Earnings Review and Free Research Report: Standex International’s Net Sales Jumped 12%; GAAP EPS Climbed 18%

LONDON, UK / ACCESSWIRE / September 18, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Standex International Corp. (NYSE: SXI) (“Standex”), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SXI, following the Company’s disclosure of its fourth quarter and fiscal 2017 financial results on August 28, 2017. The equipment manufacturing Company outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

For the fourth quarter ended June 30, 2017, Standex’s net sales increased 12.0% y-o-y to $217.09 million with organic sales up 4.4% compared to net sales of $193.78 million. The Company stated that foreign exchange had a negative effect of 0.9%; acquisitions contributed positive 10.7%; and the US Roll, Plate, and Machinery (“RPM”) divestiture had a negative effect of 2.2%. Standex’s reported numbers beat analysts’ estimates of $210.05 million

For Q4 FY17, Standex’s income from operations was $20.6 million compared to $14.0 million in Q4 FY16.

Standex’s net income from continuing operations was $14.1 million, or $1.11 per diluted share, including tax-effected $0.7 million of acquisition-related costs, $2.0 million of restructuring charges, and $1.5 million of purchase accounting expenses offset by a $0.5 million gain from the sale of real estate. The Company had net income from continuing operations of $12.1 million, or $0.94 per diluted share, in Q4 FY16, including tax-effected $4.5 million of charges related to the sale of the RPM business; a $0.1 million loss on the sale of real estate; and $0.6 million of restructuring charges – all offset by $0.3 million of discrete tax benefits and $0.2 million of income related to RPM activity.

Excluding the aforementioned items from both periods, Standex’s non-GAAP net income from continuing operations was $17.9 million, or $1.40 per diluted share, in the reported quarter, compared to $16.8 million, or $1.31 per diluted share, in the prior-year’s same period. The Company’s earnings topped Wall Street’s estimates of $1.36 per share.

Standex’s Segment Review

During Q4 FY17, the Company’s Food Service Equipment business sales increased 7.9% to $103.39 million on a y-o-y basis. Organic growth declined 0.7%, while Horizon Scientific acquisition contributed 8.7%. In Refrigeration, revenue increased 5.3% due to sales to the drug retail and dollar store segments, and backlog was at an all-time high as spending from national accounts continues to ramp up. However, the Company noted that margins on the sales of the standard products in its backlog are lower than they have historically been. In Cooking Solutions, sales were down 10.3%, primarily due to the proactive rationalization of low margin products, which were about $1.2 million in the reported quarter. The Food Service Equipment segment’s operating income declined by 14.9% to $9.32 million.

For Q4 FY17, the Engraving division sales decreased 7.5% to $27.86 million on a y-o-y basis, with a 9.1% organic sales increase, offset by a 14.1% negative effect from the RPM’s divestiture, and a negative foreign exchange impact of 2.5%. Mold texturizing’s sales were up more than 20% in the Asia/Pacific region as OEMs ramped up new model introductions, and North America and Europe increased over 10% with new program launches fueling growth. The segment’s operating income was down 18.1% compared to $5.67 million last year and down 13.8% adjusted without RPM. The segment’s margins declined on a y-o-y basis due to growth laneway investments in laser, nickel shell, and tool finishing, which were not fully utilized in the reported quarter.

During Q4 FY17, the Engineering Technologies division’s sales jumped 26.0% to $29.56 million on y-o-y basis. The segment’s sales in the Space market had increased by $3.3 million from the prior-year’s corresponding quarter, while Defense grew $1.7 million on higher Navy sales. In addition, the Company obtained approval from a key customer to begin shipping aviation components in the U.K. In the reported quarter, Engineering Technologies’ operating income increased 2.7% to $3.85 million.

The Electronics unit sales surged 40.1% to $45.23 million on a y-o-y basis in Q4 FY17. The segment’s organic growth contributed 4.1% and the effect of the Japanese acquisition added 38.5%. The segment’s European sales had increased by double digits as a result of demand from the Military/Aerospace, Appliance, Industrial, and Auto markets. Sensor and reed relay sales both grew high single digits in the reported quarter. Electronic division’s operating income soared 49.1% to $8.60 million.

For Q4 FY17, the Hydraulics unit reported a 10.7% y-o-y sales decline to $11.05 million. The sales decrease in Hydraulics was attributed to softness in the North American dump truck and dump trailer markets. The segments’ operating income decreased 21% to $1.93 million.

Cash Matters

Standex’s net working capital was $150.0 million at the end of Q4 FY17 compared to $132.3 million a year earlier. The Company’s working capital turns were 5.8 in the reported quarter and 5.9 in the year-earlier same quarter.

Standex closed Q4 FY17 with net debt (defined as debt less cash) of $103.4 million compared with a net cash position of $29.9 million at the end of Q4 FY16.

Stock Performance

At the closing bell, on Friday, September 15, 2017, Standex Intl.’s stock climbed 1.06%, ending the trading session at $100.35. A total volume of 85.85 thousand shares have exchanged hands, which was higher than the 3-month average volume of 34.20 thousand shares. The Company’s stock price advanced 9.49% in the last three months, 2.29% in the past six months, and 15.07% in the previous twelve months. Moreover, the stock gained 14.23% since the start of the year. The stock is trading at a PE ratio of 27.47 and has a dividend yield of 0.64%. The stock currently has a market cap of $1.27 billion.

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