STANDEX INTERNATIONAL CORP/DE/

Previous wording

We are a diversified industrial manufacturer with leading positions in a variety of products and services that are used in diverse commercial and industrial markets. We are headquartered in Salem, New Hampshire, and have six operating segments aggregated into five reportable segments: Electronics, Engineering Technologies, Scientific, Engraving, and Specialty Solutions. Two operating segments are aggregated into Specialty Solutions. Our businesses work in close partnership with our customers to deliver custom solutions or engineered components that solve their unique and specific needs, an approach we call "Customer Intimacy".

Current wording

We are a diversified industrial manufacturer with leading positions in a variety of products and services that are used in diverse commercial and industrial markets. We are headquartered in Salem, New Hampshire. Our businesses work in close partnership with our customers to deliver custom solutions or engineered components that solve their unique and specific needs, an approach we call "Customer Intimacy".

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 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.

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 pursue 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

We believe the discussion of these items provides enhanced information to investors by disclosing their impact on the overall trend which provides a clearer comparative view of the KPI, as applicable. For discussion of the impact of foreign exchange rates on KPIs, we calculate the impact as the difference between the current period KPI calculated at the current period exchange rate as compared to the KPI calculated at the historical exchange rate for the prior period. For discussion of the impact of acquisitions, we isolate the effect on the KPI amount that would have existed regardless of such acquisition. Sales resulting from synergies between the acquisition and existing operations of the Company are considered organic growth for the purposes of our discussion.

Current wording

We believe the discussion of these items provides enhanced information to investors by disclosing their impact on the overall trend which provides a clearer comparative view of the KPI, as applicable. For discussion of the impact of foreign exchange rates on KPIs, we calculate the impact as the difference between the current period KPI calculated at the current period exchange rate as compared to the KPI calculated at the historical exchange rate for the prior period. For discussion of the impact of acquisitions or divestitures, we isolate the effect on the KPI amount that would have existed regardless of such acquisition or divestiture. Sales resulting from synergies between the acquisition and existing operations of the Company are considered organic growth for the purposes of our discussion.

Previous 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.

Current wording

Net sales increased in the third quarter of fiscal year 2026 by $16.8 million or 8.1%, when compared to the prior year quarter. Acquisitions accounted for increased sales of $3.3 million or 1.6%. Divestitures reduced sales by $2.9 million, or 1.4%. Foreign currency positively impacted sales by $2.9 million, or 1.4%. Organic sales increased $13.5 million, or 6.5%, primarily due to increased sales into fast growth markets and contributions from new products.

Previous wording

Net sales increased in the six months ended December 31, 2025 by $78.5 million or 21.8%, when compared to the prior year period. Acquisitions accounted for increased sales of $63.5 million or 17.6%. Foreign currency positively impacted sales by $2.2 million, or 0.6%. Organic sales increased $12.7 million, or 3.5%, primarily due to increased sales into fast growth markets and contributions from new products.

Current wording

Net sales increased in the nine months ended March 31, 2026 by $95.3 million or 16.8%, when compared to the prior year period. Acquisitions accounted for increased sales of $66.9 million or 11.8%, while divestitures reduced sales by $3.0 million or 0.5%. Foreign currency positively impacted sales by $5.1 million, or 0.9%. Organic sales increased $26.3 million, or 4.6%, primarily due to increased sales into fast growth markets and contributions from new products.

Previous 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.

Current wording

Gross profit in the third quarter of fiscal year 2026 increased to $91.9 million, or a gross margin of 40.9%, as compared to $82.4 million, or a gross margin of 39.7%, in the third quarter of fiscal year 2025. The margin increase was a result of the continued focus on pricing disciplines and productivity actions.

Previous wording

Gross profit in the six months ended December 31, 2025 increased to $182.7 million, or a gross margin of 41.6% as compared to $141.5 million, or a gross margin of 39.3%, in the prior year period. The margin increase was a result of the continued focus on pricing disciplines and productivity actions.

Current wording

Gross profit in the nine months ended March 31, 2026 increased to $274.6 million, or a gross margin of 41.4% as compared to $224.0 million, or a gross margin of 39.4%, in the prior year period. 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 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.

