CORRECTING and REPLACING Standex Announces Sale of Minority Interest in Combi Oven Cooking Business; Provides Update on Cooking Solutions Divestiture; Issues Updated Proforma Historical Financial Results...

SALEM, N.H.--(BUSINESS WIRE)--Please replace the release with the following corrected version due to multiple revisions in the table titled "Reconciliation of Fiscal Q3 and Q4 2018 Financial Results to Reflect Planned Divestiture of Cooking Solutions Group."

The corrected release reads:

CORRECTING AND REPLACING STANDEX ANNOUNCES SALE OF MINORITY INTEREST IN COMBI OVEN COOKING BUSINESS;

PROVIDES UPDATE ON COOKING SOLUTIONS DIVESTITURE;

ISSUES UPDATED PROFORMA HISTORICAL FINANCIAL RESULTS TO SHOW IMPACT ON SALES, MARGINS, AND GAAP AND NON-GAAP EPS MEASURES

Standex International Corporation (NYSE:SXI) announced today that it has sold its minority interest investment in Giorik, SpA (“Giorik”) to that business’s majority owner. It was necessary to have the Company’s partner repurchase the minority interest in Giorik to allow the eventual buyer of Cooking Solutions maximum flexibility and to have a supply contract with the partner in place.

Standex continues to make progress on the Cooking Solutions divestiture from the Food Service Equipment Group segment in line with its plan. Standex has provided an updated table, attached to this release, to show the pro-forma historical impact of the divestitures of both Cooking Solutions and the Giorik minority interest on sales, margins and earnings per share both on a GAAP and non-GAAP basis.

About Standex

Standex International Corporation is a multi-industry manufacturer in five broad business segments: Food Service Equipment Group, Engineering Technologies Group, Engraving Group, Electronics Products Group, and Hydraulics Products Group with operations in the United States, Europe, Japan, Canada, Australia, Singapore, Mexico, Brazil, Argentina, Turkey, South Africa, India and China. For additional information, visit the Company's website at http://standex.com/.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures, including non-GAAP income from operations, non-GAAP net income from continuing operations, free operating cash flow, EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted earnings per share. The attached financial tables reconcile non-GAAP measures used in this press release to the most directly comparable GAAP measures. The Company believes that the use of non-GAAP measures including the impact of restructuring charges, purchase accounting, discrete tax events, and acquisition costs help investors to obtain a better understanding of our operating results and prospects, consistent with how management measures and forecasts the Company's performance, especially when comparing such results to previous periods. An understanding of the impact in a particular quarter of specific restructuring costs, acquisition expenses, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Non-GAAP measures should be considered in addition to, and not as a replacement for, the corresponding GAAP measures, and may not be comparable to similarly titled measures reported by other companies.

1 Safe Harbor Language 
Statements in this news release include, or may be based upon, management's current expectations, estimates and/or projections about Standex's markets and industries. These statements are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may materially differ from those indicated by such forward-looking statements as a result of certain risks, uncertainties and assumptions that are difficult to predict. Among the factors that could cause actual results to differ are the impact of implementation of government regulations and programs affecting our businesses, unforeseen legal judgments, fines or settlements, uncertainty in conditions in the financial and banking markets, general domestic and international economy including more specifically increases in raw material costs, the ability to substitute less expensive alternative raw materials, the heavy construction vehicle market, the ability to continue to successfully implement productivity improvements, increase market share, access new markets, introduce new products, enhance our presence in strategic channels, the successful expansion and automation of manufacturing capabilities and diversification efforts in emerging markets, the ability to continue to achieve cost savings through lean manufacturing, cost reduction activities, and low cost sourcing, effective completion of plant consolidations, successful completion and integration of acquisitions and the other factors discussed in the Annual Report of Standex on Form 10-K for the fiscal year ending June 30, 2018, which is on file with the Securities and Exchange Commission, and any subsequent periodic reports filed by the Company with the Securities and Exchange Commission. In addition, any forward-looking statements represent management's estimates only as of the day made and should not be relied upon as representing management's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company and management specifically disclaim any obligation to do so, even if management's estimates change.

 

Reconciliation of Q2 and Fiscal Year to Date 2018 Financial Results to Reflect Planned Divestiture of Cooking Solutions Group

                                     

Second Quarter FY 2018

   

Q2 FY18
Reported

   

Cooking
Divestiture

   

Pension Exp.
Reclassification

   

Q2 GAAP
Adjusted

   

Pro Forma
Non-GAAP Adjs.

