Standex International (SXI) 2 Feb 242024 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Standex International Fiscal Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] This call is being recorded on Friday, February 2, 2024. I would now like to turn the conference over to Mr. Chris Howe, Director of Investor Relations. Please go ahead, sir.

good and operator, you, morning. Thank the Please be website management's can accompanying on note at the company's that found the Investor remarks of presentation Relations www.standex.com. portion Standex statement refer include call expectations statements. Slide Please safe forward-looking estimates, discuss harbor other Standex's X. Matters today's to predictions, that management and conference will on on materially. risks subject These that cause statements to are actual could uncertainties and results to differ

detailed well public most You annual report a as to announcements XX-K and filings Standex's recent of as refer factors. SEC should Form other risk list for on

In depreciation purchase adjusted like include purchase excluding EBITDA before restructuring, and is which I'd which measures to EBITDA acquisition-related and addition, acquisition-related EBITDA accounting, which amortization; is EBIT, today's remind and excluding earnings expenses items; discussion taxes, EBITDA, EBITDA, references restructuring, of accounting, you will onetime interest and adjusted is non-GAAP adjusted EBIT, which margin that onetime and taxes; expenses to the margin. items; is EBIT, interest, earnings before

complement are consistent historical with comparison non-GAAP will results intended measures the share, an measurement and as believes adjusted operating continuing cash provides per additional to refer earnings We performance. a EBITDA. net also income to adjusted principles forma margin, operations, These measures, that serve of in to Standex free financial company's accordance pro generally adjusted including States. net flow income, provided operating to operating accounting income, United in accepted such financial debt information the from adjusted net adjusted and non-GAAP other

Chief Financial Sarcevic. Treasurer, call Officer, Chief Standex's Dunbar; On and Executive Ademir today President and and is the Chairman, Officer David

that our the as our for our support I drove and would dedication The of conference businesses of and you, performance. was their thank employees, record to highlighted margin and continued Board Good operating quality to results fiscal quarter our second XXXX efforts and trend our adjusted call. continued results. Thank Chris. like executives morning, our our in we of welcome Directors

fast markets X, second could XX% to fiscal XXXX. end million remain markets to fast growth long-term $XXX end year-on-year messages. if everyone target of track in In Slide We turn by the sales to the grew growth year in on Now our achieve million. key the quarter, sales in $XX

quarter's we effect experienced projected and we general, our partially in offset expect As market from acquisition organic quarter conditions in market moving timing in segment recent we other Minntronix fiscal unfavorable This Engineering X.X%. start project to decline markets, and currency. In led the last contributions Technologies in which outlook, softness of to foreign the XXXX. of transitory an by favorable was fourth

to In pipeline an of addition, we inorganic continue opportunities. active work on

we announced signed quarter. we fiscal during last definitive this Sanyu transaction acquire close agreement anticipate As quarter, Switch third to we a our Co., to

changing than our XX%. We macro margin free adjusted demonstrates and our improvements, from in that cash of of to the This initiatives. X gross and fiscal XX% strong profitability to and consecutive X flow segments reported basis margin gross to In adjusted operating cash continued the margin. $XX.X adapting also the of segments record operating a increased free all to year-to-date. an to than XX.X%. our operating operating above points year-on-year record in adjusted in million We X operating it adjusted quarter, flow greater XX time leading second while continued again, to conditions. the achieved reported was generate quarter productivity margin price quarter, Consolidated record and first execution drive adjusted of we company ability margin is record margin history XX%, XXth greater achieved

ROIC further businesses. and the cash of and of highlights improved our flow consistent over XX% Our quality generation

mid-single-digit included EBITDA X over a February long-term we These XX%. to on to above XXXX, set of targets targets XX% financial and margin growth, back X organic capital invested above return communicated Looking years.

targets proud our the are third pending quarter Sanyu in sequential and a acquisition a Electronics recovery higher of segments. years. On XXXX, fiscal from to we slight to basis, these within revenue and X have in contribution due reached Specialty the We expect slightly

