Standex International Corporation

Good morning, ladies and gentlemen, and welcome to Stenex International Fiscal Second Quarter 2026 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If anyone has any difficulties hearing the conference, please press door zero for operator assistance at any time. I would now like to turn the conference call over to Chris Howe. Please go ahead.

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. Sandex 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 second quarter 2026 conference call. I am very pleased to present results that demonstrate our years-long efforts to build a growth engine at Standex are now reading through in top line results. We recorded 6.4% organic growth and a book-to-bill ratio of 1.04, led by our electronics segment, which grew 11.1% organically with a book-to-bill ratio of 1.08. The contributions from sales into fast-growth markets, new product sales, and improving general industrial markets are now evident in our results. As such, the company is well-positioned to deliver mid- to high-single-digit organic growth in the fiscal third quarter and remains on track to the fiscal 2026 sales outlook. 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 second quarter 2026 results. Now, let's look at the results beginning on slide three. In the second quarter, sales increased 16.6% year-on-year. Contributing to this growth were new product sales and sales into fast-growth markets, New product sales grew approximately 13% to $16.3 million. Sales into fast growth markets were approximately $61 million, or 28% of total sales. These results have been literally years in the making as we began our focus on new product development in fiscal year 2021 by increasing our R&D spending from 1% of sales to the current 3%. In the same year, we began directing our efforts to win more applications with customers serving fast-growth markets. In our August earnings call, we said that we believed both efforts were reaching an inflection point and would deliver organic growth this fiscal year. These results show they are paying off. Orders of approximately $231 million were the highest quarterly intake ever, showing our growth engine continues to accelerate and setting us up nicely for the balance of the year. In the second quarter, sales increased 6.4% organically with book-to-bill of 1.04, highlighted by the electronics segment that grew 11.1% organically with book-to-bill of 1.08. In addition, the engraving segment grew 10.3% organically. Adjusted gross margin of 42.1% was up 120 basis points year-on-year. Adjusted operating margin of 19% was up 30 basis points year-on-year. We paged down approximately $10 million of debt and reduced our net leverage ratio to 2.3. We are reiterating our fiscal year 2026 sales outlook. Barring unforeseen economic, global trade, or tariff-related disruptions, we expect revenue to grow by over $110 million from 2025. The drivers of this increase are the strong momentum we are seeing from new sales and sales into fast-growth markets and the full-year impact of last year's acquisitions. In fiscal year 2026, we expect new product sales to contribute approximately 300 basis points of incremental sales growth and have increased our expected sales from new products to $85 million from $78 million. We launched four new products in the second quarter and remain on track to release more than 15 new products in fiscal 2026. Sales from fast growth markets are expected to grow over 45% year on year and exceed $270 million. On a year-on-year basis, in fiscal third quarter 26, we expect significantly higher revenue driven by mid to high single-digit organic growth from higher sales into fast growth in markets and increased new product sales, and slightly higher adjusted operating margin due to higher volume and favorable product mix, partially offset by growth investments and higher medical costs. On a sequential basis, we expect slightly to moderately higher revenue driven by higher contributions from fast growth end markets and new product sales, and slightly to moderately higher adjusted operating margin due to higher volume in pricing and productivity initiatives, partially offset by growth investments. I will now turn the call over to Ademir to discuss our financial performance in greater detail.