Standex International (NYSE:SXI) reported record fiscal first-quarter 2027 sales of $232.6 million, with organic growth of 12.4% and adjusted earnings per share rising 21.1% from a year earlier to $2.41. The company raised its full-year sales outlook, citing momentum in electronics, new products and fast-growth end markets including data centers, grid infrastructure, defense and space.
Chairman, President and Chief Executive Officer David Dunbar said the company’s strategy of shifting toward more attractive end markets and investing in product development was gaining momentum. Standex recorded quarterly order intake of about $273 million, producing a book-to-bill ratio of 1.17.
“Our years-long strategy to reposition the company to serve attractive end markets and to invest effectively in new product development continues to gain momentum and deliver top-line growth,” Dunbar said.
Raised fiscal 2027 outlook
Standex now expects total sales to grow at a high-single-digit rate in fiscal 2027, compared with its prior outlook for mid- to high-single-digit growth. The company expects organic sales to increase by more than $100 million and adjusted earnings per share to increase in the high teens.
The company said it remains on track to exceed $1.1 billion in total sales and reach a 23% adjusted operating margin by the end of fiscal 2028.
New product sales rose about 56% during the first quarter to roughly $17.4 million. Sales into fast-growth markets increased about 25% to $77.8 million. For the full year, Standex expects new product sales, pro forma for the Federal Industries divestiture, to increase by $27 million to $94 million and contribute more than 300 basis points of organic growth.
Sales to fast-growing markets, including defense, space and grid, are expected to rise more than 20% to above $315 million for the year, representing more than 30% of total sales, according to management.
Dunbar said data centers are expected to account for about 30% of Standex’s anticipated organic growth this year, while approximately 70% is expected to come from other sources. Grid revenue growth is expected to exceed $40 million, with about three-quarters of that growth tied to data centers and the remainder tied to broader electrification and rising electricity demand.
Electronics segment drives growth
The electronics segment posted revenue of $140.5 million, up 27.1% year over year. Organic growth was 29.5%, partially offset by a 2.4% foreign-exchange impact. The segment’s first-quarter orders reached approximately $173 million and its book-to-bill ratio was 1.23.
Electronics adjusted operating margin increased 60 basis points to 29.4%, aided by higher volume and pricing initiatives, partly offset by investments in growth initiatives and higher variable compensation expenses.
Chief Financial Officer and Treasurer Ademir Sarcevic said all electronics business units delivered organic growth above 20% during the quarter. He also said the company expects its grid business to generate at least $190 million to $200 million of sales in fiscal 2027, compared with its prior range of $180 million to $200 million.
Standex is expanding grid capacity across India, Croatia, Mexico and Houston. Sarcevic said the Mexico operation is already shipping products, while the Croatia facility is undergoing customer audits and is expected to begin manufacturing and shipping products during the current quarter. The company expects Croatia to ramp further in the third and fourth quarters.
In Houston, the company began operating its existing site around the clock and is developing a larger facility expected to be available in June or July of next year. Management expects additional time will be needed to fully begin production at that facility.
Standex said it expects capacity additions to translate into a more gradual, rather than immediate, revenue increase. Management added that customer forecasts are increasingly extending six to 12 months, while some customers are interested in three- to five-year supply agreements.
Other segment results and margins
- Aerospace and defense: Revenue rose 5.1% to $31.4 million, driven by project activity in space and defense. Adjusted operating margin increased 310 basis points to 19.9% due primarily to volume and project mix.
- Scientific: Revenue increased 1.8% to $19.8 million, reflecting pricing initiatives and a slight market recovery. Adjusted operating margin rose 420 basis points to 29.5%.
- Engraving and hydraulics: Revenue declined 14.9% to $40.9 million, including a 15.7% organic decline attributed to North American automotive-market softness. Adjusted operating margin nevertheless increased 40 basis points to 16.4%.
On a consolidated basis, adjusted gross margin improved 240 basis points to 44.4%, while adjusted operating margin increased 110 basis points to 20.2%. Sarcevic attributed future margin opportunities to a combination of favorable mix, productivity efforts, higher utilization and improvements in the company’s North American Electronics Edge operations following an earlier enterprise resource planning implementation issue.
Cash flow, capital deployment and leadership changes
Standex generated $15.7 million in operating cash flow and $9.1 million in free cash flow during the quarter, compared with $16.8 million and $10.4 million, respectively, a year earlier. Capital expenditures totaled $6.6 million in the quarter. The company continues to forecast fiscal 2027 capital expenditures of $45 million to $55 million, primarily for grid growth investments.
At quarter-end, Standex had available liquidity of approximately $168.5 million, net debt of $401.2 million and a net leverage ratio of 2. Long-term debt totaled $518.1 million, while cash and equivalents were $116.8 million.
The company declared its 249th consecutive quarterly cash dividend of $0.36 per share, up approximately 5.9% year over year, and announced a new $100 million share repurchase authorization effective Oct. 27.
Standex also said Samantha Stoddard will become chief financial officer on Dec. 1, succeeding Sarcevic, who is moving into the role of president of the electronics segment. Colby Slaughter joined the company as chief legal officer. Dunbar also noted that board member Joanne Edwards is retiring after eight years and that Brenna Preisser of Brunswick has joined the board.
About Standex International (NYSE:SXI)
Standex International Corporation (NYSE:SXI) is a diversified industrial manufacturer that develops and produces specialized equipment, components and engineered products for customers in a range of commercial and industrial markets. The company serves original equipment manufacturers and other businesses through a portfolio of operations focused on applications requiring specialized technology, precision manufacturing and customized solutions.
Its businesses include Standex Electronics, which makes sensors, switches, relays, magnetic components and power magnetics; Standex Engraving, which provides engraved tooling, mold texturing and patterned rolls for plastics, packaging and other manufacturing applications; and Standex Engineering Technologies, which develops engineered components and systems for industrial and mobile equipment.