We lower the charge me due plan. adjusted onetime the impact retirement related of expect a slightly sequentially to operating margin reaching compensation under eligibility to stock

similar margin charge, Excluding this basis. adjusted onetime sequential operating be would on a

and role plan am retirement excited our and I'm I plan, go sequential Standex's This market end acquisition continued and slight basis, committed Technologies for don't market Sanyu Although we to on from under quarter now sales I fiscal Standex. In to pending Specialty and vision a in the Electronics stock by margin. recovery higher project a compensation expect favorable adjusted improvement long-term contribution outlook my Engineering served the segment. by I as the assumes remain timing more anywhere. fourth XXXX, operating in meaningfully in eligible segments, CEO

single-digit are flow by greater organic growth and on margin adjusted These to targets at approximately than high XX% reaffirming sales, financial conversion in billion than capital We greater of XX%, XXXX. return long-term income. cash our free net $X invested include XXX% operating than fiscal outlook greater year GAAP

get it's In to anniversary we celebrated are little important and my to XXth X. how turn a take January, at down lane walk like to there. we memory I here going understand Let's Standex. will Slide I'd because where

January the let's $XXX our over cap XXXX, First, end of just look market company's was the results. At million. at

Now, XX $X.X it years billion. to later, has grown

to increased We and sales, have a over the company. The great from turn Please that small-cap story real and pace EPS. nearly the valuation Russell how a gross are the S&P delivered results that these doubled that results. XX.X% Page The On with margins significantly is to outperformed financial time, created below. we kept XXX for same accomplishment we XX.X% XXXX X. roughly

margin System. got in used internal from income. retain career become in met around We XX% Perhaps We Creation that high-performing Value our I refocused of strong XXXX, markets. collaborative businesses Our criteria problem-solving portfolio XX.X%. management productivity focused margin the of on X/X spending had acquisitions. that wanted markets we with over serve divested better businesses. company a developed digits, are same is controls going that competitive our portfolio. we to and and across implemented for pricing culture. vision over people. In We and a of lowest we and strong increased of most process an our remainder. XX% call the now X. in a X%. be to operating serving retain our corporation R&D going for single hires, this holding the operating the and business and mix delivers X.X% and organic operating and businesses to markets processes We evaluated that importantly, the investments sales the talent reducing was advantages X.X% The paths to executed. We growing time, metric number Gross with creating building all our of improvements the we our how evolve of of to from the grew positions with to of income roots our businesses to retooled operational XX%. with to sales low company, into better now We thrives potential from operating grew sales we we about most management Standex defensible a work to significantly growing end XX% end attracted XX At business and over the sales. We the with outside of we company, ensure The great am our perhaps pleased We margin filled lowest combination businesses

around XX reversed working years, we turns those with a numbers current those the we XXXX, on our to commitments. at our on positions by higher can delivered the the are to level have in we key and markets the results us, developed to going twists financial Now, begin Through showed deliver majority employees. capability these control, and perform I things of earlier. Despite a of Standex

to X. in turn copied stating, years the shown slide X we ago, would Page we financial over please the achieve X X targets expectations from XXXX the issued next presentation. here longer-term years, to the I've Now

our X target of in of XX%, income. of net delivered been years. operating target versus the XXX% We has XX%, near We EBITDA GAAP versus cash conversion met XX.X% have of free XX.X% our essentially ROIC target of the them of flow

Turn XXXX. Our teams they perform a level. can higher by year, at shown X. Last Page we achieve businesses to have and our to targets updated issued

reshaping. executing by this XX years. not significant do building do on we have differences same need will strategy we capabilities the portfolio the in the of are that We and A past developed couple

to more bringing much is products our businesses fast-growing and of addition, to penetrating devoted better getting market at better our operating and especially energy and In new markets. high-quality

call to control financial greater over exceed our energies to devote discuss things to to now position turn Ademir will the continue as will performance and targets well. I ourselves those we We to in detail. our can those

