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Dec 31, 2022
Standex Q2 2023 Earnings Report
Reported financial results for the second quarter of fiscal year 2023, achieving record GAAP operating margin and adjusted operating margin, driven by organic revenue growth and productivity actions.
Key Takeaways
Standex International Corporation reported strong second-quarter fiscal 2023 results, exceeding expectations with 5.5% organic revenue growth, a record gross margin of 38.5%, and a record adjusted operating margin of 15.2%. The company generated $24 million in free cash flow and announced the sale of its Procon business unit.
Achieved record GAAP operating margin of 14.8% and record adjusted operating margin of 15.2%, up 20 bps sequentially and 160 bps year-on-year.
Realized 5.5% organic revenue growth year-on-year, with three of the five business segments achieving >10% organic growth.
Increased fast growth market sales by approximately 35% year-on-year to approximately $19 million.
Generated $24 million in free cash flow, representing a conversion of approximately 120% of GAAP net income.
Standex
Standex
Standex Revenue by Segment
Revenue by Segment
Electronics Revenue
CapyFin.comEngraving Revenue
CapyFin.comScientific Revenue
CapyFin.comEngineering Technologies Revenue
CapyFin.comSpecialty Solutions Revenue
CapyFin.com Forward Guidance
The Company expects a slight to moderate revenue decrease primarily due to unfavorable foreign exchange and the impact of the Procon divestiture. The Company expects slightly lower to similar adjusted operating margin, on a sequential basis, as price and productivity actions mostly offset the impact of a sales decrease. The Company expects higher adjusted operating margin compared to the same period a year ago.
Positive Outlook
- Strong demand across end markets in North America.
- Increased sales into fast growth markets.
- Ongoing pricing and productivity actions in the remaining businesses.
- Expects higher adjusted operating margin compared to the same period a year ago.
- Productivity actions and lower freight cost offset volume decline.
Challenges Ahead
- Slight to moderate revenue decrease primarily due to unfavorable foreign exchange and the impact of the Procon divestiture.
- Slightly lower to similar operating margin, on a sequential basis, due to unfavorable product mix and plant moves in China and Germany.
- Revenue to decrease slightly and operating margin to decrease moderately due to unfavorable project mix.
- Significant decrease in revenue reflecting timing of projects and a slight decrease in operating margin, as productivity actions mostly offset volume decline.
- Revenue to decline moderately to significantly due to the Procon divestiture.
Revenue & Expenses
Visualization of income flow from segment revenue to net income