Cuộc họp công bố kết quả kinh doanh Quý 1 năm tài chính 2027 của Standex International (SXI): Nâng triển vọng nhờ tăng trưởng mảng điện tử

Thông tin chính

• Standex International (NYSE: SXI) đã báo cáo doanh thu quý 1 năm tài chính 2027 đạt 232,6 triệu USD, tăng khoảng 7% so với cùng kỳ năm ngoái. Doanh số tự thân tăng 12,4%, dẫn đầu là mức tăng trưởng tự thân 29,5% ở mảng Điện tử.
• Biên lợi nhuận gộp điều chỉnh mở rộng 240 điểm cơ bản lên 44,4%, trong khi biên lợi nhuận hoạt động điều chỉnh tăng 110 điểm cơ bản lên 20,2%. EPS điều chỉnh tăng 21,1% lên 2,41 USD.
• Đơn đặt hàng hàng quý đạt mức kỷ lục 273 triệu USD, tạo ra tỷ lệ book-to-bill là 1,17. Mảng Điện tử ghi nhận khoảng 173 triệu USD đơn đặt hàng và tỷ lệ book-to-bill là 1,23.
• Ban lãnh đạo đã nâng triển vọng doanh số năm tài chính 2027 lên mức tăng trưởng tổng thể ở vùng cao của khoảng một chữ số, so với mức tăng trưởng từ giữa đến cao của khoảng một chữ số trước đó. Doanh số tự thân dự kiến tăng hơn 100 triệu USD, với EPS điều chỉnh tăng trưởng ở vùng tiệm cận 20%.
• Doanh số sản phẩm mới tăng khoảng 56% lên 17,4 triệu USD. Doanh số vào các thị trường tăng trưởng nhanh tăng khoảng 25% lên 77,8 triệu USD.
• Các trung tâm dữ liệu dự kiến sẽ đóng góp khoảng 30% vào mức tăng trưởng tự thân của năm tài chính 2027, khoảng 70% còn lại đến từ các nguồn khác, bao gồm đầu tư vào lưới điện, các chương trình quốc phòng, sản phẩm mới và sự phục hồi của thị trường công nghiệp.

Kết quả tài chính cốt lõi

Kết quả hoạt động kinh doanh và vận hành

Mảng Điện tử

Doanh thu mảng Điện tử tăng 27,1% lên mức kỷ lục 140,5 triệu USD. Mức tăng trưởng tự thân đạt 29,5%, trong đó mỗi đơn vị kinh doanh đều tăng trưởng hơn 20%, theo ban lãnh đạo. Tăng trưởng đến từ các thị trường tăng trưởng nhanh, nhu cầu công nghiệp chung và các sản phẩm mới.

Biên lợi nhuận hoạt động điều chỉnh tăng 60 điểm cơ bản lên 29,4%. Sản lượng và giá bán cao hơn đã bị triệt tiêu một phần bởi các khoản đầu tư cho tăng trưởng và chi phí thù lao biến đổi cao hơn.

Mảng này ghi nhận khoảng 173 triệu USD đơn đặt hàng và tỷ lệ book-to-bill là 1,23. Ban lãnh đạo cho biết cả mảng lưới điện và mảng Điện tử truyền thống đều ghi nhận tỷ lệ book-to-bill trên 1,2.

Standex đang mở rộng công suất lưới điện tại Ấn Độ, Croatia, Mexico và Houston. Croatia đang trải qua các đợt kiểm toán từ khách hàng, với hoạt động sản xuất và giao hàng dự kiến bắt đầu trong quý 2 năm tài chính và tăng tốc rõ nét hơn trong quý 3 và quý 4. Cơ sở tại Mexico đã bắt đầu giao sản phẩm, trong khi cơ sở hiện tại ở Houston đã chuyển sang hoạt động liên tục. Một cơ sở mới tại Houston dự kiến sẽ lớn hơn khoảng 3 đến 3,5 lần so với cơ sở hiện tại.

Mảng Hàng không Vũ trụ và Quốc phòng

Doanh thu tăng 5,1% lên 31,4 triệu USD, nhờ hoạt động từ các dự án vũ trụ và quốc phòng, nhưng bị triệt tiêu một phần do tiến độ thực hiện dự án. Biên lợi nhuận hoạt động điều chỉnh mở rộng 310 điểm cơ bản lên 19,9%, chủ yếu nhờ sản lượng cao hơn và cơ cấu dự án thuận lợi.

Ban lãnh đạo đã nâng cơ hội liên quan đến tên lửa dự kiến trong những năm tới từ 40 triệu - 80 triệu USD lên 50 triệu - 90 triệu USD. Việc đạt được mức trần cao nhất phụ thuộc vào việc các nhà thầu chính đưa ra cam kết dài hạn gắn liền với việc bổ sung kho dự trữ.

Mảng Khoa học

Doanh thu mảng Khoa học tăng 1,8% lên 19,8 triệu USD, phản ánh việc điều chỉnh giá và sự phục hồi khiêm tốn của thị trường. Biên lợi nhuận hoạt động điều chỉnh tăng 420 điểm cơ bản lên 29,5%.

Mảng Chạm khắc và Thủy lực

Doanh thu giảm 14,9% xuống 40,9 triệu USD. Mức giảm tự thân 15,7% phản ánh sự suy yếu của thị trường ô tô Bắc Mỹ, được bù đắp một phần bởi 0,7% lợi thế tỷ giá. Biên lợi nhuận hoạt động điều chỉnh tăng 40 điểm cơ bản lên 16,4%.

Dự báo của Ban lãnh đạo

Standex đã nâng triển vọng tổng doanh số năm tài chính 2027 lên mức tăng trưởng ở vùng cao của khoảng một chữ số. Ban lãnh đạo kỳ vọng doanh số tự thân sẽ tăng hơn 100 triệu USD và EPS điều chỉnh tăng trưởng ở vùng tiệm cận 20%. Tăng trưởng EBITDA điều chỉnh dự kiến sẽ nằm trong khoảng 15%.

