- Record Adjusted Operating Margin of 15.2%, up 140 bps year-on-year; Eighth Consecutive Quarter of Record Level Adjusted Operating Margin
- GAAP Operating Margin of 48.0% Driven by Gain on Procon Divestiture
- Fast Growth Market Sales Increased ~40% year-on-year to ~$23 million ; Fast Growth Market Sales in Fiscal 2023 Expected to Increase ~50% to ~$85 million
- Expect Organic Revenue Growth in Fiscal Year 2023 from Four of Five Business Segments
- Generated $17.6 million in Free Cash Flow
SALEM, N.H., May 4, 2023 /PRNewswire/ -- Standex International Corporation (NYSE: SXI) today reported financial results for the third quarter of fiscal year 2023 ended March 31, 2023 .
Summary Financial Results - Total Standex | |||||
($M except EPS and Dividends) | 3Q23 | 3Q22 | 2Q23 | Y/Y | Q/Q |
Net Sales | $184.3 | $189.3 | $187.8 | -2.6 % | -1.8 % |
Operating Income - GAAP | $88.5 | $24.5 | $27.8 | 261.7 % | 218.3 % |
Operating Income - Adjusted | $27.9 | $26.1 | $28.6 | 7.0 % | -2.3 % |
Operating Margin % - GAAP | 48.0 % | 12.9 % | 14.8 % | + 3510 bps | + 3320 bps |
Operating Margin % - Adjusted | 15.2 % | 13.8 % | 15.2 % | + 140 bps | + 0 bps |
Net Income from Continuing Ops - GAAP | $80.6 | $17.4 | $20.1 | 362.8 % | 301.2 % |
Net Income from Continuing Ops - Adjusted | $19.6 | $18.7 | $20.7 | 5.2 % | -5.2 % |
EBITDA | $95.1 | $31.3 | $34.8 | 203.6 % | 172.9 % |
EBITDA margin | 51.6 % | 16.5 % | 18.5 % | + 3510 bps | + 3310 bps |
Adjusted EBITDA | $34.5 | $33.0 | $35.6 | 4.7 % | -3.2 % |
Adjusted EBITDA margin | 18.7 % | 17.4 % | 19.0 % | + 130 bps | -30 bps |
Diluted EPS - GAAP | $6.77 | $1.43 | $1.69 | 370.1 % | 300.6 % |
Diluted EPS - Adjusted | $1.65 | $1.54 | $1.74 | 7.1 % | -5.2 % |
Dividends per Share | $0.28 | $0.26 | $0.28 | 7.7 % | 0.0 % |
Free Cash Flow | $17.6 | $8.5 | $24.0 | 107.3 % | -26.6 % |
Net Debt to EBITDA | 0.0x | 0.5x | 0.6x | NM | NM |
Third Quarter Fiscal 2023 Results
Commenting on the quarter's results, President and Chief Executive Officer David Dunbar said, "Our third fiscal quarter results demonstrate our businesses' ability to perform well in an uncertain macro environment. On the top line, we delivered 1.5% organic growth, offset by foreign currency exchange and the divestiture of our Procon business unit. Sales from fast growth markets such as electric vehicles, renewable energy, smart grid, and the commercialization of space increased approximately 40% year on year to $23 million in fiscal third quarter 2023, and we anticipate our fast growth market sales for fiscal year 2023 to increase approximately 50% versus prior year. We achieved record gross margin of 38.5%, up 240 bps year on year and record consolidated adjusted operating margin of 15.2% in fiscal third quarter 2023 - our eighth consecutive quarter of record level adjusted operating margin performance. This margin growth reflects the benefits of our customer intimacy model and solid execution of our pricing and productivity initiatives.
"We remain confident in our ability to navigate this environment and continue to deliver improved results. Our regional presence, strong customer relationships and our disciplined approach to pricing and productivity have protected us from the challenges presented by supply chain challenges and inflation. We continue to benefit from secular trends in our fast growth markets, which are still in the early stages of evolution. As a result, we expect all our segments, except Scientific, to contribute to organic growth for the fiscal year."
