Standex International (SXI) Q1 Earnings call transcript Oct 29, 2025
1min read Standex International, a leading diversified technology and manufacturing company, reported its fiscal first quarter 2025 results, highlighting a record gross margin above 40% and an operating margin near 16%. The company also announced two strategic acquisitions, Amran Instrument Transformers and Narayan Powertech, for a combined enterprise value of approximately $462 million. The acquisitions, expected to be immediately accretive to Standex's financial metrics, are aimed at enhancing the company's presence in the fast-growing high-margin electrical grid market.
Record Performance and Strategic Moves
Despite challenging market conditions, Standex achieved a record gross margin of 41.1%, up 240 basis points on a sequential basis. The company's engineering, sales, and marketing teams continue to ramp up new product development, with expectations for new product releases in fiscal year 2025. Standex's sales decreased 7.7% in the fiscal first quarter, partially offset by acquisitions, but orders continue to strengthen, indicating market improvement.
Amran/Narayan Acquisition
The acquisition of Amran Instrument Transformers and Narayan Powertech is expected to significantly boost Standex's revenue growth, EBITDA margin, operating margin, earnings per share, and free cash flow. The Amran/Narayan Group has seen a cumulative annual growth rate of 30% over the last 3 years, with approximately $100 million of revenue expected in calendar year 2024. The acquisition strengthens Standex's geographic reach into the domestic Indian market and extends its technical expertise in low to medium-voltage technologies.
Outlook and New Product Development
Looking ahead, Standex expects moderately to significantly higher revenue and operating margin in the fiscal second quarter, driven by the impact of the recent acquisitions and improving overall demand in Electronics and Specialty. The company also anticipates over a dozen new product releases in fiscal year 2025, with new products contributing over 100 basis points of incremental growth.
Investor Reactions
During the earnings call, analysts raised questions about the company's sales decline and the impact of the recent acquisitions. Standex management provided reassurance, emphasizing the strategic significance of the acquisitions and the potential for new product sales to drive growth. The acquisitions are expected to increase Standex's exposure to fast-growth markets to approximately 25% of total sales on a pro forma fiscal year 2024 basis.
Conclusion
Standex International's fiscal first quarter 2025 results and strategic acquisitions underscore the company's commitment to growth and innovation in the fast-evolving technology and manufacturing landscape. The acquisitions of Amran Instrument Transformers and Narayan Powertech are expected to significantly enhance Standex's presence in the high-margin electrical grid market and extend its reach into new geographies. With a strong focus on new product development and a strategic acquisition strategy, Standex is well-positioned to navigate the challenges and opportunities of the global market.
