Standex International Q2 2025 Earnings Report

Enerpac Tool Group EPS Results

• Actual EPS: $1.91
• Consensus EPS: $1.68
• Beat/Miss: Beat by +$0.23
• One Year Ago EPS: N/A

Enerpac Tool Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $187.54 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Enerpac Tool Group Announcement Details

• Quarter: Q2 2025
• Date: 1/30/2025
• Time: After Market Closes
• Conference Call Date: Friday, January 31, 2025
• Conference Call Time: 8:30AM ET

Enerpac Tool Group (NYSE:EPAC) manufactures and sells a range of industrial products and solutions in the United States, the United Kingdom, Germany, Australia, Canada, China, Saudi Arabia, Brazil, France, and internationally. It operates through Industrial Tools & Services and Other segments. The Industrial Tools & Services segment designs, manufactures, and distributes branded hydraulic and mechanical tools; and provides services and tool rentals to the infrastructure, industrial maintenance, repair and operations, oil and gas, mining, alternative and renewable energy, civil construction, and other markets. It also offers branded tools and engineered heavy lifting technology solutions, and hydraulic torque wrenches; maintenance and manpower services; high-force hydraulic and mechanical tools, including cylinders, pumps, valves, and specialty tools; and bolt tensioners and other miscellaneous products. This segment markets its branded tools and services primarily under the Enerpac, Hydratight, Larzep, and Simplex brands. The Other segment designs and manufactures synthetic ropes and biomedical textiles. The company was formerly known as Actuant Corporation and changed its name to Enerpac Tool Group Corp. in January 2020. Enerpac Tool Group Corp. was incorporated in 1910 and is headquartered in Menomonee Falls, Wisconsin.

Enerpac Tool Group Q2 2025 Earnings Call Transcript

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Standex International Fiscal Second Quarter twenty twenty five Financial Results Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Friday, Jan.

[Operator]

31, 2025. I would now like to turn the conference over to Mr. Christopher Howe, Director of Investor Relations. Please go ahead.

[Christopher Howe, Director of Investor Relations at Standex International]

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 at www.standex.com. Please refer to Standex's Safe Harbor statement on Slide 2. Matters that Standx 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.

[Christopher Howe, Director of Investor Relations at Standex International]

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 form a net debt to EBITDA. Adjusted measures exclude the impact of restructuring, purchase accounting, amortization from acquired intangible assets, acquisition related expenses and 1 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.

[Christopher Howe, Director of Investor Relations at Standex International]

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, Adameir Sarsevic.

[David Dunbar, Chairman, President & CEO at Standex International]

Thank you, Chris. Good morning and welcome to our Following strong operating performance in the we delivered record adjusted operating margin in the supported by the highest sales since the divestiture of the refrigeration business in April 2020. Our sales into fast growing end markets continue to expand as a percent of the total. Our new product sales are increasing above our projections and our team's focus on price and productivity continues to deliver strong operating margins. For the remainder of the year, based on increasing order rates and customer activity, we continue to expect our end markets to improve with the recent Ameren, Narayan Group acquisition providing an additional tailwind.

[David Dunbar, Chairman, President & CEO at Standex International]

Today, we will provide significant updates to our fast growth market sales as well as revised and improved 2028 financial expectations. Now if everyone can turn to Slide 3, key messages. In the sales increased to 6.4% with contributions from acquisitions partially offset by organic decline. Sales from the Ameren and Orion Group exceeded our expectations. Though organic sales were down in electronics due to softness in automotive and general industrial end markets in Europe and North America, our book to bill was 1.02 indicating that markets are improving and that our commercial strategy is taking hold.

[David Dunbar, Chairman, President & CEO at Standex International]

With two months of Ameren Orion sales into the electrical grid end market, our sales into fast growth markets were over 20 of total company sales. Sales into fast growth markets were primarily driven by the electrical grid, commercialization of space and defense applications. I will share more detail on our view of fast growth markets later in the call. New product sales totaled $1,450,000,0.0 in the which increased approximately $350,000,0.0 sequentially and more than doubled year on year. I'm especially pleased that we continue to demonstrate resilient operating price and productivity initiatives and from inorganic investments.

