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    SXI
    Earnings call· Jun 2026(Q4 FY26)

    STANDEX INTERNATIONAL CORP/DE/ Q4 FY26 earnings call SXI

    Jul 31, 2026 Source

    Executive summary

    Standex International Q4 FY26 — Record Sales and Grid Capacity Expansion

    Standex International concluded FY26 with record sales and profitability, affirming its transformation into a growing engineered components company. The quarter was marked by strong organic growth, particularly in Electronics and Aerospace & Defense, fueled by new product development and expansion into fast-growth markets. The company is aggressively expanding capacity in its Grid business to capitalize on significant market opportunities, while navigating short-term operational challenges in its Edge business and the impact of a recent divestiture.

    Highlights

    5

    • Total sales grew 5.5% organically in FY26, propelled by growth initiatives.

    • Q4 sales increased 7.7% organically, driven by Electronics and Aerospace & Defense segments.

    • Q4 adjusted earnings per share were a record $2.45, up 7.4% year-on-year.

    • Generated record free cash flow of $35 million in Q4, compared to $24.9 million a year ago.

    • Achieved a record quarterly order intake of approximately $270 million, with an overall book-to-bill ratio of 1.18.

    Concerns

    4

    • Q4 adjusted operating margin decreased 70 basis points year-on-year to 19.9%.

    • Electronics adjusted operating margin decreased 140 basis points year-on-year due to growth investments and transitory operational issues in the Edge business.

    • The Federal Industries divestiture resulted in a 4.5% impact on Q4 revenue.

    • Engraving and Hydraulics revenue decreased 9.7% year-on-year, driven by a 9.6% organic decline.

    Guidance & targets

    20
    CategoryTargetConfidence
    Fiscal Year 2027 Sales Growth
    mid- to high single-digit
    high materiality
    High
    Fiscal Year 2027 Organic Growth
    high single-digit to low double-digit
    high materiality
    High
    Fiscal Year 2027 Adjusted Operating Margin
    continued expansion
    high materiality
    High
    Fiscal First Quarter 2027 Revenue
    moderately higher
    medium materiality
    Medium
    Fiscal First Quarter 2027 Adjusted Operating Margin
    slightly to moderately higher
    medium materiality
    Medium
    Fiscal Year 2027 New Product Sales
    grow by $23 million to $90 million
    medium materiality
    High
    Fiscal Year 2027 Sales into Fast-Growing Markets
    increase approximately 20% to greater than $310 million
    medium materiality
    High
    Fiscal Year 2028 Sales
    greater than $1.1 billion
    high materiality
    High
    Fiscal Year 2028 Adjusted Operating Margin
    greater than 23%
    high materiality
    High
    Grid Sales
    $340 million and $440 million
    high materiality
    High
    Croatia Annual Capacity
    approximately $75 million
    medium materiality
    High
    Mexico Annual Capacity
    approximately $25 million
    medium materiality
    High
    Texas Annual Capacity
    over $60 million
    medium materiality
    High
    India Additional Shifts Annual Capacity
    $45 million
    medium materiality
    High
    India Footprint Expansion Annual Capacity
    $50 million
    medium materiality
    High
    Productivity and Automation Annual Capacity
    $40 million
    medium materiality
    High
    Fiscal Year 2027 Capital Expenditures
    between $45 million and $55 million
    medium materiality
    High
    Fiscal Year 2027 Grid Sales
    $180 million to $200 million
    high materiality
    High
    Electronics Q1 FY27 Organic Growth
    high teens or low 20%
    medium materiality
    High
    Missile Business Sales
    $40 million and $80 million
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Electronics
    Record revenue driven by organic growth from fast-growth markets and new product sales. Adjusted operating margin decreased due to growth investments and transitory operational issues in the Edge business, partially offset by higher volume and pricing initiatives. Excluding Edge issues, margin would have increased YoY.
    Organic Growth: 12.9%Foreign Currency Impact: -0.8%Adjusted Operating Margin Change YoY: -140 bpsBook-to-Bill: 1.27Orders: $165 million
    		$129.1 million12.1%—27.2%
    Aerospace and Defense
    Organic growth driven by increased project activity in the defense end market. Adjusted operating margin increased primarily due to higher volume and favorable project mix. Management expects this segment to consistently achieve over 20% operating margin.
    Organic Growth: 18.4%Adjusted Operating Margin Change YoY: +410 bps
    		$37.9 million18.3%—22.5%
    Scientific
    Organic growth driven by pricing initiatives and a slight market recovery. Adjusted operating margin increased reflecting higher sales and tariff refunds.
    Organic Growth: 5%Adjusted Operating Margin Change YoY: +440 bps
    		$18.8 million5%—28.6%
    Engraving and Hydraulics
    Revenue decreased due to organic decline. Adjusted operating margin saw a slight increase year-on-year.
    Organic Decline: 9.6%Foreign Currency Impact: -0.1%Adjusted Operating Margin Change YoY: +20 bps
    		$42.4 million-9.7%—15.9%

    Operational metrics

    25
    Total Sales Organic Growth
    5.5%
    FY26

    Propelled by growth initiatives.

