Standex International’s Earnings Call Highlights Growth and Challenges

Standex International ((SXI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Standex International’s latest earnings call painted a picture of both achievement and challenge. The company celebrated significant milestones in profit generation, segment growth, and new product development, setting a positive tone for fiscal 2026. However, the discussion also acknowledged hurdles such as a decline in organic revenue, difficulties within the Scientific segment, and pressures from debt, which tempered the overall optimism.

Record Profit Generation in Fiscal 2025

Standex International reported a remarkable achievement in profit generation for fiscal 2025, with a 23.2% increase in sales during the fourth quarter. This growth was primarily driven by strategic acquisitions and robust new product sales. The company’s operating performance was notably strong, achieving a record adjusted operating margin of 20.6%, marking an increase of 120 basis points sequentially and 350 basis points year-on-year.

Strong Growth in Electronics Segment

The Electronics segment emerged as a standout performer, recording a 43.2% year-on-year revenue increase to $115.2 million. This impressive growth was fueled by a 41% benefit from acquisitions and a modest organic growth of 0.3%. The segment also saw a significant improvement in its adjusted operating margin, which rose by 640 basis points year-on-year.

Expansion into Fast Growth Markets

Standex made significant strides in expanding into fast growth markets, with sales in these areas rising to 28% of total company sales. The company has set ambitious expectations for fiscal 2026, projecting approximately 45% year-on-year growth in these markets, with sales expected to exceed $265 million.

Successful New Product Development

In fiscal 2025, Standex successfully launched 16 new products, with new product sales contributing approximately 2.8% to overall sales, surpassing the company’s goal of 2%. This momentum is expected to continue, with new products projected to add about 3% to sales in 2026.

Organic Revenue Decline

Despite the overall sales growth, Standex experienced a slight organic revenue decline of 1.4% in the fourth quarter of 2025. This decline highlights the challenges the company faces in maintaining organic growth amidst broader market conditions.

Challenges in Scientific Segment

The Scientific segment faced significant challenges, with a 13.9% organic decline attributed to reduced demand from academic and research institutions, impacted by cuts in NIH funding. This downturn led to a decrease in the segment’s adjusted operating margin by 530 basis points year-on-year.

Pressure from Debt and Interest Expenses

Standex’s financial health is under pressure from increased debt, with net debt rising to $448 million. The company projects an interest expense of approximately $9 million for the first quarter of fiscal 2026, indicating a continued focus on managing and reducing debt levels.

Forward-Looking Guidance

Looking ahead, Standex International is optimistic about fiscal 2026, expecting over $100 million in revenue growth. This growth is anticipated to be driven by mid- to high single-digit organic growth in the Electronics segment, double-digit growth in Engineering Technologies, and contributions from acquisitions. The company also plans to expand its presence in fast growth markets and release more than 15 new products, which are expected to contribute significantly to sales growth.

In summary, Standex International’s earnings call reflected a balanced view of accomplishments and challenges. While the company celebrated record profit generation and strong segment growth, it also acknowledged the hurdles of organic revenue decline and debt pressures. Looking forward, Standex remains optimistic about its growth prospects in fiscal 2026, driven by strategic expansions and new product developments.