Standex International (NYSE:SXI) reported record fourth-quarter adjusted earnings per share and free cash flow for fiscal 2026, supported by growth in its engineered components businesses, new product sales and demand in fast-growth end markets including grid infrastructure, defense and space.
Fourth-quarter revenue totaled $228.3 million, up 2.8% from a year earlier. Organic sales growth was 7.7%, partly offset by a 4.5% impact from the Federal Industries divestiture and a 0.4% foreign-currency impact. Adjusted earnings per share increased 7.4% year over year to a record $2.45.
For the full fiscal year, Standex said sales increased by more than $100 million and grew 5.5% organically. Adjusted gross margin reached 42%, adjusted operating margin was 19.4%, and adjusted earnings per share was a record $8.74. New product sales rose to $67 million from $40 million in the prior year, contributing $27 million, or 300 basis points, to sales growth.
Orders and fiscal 2027 outlook
Standex recorded approximately $270 million in fourth-quarter orders, producing a consolidated book-to-bill ratio of 1.18. Electronics orders were about $165 million, resulting in a 1.27 book-to-bill ratio for that segment.
Management expects fiscal 2027 sales to increase at a mid- to high-single-digit rate, including high-single-digit to low-double-digit organic growth, and anticipates continued adjusted operating-margin expansion. For the fiscal first quarter, Standex forecast moderately higher revenue from a year earlier, driven by backlog in fast-growth markets and new products, partly offset by the Federal Industries divestiture.
Dunbar said the company expects to launch more than 20 new products in fiscal 2027, following more than 15 launches in fiscal 2026. Pro forma for the Federal divestiture, management expects new-product sales to rise by $23 million to $90 million and contribute nearly 300 basis points of organic growth during the year.
Sales to fast-growth markets, including space, defense and grid infrastructure, are projected to increase about 20% to more than $310 million in fiscal 2027, representing more than 30% of total sales, according to the company.
Grid capacity expansion plans
Standex completed its acquisition of the remaining 9.9% interest in Narayan on July 2, completing its acquisition of the Amran/Narayan Group, now called Standex Grid. The company paid $64 million for the remaining interest, which Chief Financial Officer and Treasurer Ademir Sarcevic said equated to about 15 times trailing-12-month EBITDA for those shares. Including the original acquisition, he said the total transaction value represented roughly seven to eight times fiscal 2026 trailing-12-month EBITDA.
Sarcevic, who is transitioning to president of the electronics business, said Grid sales increased from roughly $100 million at the time of acquisition to approximately $148 million in fiscal 2026. Standex is targeting grid sales of $340 million to $440 million by fiscal 2030.
To support that growth, the company identified several capacity initiatives:
- Productivity and automation efforts expected to add up to $40 million of annual capacity by fiscal 2030.
- A new Croatia facility, opened in May, expected to add about $75 million of annual capacity by fiscal 2030.
- Mexico production lines for low-voltage instrument transformers expected to add about $25 million of annual capacity by fiscal 2030.
- A Texas expansion that will triple the company’s footprint to more than 200,000 square feet and is expected to add more than $60 million of annual capacity by fiscal 2030.
- Additional shifts and footprint expansion in India expected to add $45 million and $50 million of annual capacity, respectively.
Management said it expects Grid revenue to reach between $180 million and $200 million in fiscal 2027. The Texas expansion is expected to begin production in fiscal 2028, while other initiatives are already adding capacity or are ramping during fiscal 2027.
Segment performance
Electronics revenue rose 12.1% to a record $129.1 million, with 12.9% organic growth. The segment’s adjusted operating margin declined 140 basis points to 27.2%, reflecting growth investments and temporary operational issues at the Edge business following implementation of an enterprise resource planning system at two large U.S. plants. Dunbar said the margin impact from those issues was just over $2 million in the quarter and that corrective actions were underway.
Management expects electronics revenue to be slightly higher sequentially in the fiscal first quarter and forecasts double-digit organic growth from a year earlier. Sarcevic said demand was not limited to Grid, noting that each electronics business unit reported a book-to-bill ratio above 1.2 in the quarter.
Aerospace & Defense revenue increased 18.3% to $37.9 million, driven by defense project activity. Adjusted operating margin expanded 410 basis points to 22.5%, aided by higher volume and project mix. Management expects revenue and margin to decline moderately on a sequential basis because of project timing, while maintaining an expectation for double-digit organic growth year over year.
Scientific revenue increased 5% to $18.8 million, as pricing actions and a slight market recovery helped lift adjusted operating margin by 440 basis points to 28.6%. Engraving and Hydraulics revenue fell 9.7% to $42.4 million, though adjusted operating margin increased 20 basis points to 15.9%.
Cash flow, leverage and longer-term targets
Net cash from operating activities was $40.5 million in the fourth quarter, compared with $33.4 million a year earlier. Capital expenditures were $5.5 million, resulting in record free cash flow of $35 million.
At quarter-end, Standex had approximately $148 million of available liquidity, $339.2 million of net debt and a net leverage ratio of 1.8. Cash and cash equivalents totaled $178.7 million. The company expects fiscal 2027 capital expenditures of $45 million to $55 million, primarily for Standex Grid growth investments.
The board declared Standex’s 248th consecutive quarterly cash dividend of $0.34 per share, a roughly 6.3% increase from the prior year. Dunbar said the company remains on track, after considering the Federal Industries divestiture, to exceed $1.1 billion in sales and achieve an adjusted operating margin above 23% by the end of fiscal 2028.
About Standex International (NYSE:SXI)
Standex International Corporation is a diversified global manufacturer specializing in food service equipment, engineered components, and industrial products. Operating across multiple markets, the company designs and produces commercial cooking and warming solutions, precision-engraved nameplates and decorative products, fluid power hydraulics, and magnetics-based electronics. These offerings serve a broad array of end markets, including quick-service restaurants, automotive, aerospace, medical devices, and consumer appliances.
With business organized into key segments—Food Service Equipment, Engraving & Decorating, Hydraulics, Industrial Electronics, and Technical Graphical Solutions—Standex delivers a combination of proprietary technology, automated manufacturing processes, and custom engineering services.
