The following is a summary of the Standex International Corporation (SXI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Standex International Corp. reported Q3 sales into fast growth end markets of $26 million, up 9% from the previous year.

• There was a decline of 5.7% in organic growth due to transitory market softness.

• The firm posted an adjusted gross margin of nearly 40%, in line with the past quarter.

• Consolidated adjusted operating margin increased 20 basis points year-on-year to 15.4%, including a 70 basis point impact from a one-time stock compensation charge.

• All operating segments reported over 17% adjusted operating margin, with three segments reporting near or over 20%.

• Standex achieved record Q3 free cash flow of $19.3 million.

Business Progress:

• Standex expanded its relay product offering through the acquisition of Sanyu Switch Company.

• They predict slightly or moderately higher revenues for fiscal Q4 2024, due to favorable project timing, increased market demand, and recent acquisitions.

• The firm is on target to reach its goal of $200 million in annual sales into fast growth end markets by FY 2028.

• Standex aims to return to organic growth rates aligned with their long-term financial objectives in FY 2025, with sales in fast-growing markets expected to outpace general market growth.

• Several new products are planned for release in FY 2025 due to increased R&D investments.

• The launch of new products with better profit profiles is expected to improve margins.

• Standex plans to invest in R&D and sales activities to foster future growth, allocating about 3% to 3.5% of sales towards R&D expenses.

• The company stated that cabinets shipped during the COVID-19 pandemic are expected to reach their typical replacement period by the second half of 2025, further boosting sales.

More details: Standex International IR

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