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Jun 30, 2024
Standex Q4 2024 Earnings Report
Reported solid operational performance despite continued softness in general market conditions.
Key Takeaways
Standex reported a 4.3% decrease in sales for Q4 FY24, although acquisitions and fast growth markets partially offset organic decline. The company achieved an adjusted operating margin of 16.0%, up 60 bps sequentially and year-over-year, and generated free operating cash flow of $22.2 million, representing 112% of GAAP net income.
Sales from fast growth markets increased 13% year-on-year to $27 million in Q4 FY24.
Adjusted gross margin was 38.7% and adjusted operating margin was 16.0%, up 60 bps sequentially and year-on-year.
Free operating cash flow was $22.2 million, representing 112% of GAAP net income.
Four business segments finished the quarter with operating margin above 20%.
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 similar to slightly higher revenue in fiscal first quarter 2025. The Company expects general market conditions to stabilize in the first half and strengthen in the second half of fiscal year 2025.
Positive Outlook
- Higher sales into fast growth markets are expected to drive revenue.
- Over a dozen new products are planned for release, contributing over 100 bps of incremental growth.
- Sales from fast growth markets are expected to grow above 20% year-on-year and exceed $110 million.
- General market conditions are expected to stabilize in the first half and strengthen in the second half of fiscal year 2025.
- Balance sheet remains in a strong position to consider an active funnel of organic and inorganic opportunities.
Challenges Ahead
- Less favorable project timing in the Engineering Technologies segment may offset revenue gains.
- Higher investments in selling, marketing, and R&D may lead to slightly lower adjusted operating margin.
- Organic decline in Electronics segment due to continued softness in the appliances and general industrial end markets in China and Europe and prior overstocking in certain large customer accounts.
- Delays in new platform rollouts in North America impacted Engraving segment revenue.
- Lower demand from retail pharmacies impacted Scientific segment revenue.
Revenue & Expenses
Visualization of income flow from segment revenue to net income