What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-08-04 compared with 2022-08-05 · 449 added, 305 removed, 1462 unchanged (34% of the section changed)

16 unchanged sentences

Income taxes receivable

12,750  

Total current assets

10 unchanged sentences

Deferred tax asset

14,602  

Operating lease right-of-use asset

18 unchanged sentences

Income taxes payable

10,335  

Total current liabilities

39 unchanged sentences

(in thousands, except per share data)

$ 735,339  

$ 656,232  

$ 604,535  

Cost of sales

( 465,393 )  

( 414,971 )  

269,946  

241,261  

215,455  

Selling, general and administrative expenses

169,890  

163,063  

148,499  

Restructuring costs

Loss on sale of business

14,624  

Acquisition related expenses

Other operating expense

(Gain) loss on sale of business

Acquisition related costs

Other operating (income) expense, net

Income from operations

88,294  

59,165  

60,528  

Interest expense

1 unchanged sentence

Income from continuing operations before income taxes

81,289  

52,700  

54,074  

Provision for income taxes

( 19,807 )  

( 14,157 )  

Income from continuing operations

61,482  

38,543  

41,014  

Income (loss) from discontinued operations, net of tax

( 89 )  

( 2,070 )  

$ 61,393  

$ 36,473  

$ 20,188  

Basic earnings per share:

Income (loss) from continuing operations

$ 5.13  

$ 3.17  

$ 3.33  

Income (loss) from discontinued operations

( 0.17 )  

$ 5.13  

$ 3.00  

$ 1.64  

Diluted earnings per share:

Income (loss) from continuing operations

$ 5.07  

$ 3.14  

$ 3.31  

Income (loss) from discontinued operations

( 0.01 )  

( 0.17 )  

$ 5.06  

$ 2.97  

$ 1.63  

See notes to consolidated financial statements.

7 unchanged sentences

Derivative instruments:

Change in unrealized gains and (losses), net of tax

Change in unrealized gains, net of tax

Amortization of unrealized gains and (losses) into interest expense, net of tax

21 unchanged sentences

( 332 )  

( 76 )  

Stock-based compensation

1 unchanged sentence

( 21,200 )  

Adoption of ASC 606

( 55 )  

Comprehensive income:

2 unchanged sentences

Foreign currency translation adjustment

( 3,388 )  

Pension, net of tax of $ 5.6 million

17,508  

Change in fair value of derivatives, net of tax of $1.6 million

17,508  

Change in fair value of derivatives, net of tax of $ 0.9 million

Dividends declared ($ 0.94 per share)

12 unchanged sentences

Stock-based compensation

11,168  

Treasury stock acquired

4 unchanged sentences

Foreign currency translation adjustment

Pension, net of tax of $5.6 million

( 46,435 )  

Pension, net of tax of $ 1.6 million

( 269 )  

41 unchanged sentences

Cash Flows from Operating Activities

$ 61,393  

$ 36,473  

$ 20,188  

Income (loss) from discontinued operations

( 89 )  

( 2,070 )  

Income from continuing operations

61,482  

38,543  

41,014  

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

29,697  

33,241  

32,294  

Stock-based compensation

11,168  

Gain on sale of real estate and equipment

( 456 )  

Non-cash portion of restructuring charge

( 489 )  

Loss on sale of business

14,624  

(Gain) loss on sale of business

Gain from extinguishment of debt - PPP loan

( 713 )  

Deferred income taxes

( 1,967 )  

Life insurance benefit

( 193 )  

Contributions to defined benefit plans

( 535 )  

( 8,120 )  

Increase/(decrease) in cash from changes in assets and liabilities, net of effects from discontinued operations and business acquisitions:

Accounts receivables, net

( 11,571 )  

( 5,542 )  

( 18,183 )  

( 7,717 )  

Prepaid expenses and other assets

( 9,072 )  

( 8,000 )  

Accounts payable

17,612  

Accrued liabilities, pension and other liabilities

Income taxes payable

( 5,697 )  