   

Q2 FY18
Pro Forma

Net Sales     209,751     24,057     -     185,694     -     185,694
Cost of Goods Sold     138,225     15,710     (139)     122,376     -     122,376
Gross Profit     71,526     8,347     139     63,318     -     63,318
%     34.1%     34.7%           34.1%           34.1%
                                     
SG&A     50,679     6,464     (421)     43,794     -     43,794
Acquisition Related Costs     703     -     -     703     (703)     -
Restructuring     1,966     192     -     1,774     (1,774)     -
Operating Income     18,178     1,691     560     17,047     2,477     19,524
%     8.7%     7.0%           9.2%           10.5%
                                     
Interest Expense     1,793     -     -     1,793     -     1,793
Non-Operating Exp./ (Income)     (453)     (135)     560     242     -     242
Profit Before Tax     16,838     1,826     -     15,012     2,477     17,489
Income Tax     19,642     283     -     19,359     (14,338)     5,021
Net Income Continuing Ops     (2,804)     1,543     -     (4,347)     16,815     12,468
                                     

Second Quarter YTD FY 2018

   

Q2 YTD FY18
Reported

   

Cooking
Divestiture

   

Pension Exp.
Reclassification

   

Q2 GAAP
Adjusted

   

Pro Forma
Non-GAAP Adjs.

   

Q2 YTD FY18
Pro Forma

Net Sales     424,130     49,295     -     374,835     -     374,835
Cost of Goods Sold     278,423     32,345     (231)     245,847     (205)     245,642
Gross Profit     145,707     16,950     231     128,988     205     129,193
%     34.4%     34.4%           34.4%           34.5%
                                     
SG&A     100,705     12,968     (886)     86,851     -     86,851
Acquisition Related Costs     1,708     -     -     1,708     (1,708)     -
Restructuring     4,970     238     -     4,732     (4,732)     -
Operating Income     38,324     3,744     1,117     35,697     6,645     42,342
%     9.0%     7.6%           9.5%           11.3%
                                     
Interest Expense     3,514     -     -     3,514     -     3,514
Non-Operating Exp./(Income)     (1,057)     (276)     1,117     336     -     336
Profit Before Tax     35,867     4,020     -     31,847     6,645     38,492
Income Tax     24,672     1,050     -     23,622     (13,268)     10,354
Net Income Continuing Ops     11,195     2,970     -     8,225     19,913     28,138
                                     
     

Reconciliation of Fiscal Q3 and Q4 2018 Financial Results to Reflect Planned Divestiture of Cooking Solutions Group

                                     
Third Quarter FY 2018    

Q3 FY18
Reported

   

Cooking
Divestiture

   

Pension Exp.
Reclassification

   

Q3 GAAP
Adjusted

   

Pro Forma
Non-GAAP Adjs.

   

Q3 FY18
Pro Forma

Net Sales     216,743     24,596     -     192,147     -     192,147
Cost of Goods Sold     142,971     16,796     (139)     126,036     -     126,036
Gross Profit     73,772     7,800     139     66,111     -     66,111
%     34.0%     31.7%           34.4%           34.4%
                                     
SG&A     51,854     6,552     (430)     44,872     -     44,872
Acquisition Related Costs     1,254     -     -     1,254     (1,254)     -
Restructuring     1,337     276     -     1,061     (1,061)     -
Operating Income     19,327     972     569     18,924     2,315     21,239
%     8.9%     4.0%           9.8%           11.1%
                                     
Interest Expense     2,286     -     -     2,286     -     2,286
Non-Operating Exp./(Income)

 

 

293

    (139)     569     1,001     -     1,001
Profit Before Tax     16,748     1,111     -     15,637     2,315     17,952
Income Tax     3,928     231     -     3,697    

1,132

   

4,829

Net Income Continuing Ops

 

 

12,820

    880     -     11,940    

1,183

   

13,123

                                     

Fourth Quarter FY 2018

 

 

Q4 FY18
Reported

 

 

Cooking
Divestiture

   

Pension Exp.
Reclassification

   

Q4 GAAP
Adjusted

   

Pro Forma
Non-GAAP Adjs.

   

Q4 FY18
Pro Forma

Net Sales     227,508     24,039     -     203,469     -     203,469
Cost of Goods Sold     145,188     16,082     (139)     128,967     -     128,967
Gross Profit     82,320     7,957     139     74,502     -     74,502
%     36.2%     33.1%           36.6%           36.6%
                                     
SG&A     53,898     6,456     (356)     47,086     -     47,086
Acquisition Related Costs     749     -     -     749     (749)     -
Restructuring     1,287     115     -     1,172     (1,172)     -
Operating Income     26,386     1,386     495     25,495     1,921     27,416
%     11.6%     5.8%           12.5%           13.5%
                                     
Interest Expense     2,230     -     -     2,230     -     2,230
Non-Operating Exp./(Income)

 

 

(481)