[David Dunbar, Chairman, President & CEO at Standex International]

As a result, we achieved record adjusted operating margin of 18.7, up 170 basis points sequentially and up 150 basis points year on year, led by adjusted operating margin of 27.6% in the Electronics business segment. The integration of Ameren and Orion is progressing well and ahead of plan. On a sequential basis in we expect moderately to significantly higher revenue driven by the impact of the recent Ameren and Orion Group acquisition and improving overall demand in electronics. We expect slightly to moderately higher adjusted operating margin due to higher revenue, partially offset by higher investments in selling, marketing and R and D. For the remainder of the fiscal year, we continue to expect our end markets to improve with the electrical grid end market providing an additional tailwind.

[David Dunbar, Chairman, President & CEO at Standex International]

With 7 new products just released in the we remain positioned to release more than a dozen new products in Sales from new products are tracking ahead of expectations and are expected to now contribute approximately 200 basis points of incremental growth. Now if everyone can turn to Slide 4, an update on our recent acquisition. The acquisition of the Ameren Orion Group last October was the largest transaction in the company's history. Considering the magnitude of the transaction, I'm extremely pleased with how our teams have adapted, a testament to the cultural fit of this acquisition. The integration is progressing well and we have achieved all major integration milestones in the areas of finance, HR and IT.

[David Dunbar, Chairman, President & CEO at Standex International]

When we announced this acquisition, we estimated calendar year sales in 2024 of approximately $100,000,000 We are happy to report that the Ameren Orion Group exceeded this target with results higher than anticipated. In fact, the month of Dec. 0 was the highest revenue month in its history. Their contribution led to sales into fast growth markets exceeding 20% of total company sales for the first time. The growth with Enamaran Orion is being driven by 3 powerful forces to increase global electrical capacity, increasing living standards in all countries of the world, modernization of existing aging grid infrastructure and incremental demand from data centers.

[David Dunbar, Chairman, President & CEO at Standex International]

We anticipate the Ameren Orion Group to continue growing revenue at a healthy double digit rate in calendar year 2025. Now if everyone can turn to Slide 5, fast growth markets redefined. Three years ago, we identified end markets driven by long term secular trends that provide above average growth opportunities. Of these markets, those that provided Standex the best growth opportunities were renewable energy, electric vehicles, soft trim, commercialization of space and the electronics defense market. Aggregating these sales into a single number provided a shorthand to explain the growth potential of our company.

[David Dunbar, Chairman, President & CEO at Standex International]

Our fast growth market sales has become an important number for our shareholders as well as for our management as we review priorities. In those three years, our fast growth market sales have grown from $40,000,000 to nearly $100,000,000 Space, defense and electric vehicles have been the primary drivers of the growth and remain attractive. Electric vehicle sales have decelerated, but are still growing around the world and combined with our increased content per vehicle still represent an above market growth opportunity for us. Other markets like 5 gs and soft trim have not provided the lift we expected. Our recent acquisition makes a step jump change to our growth profile.

[David Dunbar, Chairman, President & CEO at Standex International]

100% of the sales of the Ameren Orion Group are into the fast growing market of the electrical grid, doubling our fast growth sales. Considering this acquisition and the degree to which the global environment has shifted versus three years ago, we are taking a fresh look to more accurately reflect the company's faster growing markets and to show how we continue to pivot towards markets with above average growth. As As the company is comprised today, our new fast growth markets are the electrical grid, renewable energy, electric and hybrid vehicles, commercialization of space and defense. We removed soft trim in 5 gs, but of course, we still serve customers in these spaces. We have added the electrical grid and defense sales in engineering technologies.