and David, everyone. morning, good Thank you,

approximately Let's $XXX.X X.X% net prior Second the and turn decreased impact discussed exchange. Summary. On Quarter XXXX line foreign Minntronix and X, X% by X.X% reflected revenue we to X.X%, offset Slide This organic year-on-year sequential Procon last total from consolidated revenue outlook our to million, with of decline quarter. benefit partially a recent acquisition divestiture in basis, from

the ago. million per consecutive basis Second to X% by XX.X%, a compared $X.XX ago. revenue Net operating OpEx were to provided our year-on-year, XXXX, $X.XX expenditures on pricing second income XXXX, history. in to a continued share a of compared margin cash year a points the Capital second activities quarter were initiatives. Adjusted X.X% increased highest was a margin margin through operating in year the year $X.X $X.X focus year-on-year grew adjusted quarter consolidated quarter company operating earnings operating X.X% in XXth and growth compared million, adjusted decrease on of XX reflecting XXXX quarter fiscal Adjusted to million driving year-on-year. improvement million $XX.X ago, $XX.X with

result, XXXX, On record the year-to-date $XX $XX.X ago. basis, history fiscal year of cash $XX.X million a of was cash represents a second half free cash a in flow million generation quarter million compared company. flow first in a free the As to

our more by quarter increased acquisition from were sales beginning were basis points and benefit lower with begin than and an offset from year-on-year revenue XXX turn productivity please XX.X% partially to Adjusted second XXXX in segment currency Slide foreign and initiatives organic pricing X.X% of benefit offset and organic outlook, X.X%. the for operating X.X% as year-on-year, decreased million product of discuss of and by acquisition Electronics. fiscal XX.X% recent I margin the Segment Now the Minntronix and as decline performance mix. will Minntronix the X, to $XX.X contribution

to margin higher expect to X.X% funnel seasonal rollouts revenue markets, fiscal Operating moderately actions. In to new the growth grid, in foreign such higher operating and COVID year-on-year and quarter freight basis, project renewable driven units on higher quarter, X.X% by slightly year-on-year organically ability operating storage meaningfully the new of currently margin second remain quarter basis $XX.X as Sanyu. energy Chinese we opportunity and of pharmacies higher pending We productivity lower volume expect and productivity XX.X% Operating lower acquisition for Engraving XXX realization was market New fiscal of our XXXX retail increased XX% observed on our XXXX, due volume business Year and X.X% XX% and in confident grew the we million. slightly margin. presence quarter new a in offset sequential decreased and lower to from improve sales. to contribution stronger and third basis order of organic next to fast Slide of fourth million, increased year-on-year due to and Based Engraving approximately smart in higher XXX XXXX. Please fiscal margin cost anticipate volume. Sequentially, slightly million, offsetting lower and due operating Our in turn to trends, fewer revenue margin we timing end demand as EV-related we benefit automation, XX.X% accelerate fiscal $XX a revenue impact and increased segment. in revenue of the and share industrial similar platform conditions growth from on increase from is America. Scientific for markets. Sequentially, higher revenue the increased to currency. and XX.X% vaccine and to Scientific by XX our a points North initiatives product discussion $XX.X the of slightly points slightly general expect

revenue similar revenue the of margin. chassis driven in increased by basis Hydraulics an sequential expenses. Sequentially, projects. shortage. of significant slightly partially segments. Engineering lower a Slide $XX.X to Solutions XX.X% year-on-year Hydraulics Sequentially, This in lower to year-on-year, and Specialty X.X% margin, foreign operating to in year-on-year, most by operating offset lower partially in segment XXX Operating end productivity fourth for turn discussion divestiture end of timing. Specialty margin XX.X% lower market to to industry-wide decreased decline government benefit decline due anticipate quarter, growth funding and Now Solutions productivity from offset due of the the XX.X% currency. year-on-year, demand Technologies and increased we from million to the pricing improvement caused higher an Procon price XX.X% due sales XXX and across we by development We favorable organic of organic and points points and business. moderately Operating higher research offset decreased basis expect XX.X% by realization, similar and delays of primarily more volume reflecting the reflecting $XX volume. margin business of defense Engineering improved expect slightly timing a initiatives by fiscal the and markets as and Technologies revenue reflected XX were revenue project million