Net cash provided by operating activities from continuing operations

78,137  

81,866  

54,677  

Net cash provided by (used for) operating activities from discontinued operations

( 421 )  

Net cash provided by operating activities

77,716  

83,582  

47,242  

Cash Flows from Investing Activities

Expenditures for property, plant and equipment

( 23,891 )  

( 21,752 )  

Expenditures for acquisitions, net of cash acquired

( 12,978 )  

( 27,406 )  

Expenditures for executive life insurance policies

( 248 )  

( 243 )  

Proceeds from sale of business

11,678  

Proceeds from sale of real estate and equipment

1 unchanged sentence

Other investing activity

( 721 )  

( 1,485 )  

Net cash (used for) investing activities from continuing operations

( 31,044 )  

( 39,091 )  

Net cash provided by (used for) investing activities from continuing operations

Net cash provided by investing activities from discontinued operations

20,003  

Net cash (used for) investing activities

( 31,044 )  

( 39,091 )  

Cash Flows from Financing Activities

Proceeds from borrowings

17,000  

106,500  

Payments of debt

( 25,000 )  

( 17,000 )  

Contingent consideration payment

( 2,167 )  

( 356 )  

Activity under share-based payment plans

Purchase of treasury stock

( 31,425 )  

( 21,200 )  

Cash dividends paid

( 12,249 )  

( 11,449 )  

Net cash (used for) financing activities

( 69,426 )  

( 31,732 )  

Effect of exchange rate changes on cash

( 8,769 )  

Net change in cash and cash equivalents

( 31,523 )  

17,558  

25,664  

Cash and cash equivalents at beginning of year

136,367  

118,809  

93,145  

Cash and cash equivalents at end of year

$ 104,844  

$ 136,367  

$ 118,809  

Supplemental Disclosure of Cash Flow Information:

Cash paid during the year for:

$ 4,745  

$ 4,904  

$ 6,324  

Income taxes, net of refunds

$ 17,987  

$ 17,185  

$ 18,737  

See notes to consolidated financial statements.

5 unchanged sentences

or the “Company”) is a diversified industrial manufacturer in five broad business segments:

Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Brazil, Turkey, South Africa, India, and China.

Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Turkey, South Africa, India, and China.

The accompanying consolidated financial statements include the accounts of Standex International Corporation and its subsidiaries and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

131 unchanged sentences

Interest rate swaps

10,235  

Debt securities

Equity securities

Financial Liabilities

Foreign exchange contracts

$ 1,722  

Interest rate swaps

Contingent consideration (a)

Financial Assets

2 unchanged sentences

$ 3,033  

Foreign exchange contracts

Interest rate swaps

1 unchanged sentence

Foreign exchange contracts

$ 1,222  

Interest rate swaps

4 unchanged sentences

The Company is obligated to pay contingent consideration to the sellers of GS Engineering in the event that certain revenue and gross margin targets are achieved during the five years following acquisition.

The targets set in the GS stock purchase agreement were not met for the first, second or third year, which concluded in the fourth quarter of fiscal years 2020, 2021, and 2022  respectively. 

As of June 30, 2022 , the Company could be required to pay up to $ 12.8 million for contingent consideration arrangements if the revenue and gross margin targets are met in fiscal years 2023  through 2024.

The targets set in the GS stock purchase agreement were not met for the first, second, third or fourth  year, which concluded in the fourth quarter of fiscal years 2020, 2021, 2022 and 2023  respectively. 

As of June 30, 2023 , the Company could be required to pay up to $ 12.8 million for contingent consideration arrangements if the revenue and gross margin targets are met in fiscal year 

The Company is also obligated to pay contingent consideration to the sellers of Renco Electronics in the event that certain earnings targets are achieved during the three years following acquisition.

3 unchanged sentences

During the fourth quarter of fiscal year 2022, the Company paid $ 1.0 million to the sellers of Renco.

The remaining unpaid amount of $ 1.2 million is payable in August 2022.

The remaining $ 1.2 million was paid in the first quarter of fiscal year 

The Company has determined the fair value of the liabilities for the contingent consideration based on a probability-weighted discounted cash flow analysis.