"In addition, Standex's consistent cash generation and substantial financial flexibility continue to position us well to pursue an active pipeline of organic and inorganic growth opportunities. Our free cash flow conversion remained healthy at near 100% in the fiscal third quarter. We have approximately $344 million in available liquidity."
Outlook
In fiscal fourth quarter 2023, on a sequential basis, the Company expects similar revenue with organic sales growth offsetting the impact of the Procon divestiture. The Company expects similar to slightly higher adjusted operating margin. On a year-on-year basis, the Company expects mid to high single digit organic growth offset by the Procon divestiture and significant adjusted operating margin improvement due to continued realization of pricing and productivity initiatives.
Third Quarter Segment Operating Performance
Electronics (42% of sales; 47% of segment operating income)
3Q23 | 3Q22 | % Change | |
Electronics ($M) | |||
Revenue | 78.2 | 79.9 | -2.1 % |
GAAP Operating Income | 17.0 | 19.2 | -11.2 % |
GAAP Operating Margin % | 21.8 | 24.0 | |
Adjusted Operating Income* | 17.0 | 19.2 | -11.3 % |
Adjusted Operating Margin %* | 21.8 | 24.1 |
*3Q22 excludes less than $0.1M of purchase accounting expenses associated with Sensor Solutions |
Revenue decreased approximately $1.7 million or 2.1% year-on-year reflecting organic growth of 1.3%, more than offset by a 3.4% impact from foreign exchange. The segment is seeing positive trends in end markets like industrial applications, power management, renewable energy technologies, and EV-related applications.
Electronics segment backlog realizable in under one year of approximately $145 million decreased 4% year-on-year. The segment had a book to bill ratio of 0.92 at the end of the fiscal third quarter.
Adjusted operating income decreased approximately $2.2 million or 11.3% year-on-year due to lower sales and product mix, partially offset by pricing and productivity initiatives.
In fiscal fourth quarter 2023, on a sequential basis, the Company expects similar revenue and operating margin primarily due to increased sales into fast growth markets, offset by a slower recovery in China and Europe .
Engraving (20% of sales; 15% of segment operating income)
3Q23 | 3Q22 | % Change | |
Engraving ($M) | |||
Revenue | 36.9 | 37.2 | -0.8 % |
Operating Income | 5.4 | 5.7 | -6.5 % |
Operating Margin % | 14.5 | 15.4 |
Revenue decreased approximately $0.3 million or 0.8% year-on-year reflecting 3.9% organic growth, which was more than offset by a 4.7% impact from foreign exchange. Operating income decreased $0.4 million or 6.5% year-on-year, primarily driven by unfavorable regional mix. The segment had a book to bill ratio of 1.12, indicating continued end market stability.
In fiscal fourth quarter 2023, on a sequential basis, the Company expects similar to slightly higher revenue and operating margin.
Scientific (10% of sales; 13% of segment operating income)
3Q23 | 3Q22 | % Change | |
Scientific ($M) | |||
Revenue | 18.9 | 18.9 | -0.1 % |
Operating Income | 4.6 | 4.2 | 9.8 % |
Operating Margin % | 24.1 | 22.0 |
Revenue remained flat at $18.9 million reflecting higher sales into research and academic end markets, offset by lower demand for COVID vaccine storage units. Operating income increased approximately $0 .4 million or 9.8% year-on-year due to price and productivity actions and lower freight cost.
In fiscal fourth quarter 2023, on a sequential basis, the Company expects similar revenue and slightly higher operating margin.
Engineering Technologies (10% of sales; 7% of segment operating income)
3Q23 | 3Q22 | % Change | |
Engineering Technologies ($M) | |||
Revenue | 18.1 | 20.9 | -13.6 % |
Operating Income | 2.4 | 2.3 | 1.0 % |
Operating Margin % | 13.0 | 11.1 |
Revenue decreased approximately $2.8 million or 13.6% year-on-year reflecting lower volume due to the timing of projects, partially offset by higher revenue from new product development. Operating income remained flat at approximately $2.4 million reflecting the impact of productivity and efficiency initiatives offsetting the lower volume.
In fiscal fourth quarter 2023, on a sequential basis, the Company expects a moderate increase in revenue and operating margin, reflecting more favorable timing of projects in aviation and space end markets.