Công ty hiện kỳ vọng doanh số sản phẩm mới năm tài chính 2027, tính theo cơ sở định dạng (pro forma) sau khi thoái vốn khỏi Federal Industries, sẽ tăng 27 triệu USD lên 94 triệu USD. Điều này sẽ đóng góp hơn 300 điểm cơ bản vào mức tăng trưởng tự thân hàng năm. Standex vẫn có kế hoạch ra mắt hơn 20 sản phẩm mới trong năm tài chính này.

Doanh số vào các thị trường tăng trưởng nhanh—bao gồm quốc phòng, vũ trụ và lưới điện—dự kiến sẽ tăng hơn 20% lên trên 315 triệu USD, chiếm hơn 30% tổng doanh số.

Ban lãnh đạo kỳ vọng doanh số mảng lưới điện năm tài chính 2027 đạt 190 triệu - 200 triệu USD, thu hẹp khoảng dự báo 180 triệu - 200 triệu USD trước đó. Chi phí vốn tiếp tục được dự phóng ở mức 45 triệu - 55 triệu USD, chủ yếu dành cho việc mở rộng lưới điện.

Đối với quý 2 năm tài chính 2027, doanh thu mảng Điện tử dự kiến tăng nhẹ so với quý trước với biên lợi nhuận hoạt động điều chỉnh tương đương. Doanh thu mảng Hàng không Vũ trụ và Quốc phòng dự kiến tăng đáng kể so với quý trước, với biên lợi nhuận cao hơn một chút. Doanh thu mảng Khoa học dự kiến tương đương đến tăng nhẹ, trong khi doanh thu và biên lợi nhuận mảng Chạm khắc và Thủy lực dự kiến giảm nhẹ.

Standex nhắc lại các mục tiêu cho năm tài chính 2028 là đạt doanh thu hơn 1,1 tỷ USD và biên lợi nhuận hoạt động điều chỉnh trên 23%.

Rủi ro và các yếu tố cần theo dõi

• Các trung tâm dữ liệu chiếm khoảng 30% mức tăng trưởng tự thân dự kiến của năm tài chính 2027. Ban lãnh đạo ghi nhận những tranh luận về giá điện, việc sử dụng nước và tác động kinh tế địa phương, mặc dù cho biết triển vọng nhu cầu của công ty vẫn không thay đổi.
• Việc tăng tốc sản xuất tại Croatia phụ thuộc một phần vào thời điểm cấp chứng nhận và kiểm toán từ khách hàng.
• Công suất lưới điện dự kiến sẽ đi vào hoạt động theo lộ trình chứ không phải cùng một lúc. Việc thực thi hiệu quả trên nhiều dự án mở rộng tiếp tục đóng vai trò quan trọng để đáp ứng nhu cầu.
• Sự suy yếu của ngành ô tô Bắc Mỹ tiếp tục gây áp lực lên doanh thu mảng Chạm khắc và Thủy lực.
• Mảng Điện tử gặp phải các sự cố vận hành sau khi triển khai hệ thống ERP tại Bắc Mỹ. Ban lãnh đạo cho biết các sự cố này đang được cải thiện nhưng chưa được giải quyết triệt để.
• Chi phí doanh nghiệp tăng khoảng 3 triệu USD so với cùng kỳ năm ngoái, do chi phí thù lao biến đổi, thù lao bằng cổ phiếu, chi phí y tế và một số chi phí tuyển dụng, điều chuyển nhân sự cấp cao phát sinh một lần.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết các trung tâm dữ liệu dự kiến sẽ đóng góp khoảng 30 triệu USD trong số hơn 100 triệu USD tăng trưởng tự thân dự kiến của năm tài chính 2027. Trong mức tăng trưởng mảng lưới điện hơn 40 triệu USD, khoảng ba phần tư dự kiến đến từ các trung tâm dữ liệu, phần còn lại gắn liền với nhu cầu điện năng rộng hơn và quá trình điện khí hóa.

Khách hàng mảng Điện tử đang cung cấp dự báo trước từ 6 đến 12 tháng, và Standex đang đàm phán các thỏa thuận từ 3 đến 5 năm với một số khách hàng trọng yếu. Công ty cũng đang thành lập một tổ chức thương mại lưới điện toàn cầu với các quản lý tài khoản trọng yếu chuyên trách cho các nhà sản xuất thiết bị lớn.

Ban lãnh đạo cho biết công suất lưới điện mới bổ sung đang được lấp đầy nhanh chóng nhờ lượng đơn đặt hàng mạnh mẽ và tầm nhìn rõ ràng từ khách hàng. Công ty cũng xác định dịch vụ sửa chữa hậu mãi là một cơ hội tự thân dài hạn trong thị trường máy biến áp đo lường.

Về biên lợi nhuận, ban lãnh đạo lý giải triển vọng tiếp tục mở rộng là nhờ cơ cấu sản phẩm thuận lợi, năng suất, hiệu suất sử dụng công suất cao hơn và việc giải quyết các sự cố vận hành mảng Điện tử tại Bắc Mỹ. Các mảng kinh doanh tăng trưởng nhanh hơn cũng nằm trong số các hoạt động có biên lợi nhuận cao hơn của Standex.

Standex đã phê duyệt chương trình mua lại cổ phiếu mới trị giá 100 triệu USD có hiệu lực từ ngày 27 tháng 10. Ban lãnh đạo mô tả việc mua lại cổ phiếu mang tính chớp thời cơ, đồng thời nhấn mạnh rằng đầu tư mở rộng công suất và các thương vụ thâu tóm vẫn là những ưu tiên hàng đầu. Danh mục M&A được cho là ngày càng sôi động và công ty đang bổ sung một vị trí phát triển doanh nghiệp.

