Standex International Corporation (NYSE:SXI) Q1 2025 Results Conference Call October 30, 2024 8:30 AM ET

Company Participants

Christopher Howe - Head of Investor Relations
David Dunbar - President & Chief Executive Officer
Ademir Sarcevic - Chief Financial Officer & Treasurer

Conference Call Participants

Christopher Moore - CJS Securities
Michael Legg - Benchmark
Mike Shlisky - D.A. Davidson
Gary Prestopino - Barrington Research
Ross Sparenblek - William Blair

Operator

Good morning, ladies and gentlemen, and welcome to the Standex International Fiscal First Quarter 2025 Financial Results Conference Call. [Operator Instructions]. This call is being recorded on Tuesday, October 29, 2024.

I would now like to turn the conference over to Christopher Howe, Director of Investor Relations. Please go ahead.

Christopher Howe

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 and public announcements for a detailed list of risk factors.

In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBIT, which is earnings before interest and taxes; adjusted EBIT, which is EBIT excluding restructuring, purchase accounting, acquisition-related expenses and onetime items; EBITDA, which is earnings before interest, taxes, depreciation and amortization; adjusted EBITDA, which is EBITDA excluding restructuring, purchase accounting, acquisition-related expenses and onetime items; EBITDA margin and adjusted EBITDA margin. We will also refer to other non-GAAP measures, including adjusted net income, adjusted operating income, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow, and pro forma net debt to EBITDA.

These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measurement and consistent historical comparison of the company's financial performance.

On the call today is Standex's Chairman, President, and Chief Executive Officer, David Dunbar; and Chief Financial Officer and Treasurer, Ademir Sarcevic.

David Dunbar

Thank you, Chris. Good morning. This is an exciting day for us at Standex as we report on our fiscal first quarter 2025 results and share details of our most recent acquisition announced earlier this morning. First, a brief summary of our quarterly results. Following record profit and cash generation in fiscal 2024, we achieved a record gross margin above 40% in the fiscal first quarter with operating margin near 16% despite challenging general market conditions that pressured the top line. Behind the scenes, our engineering, sales, and marketing teams continue to ramp up new product development, and we are on track with our new product releases in fiscal year 2025. In fiscal year 2025, based on recent order rates and customer interaction, we continue to expect our end markets to stabilize in the second quarter and strengthen in the second half.