Specialty Solutions (18% of sales; 18% of segment operating income)
3Q23 | 3Q22 | % Change | |
Specialty Solutions ($M) | |||
Revenue | 32.3 | 32.4 | -0.3 % |
Operating Income | 7.2 | 3.6 | 96.9 % |
Operating Margin % | 22.2 | 11.2 |
Specialty Solutions revenue remained relatively flat at $32.3 million, reflecting robust organic growth in the Display Merchandising business, offset by an organic decline in the Hydraulics business and the Procon divestiture. Operating income increased approximately $3.5 million or 96.9% year-on-year driven by higher sales in the Display Merchandising business and realization of productivity initiatives in the Hydraulics business.
In fiscal fourth quarter 2023, on a sequential basis, the Company expects a moderate to significant decline in revenue primarily due to the Procon divestiture and lower sales in the Display Merchandising business and slightly lower operating margin.
Capital Allocation
- Share Repurchase: During the fiscal third quarter, the Company repurchased approximately 42,500 shares for $5.0 million . There was $72.1 million remaining on the Company's current share repurchase authorization at the end of the fiscal third quarter 2023.
- Capital Expenditures: In fiscal third quarter 2023, Standex's capital expenditures were $5.6 million compared to $3.4 million in the fiscal third quarter of 2022. The Company expects fiscal year 2023 capital expenditures between $25 million and $30 million with key investments focused on growth initiatives and capacity expansion. Capital expenditures were $23.9 million in fiscal 2022.
- Dividend: On April 27, 2023, the Company declared a quarterly cash dividend of $0.28 per share, an approximately 7.7% year-on-year increase. The dividend is payable May 25, 2023, to shareholders of record on May 10, 2023 .
Balance Sheet and Cash Flow Highlights
- Net Debt: Standex had net (cash) debt of ($2.0) million on March 31, 2023, compared to $70.0 million at the end of fiscal 2022 and $65.8 million at the end of fiscal third quarter 2022. Net debt for the third quarter of 2023 consisted primarily of long-term debt of $173.3 million and cash and equivalents of $175.3 million .
- Cash Flow: Net cash provided by continuing operating activities for the three months ended March 31, 2023, was $23.3 million compared to $11.9 million in the prior year's quarter. Free cash flow after capital expenditures was $17.6 million compared to free cash flow after capital expenditures of $8.5 million in the fiscal third quarter of 2022.
Conference Call Details
Standex will host a conference call for investors tomorrow, May 5, 2023, at 8:30 a.m. ET . On the call, David Dunbar, President, and CEO, and Ademir Sarcevic, CFO, will review the Company's financial results and business and operating highlights. Investors interested in listening to the webcast and viewing the slide presentation should log on to the "Investors" section of Standex's website under the subheading, "Events and Presentations," located at www.standex.com.
A replay of the webcast will also be available on the Company's website shortly after the conclusion of the presentation online through May 5, 2024 . To listen to the teleconference playback, please dial in the U.S. (877) 344-7529 or (412) 317-0088 internationally; the passcode is 7047258. The audio playback via phone will be available through May 12, 2023 . The webcast replay can be accessed in the "Investor Relations" section of the Company's website, located at www.standex.com.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles ("GAAP"), the Company uses certain non-GAAP financial measures, including non-GAAP adjusted income from operations, non-GAAP adjusted net income from continuing operations, free operating cash flow, EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted EBITDA, adjusted EBITDA to net debt, and adjusted earnings per share. The attached financial tables reconcile non-GAAP measures used in this press release to the most directly comparable GAAP measures. The Company believes that the use of non-GAAP measures which include the impact of restructuring charges, purchase accounting, insurance recoveries, discrete tax events, gain or loss on sale of a business unit, acquisition costs, and litigation costs help investors to obtain a better understanding of our operating results and prospects, consistent with how management measures and forecasts the Company's performance, especially when comparing such results to previous periods. An understanding of the impact in a particular quarter of specific restructuring costs, acquisition expenses, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Non-GAAP measures should be considered in addition to, and not as a replacement for, the corresponding GAAP measures, and may not be comparable to similarly titled measures reported by other companies.