Toàn văn Biên bản Cuộc họp Báo cáo Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Thank you. Good morning, ladies and gentlemen, and welcome to the Standex International First Quarter 2027 Financial Results Conference Call. This call is being recorded on Friday, October 30th, 2026. [Operator Instructions] I will turn the conference over to Christopher Howe, Director of Investor Relations. Please go ahead, sir.

Huang Howe

Thank you, Operator, and good morning. Please note that the presentation accompanying management's remarks can be found on the investor relations portion of the company's website, www.Standex.com. Please refer to Standex's Safe Harbor Statement on slide two. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations, and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's most recent annual report on Form 10-K, as well as other SEC filings and public announcements, for a detailed list of risk factors. In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBIT, which is earnings before interest and taxes, adjusted EBIT, EBITDA, which is earnings before interest, taxes, depreciation, and amortization, adjusted EBITDA, EBITDA margin, and adjusted EBITDA margin.

We will also refer to other non-GAAP measures, including adjusted net income, adjusted operating income, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow, and pro forma net debt to EBITDA. Adjusted measures exclude the impact of restructuring, purchase accounting, amortization from acquired intangible assets, acquisition-related expenses, and one-time items. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measurement and consistent historical comparison of the company's financial performance. On the call today is Standex's Chairman, President, and Chief Executive Officer, David Dunbar, and Chief Financial Officer and Treasurer, Adamir Sarcevic.

David Dunbar

Thank you, Chris. Good morning and welcome to our fiscal first quarter 2027 conference call. Our years-long strategy to reposition the company to serve attractive end markets and to invest effectively in new product development continues to gain momentum and deliver top-line growth. In the fiscal first quarter, we delivered record sales of approximately $233 million, driven by double-digit organic growth. This represents the consecutive quarter of year-on-year organic growth. The Electronics segment led the way with organic growth of nearly 30%. Corporate-wide new product sales continued to ramp and grew 56%, while sales into fast growth markets grew 25%. Our overall order book continues to grow in the fiscal first quarter with record order intake at $273 million and a book-to-bill of 1.17. This gives us confidence to raise our sales outlook for fiscal year 2027.

We now expect total sales to grow high single digits in fiscal 2027, up from our prior outlook calling for mid to high single digits growth. We expect organic sales to increase by more than $100 million and adjusted earnings per share to grow in the high teens. As we put this quarter's results and the raised outlook into further context, we continue to expect to be on track to reach greater than $1.1 billion in total sales and 23% adjusted operating margin by the end of fiscal year 2028. I would like to thank our employees, our executives, and the Board of Directors for their efforts and continued dedication and support that drove our fiscal first quarter results. Prior to transitioning into more details about the quarter, I would like to highlight a couple of organizational announcements. First, I want to take a moment to welcome Colby Slaughter as our new Chief Legal Officer and look forward to his contributions in the next leg of our journey. Earlier this month, we announced the appointment of Samantha Stoddard as our next Chief Financial Officer, beginning on December 1st.

Samantha's experience as a public company CFO and a hands-on operating executive makes her an excellent fit for our needs as we continue to grow and scale efficiently. Thank you. I'm also excited to share that Colby and Samantha fit well in our culture, and we expect them each to make significant contributions to Standex's future growth. I also want to extend a special thanks to Adamir Sarcevic for his contributions as CFO. It has been a great pleasure to work closely with him to shape Standex into the company we are today. I am pleased to see him diving into his new role as President of Electronics with his usual gusto. Adamir will work closely with Samantha over the next month to ensure a seamless transition. Now, let's look at the results our strategy is delivering, beginning on slide three.

In the first quarter, sales of $232.6 million increased 12.4% organically. Electronics grew 29.5% organically. New product sales grew approximately 56% to approximately $17.4 million. Sales into fast-growth markets grew approximately 25% to $77.8 million. We had a record quarterly order intake of approximately $273 million. We are pleased with the momentum in the business reflected in this overall book-to-bill ratio of 1.17. Adjusted gross margin of 44.4% was up 240 basis points year on year. The adjusted operating margin of 20.2% was up 110 basis points year-on-year, with margin expansion across each of our segments.

Adjusted earnings per share of $2.41 was up 21.1% year on year. In fiscal second quarter 2027, we expect moderately higher revenue and adjusted operating margin and slightly higher revenue and similar adjusted operating margin on a sequential basis. For fiscal year 2027, we are raising our sales outlook. We expect organic sales to increase greater than $100 million and total sales to grow high single digits from mid to high single digits previously. We expect high teens growth in adjusted earnings per share. I continue to be pleased with the momentum that we are building in launching new products. We still expect to launch more than 20 new products in fiscal 2027.

We now expect new product sales pro forma for the Federal divestiture to grow by $27 million to $94 million, adding more than 300 basis points of organic growth in the year. Our sales into the fast-growing markets such as defense, space, and grid are now expected to increase more than 20% to greater than $315 million, constituting more than 30% of our total sales. In conjunction with results, we announced a new $100 million share repurchase authorization, effective October 27th. On this next slide, I would like to take a moment to highlight the specific areas driving growth this fiscal year. Let's turn to slide four. The methodical implementation of our strategy is showing itself in the independent drivers of growth, each now contributing meaningfully. It's no surprise that the increasing power demand of data centers is our most significant single growth driver. It is behind about 30% of our expected growth in fiscal year 2027.

The grid business is also experiencing growth stemming from general increases in grid capacity to support economic growth and increased electrification. Increased investments in defense programs support growth in our A&D business and Electronics edge business. We also highlight here the incremental growth of new products that are not sold into these end markets, reflecting share gain for our core businesses. Finally, a general recovery in industrial markets is lifting sales across Electronics and Scientific. This is a balanced set of drivers and about 70% of our growth in 2027 will come from sources other than data centers. In summary, we have multiple independent drivers of our growth that have long runways ahead of them. Now, I would like to turn the call over to Adamir to discuss our financial performance in greater detail.