    (211)     495     225     -     225
Profit Before Tax     24,637     1,597     -     23,040     1,921     24,961
Income Tax     12,020     420     -     11,600     (5,782)     5,818
Net Income Continuing Ops

 

 

12,617

    1,177     -     11,440     7,703     19,143
                                     
 

Impact of Food Service Equipment Group Sales and Operating Income on Cooking Solutions Group Divestiture

                                                 
      Q1 FY17     Q2 FY17     Q3 FY17     Q4 FY17     Q1 FY18     Q2 FY18     Q3 FY18     Q4 FY18
FSEG Reported Operating Income     9,488     7,206     7,418     9,324     10,424     7,841     6,785     9,803
Reclassify Cooking as Disc Ops     (3,199)     (2,149)     (2,593)     (2,495)     (2,070)     (1,691)     (972)     (1,386)
FSEG GAAP Operating Income     6,289     5,057     4,825     6,829     8,354     6,150     5,813     8,417
Add: Horizon Purchase Accounting     -     1,086     -     -     -     -     -     -
Cooking Restructuring Expense     (53)     (3)     (7)     -     (47)     (192)     (276)     (115)
Cooking Gain on Sale of Real Estate Above     -     -     -     652     -     -     -     -
Restated FSEG Operating Income     6,236     6,140     4,818     7,481     8,307     5,958     5,537     8,302
                                                 
Sales as Reported     92,651     92,200     92,730     103,388     103,064     97,222     95,482     101,121
Reclassify Cooking as Disc Ops     (27,653)     (24,370)     (26,591)     (28,759)     (25,237)     (24,058)     (24,596)     (24,039)
Restated FSEG Sales     64,998     67,830     66,139     74,629     77,827     73,164     70,886     77,082
                                                 
Adjusted Op Income % of Adjusted Sales     9.6%     9.1%     7.3%     10.0%     10.7%     8.1%     7.8%     10.8%
Reported Op Income % of Reported Sales     10.2%     7.8%     8.0%     9.0%     10.1%     8.1%     7.1%     9.7%
                                                 
 

Reconciliation of GAAP to non-GAAP measures 
Adjusted Earnings per Share

                                                 
      Q1 FY17     Q2 FY17     Q3 FY17     Q4 FY17     Q1 FY18     Q2 FY18     Q3 FY18     Q4 FY18
Reported EPS     1.12     0.82     0.60     1.11     1.10     (0.22)     1.00     0.99
Reclassify Cooking as Disc Ops     (0.18)     (0.13)     (0.13)     (0.14)     (0.12)     (0.13)     (0.08)     (0.11)
Restated EPS from Continuing Ops     0.94     0.69     0.47     0.97     0.98     (0.35)     0.92     0.88
                                                 
Adjustments:                                                
Restructuring as Reported     0.02     0.10     0.06     0.16     0.18     0.12     0.08     0.08
Cooking Restructuring in Above     -     -     -     -     -     (0.01)     (0.02)     (0.01)
Acquisition Related Costs     -     0.09     0.32     0.05     0.06     0.04     0.07     0.04
Purchase Accounting     -     0.06     -     0.12     0.01     -     -     -
Stock Comp Tax Accounting Change     0.03     0.02     -     (0.05)     -     -     -     -
Discrete Tax Items     -     (0.04)     -     -     -     1.18     (0.04)     0.49
Loss / (Gain) on Real Estate Sale     -     -     -     (0.04)     -     -     -     -
Cooking Gain on Real Estate Above     -     -     -     0.04     -     -     -     -
Adjusted EPS ex Cooking     0.99     0.92     0.85     1.25     1.23     0.98     1.01     1.48
As Reported Adjusted EPS Incl. CSG     1.17     1.05     0.98     1.35     1.35     1.12     1.11     1.60
                                                 
 

Adjusted EBIT by Quarter

                                                 
      Q1 FY17     Q2 FY17     Q3 FY17     Q4 FY17     Q1 FY18     Q2 FY18     Q3 FY18     Q4 FY18
Net Income / (Loss) from Continuing Operations as Reported     13,951     10,258     7,644     14,799     14,000     (2,804)     12,822     12,617
Provision for Income Taxes     5,556     2,458     2,890     4,376     5,030     19,642     3,927     12,020
Interest Expense     697     850     953     1,543     1,721     1,793     2,286     2,230
EBIT as Reported     20,204     13,566     11,487     20,718     20,751     18,631     19,035     26,867
Reclassify Cooking as Disc Ops     (3,357)     (2,326)     (2,676)     (2,678)     (2,239)     (2,018)     (1,388)     (1,728)
Restated EBIT from Continuing Ops     16,847     11,240     8,811     18,040     18,512     16,613     17,647     25,139
                                                 