About Standex
Standex International Corporation is a multi-industry manufacturer in five broad business segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Brazil, Turkey, South Africa, India, and China . For additional information, visit the Company's website at http://standex.com/.
Forward-Looking Statements
Statements contained in this Press Release that are not based on historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "should," "could," "may," "will," "expect," "believe," "estimate," "anticipate," "intend," "continue," or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company's business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include, but are not limited to: the impact of pandemics such as the current coronavirus on employees, our supply chain, and the demand for our products and services around the world; materially adverse or unanticipated legal judgments, fines, penalties or settlements; conditions in the financial and banking markets, including fluctuations in exchange rates and the inability to repatriate foreign cash; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, defense, transportation, food service equipment, consumer appliance, energy, oil and gas and general industrial markets; lower-cost competition; the relative mix of products which impact margins and operating efficiencies in certain of our businesses; the impact of higher raw material and component costs, particularly steel, certain materials used in electronics parts, petroleum based products, and refrigeration components; the impact of higher transportation and logistics costs, especially with respect to transportation of goods from Asia ; the impact of inflation on the costs of providing our products and services; an inability to realize the expected cost savings from restructuring activities including effective completion of plant consolidations, cost reduction efforts including procurement savings and productivity enhancements, capital management improvements, strategic capital expenditures, and the implementation of lean enterprise manufacturing techniques; the potential for losses associated with the exit from or divestiture of businesses that are no longer strategic or no longer meet our growth and return expectations; the inability to achieve the savings expected from global sourcing of raw materials and diversification efforts in emerging markets; the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs; the inability to attain expected benefits from acquisitions and the inability to effectively consummate and integrate such acquisitions and achieve synergies envisioned by the Company; market acceptance of our products; our ability to design, introduce and sell new products and related product components; the ability to redesign certain of our products to continue meeting evolving regulatory requirements; the impact of delays initiated by our customers; our ability to increase manufacturing production to meet demand including as a result of labor shortages; and potential changes to future pension funding requirements. In addition, any forward-looking statements represent management's estimates only as of the day made and should not be relied upon as representing management's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company and management specifically disclaim any obligation to do so, even if management's estimates change.
Standex International Corporation | ||||||||||||
Consolidated Statement of Operations | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
March 31, | March 31, | |||||||||||
(In thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||
Net sales | $ | 184,332 | 189,281 | $ | 552,721 | $ | 550,600 | |||||
Cost of sales | 113,435 | 120,900 | 341,251 | 347,210 | ||||||||
Gross profit | 70,897 | 68,381 | 211,470 | 203,390 | ||||||||