Unknown Speaker

Thank you, David, and good morning, everyone. Let's turn to slide five, first quarter 2027 summary. On a consolidated basis, total revenue increased approximately 7% year-on-year to $232.6 million. This reflected organic growth of 12.4%, partially offset by 4.4% impact from Federal Industries divestiture and 1% impact from foreign currency. First quarter 2027 adjusted operating margin increased 110 basis points year-on-year to 20.2%. Adjusted earnings per share increased 21.1% year-on-year to $2.41. Net cash provided by operating activities was $15.7 million in the first quarter of fiscal 2027 compared to $16.8 million a year ago.

Capital expenditures were $6.6 million compared to $6.4 million a year ago. As a result, we generated fiscal first quarter free cash flow of $9.1 million compared to $10.4 million a year ago. Now, please turn to slide 6, and I will begin to discuss our segment performance and outlook, beginning with our Engineered Component segments. Electronics revenue increased 27.1% year-on-year to a record $140.5 million, driven by organic growth of 29.5%, partially offset by 2.4% impact from foreign currency. Organic growth was driven by sales into fast growth markets, strong general industrial markets, and increased new product sales. Our book-to-bill in fiscal first quarter was 1.23, with record orders of approximately $173 million. Adjusted operating margin of 29.4% in fiscal first quarter 2027, increased 60 basis points year-on-year, to higher volume and pricing initiatives partially offset by growth investment and higher variable compensation expenses.

Sequentially, in fiscal second quarter 2027, we expect slightly higher revenue and similar adjusted operating margin. On a year-on-year basis, we expect significantly higher revenue driven by double-digit organic growth and slightly higher adjusted operating margin. Additionally, this marks my first full quarter as the President of Electronic Segment. I'm very pleased with the results and the strong start of fiscal year 2027. We achieved several records in the core, record organic growth of almost 30%, record bookings, and record gross margin. At the same time, we continue to invest in R&D, new products, and key growth initiatives. We remain on track to significantly expand global capacity in our grid business, a key project we highlighted in our last quarterly earnings call.

During the past few months, I also had an opportunity to visit sites across the globe and attend various customer meetings. Two things became even clearer. First, we have strong leaders in our businesses, dedicated talent in an accountable group of employees that work very well as a team. And secondly, customers truly value our custom products and solutions and look at us as partners, not just as suppliers. In summary, we have multiple ways to win, serving the rising global energy demand related to data centers and AI, grid modernization, and the overall electrification of the world to providing mission-critical components supporting needs and requirements of the U.S. defense and market, all supported by an active new product funnel to capture additional market share. I remain very optimistic about the future outlook of this segment. Moving to Aerospace and Defense. Revenue increased 5.1% to $31.4 million, driven by project activity in the space and defense end market, partially offset by project timing. Adjusted operating margin of 19.9% increased 310 basis points year-on-year, primarily due to higher volume and project mix.

Sequentially, we expect significantly higher revenue and slightly higher adjusted operating margin. On a year-on-year basis, we expect double-digit organic growth. Now, turn to slide 7 for discussion of the Scientific and Engraving and Hydraulic segments. Scientific revenue increased 1.8% to $19.8 million due to pricing initiatives and a slight market recovery. Adjusted operating margin of 29.5%, increased 420 basis points year-on-year. Sequentially, we expect similar to slightly higher revenue and similar adjusted operating margin. Engraving and Hydraulics revenue decreased 14.9% to $40.9 million, reflecting an organic decline of 15.7% from softness in the North American automotive market, partially offset by a 0.7% benefit from foreign currency.

Adjusted operating margin of 16.4% in fiscal first quarter 2027 increased 40 basis points year-on-year. In our next fiscal quarter, on a sequential basis, we expect slightly lower revenue and adjusted operating margin. Next, please turn to slide eight for a summary of Standex's liquidity statistics and capitalization structure. Our current available liquidity is approximately $168.5 million. At the end of the first quarter, Standex had net debt of $401.2 million compared to net debt of $446 million at the end of fiscal first quarter 2026. Our net leverage ratio currently stands at 2x. In fiscal second quarter 2027, we expect interest expense of between $7 million to $7.5 million.

Standex's long-term debt at the end of fiscal first quarter 2027 was $518.1 million. Cash and cash equivalents totaled $116.8 million. We declared our 249th consecutive quarterly cash dividend of $0.36 per share, an approximately 5.9% increase year-on-year. In fiscal 2027, we still expect capital expenditures between $45 million and $55 million, primarily due to grid growth investments. Before I turn the call over to David for concluding remarks, as this is my last quarterly earnings call as the CFO of Standex, I would like to express my deepest gratitude to Standex Finance team for all their contributions over the past several years. We are only as good as the team around us, and I'm truly grateful for all the hard work and efforts of every individual. The finance team will be in good hands with Samantha, and I look forward to working closely with her in the transition as the President of Electronics.

I will now turn the call over to David for concluding remarks.

David Dunbar

Thank you, Adamir. Please turn to slide nine. To summarize, I'm very pleased to see the continued organic growth in the first quarter and a book-to-bill ratio of 1.17. Organic growth was driven by our Electronics segment, which grew 29.5%. We will continue to align our organic and inorganic growth investments around secular markets and new products that expand our presence in engineered components and deepen our customer relationships. Our acquisition strategy will continue to focus on businesses with accretive margins, exposure to fast-growth markets, and the delivery of custom solutions. In fiscal 2027, we now expect organic sales to increase by more than $100 million and total sales to grow high single digits from mid to high single digits previously. We expect high teens growth in adjusted earnings per share in fiscal 2027.

We are on track to achieve greater than $1.1 billion in sales and greater than 23% adjusted operating margin by the end of fiscal year 2028. We will now open the line for questions.

Operator

Ladies and gentlemen, we now begin the question and answer session. [Operator Instructions] The first question comes from Chris Moore with CJS Securities. Please go ahead.