Current wording

Selling, General, and Administrative (“SG&A”) expenses for the third quarter of fiscal year 2026 increased to $52.4 million, or 23.3% of sales as compared to $52.0 million, or 25.1% of sales during the prior year quarter. SG&A expenses during the third quarter of fiscal year 2026 were primarily impacted by increased expenses due to the recent acquisitions, and higher U.S. medical costs as compared to the prior year quarter.

Previous wording

Selling, General, and Administrative (“SG&A”) expenses for the six months ended December 31, 2025 increased to $110.0 million, or 25.1% of sales as compared to $88.7 million, or 24.6% of sales during the prior year period. SG&A expenses during the six months ended December 31, 2025 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 period.

Current wording

SG&A expenses for the nine months ended March 31, 2026 increased to $162.4 million, or 24.5% of sales as compared to $140.8 million, or 24.8% of sales during the prior year period. SG&A expenses during the nine months ended March 31, 2026 were primarily impacted by increased expenses due to the recent acquisitions, research and development, and higher U.S. medical costs as compared to the prior year period.

Previous 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.

Current wording

We incurred restructuring expenses of $3.0 million in the third quarter of fiscal year 2026, and $9.4 million in the first nine months of fiscal year 2026 primarily related to facility rationalization activities and announced closure of four sites in our Engraving & Hydraulics segment. We expect to continue seeing realization of these restructuring actions during the last quarter of fiscal year 2026 and into fiscal year 2027.

Previous 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.

Current wording

We incurred deal related expenses of $2.5 million in the third quarter of fiscal year 2026 and $3.6 million in the first nine months of fiscal year 2026. Deal related expenses primarily consist of costs related to due diligence, advisory, legal, integration, and valuation activities associated with recent or pending acquisitions or divestitures transactions.

Previous 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.

Current wording

Income from operations for the third quarter of fiscal year 2026 was $90.8 million, compared to $26.3 million during the prior year quarter. The increase of $64.6 million, or 246.0%, is primarily due to the gain on the divestiture of Federal Industries, contributions from recent acquisitions, productivity improvement initiatives, and lower purchase accounting costs, partially offset by increase in administrative and research and development expenses.

Previous wording

Income from operations for the six months ended December 31, 2025 was $65.2 million, compared to $32.6 million during the prior year period. The increase of $32.6 million, or 100.3%, 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.

Current wording

Income from operations for the nine months ended March 31, 2026 was $156.0 million, compared to $58.8 million during the prior year period. The increase of $97.2 million, or 165.3%, is primarily due to the gain on the divestiture of Federal Industries, effects of recent acquisitions, productivity improvement initiatives, and lower purchase accounting and deal related costs, partially offset by increase in administrative and research and development expenses.

Previous 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%.

Current wording

Our effective interest rate for the nine months ended March 31, 2026 was 5.80%.

Previous 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.

Current wording

The Company's effective tax rate from continuing operations for the third quarter of fiscal year 2026 and for the nine months ended March 31, 2026 was 17.0% and 19.7%, respectively, compared with -29.6% and 1.1% for the prior year quarter and prior year period, respectively.

Previous 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.

Current wording

The tax rate was impacted in the three and nine months ended March 31, 2026 by the following items: (i) the recognition of a discrete tax benefit of approximately $6 million related to the release of a valuation allowance previously recorded against the capital loss carryforward deferred tax asset, due to the utilization of such carryforward in connection with the divestiture of Federal Industries; (ii) changes in the geographic mix of earnings; (iii) foreign withholding taxes; and (iv) federal tax credits related to research and development activities.

Previous 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.

Current wording

The tax rate was impacted in the three and nine months ended March 31, 2025 by the following items: (i) a discrete tax benefit related to the release of a previously recorded tax reserve for a one-time tax charge on historical foreign earnings, as the relevant statute of limitations expired during the quarter; (ii) the jurisdictional mix of earnings; (iii) foreign withholding taxes; and (iv) federal research and development tax credits.