[David Dunbar, Chairman, President & CEO at Standex International]

In the sales into these redefined fast growth markets were approximately $43,000,000 In we anticipate approximately $170,000,000 from sales into fast growth markets. By we anticipate sales into fast growth markets to be greater than $3.40,000,000 dollars in sales, which would represent greater than 30% of total sales. I will now turn the call over to Adamir to discuss our financial performance in greater detail.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Thank you, David, and good morning, everyone. Let's turn to Slide six, summary. On a consolidated basis, total revenue increased approximately 6.44% year on year to $18,980,000,0.0 This reflected a 15.3% benefit from recent acquisitions, partially offset by an organic revenue decline of 8.20.7% impact from foreign exchange. With the recent acquisition of the Ameren Orion Group, the largest in the company's history, non GAAP measures will now exclude amortization of acquired intangible assets, which affects our Electronics, Engraving and Scientific business segments. You may refer to our appendix slide in the presentation for historical reconciliation.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Adjusted operating margin increased 150 basis points year on year to a record 18.7. In the adjusted operating income increased 15.4% on 6.4% consolidated revenue increase year on year. Adjusted earnings per share remained flat year on year at $1,.91 Net cash provided by operating activities was $910,000,0.0 in the compared to $2,380,000,0.0 a year ago. Capital expenditures were $7,000,000 compared to $430,000,0.0 a year ago. As a result, we generated free cash flow of $210,000,0.0 compared to $1,950,000,0.0 a year ago.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Our includes 1 time payments of approximately $11,000,000 for acquisition related expenses. Now please turn to Slide 7, and I will begin to discuss our segment performance and outlook beginning with Electronics. Segment revenue of $9,590,000,0.0 increased 20.8% year on year as 32.3% benefit from recent acquisitions was partially offset by an organic decline of 10.70.9% impact from foreign currency. Adjusted operating margin of 27.6% in increased five sixty basis points year on year as the contribution from recent Ameren Narayan Group acquisition, productivity initiatives and product mix were partially offset by lower volume. Excluding recent Amra and Orion Group acquisition, our new business opportunity funnel increased approximately 32% year on year and is currently at approximately $100,000,000 Our book to bill in was $1,020,000,.00 with orders of approximately $98,000,000 driven by order strengthening in core business and contribution from the recent Ameren Orion Group acquisition.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Sequentially, in we expect significantly higher revenue driven by the recent Amra and Orion Group acquisition, accelerating new product sales and higher sales into fast growth end markets and moderately higher adjusted operating margin as contribution from recent acquisition and pricing and productivity initiatives are partially offset by higher investments in selling, marketing and R and D. Please turn to Slide 8 for a discussion of the Engraving and Scientific segments. Engraving revenue decreased 23% to 31500000.0 driven by organic decline of 22.2% and a 0.8% impact from foreign currency. Adjusted operating margin of 14.3% in decreased eight fifty basis points year on year due to lower revenue. In our next fiscal quarter, on a sequential basis, we expect slightly to moderately lower revenue and adjusted operating margin due to continued softness in the automotive end markets in North America and Europe and less favorable project timing in Asia due to Chinese New Year.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

To address the continued softness in end markets served by this segment, the company initiated additional restructuring actions that project to yield $4,000,000 in annualized savings once fully implemented starting in At the same time, we are starting to see some encouraging signs that the market is slowly recovering in North America based on recent visit to 1 of the largest tool shops in the region and large amount of tools currently being worked on. Scientific revenue increased 13.4% to $1,850,000,0.0 due to the recent acquisition and organic growth of 3.9%, mostly due to higher volume from new product sales, partially offset by lower demand from retail pharmacies. Adjusted operating margin of 26.9% decreased 80 basis points year on year due to the impact of the recent Custom Biogenic Systems acquisition. Sequentially, we expect slightly to moderately higher revenue and slightly to moderately lower adjusted operating margin due to higher contribution to revenue from the recent acquisition, additional R and D investments and higher freight costs. Now turn to Slide 9 for a discussion of the Engineering Technologies and Specialty Solutions segments.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Engineering Technologies revenue increased 13.9% to $2,260,000,0.0 driven by organic growth of 14.5%, slightly offset by 0.6% impact from foreign currency. This strong organic growth was due to more favorable project timing in the space and market and growth in sales from new products. Operating margin of 16.3% decreased 80 basis points year on year as higher development work was partially offset by higher sales. Sequentially, we expect slightly lower revenue due to project timing and slightly higher operating margin due to product mix. Specialty Solutions segment revenue of $2,130,000,0.0 decreased 2.9% year on year, primarily due to the general market softness in display merchandising and hydraulics businesses.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Operating margin of 16.7% decreased 140 basis points year on year. Sequentially, we expect similar revenue and slightly higher operating margin. Next, please turn to Slide 10 for a summary of Standex's liquidity statistics and capitalization structure. Our current available liquidity is approximately $185,000,000 At the end of the had net debt of $41,320,000,0.0 compared to $620,000,0.0 at the end of Our net leverage ratio currently stands at 2.9. In we expect interest expense to be between $7,000,000 and $750,000,0.0 Sandix's long term debt at the end of the was $53,430,000,0.0 Cash and cash equivalents totaled $12,110,000,0.0 We declared our two hundred and forty second quarterly consecutive cash dividend of $0,.32 per share, an approximately 6.7% increase year on year.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

