Standex Hits Inflection Point: Record Margins and $100M+ Growth Forecast Signal Strategic Pivot
MANCHESTER, N.H. — Standex International Corp. (NYSE: SXI) is shifting gears from a period of foundational building to one of accelerated execution, as evidenced by its strong fiscal fourth-quarter 2025 results and a bullish outlook for the year ahead. The company, which operates across electronics, engineering technologies, and industrial engraving, reported a record adjusted operating margin of 20.6%, up 350 basis points year-over-year, on revenue of $222 million.
"Fiscal year 2025 was a turning point for Standex," declared Chairman, President, and CEO David Dunbar during the earnings call. "We are a different company than we were even a year ago. Our growth drivers have now crossed the threshold... and are beginning to move the needle in a meaningful way."
The quarter's 23.2% revenue increase was largely fueled by strategic acquisitions, notably the Amran/Narayan Group and McStarlite. More encouragingly, the core Electronics segment saw its first quarter of organic growth since 2023, with orders up 16% year-over-year, signaling a potential rebound. Standex's sales into its designated "fast growth" markets—encompassing electrical grid, space, defense, and data centers—rose to 28% of total company sales.
CFO Ademir Sarcevic detailed the financial strength, noting a reduction in net leverage to 2.6x, supported by robust cash generation. The company also declared its 244th consecutive quarterly dividend.
The centerpiece of the call was Standex's confident forecast for fiscal 2026. Management expects to add over $100 million in revenue, driven by mid-to-high single-digit organic growth in Electronics, double-digit growth in Engineering Technologies, and the full-year contribution of recent acquisitions. Sales from fast-growth markets are projected to surge approximately 45% to exceed $265 million.
"We've built an engine of organic growth that is both durable and scalable," Dunbar explained, highlighting the company's new product pipeline. Sales from products launched in the last few years reached $55 million in FY2025, and with more than 15 new products slated for release in 2026, Standex expects incremental contributions of about 300 basis points to sales growth.
To support global demand, particularly for electrical equipment, the company is expanding capacity for its Amran/Narayan business and has established a new manufacturing site in Croatia to serve the European market, with first shipments expected within months.
Analyst & Investor Perspectives
The call revealed a mix of optimism and pointed scrutiny from the financial community:
Michael Shlisky, D.A. Davidson: Probed the conservatism of the $100M+ growth target, suggesting the math from acquisitions and new products alone could push it toward $130M. He also questioned the near-term impact of the EV market slowdown on Standex's electronics segment.
David Dunbar's Response: Acknowledged the upside potential, noting the guidance assumes "no overall market growth." On EVs, he clarified that while a smaller piece of the portfolio now, growth is expected with new model introductions from European OEMs.
Ross Sparenblek, William Blair: Focused on the sustainability of the order rebound in Electronics and the capacity expansion plans, seeking more concrete targets for the ramp-up of the new Croatia facility.
Gary Prestopino, Barrington Research: Sought to quantify the margin benefits of the mix shift toward faster-growing, higher-margin markets, which management estimated at 300-400 basis points higher gross margin.
Navigating Headwinds
Management addressed several challenges head-on. The Scientific segment continues to face pressure from NIH funding cuts impacting academic demand. The Engraving group, after a tough year tied to automotive delays, is stabilizing and pursuing niche production wins. Regarding recent tariff announcements, executives expressed confidence in their agility, noting only about 4% of cost of goods sold comes from India and that pricing and sourcing strategies are in place to mitigate impact.
"We have learned to love uncertainty in this company," Dunbar stated, referencing past inflationary and trade disruptions. "A highly uncertain environment kind of favors us because I think we've demonstrated we're nimble and agile."
With a clear strategy centered on innovation, strategic markets, and operational discipline, Standex is positioning its fiscal 2026 as a year of demonstrable momentum, remaining on track to hit its long-term target of over $1.15 billion in sales and greater than 23% adjusted operating margin by fiscal 2028.
Fictional Reader Reactions:
Eleanor Rigby, Portfolio Manager at Steadfast Capital: "Finally, the pieces are falling into place. The margin expansion is the real story here—20.6% is exceptional for a diversified industrial. It shows their pricing power and productivity gains are real, not just acquisition-fueled. The organic order growth in electronics is the green shoot we've been waiting for."
Marcus Thorne, Independent Manufacturing Analyst: "Color me skeptical. 'Over $100 million' is a conveniently round number that seems built on annualizing acquisitions they already own. The 'organic growth' in electronics is a measly 0.3% before you even adjust for currency. They're touting an inflection point, but it feels more like a narrative shift to justify the debt they took on for those deals. Let's see the organic numbers in a year."
Dr. Anika Patel, Engineering PhD and Retail Investor: "As someone who follows the grid tech space, the expansion into Croatia and the focus on data center power needs is very forward-looking. Their products are critical for energy transition infrastructure. The new product pipeline details give me confidence this isn't just financial engineering; there's real R&D here."
Ben Carter, Small Business Owner: "The dividend increase is a nice, tangible signal of confidence. For a long-term holder, that consistency matters. It shows management is balancing growth investments with shareholder returns, even during a 'pivot' phase."