Standex International Corporation

Good morning, ladies and gentlemen, and welcome to STANDEX International Fiscal First Quarter 2026 Financial Results Conference Call. At this time, all participant lines are in the listen-only mode. Following the presentation, we will conduct a question-and-answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Note that this call is being recorded on Friday, October 31st, 2025. And I would like to turn the conference over to Christopher Howe, Director of Investor Relations. Please go ahead, sir.

Thank you, Operator, and good morning. Please note that the presentation accompanying management's remarks can be found on the Investor Relations portion of the company's website at www.standex.com. Please refer to Standex's Safe Harbor Statement on slide two. Matters that STANDEX management will discuss on today's conference call include predictions, estimates, expectations, and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to STANDEX's most recent annual report on Form 10-K, as well as other SEC filings and public announcements for a detailed list of risk factors. In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBIT, which is earnings before interest and taxes, adjusted EBIT, EBITDA, which is earnings before interest, taxes, depreciation, and amortization, adjusted EBITDA, EBITDA margin, and adjusted EBITDA margin. We will also refer to other non-GAAP measures, including adjusted net income, adjusted operating income, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow, and pro forma net debt to EBITDA. Adjusted measures exclude the impact of restructuring, purchase accounting, amortization from acquired intangible assets, acquisition-related expenses, and one-time items. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measurement and consistent historical comparison of the company's financial performance. On the call today is Standex's Chairman, President, and Chief Executive Officer, David Dunbar, and Chief Financial Officer and Treasurer, Ademir Sarcevic.

Thank you, Chris. Good morning and welcome to our fiscal first quarter 2026 conference call. Following record operating performance in fiscal year 2025, our first quarter performance provided a strong start to the fiscal year, positioning us well to exceed our previously provided guidance of greater than $100 million of incremental sales in fiscal year 2026, which includes organic growth in our core businesses as well as the full year impact of acquisitions. First, I would like to thank our employees, our executives, and the board of directors for their efforts and continued dedication and support that drove our solid fiscal first quarter 2026 results. Now let's take a look at the results beginning on slide three. In the first quarter, sales increased 27.6%. Contributing to this growth were new product sales and sales in the fast growth markets. New product sales grew more than 35% to approximately $14.5 million. Sales into fast-growth markets were approximately $62 million, or 30% of total sales. Orders of approximately $226 million were the highest quarterly intake ever, setting us up nicely for the balance of the year. Despite electronics showing an organic decline in the quarter, its books-to-bill ratio remains above 1, and organic orders were up approximately 8% year-on-year. We remain on track for mid- to high-single-digit organic growth in electronics in fiscal 2026. Ameren Orion Group continues to perform ahead of our expectations. In the quarter, it delivered record sales of greater than $35 million. I'm excited to announce that in the quarter we kicked off operations in Croatia and Mexico. Adjusted operating margin of 19.1% was up 210 basis points year on year. This operating performance, along with our cash generation and cash repatriation, enabled us to lower our net leverage ratio to 2.4. We are raising our fiscal year 2026 sales outlook. Barring unforeseen economic, global trade, or tariffs-related disruptions, we now expect revenue to grow by over $110 million, $10 million more than we communicated last quarter. The drivers of this increase are the strong momentum we are seeing from new product sales and sales into fast-growth markets, in particular from the Ameren Orion Group, which we now expect to grow more than 20% year-on-year in fiscal 2026. In fiscal year 2026, we expect new product sales to contribute approximately 300 basis points of incremental sales growth. We launched four new products in the first quarter and remain on track to release more than 15 new products in fiscal 2026. Sales from fast growth markets are now expected to grow over 45% year-on-year and exceeds $270 million. On a year-on-year basis, in fiscal second quarter 2026, we expect significantly higher revenue driven by mid-single-digit organic growth and contributions from recent acquisitions and similar adjusted operating margin due to higher growth investments and less favorable product mix. On a sequential basis, we expect slightly higher revenue due to a higher contribution from fast growth and markets and new product sales and realization of pricing initiatives. We expect slightly lower to similar adjusted operating margin due to increased investments in growth and less favorable product mix. Please turn to slide four, which discusses how grid and new products support the increase in our sales outlook. We celebrated a significant anniversary on Wednesday. A year ago, the company made the largest acquisition in its history by acquiring the Ameren Orion Group, a leader in low and medium voltage instrument transformers. we could not be more pleased with its integration, the seamless cultural fit, and business results. Building on the shared success, we are renaming Ameren Orion as Standex Electronics Grid within the electronics business segment. Since we owned Ameren Orion, sales over the past 12 months have grown nearly 35% versus their 12 months before we acquired. Looking even further back, sales are up nearly 75% versus two years ago, This growth continues to be driven by robust end market demand within data centers, electrification, and grid modernization. To support future demand, we have expanded geographically in Croatia and Mexico. While grid has provided a step change to our sales into fast growth markets, I'm also excited to show here how fast growth markets as a whole have scaled, showing that there are several pathways for growth, including commercialization of space and defense, These factors give us confidence to raise our expectations to $270 million. In addition to fast-growth markets, new products are off to a strong start. We launched four new products in fiscal first quarter and are on track to launch more than 15 new products this fiscal year. The majority of these new products are within fast-growing end markets or new product categories and are expected to deliver margins above our core products. New product sales grew more than 35% to approximately $15 million in the fiscal first quarter and are expected to grow more than 40% to approximately $78 million in the fiscal year. These areas provide us with confidence to raise our fiscal 2026 sales outlook. I would like to turn the call over to Ademir to discuss our financial performance in greater detail.