In we expect capital expenditures to be between $30,000,000 and $35,000,000 Let's turn to Slide 11 that highlights our updated long term targets by We communicated our long term financial targets by 02/00 ago during our earnings call. This prior outlook excluded the impact of potential acquisitions and divestitures. Since then, we have acquired Vintronics, SanyoSwitch, Amran Arayan Group and Custom Biogenics Systems and divested Procon. As such, the composition of the company is meaningfully different. We now target reaching greater than $1,150,000,000,.00 in sales by versus the prior target of greater than $1,000,000,000 in sales.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

We now target adjusted operating margin of higher than 23% by versus our prior target of greater than 19% margin. We expect to continue to ramp up our R and D investments with a target over 3%. It is now our expectation that with this financial performance, we will increase our return to we will increase our return on invested capital to greater than 15.5% versus the prior target of greater than 15%. We expect our free cash flow conversion target ratio to remain at approximately 100% of GAAP net income. Our financial targets apply to our current portfolio of businesses and exclude the impact of any future acquisition or divestiture.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

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

[David Dunbar, Chairman, President & CEO at Standex International]

Thank you, Adamir. Please turn to Slide 12. I'm very proud of our team for their continued operational execution and for their efforts in integrating the largest acquisition in the company's history, both of which helped us achieve our record adjusted operating margin in the We remain optimistic about the long term secular trends that will benefit from infrastructure upgrades, capacity expansion and data center demand within the electrical grid, the evolution of space exploration, defense applications and from the transition from internal combustion to hybrid and electric vehicles in automotive. For the remainder of we expect our end markets to improve with sales into the electrical grid end market providing an additional tailwind. To support our future growth, we continue to invest in new product development and new applications across markets with growth potential.

[David Dunbar, Chairman, President & CEO at Standex International]

We are on track to release over a dozen new products this fiscal year across our businesses, which are now expected to contribute approximately 200 basis points of incremental growth. With the acquisition of the Ameren and Orion Group, we intend to use our cash flows to reduce debt while we maintain flexibility to fund an active pipeline of organic and inorganic growth opportunities that support future growth. We are increasing our long term targets to sales of greater than $1,150,000,000,.00 adjusted operating margin of greater than 23% and ROIC of greater than 15.5%. We will now open the line for questions.

[Operator]

Thank you. Your first question comes from the line of Gary Prestopino from Barrington Research. Please go ahead.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Hey, good morning, Dave and Adam here.

[David Dunbar, Chairman, President & CEO at Standex International]

Good morning, Gary.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Good morning.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Couple of questions here. First of all, I just want to make sure we clarify this with these new targets. Is the sales number and the adjusted operating margin number, is that an exit rate in or is that for the full year?

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

That will be Gary, that will be for the full years or exit rate at the end of FY 2027. But so either full year 2028 or exiting FY 2027.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

So full year. Okay, great. And then, Adam here, could you I know you gave us what the interest expense is going to be quarterly going forward. Could you maybe give us an idea of what the D and A is going to be when you have a full three months of the acquisition under your belt on a quarterly basis?

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes. So yes, sure. So our historic amortization expense before the Ameren Orion acquisition was about $2,000,000 per quarter. We think that's probably going to be around $4,000,000 to $5,000,000 going forward kind of fully once we have a three months of Ameren Orion in our run rate. So that will be for the amortization and then for depreciation $20,000,000 to $22,000,000 per year.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay. So $22,000,000 for depreciation. And what did you say was the amortization, $4,000,000 per quarter?