Selling, general and administrative expenses | 42,954 | 42,306 | 127,756 | 128,589 | ||||||||
(Gain) loss on sale of business | (62,105) | - | (62,105) | - | ||||||||
Restructuring costs | 2,237 | 1,186 | 3,330 | 2,469 | ||||||||
Acquisition related costs | 21 | 419 | 487 | 1,561 | ||||||||
Other operating (income) expense, net | (727) | - | (611) | 1,700 | ||||||||
Income from operations | 88,517 | 24,470 | 142,613 | 69,071 | ||||||||
Interest expense | 1,415 | 1,238 | 4,168 | 4,484 | ||||||||
Other non-operating (income) expense, net | 747 | 340 | 1,695 | 651 | ||||||||
Total | 2,162 | 1,578 | 5,863 | 5,135 | ||||||||
Income from continuing operations before income taxes | 86,355 | 22,892 | 136,750 | 63,936 | ||||||||
Provision for income taxes | 5,788 | 5,484 | 17,783 | 15,677 | ||||||||
Net income from continuing operations | 80,567 | 17,408 | 118,967 | 48,259 | ||||||||
Income (loss) from discontinued operations, net of tax | (57) | (86) | (144) | (135) | ||||||||
Net income | $ | 80,510 | $ | 17,322 | $ | 118,823 | $ | 48,124 | ||||
Basic earnings per share: | ||||||||||||
Income (loss) from continuing operations | $ | 6.82 | $ | 1.45 | $ | 10.06 | $ | 4.02 | ||||
Income (loss) from discontinued operations | - | (0.01) | (0.01) | (0.01) | ||||||||
Total | $ | 6.82 | $ | 1.44 | $ | 10.05 | $ | 4.01 | ||||
Diluted earnings per share: | ||||||||||||
Income (loss) from continuing operations | $ | 6.77 | $ | 1.44 | $ | 9.98 | $ | 3.98 | ||||
Income (loss) from discontinued operations | - | (0.01) | (0.01) | (0.01) | ||||||||
Total | $ | 6.77 | $ | 1.43 | $ | 9.97 | $ | 3.97 | ||||
Average Shares Outstanding | ||||||||||||
Basic | 11,811 | 11,982 | 11,825 | 12,009 | ||||||||
Diluted | 11,895 | 12,089 | 11,917 | 12,121 | ||||||||
Standex International Corporation | ||||||
Condensed Consolidated Balance Sheets | ||||||
(unaudited) | ||||||
March 31, | June 30, | |||||
(In thousands) | 2023 | 2022 | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 175,284 | $ | 104,844 | ||
Accounts receivable, net | 121,161 | 117,075 | ||||
Inventories | 104,516 | 105,339 | ||||
Prepaid expenses and other current assets | 56,611 | 45,210 | ||||
Income taxes receivable | 3,203 | 6,530 | ||||
Total current assets | 460,775 | 378,998 | ||||
Property, plant, equipment, net | 130,638 | 128,584 | ||||
Intangible assets, net | 79,562 | 85,770 | ||||
Goodwill | 269,463 | 267,906 | ||||
Deferred tax asset | 9,213 | 8,186 | ||||
Operating lease right-of-use asset | 36,069 | 39,119 | ||||
Other non-current assets | 29,368 | 25,876 | ||||
Total non-current assets | 554,313 | 555,441 | ||||
Total assets | $ | 1,015,088 | $ | 934,439 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 67,512 | $ | 74,520 | ||
Accrued liabilities | 55,704 | 67,773 | ||||
Income taxes payable | 7,371 | 8,475 | ||||
Total current liabilities | 130,587 | 150,768 | ||||
Long-term debt | 173,333 | 174,830 | ||||
Operating lease long-term liabilities | 28,463 | 31,357 | ||||
Accrued pension and other non-current liabilities | 77,155 | 78,141 | ||||
Total non-current liabilities | 278,951 | 284,328 | ||||
Stockholders' equity: | ||||||
Common stock | 41,976 | 41,976 | ||||
Additional paid-in capital | 97,294 | 91,200 | ||||
Retained earnings | 1,010,395 | 901,421 | ||||
Accumulated other comprehensive loss | (147,175) | (153,312) | ||||
Treasury shares | (396,940) | (381,942) | ||||
Total stockholders' equity | 605,550 | 499,343 | ||||
Total liabilities and stockholders' equity | $ | 1,015,088 | $ | 934,439 | ||
Standex International Corporation and Subsidiaries | ||||||
Statements of Consolidated Cash Flows | ||||||
(unaudited) | ||||||
Nine Months Ended | ||||||
March 31, | ||||||
(In thousands) | 2023 | 2022 | ||||
Cash Flows from Operating Activities | ||||||
Net income | $ | 118,823 | $ | 48,124 | ||
Income (loss) from discontinued operations | (144) | (135) | ||||
