Standex International Corp Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gary Prestopino - Barrington Research - Analyst : A couple of questions here. First of all, I just want to make sure we clarify this with these new targets. Is the sales number and the adjusted operating margin number, is that an exit rate in Q4 '28? Or is that for the full year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, SXI.N - Q2 2025 Standex International Corp Earnings Call

Question: Gary Prestopino - Barrington Research - Analyst : Okay. So full year. Okay. Great. And then, Ademir, could you -- I know you gave us what the interest expense is going to be quarterly going forward. Could you maybe give us an idea of what the D&A is going to be when you have a full three months of the acquisition under your belt on a quarterly basis?

Question: Gary Prestopino - Barrington Research - Analyst : Okay. So $22 million for depreciation. And what did you say was the amortization, $4 million per quarter?

Question: Gary Prestopino - Barrington Research - Analyst : Okay. The quarter. Great. And then -- given the -- when you made the acquisition of Amran, you said it had about a 40% adjusted EBITDA margin. And I would assume that holds for what they did in calendar '24?

Question: Gary Prestopino - Barrington Research - Analyst : Okay. And then last question, and I'll jump off. With this potential Stargate Project, who would be your main competition there and what you supply if this project gets off the ground?

Question: Gary Prestopino - Barrington Research - Analyst : Okay. So I guess the inference from that is that if this gets off the ground, these companies would be supplying most of the products, and you would be in a great position to be supplying what you supply to each of these companies.

Question: Gary Prestopino - Barrington Research - Analyst : Okay. Thank you very much.

Question: Christopher Moore - CJS Securities - Analyst : Maybe just talk a little bit about the puts and takes for organic growth in 2H. Is Q4 more likely than Q3? Just what kind of visibility you have towards organic growth at this stage?

Question: Christopher Moore - CJS Securities - Analyst : All right. I appreciate that. So I just want to make sure I'm looking at Amran correctly. I mean when you close, you had talked about $100 million in revenue in two months, it looks like you said it was a record December. It looks like they did closer to $25 million. Is there any seasonality here? Can sales be lumpy quarter to quarter just with some big orders that happen to be in December? Just any thoughts there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, SXI.N - Q2 2025 Standex International Corp Earnings Call

Question: Christopher Moore - CJS Securities - Analyst : Okay. Got it. And in terms of moving forward, the 30% that they did that's aggressive, but double digit is what we're talking about more in the -- somewhere in the teens?

Question: Christopher Moore - CJS Securities - Analyst : Got it. And maybe just one more big picture on Amran. In terms of the integration. Just trying to get a sense of how long it takes -- I mean, for example, you talked about them needing to create the footprint in Europe. Is that something that can be done over the next year? Or just any sense as to kind of what that evolution looks like?

Question: Christopher Moore - CJS Securities - Analyst : Got it. And maybe just last one for me. The Engraving restructuring is $4 million. Is there -- is that people, is that facilities? And any insight there?

Question: Christopher Moore - CJS Securities - Analyst : Got it. I'll leave it there. Appreciate it, guys.

Question: Ross Sparenblek - William Blair - Analyst : Can you maybe remind us where capacity stands for the Amran asset? And then just maybe what the margin profile was a couple of years back before we saw the acceleration in orders?

Question: Ross Sparenblek - William Blair - Analyst : Got it. That's very helpful. And then a good segue there. We think about kind of the coming capacity expansion in Europe, I mean, what does that imply for the 23% margin walk? I know you guys also have a growing productivity pipeline for the core business because first glance, it looks that 23% is largely just the mix of Amran and the [amort] exclusion?

Question: Ross Sparenblek - William Blair - Analyst : Okay. If I can, just two more here. On Scientific with the pharmacy decline, can you maybe help us size what that deceleration was versus kind of the growth in the research and industrial? I believe it's like a third of that business? And maybe just remind us where we are in the down cycle for pharmacy at Scientific? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, SXI.N - Q2 2025 Standex International Corp Earnings Call

Question: Ross Sparenblek - William Blair - Analyst : But we're really at a trough level here so that's all upside. And then lastly -- just last one on electronics book to bill, it was slightly positive. But what were the organic orders for electronics?

Question: Ross Sparenblek - William Blair - Analyst : Perfect. All right. Thank you, gentlemen.

Question: Mike Shlisky - D.A. Davidson - Analyst : David, I want to talk about maybe your thoughts on new product launches and the pipeline there. I was kind of curious as to what might happen after fiscal 2025, which is really only a few months away at this point. Do you have a similar cadence next year or maybe even an acceleration ahead. Just give us some thoughts as to what the next wave of new product discussions might look like?

Question: Mike Shlisky - D.A. Davidson - Analyst : Great. My other question, there have been some successful space launches over the last month or two here from some newer players or players expanding greatly in what they're doing in this commercialization space initiatives. Can you comment on -- are there any like major chunky pieces of business coming in the next couple of quarters that we should be aware of for our models? Or do you see more of a smooth delivery pipeline ahead?

Question: Mike Shlisky - D.A. Davidson - Analyst : Great. I'll leave it there. Thanks so much.