Standex Delivers Strong Q2 Growth, Fueled by Grid and New Products; Reiterates FY2026 Outlook
By Financial News Desk
January 29, 2026, 8:30 AM ET
Standex International Corp. (NYSE: SXI) showcased the tangible results of its multi-year strategic transformation today, posting strong fiscal second-quarter 2026 earnings. The diversified industrial manufacturer reported organic sales growth of 6.4%, led by its Electronics segment, and a record quarterly order intake of approximately $231 million.
On the earnings call, Chairman, President and CEO David Dunbar emphasized that years of focused investment are now paying off. "The contributions from sales into fast-growth markets, new product sales, and the improving general industrial markets are now evident in our results," Dunbar stated. The company's book-to-bill ratio stood at a healthy 1.04, indicating future revenue strength.
A significant driver continues to be the Grid business, acquired through Amran and Narayan. Sales into fast-growth markets, which include grid, defense, space, and electric vehicles, accounted for 28% of total revenue, or about $61 million. Standex expects this segment to exceed $270 million for the full fiscal year, representing over 45% growth.
CFO Ademir Sarcevic detailed the financials: consolidated revenue jumped 16.6% year-over-year to $221.3 million, with adjusted EPS rising 8.9% to $2.08. The company also strengthened its balance sheet, paying down $10 million in debt and reducing its net leverage ratio to 2.3x.
Looking ahead, management reiterated its fiscal 2026 sales outlook, anticipating revenue growth of over $110 million from 2025. This confidence is underpinned by the momentum in new products—with sales expected to reach $85 million—and the full integration of recent acquisitions. For Q3, Standex guides for mid- to high-single-digit organic growth.
The call also addressed a technical accounting adjustment related to the remaining 10% minority interest in the Narayan acquisition. Sarcevic explained the $17.98 million adjustment reflects the increased valuation of the business, a point Dunbar reframed positively: "We are delighted... because that means that business is doing great."
Analyst & Investor Commentary:
Eleanor Vance, Portfolio Manager at Horizon Capital: "This quarter validates Standex's patient capital allocation. Shifting R&D spend from 1% to 3% of sales since 2021 was a bold move in the industrial space. The 1.08 book-to-bill in Electronics isn't just a number; it's a leading indicator that their re-engineering towards higher-margin, custom solutions is gaining serious traction with OEMs."
Marcus Thorne, Independent Manufacturing Analyst: "The grid story is compelling, but let's not ignore the sequential guide. 'Slightly to moderately higher' revenue and margin for Q3 suggests the growth engine is humming but not overheating. The real test will be execution on the capacity expansions in Croatia, Mexico, and Houston without eroding those excellent Electronics margins."
Rebecca Choi, Editor at The Manufacturing Digest: "Finally, some clear air after years of restructuring. The 490-basis-point margin expansion in Engraving shows their operational discipline. However, I'm skeptical about the 'general industrial recovery' narrative. North America remains soft, and Specialty Solutions' 600-bp margin collapse is a glaring red flag they glossed over. This is still a story of specific, company-driven wins, not a broad macro tailwind."
Dr. Arjun Mehta, Technology & Industrial Strategist: "Standex is quietly building a fascinating ecosystem. The synergy between custom magnetic components (legacy electronics) and instrument transformers (Grid) for energy infrastructure is a powerful cross-selling opportunity. Their discussion of building a 'broader offering' in components and modules signals more targeted M&A could be on the horizon, especially with leverage coming down."