1 unchanged sentence

The fair value of the contingent consideration liability associated with future payments was based on several factors, the most significant of which are the financial performance of the acquired businesses and the risk-adjusted discount rate for the fair value measurement.

Additionally, the Company has financial assets based upon Level 3 inputs, which represent investments in a privately held company.

The Company invested $ 2.0 million for equity securities of a company whose securities are not publicly traded and where fair value is not readily available.

This was recorded as an investment within Other non-current assets in the consolidated balance sheets to reflect the initial fair value of the stock acquired.

These investments are recorded using either the equity method of accounting or the cost minus impairment adjusted for observable price changes, depending on ownership percentage and other factors that suggest significant influence.

The Company concluded it does not have a significant ownership percentage or influence.

The Company monitors this investment to evaluate whether any increase or decline in the value has occurred, based on the implied value of recent company financings, public market prices of comparable companies and general market conditions.

In the third quarter of fiscal year 2023, the Company purchased $ 2.7  million of debt securities from the same privately held company.

The available for sale asset was recorded in current asset in the Prepaid expenses and other current assets line of the consolidated balance sheet to reflect the initial fair value of the instrument acquired.

This asset will mature one year from the date of issuance.

Available-for-sale debt securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income (loss) in equity, net of related tax effects, unless the security has experienced a credit loss, we have determined that we have the intent to sell the security or we have determined that it is more likely than not that we will have to sell the security before its expected recovery.

Realized gains and losses are reported in other (income) expense, net.

There have been no changes in the fair value of the estimates for the Level 3 assets in fiscal year 2023 other than the impact of foreign exchange, which increased the fair value of the equity securities by less than $ 0.1 million from the prior year. 

The Company will update its assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the agreements expire. 

20 unchanged sentences

Research and development expenditures are expensed as incurred.

Total research and development costs, which are classified under selling, general, and administrative expenses, were $ 12.2 million, $ 9.6 million, and $ 6.9  million for the years ended June 

Total research and development costs, which are classified under selling, general, and administrative expenses, were $ 17.2 million, $ 12.2  million, and $ 9.6 million for the years ended June 

30, 2023 , 2022 , and 2021 , respectively.

19 unchanged sentences

$ 2,086  

The decrease in warranty expense during 

2022 compared to 2021 is primarily due to decreased warranty claims in Scientific driven by declines in sales covered by warranty during the most recent fiscal year.

The increase in warranty expense during 

2023 compared to 2022 is primarily due to increased warranty claims in Specialty Solutions driven by increases in sales covered by warranty during the most recent fiscal year.

Stock-Based Compensation Plans

24 unchanged sentences

The Company does not hold or issue derivative instruments for trading purposes.

The Company's income tax provision from continuing operations for the fiscal years ended June 30, 2022 , 2021 , and 

2020 was $ 19.8  million, $ 14.2  million, and $ 13.1  million, respectively, or an effective rate of 24.4 %, 

26.9 %, and 24.3 %, respectively. Changes in the effective tax rates from period to period may be significant as they depend on many factors including, but not limited to, the amount of the Company's income or loss, the mix of income earned in the US versus outside the US, the effective tax rate in each of the countries in which we earn income, and any one -time tax issues which occur during the period.

The Company's income tax provision from continuing operations for the fiscal year ended June 30, 2022 was impacted by the following items: (i) a tax provision of $ 4.3 million due to the mix of income in various jurisdictions, (ii) a tax benefit of $ 2.2 million related to Federal R&D credit and Foreign Tax Credit, (iii) a tax benefit of $ 1.3 million related to return-to-accrual adjustments to true-up up prior-period provision amounts, and (iv) a tax expense of $ 1.0 million 

The income tax provision from continuing operations for the fiscal year ended June 30, 2023 was $ 24.8 million, or an effective rate of 15.1 %, compared to $ 19.8 million, or an effective rate of 24.4 %, for the year ended June 30, 2022, and $ 14.2 million, or an effective rate of 26.9 %, for the year ended June 30, 2021.