Income from continuing operations | 118,967 | 48,259 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 21,275 | 22,411 | ||||
Stock-based compensation | 8,508 | 8,213 | ||||
Non-cash portion of restructuring charge | 129 | 595 | ||||
(Gain) loss on sale of business | (62,105) | - | ||||
Contributions to defined benefit plans | (151) | (157) | ||||
Net changes in operating assets and liabilities | (36,268) | (30,693) | ||||
Net cash provided by operating activities - continuing operations | 50,355 | 48,628 | ||||
Net cash provided by (used in) operating activities - discontinued operations | (37) | (364) | ||||
Net cash provided by (used in) operating activities | 50,318 | 36,335 | ||||
Cash Flows from Investing Activities | ||||||
Expenditures for property, plant and equipment | (16,648) | (13,138) | ||||
Expenditures for acquisitions, net of cash acquired | - | (9,902) | ||||
Proceeds from the sale of business | 67,023 | - | ||||
Other investing activities | (1,321) | 5,718 | ||||
Net cash (used in) investing activities | 49,054 | (17,322) | ||||
Cash Flows from Financing Activities | ||||||
Proceeds from borrowings | 224,500 | - | ||||
Payments of debt | (226,200) | - | ||||
Contingent consideration payment | (1,167) | (1,167) | ||||
Activity under share-based payment plans | 1,170 | 1,318 | ||||
Purchase of treasury stock | (18,582) | (21,420) | ||||
Cash dividends paid | (9,699) | (9,148) | ||||
Other financing activities | ||||||
Net cash provided by (used in) financing activities from continuing operations | (29,978) | (30,417) | ||||
Net cash provided by financing activities from discontinued operations | - | - | ||||
Net cash provided by (used in) financing activities | (29,978) | (30,417) | ||||
Effect of exchange rate changes on cash | 1,046 | (2,979) | ||||
Net changes in cash and cash equivalents | 70,440 | (2,465) | ||||
Cash and cash equivalents at beginning of year | 104,844 | 136,367 | ||||
Cash and cash equivalents at end of period | $ | 175,284 | $ | 133,902 | ||
Standex International Corporation | ||||||||||||
Selected Segment Data | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
March 31, | March 31, | |||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
Net Sales | ||||||||||||
Electronics | $ | 78,211 | $ | 79,889 | $ | 225,966 | $ | 232,351 | ||||
Engraving | 36,909 | 37,223 | 109,622 | 109,037 | ||||||||
Scientific | 18,898 | 18,914 | 56,646 | 65,079 | ||||||||
Engineering Technologies | 18,052 | 20,890 | 59,244 | 56,558 | ||||||||
Specialty Solutions | 32,262 | 32,365 | 101,243 | 87,575 | ||||||||
Total | $ | 184,332 | $ | 189,281 | $ | 552,721 | $ | 550,600 | ||||
Income from operations | ||||||||||||
Electronics | $ | 17,047 | $ | 19,194 | $ | 52,160 | $ | 54,624 | ||||
Engraving | 5,353 | 5,728 | 17,580 | 15,806 | ||||||||
Scientific | 4,561 | 4,155 | 12,449 | 14,153 | ||||||||
Engineering Technologies | 2,351 | 2,327 | 7,957 | 5,540 | ||||||||
Specialty Solutions | 7,151 | 3,632 | 18,944 | 10,185 | ||||||||
Restructuring | (2,237) | (1,186) | (3,330) | (2,469) | ||||||||
(Gain) loss on sale of business | 62,105 | - | 62,105 | - | ||||||||
Acquisition related costs | (21) | (419) | (487) | (1,561) | ||||||||
Corporate | (8,520) | (8,961) | (25,376) | (25,507) | ||||||||
Other operating income (expense), net | 727 | - | 611 | (1,700) | ||||||||
Total | $ | 88,517 | $ | 24,470 | $ | 142,613 | $ | 69,071 | ||||
Standex International Corporation | |||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
(In thousands, except percentages) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||
Adjusted income from operations and adjusted net | |||||||||||||||||
Net Sales | $ | 184,332 | $ | 189,281 | -2.6 % | $ | 552,721 | $ | 550,600 | 0.4 % | |||||||
Income from operations, as reported | $ | 88,517 | $ | 24,470 | 261.7 % | $ | 142,613 | $ | 69,071 | 106.5 % | |||||||