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes, $4,000,000 to $5,000,000

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay. Per quarter. Great.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

And then,

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

given the

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

when you made the acquisition of Ameren, you said it had about a 40% adjusted EBITDA margin. And I would assume that holds for what they did in

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay. And then last question and I'll jump off. With this potential Stargate project, who would be your main competition there and what you supply if this project gets off the ground?

[David Dunbar, Chairman, President & CEO at Standex International]

Yes. So we would get into those facilities in a couple ways. If you think about Ameren and Orion with the instrument transformers, those sales would be into the OEM equipment providers like Eaton, GE, Schneider, depending on who gets the contracts. So we're actually agnostic about who gets it because they're all customers of ours.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay. So I guess the inference from that is that if this gets off the ground, these companies would be supplying most of the products and you would be in a great position to be supplying what you supply to each of these companies.

[David Dunbar, Chairman, President & CEO at Standex International]

Yes. So they'll provide

[David Dunbar, Chairman, President & CEO at Standex International]

the switchgear, the transformers and the substations to support the power there and in each of those pieces of equipment would be the instrument transformers from our business.

[Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates]

Okay. Thank you very much.

[David Dunbar, Chairman, President & CEO at Standex International]

Yes. Thank you, Gary.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Thanks, Gary.

[Operator]

Thank you. And your next question comes from the line of Chris Moore from CJS Securities. Please go ahead.

[Chris Moore, Senior Analyst at CJS Securities]

Hey, good morning, guys. Thanks for taking a couple.

[David Dunbar, Chairman, President & CEO at Standex International]

Hi, Chris.

[Chris Moore, Senior Analyst at CJS Securities]

Yes, maybe just talk a little bit about the puts and takes for organic growth in Is more likely than Just what kind of visibility you have towards organic growth at this stage?

[David Dunbar, Chairman, President & CEO at Standex International]

I'll say a couple of words and turn it over to Adam here. If you look first half to second half, the first half, kind of a downside surprise for us was the softness in the engraving business from the auto OEMs with their delays and cancellations of programs. So they're at they were at a low point in Their is always soft. As Adam mentioned in the prepared remarks though, the tool shops are getting very busy. So we do anticipate that by and into next year, engraving will pick up.

[David Dunbar, Chairman, President & CEO at Standex International]

In all other businesses, order trends are good and we see we see a ramp.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes. No, I think that's right. We're very pleased with the order rates we are seeing in electronics and both in the core business as well as in the Ameren Orion group. And we think that's going to provide us a nice tailwind as we kind of get into this quarter, especially when we get into our and beyond. So we feel pretty optimistic about general trends we are seeing minus the engraving.

[Chris Moore, Senior Analyst at CJS Securities]

All right. I appreciate that. So I just want to make sure I'm looking at Ameren correctly. I mean, when you close, you had talked about $100,000,000 in revenue. In two months, it looks like you said it was a record Dec.

[Chris Moore, Senior Analyst at CJS Securities]

0. It looks like they're closer to $25,000,000 Is there any seasonality here? Can sales be lumpy quarter to quarter? Just with some big orders that happened to be in Dec. 0.

[Chris Moore, Senior Analyst at CJS Securities]

Just any thoughts there?

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes, sure, Chris. There's really not much seasonality. And just as a reminder, we had Amaran, Orion in our portfolio as part of Standex company for two months. And in those two months, the sales for the MRN Orion roof were about $1,950,000,0.0 So it's about $10,000,000 per month run rate right now. So you can annualize that and see that that $100,000,000 is not $100,000,000 anymore, it's more like $120,000,000.

[Chris Moore, Senior Analyst at CJS Securities]

Okay, got it. And in terms of moving forward, the 30% that they did, that's aggressive, but double digit is what we're talking about, more in the somewhere in the teens?