    New Product Sales
    $67 millionfrom $40 million
    FY26

    Meaningfully contributing to sales growth.

    Sales to Fast-Growth Markets
    $264 millionincreased $80 million
    FY26

    Markets include space, defense, and grid.

    Adjusted Gross Margin
    42%
    FY26

    Achieved record milestone.

    Adjusted Operating Income Margin
    19.4%
    FY26

    Achieved record milestone.

    Adjusted Earnings Per Share
    $8.74
    FY26

    Achieved record milestone.

    Net Cash Provided by Operating Activities
    $40.5 millioncompared to $33.4 million a year ago
    Q4 FY26

    Strong cash generation in the quarter.

    Capital Expenditures
    $5.5 millioncompared to $8.6 million a year ago
    Q4 FY26

    Quarterly capital expenditures.

    Available Liquidity
    $148 million
    Q4 FY26

    Current available liquidity.

    Net Debt
    $339.2 millioncompared to $448 million at the end of fiscal fourth quarter 2025
    Q4 FY26

    Net debt position at quarter end.

    Net Leverage Ratio
    1.8
    Q4 FY26

    Current net leverage ratio.

    Long-Term Debt
    $518 million
    Q4 FY26

    Total long-term debt at quarter end.

    Cash and Cash Equivalents
    $178.7 million
    Q4 FY26

    Cash balance at quarter end.

    Dividend Per Share
    $0.346.3% increase year-on-year
    Q4 FY26

    Declared quarterly cash dividend.

    Federal Industries Divestiture Revenue Impact
    4.5%
    Q4 FY26

    Impact on total revenue from the divestiture.

    Foreign Currency Revenue Impact
    0.4%
    Q4 FY26

    Impact on total revenue from foreign currency fluctuations.

    Electronics New Product Sales
    $23 millionapproximately 43%
    Q4 FY26

    Sales from new products within the Electronics segment.

    Electronics Fast-Growth Markets Sales
    $72 million
    Q4 FY26

    Sales into fast-growth markets within the Electronics segment.

    Grid Sales
    $148 millionfrom approximately $100 million
    FY26

    Sales growth for the Grid business since its acquisition.

    Grid Acquisition Multiple (Blended)
    7 to 8x
    FY26

    Blended multiple for the entire Amran and Narayan acquisition, including initial payment and early settlement.

    Narayan Early Payment Multiple
    15x
    Q4 FY26

    Multiple paid for the remaining 9.9% interest in Narayan.

    Electronics Business Unit Book-to-Bill
    over 1.2
    Q4 FY26

    Book-to-bill for each individual business unit within Electronics.

    Japan Reed Switch Capacity Increase
    20-25%vs FY26
    FY27

    Additional capacity available in the Kofu plant for reed switch production.

    Aerospace and Defense Operating Margin Target
    over 20%
    Long-term

    Long-term expectation for A&D operating margin, despite quarterly lumpiness.

    Interest Expense
    $7 million
    Q1 FY27

    Expected interest expense for the upcoming fiscal quarter.

    Industry KPIs

    4
    MetricValueDetails
    Capacity expansion—
    Tariff cost impact—
    Data center prime power demand$148 millionUSD
    Order backlog order intake by segment$270 millionUSD

    Orderbook & backlog

    4
    Total Order Intake$270 millionQ4 FY26
    Overall Book-to-Bill Ratio1.18Q4 FY26
    Electronics Book-to-Bill Ratio1.27Q4 FY26
    Electronics Orders$165 millionQ4 FY26

    Product announcements

    1
    ProductTypeDetails
    New Productslaunch

    Deals & partnerships

    1
    Narayan GroupAcquisition of remaining 9.9% interest, completing the acquisition of Amran and Narayan Group (now Standex Grid).$64 million

    Completed on July 2. The early buy-in was to ensure management continuity, expedite decisions for future growth, and simplify accounting complexities. The relationship and collaboration with the leadership have been exceptional.

    Capital programs

    7
    Productivity and Automation (Grid)underway

    Benefit: $40 million in full year capacity

    Focused on lean transformation and Kaizen events primarily in key lines in India, with a dedicated team. Expect to achieve significant portion (maybe half) within FY27.

    Croatia Greenfield Facility (Grid)completed

    Benefit: $75 million in annual capacity

    New facility opened in May, built in response to customer demand for local capacity in Europe. Expected to add $75 million in annual capacity by FY2030, exceeding original estimate of $60 million. It is up and running.

    Mexico New Lines (Grid)underway

    Benefit: $25 million in annual capacity

    Space freed up in existing facility to produce low-voltage instrument transformers. Starting to do some shipments out of there. Expected to add $25 million in annual capacity by FY2030.

