Standex International Corporation · NYSE:SXI
Standex International — Q1 FY2015 Earnings Presentation
43 slides from Standex International's earnings presentation, October 2014
Slide 1: Q1 FY 15 Investor Presentation
Q1 FY 15 Investor Presentation
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: Standex at a Glance
Standex at a Glance Multi-industry manufacturer in five broad segments Food Service Engraving Engineering Electronics Hydraulics Technologies FY14 Adj. EBITDA* Ticker Symbol: SXI FY 14 Sales Electronics 20% Hydraulics Hydraulics FSEG Engineering 5% Market Cap: +$1BN 5% 53% Tech 14% Quarterly Dividen
Slide 4: Key Financial Targets
Key Financial Targets Four long-term financial objectives Top-line performance: Organic revenue growth at GDP +2-3% per year Acquisition-driven revenue growth of 3-4% per year Exceed 15% overall company EBITDA Free Cash Flow Conversion of 100% or more Working capital turns average 6.0 or
Slide 5: SXI Results versus key financial targets
SXI Results versus key financial targets *EPS & EBITDA adjusted to exclude impact of discontinued operations, purchase accounting, restructuring, insurance gains or losses, gains on real estate sales, management transition expenses, legal settlement costs, and discrete tax items as applicable 5
Slide 6: Investment Highlights
Investment Highlights Strong Brands in profitable niches Attractive growth and margin potential in all businesses Clear plan of margin improvement in our biggest segment, Food Service Disciplined operator Consistent cash flow and disciplined working capital management Strong balance shee
Slide 7: Standex Operating Model: Customer Intimacy
Standex Operating Model How We Compete in the Marketplace Common Thread Driving Growth at Standex is “Customer Intimacy” Partner Develop deep understanding of problems and opportunities customer faces Solve Apply our unique engineering and process abilities to create options and test them for select
Slide 8: Growth Principles
Growth Principles Grow investments to create value with engineered customer solutions Organic Acquisition • Deployment of Standex Growth Disciplines • Bolt-ons to expand strategic • Partner with customers to platforms with complementary deeply understand their products, services or market business i
Slide 9: Capital Allocation History
Capital Allocation History FY 11-FY 14 Dividends 10% CAPEX 32% Acquisitions 58% 9
Slide 10: Management Incentive System
Management Incentive System Incentive Compensation Matrix Stock Ownership Guidelines Metric Corporate Office Business Units Role Multiple of Base Salary Sales 15% 10% President & CEO 3x EPS 30% 10% Other named 1.5x executives EBIT -- 30% Operating Cash Flow 25% 10% Strategic Goals 30% 40% Long-term
Slide 11: Financial Overview
Standex International Financial Overview 11
Slide 12: Sales and Non-GAAP Earnings Per Share Trend
Non-GAAP Earnings Per Share Trend $800 $4.22 $4.28 $4.50 $3.80 $4.00 $750 $3.60 $3.33 $3.50 $700 $2.96 $3.00 $650 Adj EPS $2.42 Sales $2.50 $600 $2.00 $550 $1.50 $500 $1.00 $450 $0.50 $400 $0.00 FY 10 FY 11 FY 12 FY 13 FY 14 TTM TTM 9/30/13 9/30/14 Sales Adj EPS* *EPS adjusted to exclude impact of d
Slide 13: Trailing Twelve Months Financial Overview
Trailing Twelve Months Financial Overview * * * * * *EPS, Operating Income, & EBITDA adjusted to exclude impact of discontinued operations, purchase accounting, restructuring, insurance gains or losses, management transition expenses, legal settlement costs, and discrete tax items as applicable. 13
Slide 14: Revenue Changes
Revenue Changes Q1 2015 Food Service Engraving Engineering Electronics Hydraulics Total YOY Change Technologies % Organic 10.1% 12.7% 1.5% 3.9% 35.1% 9.8% Acquisitions 3.7% 0.0% 13.3% 0.7% 0.0% 3.5% Currency 0.1% -0.5% 1.7% 0.1% -0.1% 0.1% Total 13.9% 12.2% 16.5% 4.7% 35.0% 13.4% Strong revenue gr
Slide 15: Net Working Capital