Changes in the effective tax rates from period to period may be significant as they depend on many factors including, but not limited to, the amount of our income or loss, the mix of income earned in the U.S. versus outside the U.S., the effective tax rate in each of the countries in which we earn income, and any one -time tax issues which occur during the period.

The income tax provision from continuing operations for the fiscal year ended June 30, 2023 was impacted by the following items:

(i) a tax benefit of $ 4.3 million due to the mix of income in various jurisdictions, (ii) tax benefits of $ 14.3 million primarily related to foreign tax credits of $ 11.6 million, as well as Federal R&D tax credits of $ 2.7 million, (iii) a tax provision of $ 11.3 million related to the U.S.

tax effects of international operations, and (iv) a tax benefit of $ 5.0  million relating to the partial release of the valuation allowance on capital loss carryforwards, which were utilized against the capital gain recognized on the divestiture of the Procon business.

The income tax provision from continuing operations for the fiscal year ended June 30, 2022 was impacted by the following items: (i) a tax provision of $ 4.3 million due to the mix of income in various jurisdictions, (ii) a tax benefit of $ 2.2 million related to Federal R&D credit and Foreign Tax Credit, (iii) a tax benefit of $ 1.3 million related to return-to-accrual adjustments to true-up up prior-period provision amounts, and (iv) a tax expense of $ 1.0 million 

related to uncertain tax position.

The Company's income tax provision from continuing operations for the fiscal year ended June 30, 2021 was impacted by the following items:

The income tax provision from continuing operations for the fiscal year ended June 30, 2021 was impacted by the following items:

(i) a tax provision of $ 5.1 million due to the mix of income in various jurisdictions, (ii) a tax benefit of $ 1.0 million from our 2019 and 2020 tax losses that the CARES Act allows to be carried back to 2014 and 2015, when the U.S.

federal income tax rate was 35%, (iii) a tax benefit of $ 0.8 million related to Federal R&D credit and Foreign Tax Credit, (iv) a tax benefit of $ 1.7 million related to return to provision adjustments, and (v) the tax expense of $ 1.2 million attributable to the divestiture of the Enginetics Corporation during the year.

The Company's income tax provision from continuing operations for the fiscal year ended June 30, 2020 was impacted by the following items:

(i) a tax benefit of $ 1.2 million related to the Federal R&D credit, (ii) a tax provision of $ 1.4 million due to the mix of income in various jurisdictions, (iii) a tax benefit of $ 0.7 million related to the release of uncertain tax provision reserves, and (iv) a tax provision of $ 0.8 million related to GILTI.

Earnings Per Share

14 unchanged sentences

There were no outstanding instruments that had an anti-dilutive effect at June 30, 2023, 2022 or 2021.

There were 

32,000  outstanding instruments that had an anti-dilutive effect at June 30, 2020 .

Recently Issued Accounting Pronouncements

November 2021, 

the FASB issued ASU 

2021 - 10,  Government Assistance (Topic 

Disclosures by Business Entities about Government Assistance, which requires business entities to provide certain disclosures when they ( 1 ) have received government assistance and ( 2 ) use a grant or contribution accounting model by analogy to other accounting guidance.

The guidance in ASU 

2021 - 10  is effective for all entities for fiscal years beginning after 

December 15, 2021 

with early adoption permitted.

The Company does 

not  expect the adoption of this ASU to have a significant impact on its Consolidated Financial Statements.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date.

Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards had or may have a material impact on its condensed consolidated financial statements or disclosures.

The Company’s recent acquisitions are strategically significant to the future growth prospects of the Company. 

At the time of the acquisition and June 30, 2023 , the Company evaluated the significance of each acquisition on a standalone basis and in aggregate, considering both qualitative and quantitative factors.

Subsequent to the end of the fiscal year 2023, o n July 31, 2023, the Company paid approximately $30.0 million in cash for the purchase of all the issued and outstanding equity interests of Minntronix, a privately held company.

Minntronix designs and manufactures customized as well as standard magnetics components and products including transformers, inductors, current sensors, coils, chokes, and filters.