    Texas Footprint Expansion (Grid)underway

    Benefit: $60 million in annual capacity

    Signed a lease to triple footprint to over 200,000 square feet. Machinery on order, production on track to start in fiscal 2028. Expected to add over $60 million in annual capacity by FY2030.

    India Additional Shifts (Grid)underway

    Benefit: $45 million of annual capacity

    Involves putting a second shift in the India plant. Expected to add $45 million of annual capacity by FY2030.

    India Footprint Expansion (Grid)underway

    Benefit: $50 million of annual capacity

    Expected to add $50 million of annual capacity by FY2030. This expansion is a later-year event, following the Texas expansion.

    Houston Facility Fourth Shiftcompleted

    Benefit: $5 million of additional capacity

    Set up a fourth shift in the current Amran, Houston facility, meaning the plant will run approximately 24/7. This should provide an additional $5 million of capacity.

    Risks & headwinds

    4
    Transitory Operational Issues in Edge BusinessQ4 FY26, expected to turn the corner

    Impacted margins by a couple of million dollars in Q4 FY26.

    Mitigation: New personnel involved in driving corrective actions; management expects to get arms around it and get it back on track.

    Federal Industries Divestiture ImpactOngoing impact in Q1 FY27

    4.5% impact on Q4 FY26 revenue.

    Mitigation: Offset by organic growth from fast-growth markets and increased new product sales.

    Growth Investments Offsetting ProductivityQ1 FY27

    Partially offset by growth investments.

    Mitigation: Organic growth and realization of productivity actions are expected to partially offset this, leading to slightly to moderately higher adjusted operating margin.

    Natural Disaster Impact (Japan Earthquake)Recent (past week)

    Minimal impact on Sanyu Relay facility; some employees had damage to their homes.

    Mitigation: No employees injured; company's hearts are with employees and their families as they recover.

    What to watch in Q1 FY27

    5

    Electronics Adjusted Operating Margin

    Q1 FY27
    Current27.2% (-140 bps YoY)
    TargetModerately higher (sequential)

    Why it matters

    Recovery of Electronics margins from transitory📎 operational issues in the Edge business is crucial for overall profitability and segment performance.

    Sequentially, in fiscal first quarter 2027, we expect slightly higher revenue, reflecting higher sales into fast-growth end markets and increased new product sales. We expect moderately higher adjusted operating margin.

    Q&A highlights

    7

    Asked for more detail on the sequential process and team structure for the multi-continent Grid capacity expansion plan.

    Management explained the multi-year project involves dedicated 'tiger teams' for different sites and initiatives. Productivity/automation efforts are focused on India, Croatia and Mexico are managed by a separate team and are already ramping up, while Texas and India footprint expansions are later-year events. They expect to reach $180M-$200M in Grid sales in FY27.

    “We do have a team that's solely focused on grid expansion kind of across these different sites. And this, Mike, is kind of a multi-year project, multi-year projection.”

    asked by Michael Shlisky · answered by Ademir Sarcevic

    2 min read5 chapters

    Detailed Narrative

    01

    Transformation to Engineered Components Company

    Standex International has successfully transitioned into an engineered components company, with 73% of Q4 sales derived from these businesses. This strategic shift positions the company in large end markets with significant organic and inorganic growth opportunities. The company's focus on engineered components is a key driver of its overall growth trajectory and long-term strategy.

    02

    Strategic Focus on Fast-Growth Markets

    The company is increasingly focused on fast-growth markets such as space, defense, and grid infrastructure. Sales to these markets increased by $80 million to $264 million in FY26, representing 30% of total sales. This strategic alignment is expected to continue driving growth, with sales into these markets projected to increase approximately 20% to over $310 million in FY27.

    03

    New Product Development Engine

    New product development efforts are contributing meaningfully to sales, growing from $40 million to $67 million in FY26, adding 300 basis points to sales growth. The company plans to launch over 20 new products in FY27, building on the 15+ launched in FY26. New product sales are expected to reach $90 million in FY27, further contributing to organic growth.

    04

    Grid Capacity Expansion Strategy

    A major strategic priority is the expansion of capacity within the Standex Grid business, which saw sales grow from $100 million at acquisition to $148 million in FY26. The company targets Grid sales of $340 million to $440 million by FY2030 through a multi-pronged approach including productivity improvements, a new facility in Croatia, new lines in Mexico, footprint expansion in Texas, and additional shifts and expansion in India. These efforts are managed by dedicated teams to capture significant market opportunities in power infrastructure.

    05

    Leadership Transition and Employee Recognition

    Ademir Sarcevic, the current CFO, will transition to President of Electronics, a move seen as a natural progression given his operational involvement. The company acknowledged the efforts of its employees, executives, and Board for the record FY26 performance. Additionally, Alan Glass, Chief Legal Officer, announced his retirement after 10 years of service.

    AI-generated summary of the company’s earnings call. Not investment advice.