Standex International (SXI) Tops Q1 EPS by 24c, Revenues Beat

October 29, 2020 4:45 PM

Standex International (NYSE: SXI) reported Q1 EPS of $0.96, $0.24 better than the analyst estimate of $0.72. Revenue for the quarter came in at $151.3 million versus the consensus estimate of $142.42 million.

First Quarter Fiscal 2021 Results

Commenting on the quarter's results, President and Chief Executive Officer David Dunbar said "We are very pleased with our fiscal first quarter 2021 results which were ahead of our expectations on several fronts driven by stronger than anticipated sales at our Electronics, Engraving and Scientific segments. Overall, total revenue increased 8.5% sequentially with Scientific reporting its highest quarterly sales in its history. Sequential improvement in operating margin exceeded our expectations primarily reflecting the impact of revenue growth, cost reduction efforts, and recently implemented productivity initiatives in all businesses.

"Our previously announced cost savings efforts are on track to deliver over $7 million in annual savings in fiscal 2021.

"Our financial profile is strong and we are well positioned to execute on our active pipeline of organic and inorganic opportunities. We ended the quarter with approximately $206 million in available liquidity, a net debt to adjusted EBITDA ratio of 1.1x, and we generated $4.4 million in free cash flow. We also continued our cash repatriation efforts by repatriating approximately $8 million. We expect to repatriate approximately $35 million in total in fiscal 2021 resulting in approximately $74 million in cash repatriation over the past two fiscal years.

"In addition, we have undertaken a number of financial initiatives to further drive positive cash flow. Our previously announced floating to fixed rate interest swaps decreased interest expense approximately $0.6 million year-over-year in fiscal first quarter 2021 and we expect to realize $1.5 million in total savings in fiscal 2021. We also began several tax initiatives including optimizing our foreign tax credits. As a result, we expect our tax rate in fiscal 2021 to be approximately 22% or five hundred basis points lower than fiscal 2020. We expect these actions to result in cash savings of $2 million to $3 million in fiscal 2021.

"In closing, we are off to a solid start and expect continued growth and margin improvement as we move through fiscal 2021. In Electronics, we have a growing pipeline of new business opportunities and are expanding our customer base. At Scientific, we expect sequential growth throughout fiscal 2021 as demand for COVID-19 vaccine storage rises. In addition, our efficiency and productivity initiatives are taking hold across our businesses as evidenced by Engraving margin trends which we expect to further increase in the fiscal year.

Outlook

In fiscal second quarter 2021, Standex expects consolidated Company revenue to be flat to slightly above fiscal first quarter 2021 and total segment operating margin to increase slightly to moderately. The Electronics and Engraving segments are expected to have slight sequential revenue increases. In fiscal second quarter 2021, the Company expects moderate sequential revenue increase at Scientific as vaccine storage demand rises.

Engineering Technologies revenue is expected to be similar to fiscal first quarter 2021 as commercial aviation markets stabilize with a slight increase in operating margin reflecting productivity and cost reduction activities. Specialty Solutions revenue and operating margin are expected to decrease slightly primarily due to seasonality and a lower number of shipping days in the quarter.

For earnings history and earnings-related data on Standex International (SXI) click here.

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