Net Working Capital 160 5.7 5.4 5.6 5.5 5.5 6.0 140 5.0 120 NWC Turns 4.0 100 NWC $’s 80 3.0 60 2.0 40 1.0 20 0 0.0 Q1-11 Q1-12 Q1-13 Q1-14 Q1-15 NWC NWC Turns (1) Excluding impact of quarter acquisitions Working Capital increase due to: recent acquisitions of Ultrafryer, Enginetics volume incre
Slide 16: Debt Management and Net Debt to Capital Ratio
Debt Management Short Term Debt 9/30/14 - Long Term Debt 125,049 Funded Debt 125,049 $140 20% Cash 71,983 Net Debt to Capital Ratio $120 15% Net Debt 53,066 $100 10% $80 Debt Shareholders Equity 342,971 $60 5% $40 Letters of Credit 9,719 0% EBITDA per Credit Agreement 101,279 $20 -5% $- Net Debt to
Slide 17: Capital Spending Overview
Capital Spending Overview $30 $25 Capital spending in FY 15 will be $20 dedicated to automation and key $15 growth programs $10 FY 15 capital spending is estimated to be between $24–$26M $5 $- Summary of Q1 Capital Spending FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 CAPEX Depreciation Amortizatio
Slide 18: Business Segment Overview
Standex International Business Segment Overview 18
Slide 19: Food Service
Food Services Food Service 14% Sales FY 14 $400 12% Hot $320 10% 26% $240 8% 6% $160 4% Cold $80 57% 2% Custom $0 0% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 TTM Q1 TTM Q1 17% 14 15 Sales OI% * *OI adjusted to exclude impact of purchase accounting & discontinued operations Pro Forma Sales by Region F
Slide 20: Engraving
Engraving Sales FY 14 Engraving Non-Auto $120 25.0% Molds 25% $100 20.0% $80 15.0% $60 Drums, 10.0% Auto Molds Systems & $40 49% Vents 9% $20 5.0% Rolls, $0 0.0% Plates & FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 TTM Q1 TTM Q1 Mach 14 15 17% Sales OI% Description Sales by Region FY 14 Designs and appl
Slide 21: Engineering Technologies
Engineering Technologies Sales FY 14 $100 25.0% Engineering Technologies Energy $80 20.0% 34% $60 15.0% Space 27% $40 10.0% $20 5.0% $0 0.0% FY 2010 FY 2011* FY 2012 FY 2013 FY 2014* TTM Q1 TTM Q1 Aviation 14 15* Other 6% 33% Sales OI% *OI adjusted to exclude impact of purchase accounting Sales by R
Slide 22: Enginetics Acquisition
Enginetics Acquisition Aircraft delivery forecast (2013 to 2032) Description Manufacturer of unique metal forming capability for the aviation market Two plants in US Founded in 1976 Blue chip customers Source: Boeing Current Market Outlook 2014 Benefits FY 2014 Sales Expands forming capabi
Slide 23: Electronics
Electronics Sales FY 14 Other Electronics 15% $140 20% Household 9% $120 16% Transport / $100 Medical Auto 6% 22% $80 12% Test & Measurement $60 8% 6% $40 Security & 4% Safety $20 5% Military 5% $0 0% HVAC FY 2010 FY 2011 FY 2012 FY 2013* FY 2014 TTM Q1 TTM Q1 3% Industrial 14* 15 29% Sales OI%* *OI
Slide 24: Hydraulics
Hydraulics Sales FY 14 Hydraulics $40 20% Dump Truck Refuse 13% 23% $35 16% $30 $25 12% $20 $15 8% Dump $10 Trailer 4% 28% $5 Aftermarket 24% $0 0% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 TTM Q1 TTM Q1 14 15 Other Sales OI% 12% Sales by Region FY 14 Description Americas 98% Designs and manufacturers
Slide 25: Summary
Summary Q1 was a solid start to 2015 Commercial activity strong and backlogs are up in all businesses Food service is focused on completing the Nogales ramp up All businesses are executing their investment plan to support increased demand Acquisition integrations are proceeding well and we
Slide 26: FY 15 Q1 Financial Statements
FY 15 Q1 Financial Statements 26
Slide 27: Consolidated Statement of Operations
Standex International Corporation Consolidated Statement of Operations Three Months Ended September 30, (In thousands) 2014 2013 Net sales $ 202,027 $ 178,140 Cost of sales 135,915 117,735 Gross profit 66,112 60,405 Selling, general and administrative expenses 43,954 39,535 Restructuring costs 862 3
Slide 28: Condensed Consolidated Balance Sheets
Standex International Corporation Condensed Consolidated Balance Sheets September 30, Sune 30, (in thousands) 2014 2014 ASSETS Current assets: Cash and cash equivalents s 71,983 s 74,260 Accounts receivable, net 114,458 107,674 Inventories 111,491 97,065 Prepaid expenses and other current assets 7,5
