The following is a summary of the Standex International Corporation (SXI) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Reported a record gross margin above 40% and operating margin near 16% in Q1 2025.

• Total revenue decreased by 7.7% year-on-year to $170.5 million, with an organic revenue decline of 11.4% partially offset by a 3.8% benefit from recent acquisitions.

• Adjusted operating margin remained flat at 15.9% year-on-year, while adjusted operating income decreased 8%.

• Adjusted earnings per share decreased by 1.7% year-on-year to $1.71.

Business Progress:

• Acquired Amran Instrument Transformers and Narayan Powertech, enhancing presence in electrical grid markets.

• Launched three new products with plans for over a dozen new product releases throughout fiscal 2025, aimed to contribute over 100 basis points of incremental growth.

• Increased efforts and investments in engineering, sales, and marketing for new product development.

• Plans to use cash flows primarily to reduce debt post-acquisition, maintaining focus on operational efficiency.

Opportunities:

• Acquisition enhances Standex's exposure to fast-growth, high-margin electric grid-end markets, which are expected to benefit from infrastructure upgrades and rising data center demand.

• Introduction to Indian market and expansion into European markets through the acquired companies could open additional avenues for growth in these regions.

Risks:

• Organic revenue decline noted across segments due to slow demand and market softness, particularly in European industrial and North American engraving markets.

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