What changed in this filing

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Item 1. Business

2021-08-13 compared with 2020-08-25 · 48 added, 66 removed, 145 unchanged (44% of the section changed)

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Currently our fiscal year end is June 30. 

For further clarity, our fiscal year 2020 includes the twelve-month period from July 1, 2019 to June 30, 2020.

We are a diversified industrial manufacturer with leading positions in a variety of products and services that are used in diverse commercial and industrial markets.

As of the end of the fiscal third quarter 2020, we had nine operating segments aggregated into five reportable segments. 

During the third quarter of 2020, we announced the divestiture of our Refrigerated Solutions Group (RSG) consistent with our strategy to focus our financial assets and managerial resources on our higher growth and operating margin businesses.

The divestiture of RSG was completed and consideration was exchanged in April of fiscal year 2020.

Subsequent to the disposition of the RSG, we reviewed the quantitative and qualitative characteristics of our remaining businesses, including the manner in which our chief operating decision maker makes decisions regarding these businesses, and determined that we have seven operating segments that aggregate to five reportable segments. 

Our new reportable segment structure is as follows:

Electronics operating segment

Engraving operating segment

Scientific operating segment

Engineering Technologies Group operating segment

Specialty Solutions –

an aggregation of our Federal, Procon, and Hydraulics operating segments. 

Our segments differentiate themselves by collaborating with our customers in order to develop and deliver custom solutions or engineered components that solve problems for our customers or otherwise meet their needs (a business model we refer to as “Customer Intimacy”).

Our long-term strategy is to enhance shareholder value by building larger, more profitable “Customer Intimacy”

focused industrial platforms through a value creation system that assists management in meeting specific corporate and business unit financial and strategic performance goals in order to create, improve, and enhance shareholder value.

For further clarity, our fiscal year 2021 includes the twelve-month period from July 1, 2020 to June 30, 2021.

We are a diversified industrial manufacturer with leading positions in a variety of products and services that are used in diverse commercial and industrial markets. We have seven operating segments aggregated into five reportable segments:

Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions.

Three operating segments are aggregated into Specialty Solutions. Our segments differentiate themselves by collaborating with our customers in order to develop and deliver custom solutions or engineered components that solve problems for our customers or otherwise meet their needs (a business model we refer to as “Customer Intimacy”). 

Our long-term strategy is to enhance shareholder value by building larger, more profitable focused industrial platforms through our Standex Value Creation System that assists management in meeting specific corporate and business unit financial and strategic performance goals in order to create, improve, and enhance shareholder value.

In so doing, we expect to focus our financial assets and managerial resources on our higher growth and operating margin businesses while considering divestiture of those businesses that we feel are not strategic or do not meet our growth and return expectations. 

The Standex Value Creation System is a methodology which provides standard work and consistent tools used throughout the Company in order to achieve our organization’s goals.

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Balanced Performance Plan, Growth Disciplines, Operational Excellence, and Talent Management.

The Balanced Performance Plan process aligns annual goals throughout the company and provides a standard reporting, management and review process.

It is focused on setting, tracking and reviewing annual and quarterly targets that support our short and long-term goals.

The Growth Disciplines use a standard work playbook of tools and processes including market maps, market tests, and growth laneways to identify, explore and execute on opportunities that expand the business organically and through acquisitions.

Operational Excellence also employs a standard work playbook of tool and processes, based on LEAN, to improve operating execution (effectiveness), eliminate waste (efficiency) and thereby improve profitability, cash flow and customer satisfaction.

Finally, Talent Management is an organizational development process that provides training, development, and succession planning for employees throughout our worldwide organization.

The Standex Value Creation System ties all of these disciplines together under a common umbrella by providing standard playbook of tools and processes to deliver our business objectives.

It is our objective to grow larger and more profitable business units through both organic (Growth Disciplines) and inorganic (acquisition) activities.

We seek to identify and implement organic growth initiatives such as new product and service development, new and current customer acquisition / expansion, geographic market enlargement, sales channel partner extension, and new business model investigation.

Also, we have a long-term objective to create sizable business platforms by adding strategically aligned acquisitions to strengthen the individual businesses, create both sales and cost synergies with our core business platforms, and accelerate their growth and margin improvement.

We also look to drive continuous improvement within our business platforms to enhance the execution of their current core business to accelerate growth and improve margins.

In these pursuits, we have a particular focus on identifying and investing in opportunities that complement our current products and services and will increase the global presence and capabilities of our businesses.