first $XX.X we Cash capital $X.X $XXX.X totaled of at million. With to second please had quarter XXXX second the fiscal XX,XXX the capitalization shares Standex's end approximately million. and in million and of to Standex allocation, of liquidity $XXX.X equivalents Next, $XXX end structure, million, compared fiscal of to debt regards quarter. liquidity. for second million net a the available $X.X with the Slide of fiscal million for of cash debt turn XXXX quarter, Standex's summary remained quarter quarter ended long-term XX Standex at was At the statistics strong. repurchased the end XXXX. second which

from over million results. discuss dividend We cash turn to also year-on-year. In $X.XX $XX million, compared increase per XXXX. $XX of declared David now and expect approximately X.X% XXXX, quarter we approximately our quarterly share, expenditures capital call consecutive second XXXth be key I million our will an to in fiscal the to takeaways $XX fiscal to between

expected strong Thank results. In our have we and team streak can you, and of led for margin, of to proven operational Please very continued XX Ademir. record growing markets proud fast changing margin quarterly conditions. focus customer the growth even profit product consecutive new on that macro expand excited their growth and Slide turn become to releases, organic earnings contributors to these potential. grow give with us adapting long-term organic by that applications our markets combined XX. I and am new from and our strong operational more relationships execution I'm our growth. Sales company's quarters as sales we to of in in significant growth markets, rigor, confidence

a adjusted $XXX fast-growth allocation, fiscal than expansion XXXX, in maintain sales additional our the XXXX. to margin flow on sales, tracking continue operating continue million at cash We pursue to long-term XX%. XXX% plus invested margin approximately to continue free to investments and growth, capital GAAP our expect our sheet conversion and In balance by based anticipate income. capital of we complementary billion consistent financial continued our progressing in prudent us organic inorganic include high fiscal net strategy. single-digit markets outlook. We allows fiscal to greater on outlook towards XX% to strong XXXX. for than long-term than greater Return These of $X We reaffirm targets greater which

We open line will now questions. the for

We Securities. have Instructions] from Chris Moore the line first coming CJS [Operator question from of our

China and looks So Europe are It in conditions like maybe Electronics we'll just Electronics. softer start continuing.

any, So to there. might a What are at, there? you help maybe demand bit indicators strengthen looking X questions when if gauge

those particular. reverse few out out call Yes. We would and the we In and Appliance begin saw market in we the Europe. Chris, we in last quarters, to softness China pointed anticipate also

orders many many we for are us channels. a markets. These samples there indicator used when for They also distribution they're that switches. into is sold the through applications, products. people good leading often are at different go across new developing trends, look So And as end

that's tick the So to and thing first typically down to the up. first come

This starting tick up. we're to quarter see orders those to

are Europe about we talked year, this the those we appliance expected for we're historic expected come and sales on order based and we to than in last reversing, lower so -- are next level this quarter we're up. still late back in quarter. trends we with General the that come when but So turning -- account, orders seeing seeing into China

understanding represents Got Chin revenue. My that helpful. that. XX% it. a Appreciate Electronics is That's roughly

Just puts new to What trying the are and from the normal. stay understand what's X for China to to takes X that level years at now?

in That's China, for But a question. good are China sales our of in China. X/X

some China. multinationals manufacturers there. addresses from ship There So to us. are are in that There's a that of lot purchase they Chinese

of talking change wherever right other pocket, North There that a -- other left third more And it's our export, us, We'll will thing. is it there? so reselling America. are the customers is follow business The kind are is. for to X/X frankly, that about of pocket what

business, For guess good do as Chinese the the your to has remainder economy. mine, the more prospects it of with -- about is for the as

Appreciate it. Maybe that. just Engineering. on Got

obviously funding, So a delays you're big expecting increase by QX. in government impacted being

bit little have more much that. visibility how about a maybe on Just you

Yes.

delay said of delay much it's we of their where not It's So reallocation sort in so in funding, spending a funding.

is.

