Q3 2024 Standex International Corp Earnings Call Transcript
Key Points
- Standex International Corp (SXI) reported strong margin performance, achieving an adjusted gross margin of nearly 40%.
- Record fiscal third quarter free cash flow of $19.3 million was achieved, maintaining strong year-to-date performance.
- Sales into fast growth end markets grew by 9% year-on-year, contributing to a long-term target of $200 million annual sales by fiscal year 2028.
- Recent acquisitions, such as Sanyu Switch Company, expanded product offerings and contributed positively to financial results.
- Standex International Corp (SXI) demonstrated resilience and adaptability in operating improvements despite challenging macro conditions.
- Organic revenue declined by 5.7% due to market softness, particularly in appliances and general industrial end markets in China and Europe.
- The electronics segment faced continued challenges with a 9.3% organic decline and softness in key markets like Europe and Asia.
- A one-time stock compensation charge related to the CEO's 10th anniversary impacted adjusted operating margin by approximately 70 basis points.
- Foreign exchange negatively impacted revenue, with a 0.9% effect on the consolidated basis.
- The Specialty Solutions segment experienced a significant revenue decrease of 27.1% year-on-year, primarily due to the Procon divestiture and normalization in the display merchandising business.
Good morning, ladies and gentlemen, and welcome to the Standex interim -- fiscal third quarter 2024 financial results conference call. (Operator Instructions) And this call is being recorded on Friday, May 3, 2024. I would now like to turn the conference over to Mr. Christopher Howe, Director of Investor Relations. Please go ahead.
Thank you, operator, and good morning. Please note that the presentation accompanying management's remarks can be found on the Investor Relations portion of the company's website at www.standex.com. Please refer to Standex's safe harbor statement on slide 2. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations, and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's most recent annual report on Form 10-K as well as other SEC filings
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