expect similar revenue and slightly lower operating margin due to higher contribution from Custom Biogenic Systems and increased tariff costs.

Current wording

In the third quarter of fiscal year 2026, on a sequential basis, we expect similar revenue and slightly lower operating margin due to product mix, investments in research and development, and tariff costs, partially offset by pricing and productivity initiatives.

Previous wording

Net sales in the first quarter of fiscal year 2026 increased by $2.5 million, or 7.4%, when compared to the prior year quarter. Organic sales increased by $1.8 million, or 5.6%, due to improved demand in Europe. Foreign currency negative impacts on net sales were $0.6 million, or 1.9%.

Current wording

Net sales in the second quarter of fiscal year 2026 increased by $4.3 million, or 13.6%, when compared to the prior year quarter. Organic sales increased by $3.2 million, or 10.3%, due to improved demand in Europe and North America. Foreign currency positive impacts on net sales were $1.0 million, or 3.3%.

Previous wording

Income from operations in the first quarter of fiscal year 2026 increased by $0.7 million, or 12.2%, when compared to the prior year quarter. The operating income increase was driven by organic sales increase and the realization of previously announced productivity initiatives and restructuring actions.

Current wording

Income from operations in the second quarter of fiscal year 2026 increased by $2.4 million, or 59.3%, when compared to the prior year quarter. The operating income increase was driven by organic sales increase and the realization of previously announced productivity initiatives and restructuring actions.

Previous wording

In the second quarter of fiscal year 2026, on a sequential basis, we expect moderately lower sales and slightly lower operating margin due to project timing.

Current wording

In the third quarter of fiscal year 2026, on a sequential basis, we expect similar revenue and slightly lower operating margin due to project and regional mix.

Previous wording

Income from operations in the first quarter of fiscal year 2026 decreased $0.7 million, or 18.6%, when compared to the prior year quarter, due to the higher tariff costs which have been partly offset by increased pricing.

Current wording

Income from operations in the second quarter of fiscal year 2026 decreased $1.5 million, or 40.7%, when compared to the prior year quarter, due to lower volume and higher tariff costs which have been partly offset by increased pricing.

Previous wording

In the second quarter of fiscal year 2026, on a sequential basis, we expect slightly higher revenue and operating margin.

Current wording

In the third quarter of fiscal year 2026, on a sequential basis, we expect moderately to significantly higher revenue and operating margin.

Previous wording

Corporate expenses in the first quarter of fiscal year 2026 increased as compared to the prior year periods primarily due to increase in variable compensation, employee medical costs and professional fees.

Current wording

Corporate expenses in the second quarter and first six months of fiscal year 2026 increased as compared to the prior year periods primarily due to increase in variable compensation and employee medical costs.

Previous wording

In pursuing our business strategy, we 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, 2025 and less than $0.1 million for the three months ended September 30, 2024.

Current wording

In pursuing our business strategy, we 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 and six months ended December 31, 2025 and less than $(0.1) million for the three and six months ended December 31, 2024.

Previous wording

At September 30, 2025, our total cash balance was $98.7 million, of which $78.9 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 December 31, 2025, our total cash balance was $97.0 million, of which $77.8 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 three months ended September 30, 2025, was $16.8 million compared to net cash provided by continuing operating activities of $17.5 million in the prior year. We generated $26.3 million from income statement activities and used $9.5 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, 2025 totaled $6.4 million and consisted primarily of cash used for capital expenditures. Cash used for financing activities for the three months ended September 30, 2025 totaled $15.5 million and consisted primarily of repayments of borrowings of $8.0 million, cash paid for dividends of $3.8 million and activity under share-based payment plans of $1.1 million.

Current wording

Net cash provided by continuing operating activities for the six months ended December 31, 2025, was $37.5 million compared to net cash provided by continuing operating activities of $26.7 million in the prior year period. We generated $58.4 million from income statement activities and used $20.9 million of cash to fund working capital and other balance sheet increases. Cash flow used in investing activities for the six months ended December 31, 2025 totaled $14.1 million and consisted primarily of cash used for capital expenditures. Cash used for financing activities for the six months ended December 31, 2025 totaled $30.1 million and consisted primarily of repayments of borrowings of $26.0 million, cash paid for dividends of $7.9 million, and treasury stock related taxes of $3.8 million, and borrowings of $8.0 million.