[David Dunbar, Chairman, President & CEO at Standex International]

Yes. So I'd say that their current run rate their current growth continues to be at that same momentum we showed last year, either 20%, thirty %. But if you look out over a year or two, we're still recommending a 15% model. We need some more time with this business as we get to know the customers and the customers' plans. We think 15% is a very solid expectation, could be higher than that.

[David Dunbar, Chairman, President & CEO at Standex International]

They certainly are growing faster than that at this moment.

[Chris Moore, Senior Analyst at CJS Securities]

Got it. And maybe just 1 more big picture on Ameren in terms of the integration, just trying to get a sense of how long it takes. I mean, for example, you talked about them needing to create a footprint in Europe. Is that something that can be done over the next year or just any sense as to kind of what that evolution looks like?

[David Dunbar, Chairman, President & CEO at Standex International]

Yes, no question. Our plan is to have a footprint in Europe in the calendar year. It's a and so receiving a a lot of attention now. We put some of our European management team on this working with the Narayan team out of India. And we've already had many discussions with customers to sort out the planning of which particular products need to be ramped up first.

[David Dunbar, Chairman, President & CEO at Standex International]

So this is very much a live project.

[Chris Moore, Senior Analyst at CJS Securities]

Got it. And maybe just the last 1 for me. The engraving restructuring is $4,000,000 is there is that people, is that facilities and any insight there?

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

It is, Chris, it's both. It's both facilities, consolidation and headcount reduction for the roles we don't plan to replace.

[Chris Moore, Senior Analyst at CJS Securities]

Got it. I will leave it there.

[Chris Moore, Senior Analyst at CJS Securities]

I appreciate it guys.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Thank you.

[Operator]

Thank you. And your next question comes from the line of Ross Perbeck from William Blair. Please go ahead.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

Hey, good morning gentlemen.

[David Dunbar, Chairman, President & CEO at Standex International]

Good morning Ross.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

Hey guys, can you maybe remind us where capacity stands for the Amron asset? And then just maybe what the margin profile was a couple of years back before we saw the acceleration in orders?

[David Dunbar, Chairman, President & CEO at Standex International]

Well, the margin let me start with the last question first. The margin before COVID was they were in the mid to upper 30s and they've kind of ramped into the 40s primarily on leverage and but it's always been a healthy margin profile. So I think we think where they're running now is representative. In terms of capacity, they were running their plants at 1 shift. And so we're working with them now to add a second shift and even a third shift.

[David Dunbar, Chairman, President & CEO at Standex International]

So there is so what would that mean? There may be at 60% capacity with the expansion that those ships can give us. And then as we just mentioned before, we're looking at this European side to add additional capacity.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes, that's right.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

Got it. That's very helpful. And then a good segue there, we think about kind of the coming capacity expansion in Europe. I mean, what does that imply for the 23% margin walk? I know you guys also have a growing productivity pipeline for the core business because first glance it looks like that 23% is largely just the mix of Amaran and the Amort exclusion.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes. I mean, I think obviously Amram margins are extremely healthy and we do expect we're going to get leverage on the sales or the setup we're going to have in Europe. And but we also think we can get a very healthy margin expansion on our core business. I think historically, Ross, we have proven between price and productivity. We know how to drive margin improvement.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

And we do expect as we get into the later part of this fiscal year into next year that we're going to start seeing a healthy organic growth in our electronics core business, which also should help us drive the margin expansion because it's and scientific also has been very, very healthy and those are the 2 segments that drive the overall margin expansion for the company. And as you have seen, engraving has given us a little bit of a headwind this quarter. And we think as we get into the next fiscal year, that's going to update that and get a little bit easier from a comp standpoint as well.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

Okay.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

If I can, just 2 more here. I mean, on Scientific with the pharmacy decline, can you maybe help us size what that deceleration was versus kind of the growth in the research and industrial? I believe it's like a third of that business and maybe just remind us where we are in the down cycle for pharmacy at Scientific?

[David Dunbar, Chairman, President & CEO at Standex International]

Well, maybe a way to look at I think it's Adam is looking up the numbers at a peak back in COVID. I think the pharmacies were running just over $20,000,000 a year. I think now it's about $2,000,000

[David Dunbar, Chairman, President & CEO at Standex International]

a year.