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Christopher Moore

Hey, good morning, guys. Congrats on another really good quarter. Thanks for taking a couple. Maybe you addressed it on slide four. Maybe we could dig in a little deeper. Obviously, AI data center build out very beneficial to Electronics, grid in particular. It does feel like the stock has kind of moved maybe a little bit too much in concert with the AI wins. Can you talk a little further about, you know, how important data center AI growth is to grid, that 30% of the growth that you're talking about this year, do you expect it to accelerate as a portion of overall growth moving forward, or just, you know, kind of any thoughts in terms of if AI growth slows a little bit what that does to Electronics overall.

David Dunbar

Yeah, thank you, Chris. I mean, obviously this is an important message. That's why we put the page in here. We have multiple growth levers. All of them really are now contributing meaningfully. And a lot of the questions we've had in the last quarters have been data centers, because everybody's excited about that growth, as are we. But to put it into context, of the $100 million plus we expect in organic growth this year, it's about 30% of that will come from data centers. And if you zoom in on grid, which is where your question was, you know, our growth in grid will be $40+ million. You know, about three-quarters of that will come from, will come from data centers.

The other is just the increased demand of electricity from electrification, increasing living standards. And the way we get that number is we talk with our customers. And if you just look at the public statements of large electrical equipment OEMs, there are a lot of growth drivers in the electrical equipment business. Right now, data centers is by far #1, but there's still increased demand for electricity around the world. That's driving an increase. So I wouldn't actually expect this mix to change in the future. You know, we continue to see a long-term runway for growth in electrical equipment in general, and data centers right now are providing an additional surge.

Christopher Moore

Very helpful. You talked about on the Electronic side your customers kind of viewing you guys more as partners than suppliers. Any thoughts on that? Any discussion with any of the big guys in terms of, you know, kind of long-term supply agreements they, you know, to kind of lock in um availability? Is that part of any of the discussions at this point in time?

Unknown Speaker

Hey, good morning, Chris. It's Adamir here. I'll take this one. Yes. I mean, the answer is clearly yes. You know, our customers, you know, have a pretty solid book of business in the next three to five years. And they are looking at us truly as partners, somebody who can grow with them as they grow into their end market. So, you know, as we are talking to our customers, we are looking actually to signing three to five-year long-term agreements with some of our key, you know, key customers. At the same time, on the grid side, we are shuffling or rearranging a little bit the way we're going to run the commercial organization. We're going to run the grid more as a global grid business with key account managers assigned to each one of those global OEMs.

We truly believe there's a huge opportunity there for us to partner with them much more closely going forward and get these long-term agreements with many of them. Yes, and they are very, very interested in actually making sure that we have a capacity to support their growth needs.

Christopher Moore

Got it. Terrific. And maybe just the last one for me. You know, I think missiles were on the A&D side $9 million in '26, talking about teens in fiscal '27, and potentially $40 million to $80 million over the next four years. I guess the question is, what has to happen to get close to that $80 million?

David Dunbar

$ number? Yes, the situation hasn't changed in that it is really a function of the annual procurement cycle, government budgeting cycle, working with the, through the Department of Defense with the primes to then cascade orders down to us. We have seen increased activity. And recall that $9 million was really just a couple programs. It was a SAM 3, PRISM, and kind of the tail end of the ATTACOMS program. We had anticipated that to be $15 million this year. I think it will be closer to $20 million this year. We have had more order activity. We think that $40 million to $80 million is likely to be, you know, $50 million to $90 million in the coming years.

And it's the same as we've communicated in the past. To get to that $90 million, we'll just require the primes to be able to make long-term commitments to replenish those stockpiles. But we've had several meetings with them reviewing multiple scenarios to increase our capacity. And we are, you know, we're ready to go. But we would raise that expectation, both on the low end and the high end, by $10 million.

Christopher Moore

That sounds great. I will leave it there. Thanks, guys.

David Dunbar

Thank you, Chris.

Unknown Speaker

Thanks, Chris.

Operator

Your next question comes from Ross Sparenblek with William Blair. Please go ahead.

Ross Sparenblek

Hey, good morning, gentlemen.

David Dunbar

Good morning, Russ.

Unknown Speaker

Good morning, Russ.

Ross Sparenblek

Starting off on Electronics, can you help us break out the power orders separate from the legacy Electronics business.

Unknown Speaker

Yes, I'll take that, Ross. I mean, our book-to-bill in the quarter was 1.23 for the total Electronics. And, you know, the legacy businesses as well as grid were about the same. So each one of them were over 1.2. So the orders really continue to be strong kind of across the board for us.

Ross Sparenblek

Okay, and then just to back out, kind of grid revenue contribution to Electronics. Forgive me if you guys gave that already.

Unknown Speaker

Yeah, I mean, so we grew organically almost 30% in a quarter, and every one of our business units grew more than 20%. So it was a really, really strong organic growth kind of across the board. And, you know, based on the backlog and a book-to-bill, you know, we would anticipate that we're going to continue to have a strong organic growth across all of our business units.

Ross Sparenblek

platforms. Okay. Well, should we think that power is leading the charge there and I guess the back half of that question is being, you know, just where we are with Croatia and ramping that. I know that you guys cut the red tape several months back, and now it's just about filling out the capacity.

Unknown Speaker

Yes, so on Croatia first, Ross. Yes, I mean, right now we are going through customer audits. You know, it's a new site. You know, the site has to be certified and audited by our customers before we can actually start manufacturing parts there. We're going through some of the audits by our key customers. You know, a little bit we are at the mercy of their own schedule as to when their teams can come. really well and we are now anticipating that we're going to start, you know, making, actually manufacturing and shipping products out of Croatia, you know, within this quarter. We had some buy and resale sales coming out of Croatia in the prior month, but it's going to, you know, we're going to see a pretty nice ramp up there in Q3 and Q4.

