Standex International Corporation · NYSE:SXI
Standex International — Q3 FY2011 Earnings Presentation
21 slides from Standex International's earnings presentation, Apr 28, 2011
Slide 1: Third Quarter Fiscal Year 2011 Conference Call
Electronics INTERNATIONAL CORPORATION Hydraulics Food Service Engraving Engineering Equipment Technologies Air Distribution Thi d Quarter Third Q Fiscal Fi l Year Y 2011 Conference Call April 28, 2011 1
Slide 2: Agenda
Agenda Overview Roger Fix – President & Chief Executive Officer Financial Review Tom DeByle – Chief Financial Officer Third Quarter 2011 Segment Results and Outlook Roger Fix – President & Chief Executive Officer Statements in this p presentation include, or mayy be based upon, p management's
Slide 3: Third Quarter 2011 Overview
Third Quarter 2011 Overview Sales increase 8.3% to $146 million inclusive of: Organic sales growth of 5.6% 5 6% Acquisition growth of 2.1% FX effect of 0.6% Non-GAAP N GAAP profit fit reflects fl t b benefits fit off previous i costt reductions d ti Operating income +9% YOY EBITDA +2%
Slide 4: FY 11 Acquisition Update
FY 11 Acquisition Update Acquisition Sales TTM by Segment 21.5% 4.7% 73.8% Engineering Technologies Engraving FSEG Blended EBITDA Sales TTM EBITDA TTM Purchase Price Multiple $25,174 $ 4,792 $ 26,603 5.6X Completed four strategic acquisitions Increased geographical presence Filled critical pro
Slide 5: Standex YOY% Revenue Change
Standex YOY% Revenue Change Five consecutive quarters of sales growth reflect both acquisitions q and top-line p growth initiatives g ($, in thousands) 5
Slide 6: Seasonality
Seasonality Q3 represents our seasonally slowest quarter Range of Quarterly % of Sales, 2007- Present 32% 30% 29 8% 29.8% 28% 26 3% 26.3% 26% 25.6% 25.2% 24.2% 24% 24 0% 24.0% 23.0% 22% 21.6% 20% Q1 Q2 Q3 Q4 6
Slide 7: Q3 FY 11 Comparison
Q3 FY 11 Comparison ($, in millions, except per share amounts) Q3 Q3 FY 2011 FY 2010 Delta Sales $ 146.592 $ 135.411 8.3% Operating Income $ 7.006 $ 6.745 3.9% Operating Income Margin 4.78% 4.98% -20 bps Operating Income excl Special Items $ 8.069 $ 7.405 9.0% Operating Income Margin % excl Special
Slide 8: Operating Income Margin
Operating Income Margin Margins continue to improve across Standex - margins at Spincraft driven by “lumpy” 3Q10 Adjusted Operating Income Margin* 35% 30.2% 30% 25% 20% 16.2% 16.5% 14.0% 15% 9.8% 10.6% 10% 8 2% 7.5% 8.2% 5.5% 5.5% 5% 0% FSEG ADP Engraving Engineering Electronics & SXI 5% ‐5% Technol
Slide 9: Gross Margin
Gross Margin While down slightly YOY, gross margins continue to reflect our improved p cost structure *Excludes purchase accounting and LOCM inventory adjustments in 2011 and 2009, respectively 9
Slide 10: Q3 FY11 EPS Performance
Q3 FY11 EPS Performance Strong Non-GAAP Net Income From Cont Ops Growth ($, in thousands, except per share amounts) Net Income Q3 EPS Q3 FY 11 FY 10 % Change FY 11 FY 10 % Change Net Income Continuing Operations $ 5,166 $ 4,641 11.3% $ 0.41 $ 0.37 10.8% Add: Restructuring (Tax Effected) $ 121 $ 432
Slide 11: Working Capital Performance
Working Capital Performance Working Capital impacted by inventory build ($, in thousands) As Reported Versus Prior Quarter Versus Prior Year Increase Increase 3/31/2011 12/31/2010 (Decrease) 3/31/2010 (Decrease) Accounts Receivable $ 93,513 $ 89,726 $ 3,787 $ 83,278 $ 10,235 DSO 55 50 5 55 - Invento
Slide 12: Net Debt
Net Debt Net Debt to Capital ratio of 23.4% continues to provide us with significant resources for investment 12
Slide 13: Free Cash Flow Generation
Free Cash Flow Generation Free Cash Flow impacted by inventory build ($, in thousands) Free operating cash flow: Q3 FY2011 Q3 FY2010 Net cash provided by operating activities, as reported $ 2,166 $ 4,386 Less: Capital Expeditures (1,522) (1,312) Free operating cash flow $ 644 $ 3,074 Net Income 5,09
Slide 14: Third-Quarter FY11 Operational Segment Review
Third-Quarter Q FY11 Operational Segment Review 14
Slide 15: Food Service Equipment Group
Food Service Equipment Group Q3’11 (‘000s) $ Δ% (yoy) Revenues $83 295 $83,295 10 2% 10.2% Operating Income $6,795 19.8% Q3 seasonality more pronounced than typical due to delays in the retail segment impacting Refrigerated Solutions Dollar store segment offers new growth opportunity Cooking S
Slide 16: Engraving Group
Engraving Group Q3’11 (‘000s) $ Δ% (yoy) Revenues $21 992 $21,992 18 0% 18.0% Operating Income $3,555 94.3% Sales grow sequentially despite historical seasonality Operating income growth demonstrates strong leverage Acquisitions performing above expectations on top and bottom lines Good grow
Slide 17: Engineering Technologies Group
Engineering Technologies Group Q3’11 (‘000s) $ Δ% (yoy) Revenues $10 996 $10,996 -30.4% 30 4% Operating Income $1,563 -67.3% Difficult comparison in Q3 FY11 due to large NASA-related NASA related shipment in the prior year Spincraft business historically participates in large projects that will
Slide 18: Electronics & Hydraulics Group
Electronics & Hydraulics Group Q3’11 (‘000s) $ Δ% (yoy) Revenues $18,039 28.4% Operating Income $2,520 69.1% Fifth consecutive quarter of double digit YOY sales increases at Electronics Record shipment of reed switches Electronics continues to successfully penetrate blue-chip OEM customers due
Slide 19: ADP Group
ADP Group Q3’11 (‘000s) $ Δ% (yoy) Revenues $12,270 8.3% Operating Income ($1,127) NM ADP continues to be affected by housing market downturn Strategy is to drive market share gains through traditional products and customers, and to add new business through new products and wholesaler accounts
Slide 20: Summary
Summary Solid Organic Growth and Acquisition Opportunities Double-digit top- and bottom-line growth in Q3 at Food Service, Engraving and Electronics & Hydraulics Increasingly optimistic about end-market growth Solid near near-term term organic growth opportunities Recent acquisitions perform
Slide 21: Q & A Session
Q&A Session 21
Standex International — Q3 FY2011 Earnings Presentation on 6ix