-- think, will customers script, projects strong Technology. very it And We to nuclear the some have been of be record in don't if Engineering visibility spending actually now. do customer execute a the support for We the out we be Well, has position in the as in the out called some and -- conflicts that we've have QX good it pushed change, quite up I in for delivery. for of world line the and Engineering a QX around order we a expect fund Technologies vessels, business. Navy could

in confident that. quite we're So

me. Sanyu closing on just is M&A last shortly. Maybe side, Perfect. looks It the one for

there stage? the $XX deep at out is this there kind revenue million-plus funnel? Are how Just targets any of

which to other a businesses, continue with. $XX That's attractive There million, there year, changing to bit. businesses. $XX relationships actionable. family-owned we $XXX But larger little were there Last very few businesses seem said Yes. million build we be million, that some are were

We quarter of or X. actionable owners. have some ourselves been be it them positioning could And with next looks like in the the

I'd year. So is looking say last than the healthier funnel it did

coming next Benchmark. have of Michael We Legg the our question line from from

goal cost XX% external much internal development, product How look of your by margin coming that When versus you from operating businesses? is acquired new expectations versus from at initiatives XXXX.

Mike. to -- actually there, it's get it's Well, pretty easy

estimate a we're million year, take at your above fast-growth sales those sales add you average. whatever If X will are our -- confident markets another very margins the look for years, at next over is all this and to our $XXX sales

that with mixes leverage growth So you some business us and the rest get we And to the the on up. just rest on XX%. the get you then -- X.X% just growth that, that of take of base if

a little give succeeding you a higher credit if So margin and to upside top both are a new with margins, us mix line. are which typically for there's products, to

operating X a standpoint. Yes. can And pricing both the Ademir, We and from years, I just last over Mike, developed if X it's then, OpEx add. muscles or pretty good

top volume a to and some said, to dollars funnel standpoint, productivity and of fund use and from we R&D we'll to continue the driving gross So of drive our on up David just what continue continue margin anticipate those grow.

lot from we're your then you're seeing of talk slowed. And sales just being EV a little a customers? bit news sector, on you what EV seeing the Can on Great.

Yes.

we've talked about I -- Our before. EV think, this presence

higher say, especially volts. XXX voltages, are to products operate that above the needs EVs Our at adapted of

XXX more. So last operated electric about at million year, last of those -- sold think vehicles I XX -- X million were or volts year, vehicles

those -- of We're of if vehicles. higher the those XX% of remainder We of are XX% on content at vehicles. high-voltage vehicles. And our is on those kind you about

these continue vehicles. our So come from about they sales -- of higher-end to And nicely. grow XX% that EV

this the It we EV. fact, quarter, we've nicely. grow In continues we last to biggest had very just quarter -- in had

healthy So, growth. at the top see end, we to continue

still quarter. of market, XXX-volt the in the growth this opportunity, In fact, the we vehicles. a X lower At end as see platform, -- we double-digit X positions slow, growth just won even the another may last but that platforms Mercedes

how Sanyu, into guidance as On one. last the during much the the that far just then as of that are the And incorporating third timing you contribution? gave you Sanyu's quarter, Great.

here Ademir want I on it.

few Yes, quarter. I guidance close kind months Sanyu would we revenue the gave slightly it within that the moderately slightly Sanyu no or in the get of think, we Michael, assume of moderately we next X.X X if to assumes weeks, can month actually

We coming from question Shlisky line the have from our Mike DA next of Davidson.