Slide 29: Statements of Consolidated Cash Flows
Standex International Corporation and Subsidiaries Statements of Consolidated Cash Flows Three Months Ended September 30, (in thousands) 2014 2013 Cash Flows from Operating Activities Net income $ 14552, $ 9,082 Income (loss) from discontinued operations (375) (G,266) Income from continuing operatio
Slide 30: Selected Segment Data
Standex International Corporation Selected Segment Data Three Months Ended September 30, thousands 2014 2013 Net Sales Food Service Equipment $ 113,833 $ 99.911 Engraving 28,088 25,027 Engineering Technologies 20,119 17,265 Electronics Products 29,470 28,144 Hydraulics Products 10,517 7,793 Total $
Slide 31: Reconciliation of GAAP to Non-GAAP Financial Measures
Standex International Corporation Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended September 30, % (In thousands, except percentages) 2014 2013 Change Adjusted income from operations and adjusted net income from continuing operations: Income from operations, as reported $ 21,
Slide 32: Reconciliation of GAAP to Non-GAAP Financial Measures (EPS)
Standex International Corporation Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended September 30, Adjusted earnings per share from % continuing operations 2014 2013. Change Diluted earnings per share from continuing operations, as reported $ 116 $ 0.97 19.6% Adjustments: Restr
Slide 33: Business Units Products and Customers
Business Units Products and Customers 33
Slide 34: Food Services Products
Food Services Hot Cold Specialty Ranges Rotisseries Reach-in Walk-in Refrigerator/Freezer Refrigeration/Freezer Hot/Cold Refrigerated Airport Display Cases Concessions Steam tables Fryers Remote Reach-in Rack Refrigeration Refrigerator/Freezer Open Air Merchandisers Beverage Pump Countertop Cooking
Slide 35: Food Services Customers
Food Services Convenience Drugstore, Retail & Institutional Caterers, Stores Dollar Store Schools & Stadiums Beverage Scientific 35
Slide 36: Engraving Products
Engraving Molds Press Plates Rolls Machinery Instrument Panels & Fashion Designs Flooring Patterns Continuous Length Plastic Parts Patterns 36
Slide 37: Engraving Markets
Engraving Electronics Fashion & Apparel Household & Building Materials Automotive Heavy Truck Toys Packaging Tissue & Towels Medical Aviation Medical White Goods 37
Slide 38: Engineering Technologies Products
Engineering Technologies Tanks Nose Cones MRI Components Particle Separators Lipskins UAV Missile Hardware MRI Helicopters Engine Components Domes Crew Capsules Shims Hot Side Gas Turbines Un-manned Manned Oil and Gas Floating Rigs Land-Based Aerospace Aerospace Gas Turbines 38
Slide 39: Engineering Technologies Markets
Engineering Technologies Oil & Gas Aerospace Aviation Defense Energy Healthcare Marine 39
Slide 40: Electronics Products
Electronics SPACE INDUSTRIAL MEDICAL MILITARY METERING PLANAR CURRENT SENSE ROGOWSKI MIL-AERO TRANSFORMERS TRANSFORMERS TRANSFORMERS COILS/MODULES MAGNETICS AND INDUCTORS SECURITY TESTING AUTOMOTIVE HOUSEHOLD HYDRAULICS FLUID LEVEL PROXIMITY OTHER SENSING REED SWITCHES REED RELAYS SWITCHES SENSORS A
Slide 41: Electronics Customers
Electronics MW, woopwarp Honeywell SIEMENS § EMERSON 41 Donaldson. Iron RAINY BRD. E:TeN Powering Business Worldwide (4 Franklin Electric Hamilton Sundstrand itt — BAE SYSTEMS stryker’ ThermoFisher SCIENTIFIC GE Healthcare tyco Automotive & Transportation @ntinental@ asm @D @BOSCH DELPHI €> PeLaARis
Slide 42: Hydraulics Products
Hydraulics Double Acting Telescopic “DAT” Gear Pump Single Acting or Double Acting Cylinders “SA”or “DA” Dump Truck Dump Trailer Hook Lift / Roll Off Refuse Airport Catering Skid Loader Oil and Gas Mining 42
Slide 43: Hydraulics Markets
Hydraulics Construction & Infrastructure Aftermarket Refuse Mining , Oil & Gas Export 43
Standex International — Q1 FY2015 Earnings Presentation on 6ix