Okay. And then your question on power? Right. Oh, you mean the... Yes, was it at the higher end? Was it the higher end of the growth range? You said like 20%, 30%, 40%? Yes, so, yes, yes. No, I got it. I now understand. Yes, so we said, you know, if you go back, you know, we gave that outlook of $340 million to $440 million, you know, years out. We're gonna, that range still holds. We feel pretty confident about it. $340 million and obviously we're going to work to get close to the higher end of the range. For this fiscal year, Ross, our initial range was about $180 million to $200 million.

We are very confident that we're going to be at least $190 million to $200 million. So we do think we're going to be more at the midpoint or higher end of the range for this fiscal year.

Ross Sparenblek

Okay. But it's safe to assume that sequentially the grid business stepped up on the revenue.

David Dunbar

Yes. Yeah, no question. I have to say, we're very pleased with the work that the capacity expansion team has done. It was a very strong first quarter.

Ross Sparenblek

Okay, fantastic. I'll pass it along and head back and keep you guys. Thank you.

Operator

Thank you.

Unknown Speaker

Thanks, Ross.

Operator

Your next question comes from Matt Karanda with Roth Capital Partners. Please go ahead.

Matt Koranda

Hey guys, good morning. Appreciate the bridge on slide four. I just wanted to maybe dig into, in the new products component of the organic sales bridge, is there any data center exposure there? Just curious to think about sort of, you know, the overall exposure to data center growth that you have in the growth bridge and the um Yeah, good, yeah.

David Dunbar

So we tried to make this easy to read and not overdo it with explanation, but that new product number, that is only the new product sales that are outside those other markets. There are new products into data centers, but those are included in the data center box to the left.

Matt Koranda

Okay, that makes total sense. I appreciate that, David. Yes, totally does. Okay. And then,

David Dunbar

answer the question. I don't.

Matt Koranda

Maybe one for Adamir, it was kind of touched on a little bit tangentially in some of the responses to questions, but just wanted to hear, I guess, sort of your main areas of focus now that you're fully in the seat in Electronics. It sounded like maybe there was a bit of a reorganization of the way you go to market. some of your longer-term OEM partners, but maybe could you touch on some of the bigger changes that are either in motion or already made since you took the seat?

Unknown Speaker

Yes, well, I've been in the seat for now a little over three months and kind of still double doing. Double doing dog years.

Matt Koranda

doing dog years so.

Unknown Speaker

Well, look, I mean, I'll start answering the question by telling you, as I visited some of the sites and spent more time with our employees and leaders, we really have a solid group of employees in Electronics who truly value Standex's culture. And this is really a special place in the way we operate. And you can see that people are fully committed to their jobs and really serving the customers. We have capable business leaders. And frankly, you know, we got, Matt, we got, you know, exposure to some really exciting end markets in terms of our product solutions. And as I said in my prepared remarks, you know, meeting with customers, what was really a little bit eye-opening is they truly look at us as partners. You know, they want to partner with us in the years to come. And, you know, one of the things we are trying to do is make it easier for them to partner with us.

So we are looking a little bit in the way we go to market. So for example, in grid historically, we would go to market a little bit separately between North America and India or Asia. And you know, our customers are really looking to have one point of contact. So we are setting up a global commercial organization. We're going to have key account managers really focused on supporting our key customers and their growth initiatives. So there'll be one example. We're going to continue with the strategy we've been on for years in terms of new products. You know, we have an opportunity to continue to expand our wallet share.

We have an opportunity, for example, in our grid business to look at the outdoor opportunities, which we haven't, and that's a huge market for us. And we haven't really had an opportunity or chance to truly explore that much in the past. And then, you know, the strategy is basically going to continue. So we got talented people. We are making some changes on the commercial side. The grid expansion, the capacity expansion, remains a key priority. And we'll keep on going.

David Dunbar

I would say, like Matt teed it up for you, has worked with the team to put in place the first steps of this new global commercial organization so we can, so it's not just words, I mean there's structure coming in in behind it. You've also redeployed some talent in North America to drive improvements here. That was a headwind for us last quarter. It's not fixed yet, but it is reversing and improving. So in three months, you're having an effect. And let's see in six months, nine months before we... Yeah. We'll give you a little bit more time before we ask the question again, Adamir.

Unknown Speaker

Thanks. Appreciate it.

Matt Koranda

Maybe the last thing I just wanted to ask was just capital allocation priorities. With the stock sort of moving against you a little bit in the last several months, and the up, I guess the upping of the repurchase authorization. Is that a signal that we should look at as, hey, we're going to go a little bit harder on um deploying the buyback here. I noticed it did sort of tick up sequentially in the first quarter in terms of deployment. but wanted to hear a little bit about that versus how you balance sort of the opportunity set that's that's in the funnel for, for acquisition as well.

David Dunbar

Yes, there's a few things. One is we had a great discussion with the board recently about our share buyback authorization. And our last authorization, we were running low on it. We maybe had about $20 million left on that. And our approach to buybacks has been to be somewhat opportunistic because there are times we think the market doesn't fully appreciate the value of the company. And there were a few years ago, we bought a lot of shares when that was the case and we wanted to be ready to respond to market conditions. We have been trading with more of your data center stocks. There's been more volatility in the Standex stock recently than our consistently improving results would justify.

So we just wanted to be ready to respond to market conditions. We are still full speed ahead on the capacity expansion and that $40 million to $50 million CapEx this year. And I would say on the M&A front, our funnel is becoming more active. We actually are adding a person to focus on corporate development so we can drive more consistently M&A activity. So no slowdown in the growth investments or the capital we expect to put into growth.

Matt Koranda

Okay, appreciate all the detail guys, so I'll leave it there. Thank you.

Operator

Your next question comes from Tom Asano with JPMorgan. Please go ahead.

Unknown Speaker

Hi, good morning everyone.

David Dunbar

Good morning.

Unknown Speaker

Thanks for having us. Um, maybe just on margins, uh, which were very strong this quarter, both gross margin and operating margins. As you think about the path from here, how much of the opportunity is mix versus productivity and then operating leverage?