Previous wording

Backlog includes all active or open orders for goods and services. Backlog also includes any future deliveries based on executed customer contracts, so long as such deliveries are based on agreed upon delivery schedules. Backlog orders are not necessarily an indicator of future sales levels because of variations in lead times and customer production demand pull systems, with the exception of Engineering Technologies. Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties. Due to the nature of long-term agreements in the Engineering Technologies segment, the timing of orders and delivery dates can vary considerably resulting in significant backlog changes from one period to another.

Current wording

Backlog includes all active or open orders for goods and services. Backlog also includes any future deliveries based on executed customer contracts, so long as such deliveries are based on agreed upon delivery schedules. Backlog orders are not necessarily an indicator of future sales levels because of variations in lead times and customer production demand pull systems, with the exception of Aerospace & Defense. Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties. Due to the nature of long-term agreements in the Aerospace & Defense segment, the timing of orders and delivery dates can vary considerably resulting in significant backlog changes from one period to another.

Previous 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.

Current wording

Total backlog realizable under one year increased $55.2 million, or 22.1%, to $305.1 million at March 31, 2026, from $249.9 million at March 31, 2025. The year over year increase is primarily driven by fast growth end markets.

Previous 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.

Current wording

Income from operations in the third quarter of fiscal year 2026 increased by $6.2 million, or 24.3%, when compared to the prior year quarter. The operating income increase was the result of higher volume, pricing initiatives and product mix, partially offset by growth investments.

Previous wording

Net sales in the six months ended December 31, 2025 increased $52.6 million, or 30.3%, when compared to the prior year quarter. The recent acquisitions added $44.5 million, or 25.6%, in sales for the six months ended December 31, 2025. Organic sales increased by $7.8 million, or 4.5%, due to sales into fast growth markets and increased new product sales. The foreign currency impact increased net sales by 0.2% as compared to the prior year quarter.

Current wording

Net sales in the nine months ended March 31, 2026 increased $61.0 million, or 21.4%, when compared to the prior year period. The recent acquisitions added $44.5 million, or 15.6%, in sales for the nine months ended March 31, 2026. Organic sales increased by $15.3 million, or 5.4%, due to sales into fast growth markets and increased new product sales. Foreign currency impact increased net sales by 0.4% as compared to the prior year period.

Previous wording

Income from operations in the six months ended December 31, 2025 increased by $23.6 million, or 68.5%, when compared to the prior year quarter. The operating income increase was the result of higher volume, pricing initiatives and product mix.

Current wording

Income from operations in the nine months ended March 31, 2026 increased by $29.8 million, or 49.7%, when compared to the prior year period. The operating income increase was the result of higher volume, pricing initiatives and product mix, partially offset by growth investments.

Previous 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.

Current wording

In the fourth 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 increased new product sales. The Company expects slightly higher operating margin due to higher revenue, partially offset by continued growth investments.

Previous wording

Net sales in the second quarter of fiscal year 2026 increased by $8.0 million, or 35.3%, when compared to the prior year quarter. Sales increase was attributable to the acquisition of McStarlite which added $7.6 million to revenue and an organic sales increase of $0.3 million or 1.2% was suppressed by delays in customer project timing.

Current wording

Net sales in the third quarter of fiscal year 2026 increased by $9.2 million, or 33.7%, when compared to the prior year quarter. Sales increase was attributable to the acquisition of McStarlite which added $3.3 million to revenue and an organic sales increase of $5.7 million or 20.8% primarily driven by increased projects activity in commercialization of space end market. Foreign currency impact increased net sales by 0.7% as compared to the prior year quarter.

Previous 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.

Current wording

Income from operations in the third quarter of fiscal year 2026 increased by $2.4 million, or 70.9%, when compared to the prior year quarter. The increase in operating income was a result of higher volume.

Previous 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.

Current wording

Net sales in the nine months ended March 31, 2026 increased by $26.6 million, or 37.7%, when compared to the prior period. Sales increase was attributable to the acquisition of McStarlite which added $17.5 million or 24.9% to revenue and an organic sales increase of $8.6 million or 12.2% driven by growth in the space and aviation end markets. Foreign currency impact increased net sales by 0.6% as compared to the prior year period.