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

That's right. Yes, that's right.

[David Dunbar, Chairman, President & CEO at Standex International]

So you can maybe back end. So we have had kind of a strengthening in the other parts of the business. You can kind of do the math there.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

So we're really at a trough level here. So it's all upside. And then just last 1 on Electronics book to bill, it was slightly positive, but what were the organic orders for Electronics?

[Ademir Sarcevic, VP, CFO & Treasurer at Standex International]

Yes. So Ross, the organic orders, the book to bill for the core business was about 1 and Ameren Orion was at about 1.2. So that gets us to about 1.02 average.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

Perfect.

[Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C]

All right. Thank you, gentlemen.

[David Dunbar, Chairman, President & CEO at Standex International]

Thank

[David Dunbar, Chairman, President & CEO at Standex International]

you.

[Operator]

Thank you. Your next question comes from the line of Mike Schleske from D. A. Davidson.

[Operator]

Please go ahead.

[Michael Shlisky, Managing Director & Senior Equity Research Analyst at D.A. Davidson]

Hey there. Good morning. Thanks for taking my questions.

[David Dunbar, Chairman, President & CEO at Standex International]

Hi.

[Michael Shlisky, Managing Director & Senior Equity Research Analyst at D.A. Davidson]

Hey David, I wanted to talk about maybe your thoughts on your new product launches and the pipeline there. There. I was kind of curious as to what might happen after which is really only a few months away at this point. Do you have a similar cadence for next year or maybe even an acceleration ahead? Just give us some thoughts as to what the next wave of new product discussions might look like.

[David Dunbar, Chairman, President & CEO at Standex International]

Yes. So we do have if we look at FY 2026, I think we've got roughly the same well, it's eighteen months out to the end of but the the products that are queued up to be released in is about the same order of magnitude of as those in '20 '20 05/00. So we've got we started the new product development three or four years ago, takes a while for these things to start coming up, but the pipelines are full. So we anticipate a stream of new products every year going forward. And this is the first full year, the first year the pipelines have been full in launching new products.

[Michael Shlisky, Managing Director & Senior Equity Research Analyst at D.A. Davidson]

Great. My other question, there have been some successful space launches over the last month or two here from some newer players or players expanding greatly in what they're doing in the first system of space initiatives. Can you comment on are there any like major chunky pieces of business coming in the next couple of quarters that we should be aware of for our models? Or do you see more of a smooth delivery pipeline ahead?

[David Dunbar, Chairman, President & CEO at Standex International]

Let's see. First of all, our content in space is on the larger vehicles. So some of the newer players you've heard about have smaller vehicles and we don't make the domes for them. So if you listen to the launch announcements from ULA, from the larger the larger vehicles from everybody, that's what drives our business. And that is still ramping into next year and the year after and then should be kind of on a gradual and steady increase as we get to '26, '20 07/00, '20 08/00.

[Michael Shlisky, Managing Director & Senior Equity Research Analyst at D.A. Davidson]

Great. I'll leave it there. Thanks so much.

[David Dunbar, Chairman, President & CEO at Standex International]

All right. Thank you, Mike.

[Operator]

Thank you. There are no further questions at this time. I would now like to turn the call over to Mr. David Dunbar for any closing remarks.

[David Dunbar, Chairman, President & CEO at Standex International]

Thank you, everybody, for listening to the call today. We enjoy reporting on our progress at Standex. And finally, I want to thank our employees, the Board of Directors and shareholders for your continued support and contributions. We look forward to speaking with you again in our call.

[Operator]

Thank you. And this concludes today's call. Thank you for participating. You may all disconnect.

Participants

Analysts

• Christopher Howe, Director of Investor Relations at Standex International
• David Dunbar, Chairman, President & CEO at Standex International
• Ademir Sarcevic, VP, CFO & Treasurer at Standex International
• Gary Prestopino, Vice President & Senior Research Analyst at Barrington Research Associates
• Chris Moore, Senior Analyst at CJS Securities
• Ross Sparenblek, Equity Research Analyst at William Blair & Company, L.L.C
• Michael Shlisky, Managing Director & Senior Equity Research Analyst at D.A. Davidson