Standex International Corporation · NYSE:SXI
Standex International — Q2 2020 Earnings Presentation
17 slides from Standex International's earnings presentation, Feb 4, 2020
Slide 1: Second Quarter Fiscal 2020 Conference Call
Second Quarter Fiscal 2020 Conference Call February 4, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that are not based on historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology s
Slide 3: 2Q20 Highlights
2Q20 Highlights • Engraving: margin increase sequentially and YOY on flat sales; improved N.A. performance • Electronics: results similar to 1Q20 as expected; impacted by lower Asia demand and material inflation SEGMENT • Engineering Technologies: improved margins and continued strength in aviation
Slide 4: Engraving
Engraving Engraving $ in 000’s 2Q20 2Q19 % 2Q Summary Change • Sales softness reflected timing of customer automotive programs balanced with laneway growth Revenue $38,256 $38,485 -0.6% and contribution from GS Engineering acquisition Operating Income $6,916 $6,849 1.0% • Laneway growth of 22% YOY t
Slide 5: Electronics
Electronics Electronics $ in 000’s 2Q20 2Q19 % 2Q Summary Change • Sales decline reflected weaker end markets in Asia and distributor de-stocking; although both Revenue $45,834 $52,700 -13.0% appear to be moderating Operating Income $7,776 $10,376 -25.1% • Positive trends for applications in the def
Slide 6: Engineering Technologies
Engineering Technologies Engineering Technologies $ in 000s 2Q20 2Q19 % 2Q Summary Change • Volume leverage associated with core markets of Revenue $26,495 $23,568 +12.4% Aviation, Space and Defense • Backlog to be delivered in under one year increased Operating Income $3,422 $2,061 +66.0% 17% YOY O
Slide 7: Hydraulics
Hydraulics Hydraulics $ in 000s 2Q20 2Q19 % 2Q Summary Change • Sales decrease reflects customers reducing Revenue $11,316 $12,116 -6.6% existing inventory levels as well as slowdown in dump truck market partially offset by positive Operating Income $1,818 $1,929 -5.8% refuse market trends OI Margin
Slide 8: Food Service Equipment Group
Food Services Food Service Equipment Group $ in 000s 2Q20 2Q19 % 2Q Summary Change • Relatively flat demand across the group • Increase in operating income largely due to Revenue $68,684 $68,653 0.1% improved Refrigeration contribution Operating Income $6,773 $5,190 30.5% • Scientific business conti
Slide 9: 2Q20 Financial Summary
2Q20 Financial Summary ($ in M's) 2Q20 2Q19 YOY Comments Revenue $190.6 $195.5 -2.5% Components of revenue increase: Organic -3.0% Acquisitions +0.8% F/X impact of -0.4% Gross Margin 34.9% 34.2% +70 bps Adj. Gross Margin 34.9% 34.3% +60 bps Sales mix & productivity improvements Adj. Operating Income
Slide 10: 2Q20 Revenue Drivers
2Q20 Revenue Drivers Q2 2020 Engraving Electronics Engineering Hydraulics Food Service Total YOY Change % Technologies Organic -2.7% -13.6% 12.9% -6.6% 0.3% -3.0% Acquisitions 4.2% 0.0% 0.0% 0.0% 0.0% 0.8% Currency -2.2% 0.6% -0.5% 0.0% -0.2% -0.4% Total -0.6% -13.0% 12.4% -6.6% 0.1% -2.5% Strength
Slide 11: 2Q20 Free Cash Flow
2Q20 Free Cash Flow • Net cash from continuing ops decreased YOY primarily due to an earnout payment associated with a prior acquisition which is now complete • Working capital management continued to improve • Capital expenditures decreased YOY reflecting timing of projects Solid Free Cash Flow Gen
Slide 12: 2Q20 Working Capital Trends
2Q20 Working Capital Trends Q2 FY 20 Q2 FY 19 $180 Actual Actual 7.0 $160 A/R 110,087 111,864 $140 5.3 5.4 5.2 6.0 4.9 5.1 DSO 51 52 4.7 $120 5.0 NWC Turns Inventory 108,513 109,423 NWC $’s $100 4.0 Inventory Turns 4.8 4.6 $80 3.0 $60 A/P (69,737) (56,460) 2.0 DPO 44 35 $40 $20 1.0 Net Working Capit
Slide 13: 2Q20 Capitalization
2Q20 Capitalization Favorable Liquidity Profile • Net debt to adj. EBITDA of 0.8x • Net debt to total capital of 15.2% • ~$195M of available liquidity post Torotel Capital Spending • Approximately $3.6M of CAPEX in the quarter compared to $8.7M in 2Q19 • Fine tuning FY20 CAPEX to between $30M - $32M
Slide 14: Key Takeaways
Key Takeaways In 3Q20, Standex expects total revenue to be similar to the third quarter of 1 2019. Operating income is expected to be sequentially similar to slightly better than 2Q20 with a significant improvement year-over-year as the benefits of cost reduction actions are more fully leveraged. 2
Slide 15: Q&A
Q&A HT Standex
Slide 16: Appendix
APPENDIX = i Standex
Slide 17: 2Q20 GAAP to Non-GAAP Bridge
2Q20 GAAP to Non-GAAP Bridge GAAP 2nd Quarter Net Income $12.4M versus Prior Year at $12.5M Non-GAAP Net Income $12.8M versus Prior Year at $12.5M GAAP EPS increased 2.0%; Non-GAAP EPS up 5.1% 17
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