Unknown Speaker

Yes, I think it's a combination of both in terms of, you know, obviously, you know, the businesses that are growing at the highest rate are our highest margin businesses, so we are mixing up from that standpoint. And then, Tomo, as we said in a prior quarter, we had some operating issues in our, you know, Electronics edge business in North America. We had an ERP implementation, you know, a few quarters ago and that created a little bit of issues for us, so to speak. And, you know, we've been resolving that so we feel we are kind of on the tail end of that and we're going to see some of the margin lift coming from those activities. So, you know, we're going to continue driving productivity across all of our businesses. Obviously, when the volume is up and you're running at a higher capacity, that's just going to help you get the margins up as well. But we do believe there is a margin expansion opportunity in all of our segments going forward, and we're going to continue driving that across the board.

Unknown Speaker

Thank you, Adamir. And one follow-up. You remain on track for more than $1.1 billion of revenue and over 23% operating margins by the end of next year, fiscal year 2028. After this quarter, where do you feel most confident and where is your biggest challenge? they are still the most like work to do.

David Dunbar

Well, yes, we're very confident about that $1.1 billion and the 23% operating margin. The margin, you kind of answer your answer the question on the margin yourself. But hitting the $1.1 billion, because the higher margin businesses are the ones providing the growth, I mean, we will lever into the 23% operating margin. We're quite confident about that. If I look at our results, I'm very pleased with the multiple growth engines that are firing right now. I would say the new products has been kind of an underappreciated growth avenue for us because this is something that is, it's very much in our control. This is a flywheel that is gaining momentum every year. I mean, this year we'll have $94 million of new products, which you think of where we came from four or five years ago, it was almost close to zero.

And every year we get better at identifying new opportunities, launching new products. I mean, in the first quarter, the sales year on year a 56% growth in new products. So it's a smaller number than the fast growth markets, but it continues to grow every quarter. So I personally, I'm most excited for long-term potential that that new product number brings for us.

Unknown Speaker

Great. Thank you, David, and congrats on the quarter.

David Dunbar

Yes, thank you.

Operator

Thank you. Our next question comes from Michael Shlisky with D.A. Davidson. Please go ahead.

Michael Shlisky

Good morning. Thanks for taking my questions here. Can you provide just a little bit more detail on the footprint expansion in Electronics? Maybe just tell us what's currently your plan for today and what's still to come for the fiscal year? which is that the zones yes so Mike if you remember we kind of a there's four different.

Unknown Speaker

of this project. So first one is expanding our India capacity. And we are up probably about 30% year on year in terms of expanding capacity in our current sites in India. And we're going to continue working on those efforts. Croatia, as we mentioned earlier, you know, is just going through customer audits right now, and is going to start manufacturing and shipping out of the site within this quarter. And again, we expect that's gonna get started to ramp up more in Q3 and Q4 of this fiscal year for us. Mexico is up and running and so are the shipping products out of Mexico. There's an existing Electronics facility right across the border of Arizona.

We allocate the portion of the space to the grid business that's already up and running. And then in Houston, you know, we are already working 24/7 in terms of the current site as of actually two weeks ago. We are in the process of getting a much larger facility, probably about three times, three and a half times the size of the current facility. So we expect, it's a new construction, and we expect to get the keys from that site in a June, July timeframe of next year. And then probably going to take us a couple of months to get the production fully up and running. In the meantime, the other site is going to be running at full capacity so we don't lose any opportunities. But, you know, it's all on track.

It's all moving as we would expect it. And, you know, that one of the reasons, you know, we're actually raising that $180 million to $200 million in grid sales to $190 million to $200 million is because we feel confident that capacity expansion work is yielding results.

Michael Shlisky

Great. Um, thanks for that. And then I also wanted to ask about the pipeline you've got in Aerospace and Defense. As you look at what's in the backlog today of what you signed more recently, does something have a higher margin profile maybe next 12 months than you saw over the last 12 months? It sounds like for a lot of contractors, they're seeing better margins. You're a supplier to other contractors, but just curious as to whether you're seeing a better mix or kind of better project work there.

David Dunbar

I would say that the new programs that we're winning, we're winning because we have a competitive advantage in our process in making those parts with spin forming versus traditional methods. So that tends to be reflected in gross margin where we're able to generate. So they are marginally more, marginally higher margin than the core business. So these new programs will help the Aerospace and Defense continue to mix up in margin.

Michael Shlisky

Great. Thanks for that, David. I'll pass it along.

David Dunbar

Thank you.

Unknown Speaker

Thank you.

Operator

Thank you. Your next question comes from Gary Prestopino with Barrington Research. Please go ahead.

Gary Prestopino

Hey, good morning all. A couple of quick questions just on the numbers. I noticed that it looks like the corporate expense when you look at the segments and the applied corporate expense, it really jumped year over year. What happened there? And is that the run rate we should expect going forward? Yes.

Unknown Speaker

Hey, good morning, Gary. So yes, it's up about $3 million year on year, you know, versus prior Q1. And about two-thirds of that increase, Gary, relate to, you know, higher variable compensation expenses and stock comp as well as higher medical costs. The medical costs have been increasing for us over the past year or two, and that continues. And there are about a one-third of that increase is more like a one-time cost, primarily related to some of the executive recruiting and transfers we had at the company. And that obviously is not going to continue. So we would expect the corporate cost is gonna come somewhat down in Q2 and get a little bit more normalized as we get into the Q3 and Q4.

Gary Prestopino

Okay, that's helpful. And then um, before I just get into general industry questions here, if you're looking at high teens adjusted EPS growth, what kind of, uh, growth would that come to on an adjusted EBITDA basis? Would we be looking at a similar level of percentage growth from adjusted EBITDA with an adjusted EPS growth of, you know, mid-teens or high-teens?

Unknown Speaker

Yeah, I think that's probably not that far off. You know, kind of mid-teens is probably a good way to look at it.

