Standex International (SXI) Q3 2026 earnings summary

Executive summary

• Q3 FY26 sales rose 8.1% year-over-year to $224.6 million, with 6.5% organic growth and new product sales up ~40%, driven by fast-growing end markets and portfolio simplification through the Federal Industries divestiture.

• Electronics and Aerospace & Defense segments now generate about 70% of sales and nearly 80% of segment profits, reflecting a successful portfolio shift and acquisitions such as McStarlite and Amran/Narayan Group.

• Debt was reduced by $62 million in Q3 FY26, lowering net leverage to 1.9x, and supporting improved financial flexibility.

• Segment realignment and reorganization completed, now reporting Electronics, Aerospace & Defense, Scientific, and Engraving & Hydraulics.

• Book-to-bill ratio was 1.05 overall and 1.14 for Electronics, indicating strong order flow.

Financial highlights

• Adjusted operating margin rose 30 basis points year-over-year to 19.7%; GAAP operating margin reached 40.4%.

• Adjusted EPS increased 13.5% year-over-year to $2.21; GAAP diluted EPS was $5.56.

• Free cash flow was $6.3 million, up 81.5% year-over-year.

• Net income from continuing operations (GAAP) was $68.6 million, up 201.3% year-over-year; adjusted net income was $26.7 million, up 13.5%.

• Net debt reduced to $369.1 million from $470.4 million year-over-year; net leverage at 1.9x.

Outlook and guidance

• FY26 revenue expected to increase by about $100 million over 2025, even after Federal Industries divestiture, with mid-to-high single-digit organic growth in Electronics and double-digit growth in Aerospace & Defense.

• Fast growth market sales projected to rise ~45% year-over-year to ~$270 million.

• Over 15 new products to be released, contributing ~300 basis points of incremental organic growth.

• Q4 FY26 guidance: slightly to moderately higher revenue sequentially, with slightly lower adjusted operating margin year-over-year due to growth investments and higher costs.

• Tax rate for Q4 expected at 24%-25%.