The Balanced Performance Plan process aligns annual goals throughout the Company and provides a standard reporting, management and review process. 

It is focused on setting, tracking and reviewing annual and quarterly targets that support our short and long-term goals. 

The Growth Disciplines use a standard playbook of tools and processes including market maps, market tests and growth laneways to identify, explore and execute on opportunities that expand the business organically and through acquisitions. 

Operational Excellence also employs a standard playbook of tools and processes, based on LEAN, to improve operating execution (effectiveness), eliminate waste (efficiency) and thereby improve profitability, cash flow and customer satisfaction. 

Finally, Talent Management is an organizational development process that provides recruitment, training, development, and succession planning for employees throughout our worldwide organization. 

Through the use of our Standex Value Creation System, we have developed a balanced approach to value creation. 

We intend to continue investing acquisition capital in high margin and growth businesses, and we will continue to support all of our businesses as they enhance value through deployment of the Standex Valuation Creation System.

It is our objective to grow larger and more profitable business units through both organic initiatives and acquisitions. 

We seek to identify and implement organic growth initiatives such as new product development, geographic expansion, and the introduction of products and technologies into new markets, key accounts and strategic sales channel partners. 

Also, we have a long-term objective to create sizable business platforms by adding strategically aligned or “bolt on”

acquisitions to strengthen the individual businesses, create both sales and cost synergies with our core business platforms, and accelerate their growth and margin improvement.

We have a particular focus on identifying and investing in opportunities that complement our products and will increase the global presence and capabilities of our businesses. 

From time to time, we have divested, and likely will continue to divest, businesses that we feel are not strategic or do not meet our growth and return expectations.

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We recognize that our businesses are competing in a global economy that requires us to improve our competitive position, and we continue to deploy these capabilities to drive improvements in the cost structure of our businesses.

These efforts include but are not limited to the application of LEAN, the use of low cost manufacturing facilities in countries such as Mexico and India, the consolidation of manufacturing facilities to achieve economies of scale and leveraging of fixed infrastructure costs, the use of alternate sourcing to achieve procurement cost reductions, and the investment of capital to increase productivity in both the shop floor and back-office.

The Company’s strong historical cash flow has been a cornerstone for funding our capital allocation strategy.

Our priority for the use of capital is to use cash flow generated from operations for maintenance and safety capital assets;

investment in capital assets to fund the strategic growth programs described above, including acquisitions, if our return and investment criteria are met;

repayment of outstanding debt if our liquidity levels meet our criteria;

and to return cash to our shareholders through the payment of dividends and stock buybacks.

These efforts include but are not limited to the application of LEAN, the use of low cost manufacturing facilities in countries such as Mexico, China, and India, the consolidation of manufacturing facilities to achieve economies of scale and leveraging of fixed infrastructure costs, the use of alternate sourcing to achieve procurement cost reductions, and the investment of capital to increase productivity in both the shop floor and back-office.

The Company’s strong historical cash flow has been a cornerstone for funding our capital allocation strategy. 

We use cash flow generated from operations to fund investments in capital assets to upgrade our facilities, improve productivity and lower costs, invest in the strategic growth programs described above, including organic growth and acquisitions, and to return cash to our shareholders through payment of dividends and stock buybacks. 

Please visit our website at www.standex.com to learn more about us or to review our most recent SEC filings.

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Markets and Applications

Our diverse and highly engineered products and solutions and vertically integrated manufacturing capabilities are vital to an array of markets and provide safe and efficient power transformation, current monitoring, isolation, as well as sensors and relays to monitor systems for function and safety.

The end-user of our engineered solution is typically an Original Equipment Manufacturer (“OEM”) industrial equipment manufacturer.

Our diverse and highly engineered products and solutions and vertically integrated manufacturing capabilities are vital to an array of markets and provide safe and efficient power transformation, current monitoring, and isolation, as well as sensors and relays to monitor systems for function and safety.

The end-user of our engineered solution is typically an original equipment manufacturer (“OEM”) or industrial equipment manufacturer.

End-user markets include, but are not limited to, smart-grid, alternative energy, appliances, HVAC, security, military, medical, aerospace, test and measurement, power distribution, transportation and general industrial applications.

Business unit names are Standex Electronics, Standex-Meder Electronics, Northlake Engineering, Agile Magnetics, Standex Electronics Japan, and the MEDER, KENT, and KOFU reed switch brands.