that's or wanted down I to COVID want start to to you quarter will. off I on asking due year-over-year hangover, -- know start if the Scientific. the I

kind I'm at you've every where point You've quarter. growth just almost negative organic we now, X positive about twice. some now kind business. had for start of seeing mean, to Is out? organic that it see that's growth been of point, lapped there flattens in years that I a when might curious

half up years. We that it decline surge down Yes. less. 'XX, then up most is from growth And we've the purchase last of down was mean pharmacies. I been the it's reduced that of lapped the in sales the -- last like business But COVID. from for or that XX% 'XX, was is think will X -- year year. that be in This XX% down it X%

are -- We new growth our in we're products. seeing seeing

XX%. We're of laboratories, a business year, are or of to universities, That about XX% gets patterns a talked life other normal science from products new that more kind we've segments. approaching -- into of than buying New return this last us little sales institutions. about in

here. we So growth from expect

add X about say Yes. I it's life, but usually to it don't X if Ademir, useful that. have, These -- that utilized can to for just years they And, usually I Mike, sold are to before are replaced. units call they're want

at some a that XXXX, be there next over in to of if sold that So point as go hope will to opportunity you cycle well. replacement couple units we we capture coming back years, those the in and

with in of it. -- I'd I the fire to only notice booked hydraulic guess, few I some Solutions. be a manufacturers I'd are there, there, there's I they those lot important they start the more curious, little this right and more point, than positive Yes. curious even guess, trying that's as as might a dealing and throughput in to of is of maximize folks one, turn turning to already their did going to be can then out And truck wanted them an maybe, just a the at orders through seeing to are I truck fire seem is know that Got bit piece they that are and be but now. handle real a talk a a when high-growth slide I'm you fire market. with you you curious, are kind Specialty put XXXX also truck, now. had because I improvements? two, of it's that -- market I now forward? for you

That's We the chain, now. application, the see there we the have put we're still of some fire current great It's working Yes, piece modest us. win supply as truck. it's observant -- if provide on to fire And small sales our there's in a work a for point. market, you growth very new truck that the we there application the business through described. that because opportunity Yes. to would a in in delays

shortage few sales the sales. there, broader vehicles. dump loosen chassis garbage a So to been that been of dump trailer maybe I truck, looks X, adds And up starting dampened orders to driver yesterday, the good and last growth. The the for or Hydraulics And is bigger orders that's have basic waste into leader for due chassis shortage. is in vehicles, truck, the it year business. dump really that in some like business dump have quarters, trailer, in translating talked And a these markets, January just with

half So a business. for we second stronger our Hydraulics see

first as the in you X-year goals. goals to chance if call not that I'm frame, is attainable time some because ask curious about wanted on years? 'XX 'XX? And time X we years, X were call Or -- a feel you've plan in these it might you more like your is and you be there's it reached just 'XX basic fiscal to your I you goals that X-year reiterated fiscal same are question. here, strictly very Great. could then of the do X And a a that a

Yes, a But it 'XX, debated we things, let's point. that's not to to could deliver let's 'XX. last plan. X- just actually whether earlier. We just as just said, say year We a that great by communicate X-year complicate

an this about answer year, think $X have Mike, growth billion. up $XXX X million or believe wherever that. another to more to get end The there. Chris we you If in fast we we'll There's to the years markets,

Our sales product are up. ramping new

and years get -- leases are is are Our new X.X% that. growth we at we're need product billion. sales markets better $X to All getting X we better attractive. The serve relatively that over to

if the sales So get with earlier. little from us little tailwind market, give we could you a success more there some new product and maybe a

top anything Obviously, comes that. right? target, we're organic doing an on that's of organically Mike, And, Yes.

question Sparenblek line the We next Blair. have from from Ross our William of coming

to Europe seems and what it to America, the Sticking that as next China North over look few in centric just market the mean, mix EVs, like China? given to relates to the I be mean, I pretty years, does

Yes.

are voltage our million X last geographically, described XX% were I which voltage. our in remainder those. more EVs XX% million the high sales concentrated vehicles, in vehicles, sales that's the America. higher how XX we're The earlier spread in in and the way in about So Europe. come North China XX% of year of from

we that in the And hundred pull couple low? help the a mix? very parse I out basis exactly? forward normal in helpful. then engraving quarter? still quarter maybe out there's of maybe what points. what seasonally Is there forward consolidation, any is footprint the outperformance to it is to of us Maybe second some taking moving mean, since expect maybe a of carry you just benefit third that should And operating Can margins. just That's leverage and

Ademir. it's Ross, Yes.