Adjustments:                                                
Restructuring     394     1,664     1,019     2,748     3,004     1,966     1,337     1,287
Cooking Restructuring in Above     (53)     (3)     (7)     -     (47)     (192)     (276)     (115)
Acquisition Related Costs     -     1,503     5,422     918     1,005     703     1,254     749
Purchase Accounting     -     1,086     -     1,998     205     -     -     -
Loss / (Gain) on Real Estate Sale     -     -     -     (652)     -     -     -     -
Cooking Gain on Real Estate in Above     -     -     -     652     -     -     -     -
Adjusted EBIT from Continuing Ops     17,188     15,490     15,245     23,704     22,679     19,090     19,962     27,060
                                                 
Sales as Reported     179,600     173,854     184,715     217,089     214,379     209,751     216,743     227,508
Reclassify Cooking as Disc Ops     (27,653)     (24,370)     (26,591)     (28,759)     (25,237)     (24,058)     (24,596)     (24,039)
Adjusted Sales from Continuing Ops     151,947     149,484     158,124     188,330     189,142     185,693     192,147     203,469
                                                 
Adjusted EBIT % of Adjusted Sales     11.3%     10.4%     9.6%     12.6%     12.0%     10.3%     10.4%     13.3%
                                                 
 

Reconciliation of GAAP to non-GAAP measures

Adjusted EBITDA

FULL YEAR

                                     
      FY13     FY14     FY15     FY16     FY17     FY18
Net Income, as Reported     44,054     49,749     55,243     52,230     46,577     36,632
Provision for Income Taxes     15,244     18,054     20,874     16,295     15,355     40,620
Interest Expense     2,469     2,249     3,161     2,871     4,043     8,030
Depreciation & Amortization     15,236     14,591     16,683     17,954     20,315     29,163
EBITDA     77,003     84,643     95,961     89,350     86,290     114,445
                                     
Adjustments:                                    
Restructuring     2,666     10,077     3,443     4,232     5,825     7,594
CSG Restructuring in Above     (157)     (9,155)     (2,574)     (2,168)     (63)     (630)
Acquisition Related Costs     -     -     -     -     7,843     3,749
Purchase Accounting     1,549     60     1,696     423     3,084     205
CSG Purchase Accounting in Above           (60)     (587)                  
Legal Settlement     2,809     -     -     -     -     -
Management Transition Costs     -     3,918     -     -     -     -
Loss on Disposed Business     -     -     -     7,267     -     -
DA of Disposed Business (RPM)     (1,090)     (668)     (506)     (508)            
DA of Disposed Business (CSG)     (2,328)     (2,108)     (2,977)     (2,954)     (2,502)     (2,457)
Profit by Disposed Business (RPM)     (1,436)     (174)     (90)     (860)     -     -
Profit by Disposed Business (CSG)     (7,185)     (5,436)     (2,878)     (12,483)     (11,036)     (7,373)
Life Insurance Benefit     (2,278)     (3,353)     -     -     -     -
Net Gain on Insurance Proceeds     -     (3,462)     (497)     -     -     -
Loss / (Gain) on Real Estate Sale     -     -     -     191     (652)     -
CSG Real Estate Gain in Above     -     -     -     -     652     -
Adjusted EBITDA     69,553     74,282     90,991     82,490     89,441     115,533
                                     
Sales as Reported     673,390     716,180     772,142     751,586     755,258     868,382
Sales of Disposed Business (RPM)     (16,468)     (14,645)     (14,654)     (17,445)     -     -
Sales of Disposed Business (CSG)     (100,092)     (97,050)     (118,621)     (119,161)     (107,373)     (97,930)
Adjusted Sales     556,830     604,485     638,867     614,980     647,885     770,452
                                     
Adjusted EBITDA % of Adjusted Sales     12.5%     12.3%     14.2%     13.4%     13.8%     15.0%
                                     
 

CSG Operating Statistics by Quarter

                                                 
      Q1 FY17     Q2 FY17     Q3 FY17     Q4 FY17     Q1 FY18     Q2 FY18     Q3 FY18     Q4 FY18
CAPEX     37     339     375     240     528     432     223     81
Depreciation & Amortization     638     628     610     625     598     611     623     635
                                                 
Accounts Receivable     13,035     10,923     10,913     12,820     13,303     11,723     12,180     14,445
Inventory     23,957     23,559     25,131     23,316     23,723     24,922     24,451     22,923
Accounts Payable     (9,045)     (8,814)     (11,462)     (12,910)     (9,525)     (9,896)     (9,936)     (10,759)
Net Working Capital     27,947     25,668     24,582     23,226     27,501     26,749     26,695     26,609
                                                 

 

Contact:

Thomas DeByle, CFO 
(603) 893-9701 
InvestorRelations@Standex.com