Income from operations margin | 48.0 % | 12.9 % | 25.8 % | 12.5 % | |||||||||||||
Adjustments: | |||||||||||||||||
Restructuring charges | 2,237 | 1,186 | 3,330 | 2,469 | |||||||||||||
Acquisition-related costs | 21 | 419 | 487 | 1,561 | |||||||||||||
Litigation (settlement refund) charge | (996) | - | (881) | 1,700 | |||||||||||||
(Gain) loss on sale of business | (62,105) | - | (62,105) | - | |||||||||||||
Environmental remediation | 271 | - | 271 | - | |||||||||||||
Purchase accounting expenses | - | 31 | - | 31 | |||||||||||||
Adjusted income from operations | $ | 27,945 | $ | 26,106 | 7.0 % | $ | 83,715 | $ | 74,832 | 11.9 % | |||||||
Adjusted income from operations margin | 15.2 % | 13.8 % | 15.1 % | 13.6 % | |||||||||||||
Interest and other income (expense), net | (2,162) | (1,578) | (5,863) | (5,135) | |||||||||||||
Provision for income taxes | (5,788) | (5,484) | (17,783) | (15,677) | |||||||||||||
Discrete and other tax items | - | - | 100 | - | |||||||||||||
Tax impact of above adjustments | (370) | (392) | (769) | (1,413) | |||||||||||||
Net income from continuing operations, as adjusted | $ | 19,625 | $ | 18,652 | 5.2 % | $ | 59,400 | $ | 52,607 | 12.9 % | |||||||
EBITDA and Adjusted EBITDA: | |||||||||||||||||
Net income (loss) from continuing operations, as reported | $ | 80,567 | $ | 17,408 | 362.8 % | $ | 118,967 | $ | 48,259 | ||||||||
Net income from continuing operations margin | 43.7 % | 9.2 % | 21.5 % | 8.8 % | |||||||||||||
Add back: | |||||||||||||||||
Provision for income taxes | 5,788 | 5,484 | 17,783 | 15,677 | |||||||||||||
Interest expense | 1,415 | 1,238 | 4,168 | 4,484 | |||||||||||||
Depreciation and amortization | 7,309 | 7,189 | 21,275 | 22,411 | |||||||||||||
EBITDA | $ | 95,079 | $ | 31,319 | 203.6 % | $ | 162,193 | $ | 90,831 | 78.6 % | |||||||
EBITDA Margin | 51.6 % | 16.5 % | 29.3 % | 16.5 % | |||||||||||||
Adjustments: | |||||||||||||||||
Restructuring charges | 2,237 | 1,186 | 3,330 | 2,469 | |||||||||||||
Acquisition-related costs | 21 | 419 | 487 | 1,561 | |||||||||||||
Litigation (settlement refund) charge | (996) | - | (881) | 1,700 | |||||||||||||
(Gain) loss on sale of business | (62,105) | - | (62,105) | - | |||||||||||||
Environmental remediation | 271 | - | 271 | - | |||||||||||||
Purchase accounting expenses | - | 31 | - | 31 | |||||||||||||
Adjusted EBITDA | $ | 34,507 | $ | 32,955 | 4.7 % | $ | 103,295 | $ | 96,592 | 6.9 % | |||||||
Adjusted EBITDA Margin | 18.7 % | 17.4 % | 18.7 % | 17.5 % | |||||||||||||
Free operating cash flow: | |||||||||||||||||
Net cash provided by operating activities - continuing operations, as reported | $ | 23,265 | $ | 11,929 | $ | 50,356 | $ | 48,628 | |||||||||
Less: Capital expenditures | (5,620) | (3,417) | (16,648) | (13,138) | |||||||||||||
Free cash flow from continuing operations | $ | 17,645 | $ | 8,512 | $ | 33,708 | $ | 35,490 | |||||||||
Standex International Corporation | |||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
Adjusted earnings per share from continuing operations | March 31, | March 31, | |||||||||||||||
2023 | 2022 | % | 2023 | 2022 | % Change | ||||||||||||
Diluted earnings per share from continuing operations, as reported | $ | 6.77 | $ | 1.44 | 370.1 % | $ | 9.98 | $ | 3.98 | 150.8 % | |||||||
Adjustments: | |||||||||||||||||
Restructuring charges | 0.14 | 0.07 | 0.21 | 0.16 | |||||||||||||
Acquisition-related costs | - | 0.03 | 0.03 | 0.10 | |||||||||||||
Litigation (settlement refund) charge | (0.06) | - | (0.06) | 0.10 | |||||||||||||
(Gain) loss on sale of business | (5.22) | - | (5.22) | - | |||||||||||||
Environmental remediation | 0.02 | - | 0.02 | - | |||||||||||||
Discrete tax items | - | - | 0.01 | - | |||||||||||||
Diluted earnings per share from continuing operations, as adjusted | $ | 1.65 | $ | 1.54 | 7.1 % | $ | 4.97 | $ | 4.34 | 14.5 % | |||||||
SOURCE Standex International Corporation