As we have before segment Engraving did site consolidations, play, just in performance, talked lot about quoted. you and we a our which put productivity including initiatives of

and to out is of in going reading that QX Some QX. start

we're that going will be So XX%. you quarters. is said achieve always that an to there We Engraving margin target over those in additional if will, the savings,

it us this does on know going based think forward. well, quarter-to-quarter that you we get level. us of But segment over basis, As lumpy XX% an kind annualized on volume Engraving very the margins start giving over will

will the softness bit some in a over enter we will margin just Engraving America. of the expect 'XX, seeing of So we stay North in be lower But XX%. we seasonality little and fiscal QX China are that as because

Yes.

read CapEx? just the one rate we million commitments. should Engineered of exit customer to the pretty it expecting by as quarter. it reduced more So nice tied We there. was then maybe And $XX here. and entered Electronics that And the anything now into roughly be about there to year a Is second

So this customer the [indiscernible]? right? being programs Just pushed being pushed the right? to is the to Are just

for watched profit. getting We're You've a us forecasting much sales at better while. and

on to ways have We go forecasting CapEx.

I'd So coming say with in said capital year the some update now, delay plants. and need between of into there's that our we what we the the the bit a difference of equipment

X implement pushes That the in in kind of year, -- some of -- Ademir? about that's lower are to -- businesses X some we've the end Those to adjust right. the headcount So that factors. projects markets. We right. last pushed the talked did the some manpower been to sales projects, we so to major reduces reduced to big

Yes, that's it.

Research. from have next We Prestopino the line question coming from Gary of our Barrington

of questions here. couple A

QX, some sales markets that or those seeing function what are Engraving to looking the you're you're market automotive in on lower of in the said are lower all, of sequentially? causing you move down sales what side, First actually a at

Yes.

time weeks China. slows of a for year. New So do in It's It's Chinese this Year very this effect. a sizable and couple happens every every profitable year. We down business

Okay.

So industry because China serving, in nothing in in of just you're the it's systemic to year? slowdown terms a some that's there particular of new

business and And project Right. quarter-to-quarter waves issues. this from are there there's timing this

America is as simply platform timing North well, So to releases. platforms be slower the from a going little -- of

into to new adjusted -- EBITDA to right? card, for thing you regard that in day, then does retirement QX this your And besides Will backing you're be Medicare with Okay. your charge getting know I that charge take calculation? going that charge back your

will. It

didn't this appropriate our as as adjustment. would part at thing. look We P&L, a adjusted. call feel be of Gary, be not timing it some will out we and it at will, that to point, an It was this

So will our line. expenses in right, our in be -- included corporate it

corporate expense. The

what Okay. are it? Sanyu as And you how paying it transaction? my Are then you balances? just paying just all a you're debt could for for debt and memory Is you your to refresh paying cash lowering or

we in it buy million sale and to we where just taking of are the from cash the on to Sanyu, terms all, give money that $XX to of balances. and Remember, Procon of remind we and share back Minntronix, will first our buy then additional existing you netted shareholders I buybacks. used Well, dividends

way was So that's would of the funded. -- that's the that's -- way it we kind

we're price as the of about good haven't really more -- close. indication exact we disclose We and still the information what that purchase are to everything you paying waiting transaction. But we for. else We'll close a gives

Mr. the David back There call are comments. now over no to final to time. closing further I'd Dunbar for questions like turn this at

for We you. to thank again, third our Standex. us Thank in support thank look reporting and want our call. for progress call. you at the forward again contributions. fiscal And enjoy I everybody and our your finally, of Board with speaking want employees, quarter the right. We All I Directors continued on for XXXX to to shareholders joining

concludes and day. you lines. ask thank for for your conference Thank you, participating today. gentlemen, We your sir. and disconnect a Have this call you please lovely that Ladies