Previous wording

Income from operations in the six months ended December 31, 2025 increased by $0.3 million, or 3.8%, when compared to the prior year quarter. The increase in operating income was a result of higher volume.

Current wording

Income from operations in the nine months ended March 31, 2026 increased by $2.7 million, or 24.4%, when compared to the prior year period. The increase in operating income was a result of higher volume.

Previous 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.

Current wording

In the fourth quarter of fiscal year 2026, on a sequential basis, we expect slightly to moderately 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 and realization of productivity initiatives.

Previous 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.

Current wording

Net sales in the third quarter of fiscal year 2026 decreased by $0.3 million, or 1.7%, when compared to the prior year quarter due primarily to lower demand at academic and research institutions that were impacted by NIH funding cuts.

Previous wording

Net sales in the six months ended December 31, 2025 increased by $2.8 million, or 7.7%, when compared to the prior year quarter due primarily to an 13.3% benefit from the Custom Biogenic Systems acquisition, partially offset by an organic decline of 5.6% from lower demand at academic and research institutions that were impacted by NIH funding cuts.

Current wording

Net sales in the nine months ended March 31, 2026 increased by $2.5 million, or 4.5%, when compared to the prior year period due primarily to an $4.8 million benefit from the Custom Biogenic Systems acquisition, partially offset by an organic decline of $2.3 million from lower demand at academic and research institutions that were impacted by NIH funding cuts.

Previous wording

Income from operations in the six months ended December 31, 2025 decreased $0.3 million, or 3.2%, 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 nine months ended March 31, 2026 decreased $0.5 million, or 3.7%, when compared to the prior year period due to organic decline partially offset by contribution from the acquisition.

Previous 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.

Current wording

In the fourth quarter of fiscal year 2026, on a sequential basis, we expect slightly higher revenue and similar operating margin due to product mix.

Previous 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.

Current wording

Income from operations in the third quarter of fiscal year 2026 increased by $1.2 million, or 23.4%, when compared to the prior year quarter. The operating income increase was a result of realization of previously announced productivity initiatives and restructuring actions.

Previous wording

Income from operations in the six months ended December 31, 2025 increased by $3.2 million, or 31.8%, 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 nine months ended March 31, 2026 increased by $2.8 million, or 15.3%, when compared to the prior year period. The operating income increase was driven by higher sales and the realization of previously announced productivity initiatives and restructuring actions.

Previous wording

Net sales in the second quarter of fiscal year 2026 decreased by $1.5 million, or 7.2%, when compared to the prior year quarter primarily due to lower demand in food service equipment and refuse and dump end markets.

Current wording

Net sales in the third quarter of fiscal year 2026 decreased by $1.5 million, or 21.1%, when compared to the prior year quarter primarily due to divestiture timing.

Previous 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.

Current wording

Income from operations in the third quarter of fiscal year 2026 decreased $0.6 million, or 44.1%, when compared to the prior year quarter, due to divestiture timing and higher tariff costs which have been partly offset by increased pricing.

Previous wording

Income from operations in the six months ended December 31, 2025 decreased $2.1 million, or 29.7%, when compared to the prior year quarter, due to the lower volume and higher tariff costs which have been partly offset by increased pricing.

Current wording

Income from operations in the nine months ended March 31, 2026 decreased $1.2 million, or 22.4%, when compared to the prior year period, due to divestiture timing and higher tariff costs which have been partly offset by increased pricing.

Previous 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.

Current wording

Corporate expenses in the third quarter of fiscal year 2026 remained flat as compared to the prior year quarter. Corporate expenses for the first nine months of fiscal year 2026 increased as compared to the prior year period primarily due to increase in variable compensation and employee medical costs.

Previous wording

The restructuring and acquisition related costs have been discussed above in the Company Overview.

Current wording

The restructuring, gain on sale of business and deal related costs have been discussed above in the Company Overview.

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 and six months ended December 31, 2025 and less than $(0.1) million for the three and six months ended December 31, 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 loss from discontinued operations was approximately $0.1 million for the three and nine months ended March 31, 2026 and 2025.