Business unit names are Standex Electronics, Standex-Meder Electronics, Renco Electronics, Northlake Engineering, Agile Magnetics, Standex Electronics Japan, and the MEDER, KENT, and KOFU reed switch brands.

Our sensing products employ technologies such as reed switch, Hall effect, inductive, conductive and other technologies.

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In addition to these services, we also produce soft trim tooling such as in mold graining (IMG) and nickel shells.

Engraving companies and brands also include:

In addition to the Mold Tech brand, Engraving companies and brands also include:

Piazza Rosa and World Client Services which both offer laser engraving and tool finishing in Europe and Mexico.

Tenibac-Graphion provides additional texturizing and protyping capabilities in North America and China.

GS Engineering employs advanced processes and technology to rapidly produce molds for the creation of soft-touch surfaces.

Innovent, located in North America and Europe, is a specialized supplier of tools and machines used to produce diapers and products that contain absorbent materials between layers of non-woven fabric.

Tenibac-Graphion which provides additional texturizing and prototyping capabilities in North America and China.

GS Engineering which employs advanced processes and technology to rapidly produce molds for the creation of soft-touch surfaces.

Innovent, located in North America and Europe, which is a specialized supplier of tools and machines used to produce diapers and products that contain absorbent materials between layers of non-woven fabric.

Products and Services

Texturing is achieved with either a laser or a chemical etching technique.

Laser Engraving offers superior features previously unavailable on products, such as multiple gloss levels, the elimination of paint and optimized scratch performance, and sharp definition for precise geometric patterns.

Laser Engraving offers superior features, such as multiple gloss levels, the elimination of paint and optimized scratch performance, and sharp definition for precise geometric patterns.

Chemical Engraving produces carefully designed textures and finishes without seams or distortion.

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Soft Trim Tooling and nickel shell molds are used to produce soft surfaces that emulate the feel of natural materials. 

This business has become the global leader providing these products and services by offering a full range of services to OEM’s, product designers, Tier 1 suppliers and toolmakers all around the world.

The Engraving business has become the global leader providing these products and services by offering a full range of services to automotive OEM’s, product designers, Tier 1 suppliers and toolmakers all around the world.

The Scientific business is a provider of specialty temperature-controlled equipment for the medical, scientific, pharmaceutical, biotech and industrial markets.

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Engineering Technologies

The Engineering Technologies Group is a provider of innovative, turnkey metal-formed solutions for OEM and Tier 1 manufacturers for their advanced engineering designs.

The Engineering Technologies Group is a provider of innovative, metal-formed solutions for OEM and Tier 1 manufacturers for their advanced engineering designs.

Our solutions seek to reduce input weight, material cost, part count, and complexity for unique customer design challenges involving all formable materials with particular focus on large dimensions, large thickness or thin-wall construction, complex shapes and contours, and/or single-piece construction requirements.

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We intend to grow sales and product offerings by investing in advancements in our current and new technologies and identifying new cutting-edge solutions for these capabilities in existing and adjacent markets via customer and research collaboration. 

Our segment is comprised of two businesses, Spincraft, with locations in Billerica, MA, New Berlin, WI, and Newcastle upon Tyne in the U.K, and Enginetics, located in Huber Heights, OH.

This business unit’s brand names are Spincraft and Enginetics.

Our segment is comprised of our Spincraft businesses with locations in Billerica, MA, New Berlin, WI, and Newcastle upon Tyne in the U.K.

This business unit’s brand name is Spincraft.

Markets and Applications

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Applications within the energy market include components and assemblies for new and MRO gas turbines, as well as solutions for oil & gas exploration operations

Enginetics aviation market offerings include a large portfolio of components within engines such as seals, heat shield, and combustor elements, as well as components of aero structures.

Engineering Technologies components are sold directly to large space, aviation, defense, energy and medical companies, or suppliers to those companies.

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Federal custom designs and manufactures refrigerated, heated and dry merchandising display cases for bakery, deli, confectionary and packaged food products utilized in restaurants, convenience stores, quick-service restaurants, supermarkets, drug stores and institutions such as hotels, hospitals, and school cafeterias.

Procon custom fluid pump solutions are sold into the global carbonation, coffee, and beer chilling beverage markets as well as reverse osmosis water treatment, medical, welding, and commercial ink markets.