Previous wording

During the second quarter of fiscal year 2025, we entered into a $250 million 364-day term loan with existing lenders. Also, during the period, we converted the 364-day term loan into an exercise of the accordion feature under our existing credit facilities. In connection with the conversion of the loan, we entered into a Second Amendment to Third Amended and Restated Credit Agreement. This amendment expanded the total available credit under the Revolving Credit Agreement from $500 million to $825 million. As of September 30, 2025, we used $1.9 million against the letter of credit sub-facility and had the ability to borrow $197.6 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. Current financial covenants under the facility are as follows:

Current wording

During the second quarter of fiscal year 2025, we entered into a $250 million 364-day term loan with existing lenders. Also, during the period, we converted the 364-day term loan into an exercise of the accordion feature under our existing credit facilities. In connection with the conversion of the loan, we entered into a Second Amendment to Third Amended and Restated Credit Agreement. This amendment expanded the total available credit under the Revolving Credit Agreement from $500 million to $825 million. As of December 31, 2025, we used $3.5 million against the letter of credit sub-facility and had the ability to borrow $212.6 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. Current financial covenants under the facility are as follows:

Previous wording

Interest Coverage RatioWe are 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, 2025, the Interest Coverage Ratio was 4.62:1.

Current wording

Interest Coverage RatioWe are 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 December 31, 2025, the Interest Coverage Ratio was 4.33:1.

Previous wording

Leverage Ratio The 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, 2025, the leverage ratio was 2.62:1.

Current wording

Leverage Ratio The 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 December 31, 2025, the leverage ratio was 2.55:1.

Previous wording

As of September 30, 2025, we had borrowings under our facility of $544.6 million. In order to manage our interest rate exposure on these borrowings, we are party to $225 million of active floating to fixed rate swaps. These swaps convert our interest payments from SOFR to a weighted average fixed rate of 3.48%. The effective rate of interest for our outstanding borrowings, including the impact of the interest rate swaps, was 6.10%.

Current wording

As of December 31, 2025, we had borrowings under our facility of $534.7 million. In order to manage our interest rate exposure on these borrowings, we are party to $225 million of active floating to fixed rate swaps. These swaps convert our interest payments from SOFR to a weighted average fixed rate of 3.48%. The effective rate of interest for our outstanding borrowings, including the impact of the interest rate swaps, was 6.03%.

Previous wording

Contributions of $1.3 million and $3.4 million were made during the three months ended September 30, 2025 and 2024, respectively. We expect to pay $5.7 million in contributions to our defined benefit plans during the remainder of fiscal year 2026 comprising of $5.4 million and $0.3 million to our 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.

Current wording

Contributions of $2.8 million and $4.8 million were made during the six months ended December 31, 2025 and 2024, respectively. We expect to pay $4.1 million in contributions to our defined benefit plans during the remainder of fiscal year 2026 comprising of $3.8 million and $0.3 million to our 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 two retired executives. Current executives and new hires are not eligible for this program. At September 30, 2025, the underlying policies had a cash surrender value of $6.5 million and are reported net of loans of $2.7 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 two retired executives. Current executives and new hires are not eligible for this program. At December 31, 2025, the underlying policies had a cash surrender value of $6.8 million and are reported net of loans of $2.7 million for which we have the legal right of offset, these amounts are reported net on our balance sheet.

Previous wording

Defined Benefit Pension Plans – We record expenses related to these plans based upon various actuarial assumptions such as discount rates, mortality rates, and assumed rates of returns. Our pension plan is frozen for substantially all eligible U.S. employees and participants in the plan ceased accruing future benefits.

Current wording

Defined Benefit Pension Plans – We record expenses related to these plans based upon various actuarial assumptions such as discount rates, mortality rates, and assumed rates of returns. Our pension plan is frozen for substantially all eligible U.S. employees and participants in the plan have ceased accruing future benefits.