Standex International Corporation

Good morning, ladies and gentlemen, and welcome to the STANDEX International First Quarter 2027 Financial Results Conference call. At this time, I'll enter in rationality mode. Following the presentation, we will conduct a question-and-answer session. If at any time you need a call or require immediate assistance, please register through the operator. This call is being recorded on Friday, October 30th, 2026. An election conference over to Christopher Howe, Director, 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 Proforma 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 2027 conference call. Our years-long strategy to reposition the company to serve attractive end markets and to invest effectively in new product development continues to gain momentum and deliver top-line growth. In the fiscal first quarter, we delivered record sales of approximately $233 million, driven by double-digit organic growth. This represents the fifth consecutive quarter of year-on-year organic growth. The electronics segment led the way with organic growth of nearly 30%. Corporate-wide new product sales continued to ramp and grew 56%, while sales into fast growth markets grew 25%. Our overall order book continues to grow in the fiscal first quarter with record order intake at $273 million and a book to bill of 1.17. This gives us confidence to raise our sales outlook for fiscal year 2027. We now expect total sales to grow high single digits in fiscal 2027 up from our prior outlook calling for mid to high single digits growth. We expect organic sales to increase by more than $100 million and adjusted earnings per share to grow in the high teens. As we put this quarter's results and the raised outlook into further context, we continue to expect to be on track to reach greater than $1.1 billion in total sales and 23% adjusted operating margin by the end of fiscal year 2028. 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 fiscal first quarter results. Prior to transitioning into more details about the quarter, I would like to highlight a couple of organizational announcements. First, I want to take a moment to welcome Colby Slaughter as our new Chief Legal Officer and look forward to his contributions in the next leg of our journey. Earlier this month, we announced the appointment of Samantha Stoddard as our next Chief Financial Officer, beginning on December 1st. Samantha's experience as a public company CFO and a hands-on operating executive makes her an excellent fit for our needs as we continue to grow and scale efficiently. I'm also excited to share that Colby and Samantha fit well in our culture, and we expect them each to make significant contributions to Standex's future growth. I also want to extend a special thanks to Ademir Sarcevic for his contributions as CFO. It has been a great pleasure to work closely with him to shape StandX into the company we are today, and I am pleased to see him diving into his new role as president of electronics with his usual gusto. Ademir will work closely with Samantha over the next month to ensure a seamless transition. Now, let's look at the results our strategy is delivering, beginning on slide three. In the first quarter, sales of $232.6 million increased 12.4% organically. Electronics grew 29.5% organically. New product sales grew approximately 56% to approximately $17.4 million. Sales into fast growth markets grew approximately 25% to $77.8 million. We had a record quarterly order intake of approximately $273 million. We are pleased with the momentum in the business reflected in this overall book-to-bill ratio of 1.17%. Adjusted gross margin of 44.4% was up 240 basis points year-on-year. Adjusted operating margin of 20.2% was up 110 basis points year-on-year, with margin expansion across each of our segments. Adjusted earnings per share of $2.41 was up 21.1% year-on-year. In fiscal second quarter 2027, we expect moderately higher revenue and adjusted operating margin and slightly higher revenue and similar adjusted operating margin on sequential basis. For fiscal year 2027, we are raising our sales outlook. We expect organic sales to increase greater than $100 million and total sales to grow high single digits from mid to high single digits previously. We expect high teams growth and adjusted earnings per share. Thank you very much. constituting more than 30% of our total sales. In conjunction with results, we announced a new $100 million share repurchase authorization effective October 27th. On this next slide, I would like to take a moment to highlight the specific areas driving growth this fiscal year. Let's turn to slide four. The methodical implementation of our strategy is showing itself in the independent drivers of growth, each now contributing meaningfully. It's no surprise that the increasing power demand of data centers is our most significant single growth driver. It is behind about 30% of our expected growth in fiscal year 2027. The grid business is also experiencing growth stemming from general increases in grid capacity to support economic growth and increased electrification. Increased investments in defense programs support growth in our A&D business and electronics edge business. We also highlight here the incremental growth of new products that are not sold into these end markets, reflecting share gain for our core businesses. Finally, a general recovery in industrial markets is lifting sales across electronics and scientific. This is a balanced set of drivers, and about 70% of our growth in 2027 will come from sources other than data centers. In summary, we have multiple independent drivers of our growth that have long runways ahead of them. Now, I would like to turn the call over to Ademir to discuss our financial performance in greater detail.