Industries that utilize Custom Hoist’s single and double acting telescopic and piston rod hydraulic cylinders include construction equipment, refuse, airline support, mining, oil and gas, and other material handling applications. 

Industries that utilize Custom Hoists' single and double acting telescopic and piston rod hydraulic cylinders include construction equipment, refuse, airline support, mining, oil and gas, and other material handling applications. 

We also sell specialty pneumatic cylinders and promote complete wet line kits, which are complete hydraulic systems that include a pump, valves, hoses and fittings. 

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International Operations

We have international operations in all of our business segments.

International operations are conducted at 66 locations, in Europe, Canada, China, Japan, India, Southeast Asia, Korea, Mexico, Brazil, and South Africa.

International operations are conducted at 41 locations, in Europe, Canada, China, Japan, India, Southeast Asia, Korea, Mexico, Brazil, and South Africa.

See the Notes to Consolidated Financial Statements for international operations financial data.

Our net sales from continuing international operations decreased from 42% in 2019 to 40% in 2020.

Our net sales from continuing international operations increased from 40% in 2020 to 41% in 2021.

International operations are subject to certain inherent risks in connection with the conduct of business in foreign countries including, exchange controls, price controls, limitations on participation in local enterprises, nationalizations, expropriation and other governmental action, restrictions of repatriation of earnings, and changes in currency exchange rates.

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Financial Information about Geographic Areas

Information regarding revenues from external customers attributed to the United States, all foreign countries and any individual foreign country, if material, is contained in the Notes to Consolidated Financial Statements,“Industry Segment Information.”

Number of Employees

As of June 30, 2020, we employed approximately 3,800 employees of which approximately 1,100 were in the United States.

About 250 of our U.S.

employees were represented by unions.

Approximately 44% of our production workforce is situated in low-cost manufacturing regions such as Mexico and Asia.

As of June 30, 2021, we employ approximately 3,900 employees of which approximately 1,200 are in the United States.

About 200 of our U.S.

employees are represented by unions.

Approximately 43% of our production workforce is situated in low-cost manufacturing regions such as Mexico and portions of Asia.

Executive Officers of Standex

The executive officers of the Company as of June 30, 

2020 were a s follows:

2021 are a s follows:

Principal Occupation During the Past Five Years

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Various positions over the years at Pentair plc from 2012 to September 2019 with increasing responsibility ending as Senior Vice President and Chief Accounting Officer.

Vice President, Chief Legal Officer and Secretary of the Company since April 2016.

Vice President, General Counsel and Secretary of CIRCOR International, Inc.

from 2000 through 2016.

Vice President, Chief Legal Officer and Secretary of the Company since April 2016. 

Sean Valashinas

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Annemarie Bell

Vice President of Human Resources since June 2019, Interim Vice President of Human Resources from October 2018 through June 2019;

Vice President of Human Resources for four of Standex business units from October 2015 through October 2018, Director of Human Resources and Human Resources Business Partner at PerkinElmer from 2007 through 2015.

Vice President of Operations and Supply Chain since February 2020, Senior Vice President for Hillenbrand Inc.

Vice President, Chief Human Resources Officer since July 2021, Vice President of Human Resources since June 2019, Interim Vice President of Human Resources from October 2018 through June 2019;

Vice President of Human Resources for four of Standex business units from October 2015 through October 2018

Vice President of Operations and Supply Chain since February 2020, Integration Leader and Senior Vice President of Operations for Hillenbrand Inc.

from June 2017 to February 2020, several management roles with Steel Partners Holdings from September 2011 to June 2017 including GM Industrial/Commercial Products from July 2015 to June 2017. 

The executive officers are elected each year at the first meeting of the Board of Directors subsequent to the annual meeting of stockholders, to serve for one-year terms of office.

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Securities and Exchange Commission (the “SEC”) maintains an internet website at www.sec.gov that contains our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, and all amendments thereto.

All reports that we file with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549.

Information about the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

Standex’s internet website address is www.standex.com.

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In addition, our code of business conduct, our code of ethics for senior financial management, our corporate governance guidelines, and the charters of each of the committees of our Board of Directors (which are not deemed filed by this reference), are available on our website and are available in print to any Standex shareholder, without charge, upon request in writing to “Chief Legal Officer, Standex International Corporation, 23 Keewaydin Drive, Salem, New Hampshire, 03079.”

The certifications of Standex’s Chief Executive Officer and Chief Financial Officer, as required by the rules adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, are filed as exhibits to this Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business