Gary Prestopino

Okay. And then, David, um with the uh slide that you provided with the growth drivers, data centers, grid, et cetera, And Adamir, maybe you can help chip in here. I mean, what are your thoughts on all of the noise that's coming out again against data centers and is that, is there a similar movement in international markets against data center growth?

David Dunbar

Um, we're actually seeing more data centers planned outside America in the last three to six months, um, in our our discussions with our customers indicate they're seeing an increase in activity investments outside the U.S. I was just in Europe a few weeks ago. Depending on the country you're in, there is some of the same. same debate about the impact of data centers on electricity prices, on water, on the local economy. So I I think all the governments and society are going to have to work that out. But we see no change in our expected outlook. You know, individual programs may be pushed out. They may move geographically, but there's such a hunger to get this productivity online.

All the all the language we hear from our customers is that they are exploring multiple options where necessary to bring that capacity online.

Gary Prestopino

Okay. Um, uh, thank you. Oh, no, the other thing I just want to, well, never mind. I'll ask that offline. Thank you.

Unknown Speaker

Thank you.

Operator

Russ has a follow-up. Please go ahead.

Ross Sparenblek

Hey, thanks guys. I just wanted to get a sense of the expectation of the capacity on lock on demand. I mean, you know it in the past that everything that you're making is shipping, and so if the demand is that immense, and we know that there's a massive imbalance between the supply and demand of gigawatts in the channel, I mean, should it be a pretty healthy unlock as you start to get these machines, get these employees, or do you think it'd be more measured, kind of like the linear path that you uh,

Unknown Speaker

presented here recently. Ross, I think you'll probably be a little bit more linear as we as we kind of unlock the capacity. But what I will tell you, know, we the orders remain very, very strong and you know, we we have no worries that as we unlock the capacity, we'll be able to fulfill that capacity in terms of in terms of being busy in terms of sales. So we do think it's going to be a little bit more linear in the in the quarters to come.

Ross Sparenblek

All right. Well, maybe a better way is just when, like, you know, purchasing patterns. I mean, do these things come in and, you know, measured in thousands, tens of thousands, or they're kind of, you know, batch orders of size and there's a certain timeframe to fill them or is it just kind of, again, back to the book and ship? I mean, there's just demand. available in the market and so everything that you're making you're it's going out the door. What does that, uh, you know, customer sales process look like.

Unknown Speaker

Yes, I mean, it's kind of, you know, customers are actually now looking, and we talked about these long-term agreements in this space, right? Customers are actually kind of looking to give you a bit of a longer lead time, a longer forecast in terms of what they need. So, you know, some of the customers are now looking and giving us a forecast, you know, six to 12 months out. So there is that visibility. we are starting to get. And part of that is also just making sure that we have capacity to support them. But again, you know, what I will tell you is as we unlocked the capacity, you know, that capacity gets filled pretty quickly. So, yeah.

David Dunbar

I would just add to that, the customers are managing their entire supply chain. So they're being quite transparent with us about their demand and their requested schedules. So we may receive orders for products to be delivered in a month or two months, but we have long-term planning. So they give us an idea what's likely to come in a quarter, in two quarters, in three quarters. our input on our capacity affects their own plan. So it's a very interactive process. Very dynamic, yes.

Ross Sparenblek

Yes. Well, I mean, I imagine that their internal build rates have only been increasing over the last 18 months. Well, then maybe just out of it. Yes. Sorry.

David Dunbar

and I do want to remind Yes, I'm sorry, but I just want to make another point. When we've talked about the opportunity for our grid business with instrument transformers in in our investor presentation there's a breakdown of the total market. Total market is $12 billion. We have been serving about a $1 billion piece of that in North America and India. There's a $3.5 billion piece of that which is aftermarket repair. It's local business that's sold to utilities. that is an opportunity for us to unlock as this capacity comes online. So, um We're not concerned about a long-term imbalance with capacity and demand because we have another larger market to begin serving.

Ross Sparenblek

longer term. That's what I wanted to kind of get into is just, you know, Adamir, you know, a couple months in the seat. You mentioned, you know, partnership opportunities and you David just talked about kind of a service and aftermarket. I mean, what else are you seeing out there? I mean, how can you start to get a bigger piece of this TAM and is M&A required?

Unknown Speaker

I think, Ross, quite frankly, I think organically we feel pretty good we can capture significant market opportunities. And to David's point, there's this additional markets we haven't even explored, and we're going to start exploring opportunities in those markets as well. And on an M&A side, we have a pretty busy pass. M&A pipeline, and obviously we're going to continue to be acquisitive at the same time. And so our strategy is going to continue, you know, from, you know, new product development, organic focus on capacity expansion, you know, sales and commercial excellence, organic growth at the same time complemented by inorganic opportunities as they come. And, you know, as you know, those you can't really predict when they're going to happen. but we remain out there.

Ross Sparenblek

Okay, that's great guys. I'll leave it there. Thank you.

David Dunbar

Good to have you here, Gatsby. I'll miss you.

Operator

Thank you, Russ. That's enough for the questions. I will turn it back to Mr. Dunbar for some closing remarks.

David Dunbar

All right, thank you. I want to also mention that Joanne Edwards will be retiring from the Board of Directors after eight years. She has been influential in supporting our strategy to grow in the electrical equipment and the markets, which is obviously paying off. I want to thank her for her many contributions. We wish her and her family all the best in her retirement. We're also happy to welcome Brenna Preisser from Brunswick to the board. Brenna brings strong strategic planning skills and deep talent development experience, which will be valuable as we chart the next steps in our journey. I want to thank you all for joining our call today.

We truly enjoy reporting on our progress and the outlook at Standex. Thank you again to all of our employees who are solving problems and taking care of customers every day, and Standex a great place to work. I look forward to speaking with you again in our fiscal second quarter 2027 call.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask you to please disconnect your lines. Have a great day.

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