The products are used in applications across cable fiber, smart meters, industrial control and lighting, electric vehicles, and home security markets. 

During the fourth quarter of fiscal year 2022, the Company paid $ 3.1 million in cash for acquired assets and liabilities of a manufacturer of magnetic components.

16 unchanged sentences

The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management's best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. 

The components of the fair value of the Sensor Solutions acquisition, including the preliminary allocation of the purchase price are as follows (in thousands): 

Preliminary Allocation  

March 31, 2022

June 30, 2022

The components of the fair value of the Sensor Solutions acquisition, including the final allocation of the purchase price are as follows (in thousands): 

Final Allocation

Fair value of business combination:

1 unchanged sentence

$ 10,016  

Less, cash acquired

$ 9,902  

Identifiable assets acquired and liabilities assumed:

Other acquired assets

$ ( 2 )  

Property, plant, and equipment

Identifiable intangible assets

( 20 )  

( 161 )  

Liabilities assumed

$ 9,902  

Renco Electronics

31 unchanged sentences

These costs do not include purchase accounting expenses, which the Company defines as acquired backlog and the step-up of inventory to fair value, or the amortization of the acquired intangible assets.

For the fiscal year ended June 30, 2020, the Company recorded deferred compensation costs of $ 1.2 million related to estimated deferred compensation earned by the Horizon Scientific seller to date. 

The payments were contingent on the seller remaining an employee of the Company, with limited exceptions, at each anniversary date.

The final payment due to the seller was made during the second quarter of fiscal year 2020, and the liability was considered settled. 

The components of acquisition related expenses are as follows (in thousands):

Deferred compensation arrangements

$ 1,170  

Acquisition related expenses

$ 1,618  

$ 1,759  

Acquisition related expenses were $ 0.6 million, $ 1.6 million and $ 0.9 million for fiscal years 2023, 2022 and 2021, respectively. 

REVENUE FROM CONTRACTS WITH CUSTOMERS

14 unchanged sentences

June 30, 2021

305,872  

304,290  

253,369  

Engraving Services

145,616  

136,779  

137,159  

Engraving Products

Total Engraving

152,067  

146,255  

147,016  

74,924  

83,850  

79,421  

Engineering Technologies

81,079  

78,117  

75,562  

Hydraulics Cylinders and System

61,010  

54,864  

48,776  

Merchandising & Display

44,836  

34,305  

26,049  

21,260  

33,658  

26,039  

Total Specialty Solutions

127,106  

122,827  

100,864  

Total revenue by product line

$ 741,048  

$ 735,339  

$ 656,232  

The following table presents revenue from continuing operations disaggregated by geography based on company’s locations (in thousands):

3 unchanged sentences

United States

$ 449,820  

$ 429,368  

$ 386,829  

130,130  

148,028  

125,516  

144,672  

143,967  

129,908  

Other Americas

16,426  

13,976  

13,979  

$ 741,048  

$ 735,339  

$ 656,232  

EMEA consists primarily of Europe, Middle East and S.

5 unchanged sentences

Products and services transferred at a point in time

$ 668,633  

$ 675,461  

$ 619,029  

Products transferred over time

72,415  

59,878  

37,203  

$ 741,048  

$ 735,339  

$ 656,232  

Contract Balances

8 unchanged sentences

Year ended June 30, 2023

Balance at Beginning of Period

Balance at End of Period

Balance at Beginning of Period  

Additions  

Deductions  

Balance at End of Period  

Contract assets:

Prepaid expenses and other current assets

$ 24,679  

69,402  

62,943  

$ 31,138  

Contract liabilities:

Customer deposits

15,505  

15,546  

Year ended June 30, 2022

Balance at Beginning of Period

Balance at End of Period

Balance at Beginning of Period  

Additions  

Deductions  

Balance at End of Period  

Contract assets:

Prepaid expenses and other current assets

$ 15,013  

44,168  

34,502  

$ 24,679  

Contract liabilities:

Customer deposits

12,972  

13,402  

We recognized the following revenue which was included in the contract liability beginning balances (in thousands):

11 unchanged sentences

Raw materials

$ 45,268  

$ 56,321  

Work in process

20,389  

20,592  

Finished goods

Distribution costs associated with the sale of inventory are recorded as a component of selling, general and administrative expenses and were $ 14.0 million, $ 11.0  million, and $ 9.0 million in 2022 , 2021  and 

32,880  

28,426  

$ 98,537  

$ 105,339  

Distribution costs associated with the sale of inventory are recorded as a component of selling, general and administrative expenses and were $ 12.2 million, $ 14.0 million, and $ 11.0 million in 2023 , 2022  and 

2021  respectively.

2 unchanged sentences

Land, buildings and leasehold improvements

$ 79,335  

$ 74,834  

Machinery, equipment and other

217,497  

208,878  

296,832  

283,712  

Less accumulated depreciation

( 165,895 )  

Property, plant and equipment, net

$ 130,937  

$ 128,584  

Depreciation expense totaled $ 18.2 million, $ 18.0 million, and $ 19.2 million, respectively for the years ended June 30, 2023 , 2022  and 

1 unchanged sentence

The Company’s annual test for impairment is performed using a May 31st measurement date.

The Company has identified seven reporting units for impairment testing:

Electronics, Engraving, Scientific, Engineering Technologies, Procon, Federal, and Hydraulics.

The Specialty Solutions segment includes Procon, Federal and Hydraulics.

The Company has identified six reporting units for impairment testing:

Electronics, Engraving, Scientific, Engineering Technologies, Federal, and Hydraulics.

The Specialty Solutions segment includes Federal and Hydraulics.

As quoted market prices are not available for the Company’s reporting units, the fair value of the reporting units is determined using a discounted cash flow model (income approach). 

9 unchanged sentences

no additional impairment charges were recorded.

In connection with the divestiture of the Refrigerated Solutions Group, the Company compared the fair value of each reporting unit, Master-Bilt and NorLake, to its carrying value as of March 31, 2020. 

This resulted in an asset impairment charge in the third quarter of fiscal year 2020 of $ 7.7  million in discontinued operations, which represented the full amount of goodwill associated with both reporting units.

In addition, due to the impact that the COVID- 19 pandemic had on projected operating results, cash flow, and market capitalization, the Company completed an interim goodwill impairment assessment for its remaining reporting units in the third quarter of fiscal year 2020.

As a result of the assessment in the third quarter, the Company determined that the fair value of its reporting units, with the exception of RSG, substantially exceeded their respective carrying values. 

Therefore, no additional impairment charges were recorded in connection with the third quarter 2020 assessment. 

The Company completed its annual impairment testing as of May 31, in each of the last two fiscal years and determined that the fair value of each of its reporting units substantially exceeded each unit’s respective carrying value, therefore, no impairment charges were recorded in connection with the testing and assessment. 

The Procon operating unit's goodwill balance of $ 0.2  million was written off as a part of the divestiture of the business in the third quarter of fiscal year 2023.

The Company completed its annual impairment testing as of May 31, in each of the last three fiscal years and determined that the fair value of each of its reporting units substantially exceeded each unit’s respective carrying value, therefore, no impairment charges were recorded in connection with the testing and assessment. 

Changes to goodwill by segment associated with continuing operations during the fiscal year is as follows (in thousands):

2 unchanged sentences

June 30, 2023

$ 136,969  

$ ( 3,537 )  

$ 133,432  

76,250  

76,583  

15,454  

Engineering Technologies

35,928  

36,293  

Specialty Solutions

( 246 )  

$ 267,906  

$ ( 246 )  

$ ( 2,839 )  

$ 264,821  

Intangible Assets

2 unchanged sentences

June 30, 2023

$ 58,844  

$ 22,328  

$ 42,819  

$ 3,072  

$ 127,063  

Accumulated amortization

( 28,667 )  

( 19,782 )  

( 2,963 )  

Balance, June 30, 2023

$ 30,177  

$ 22,328  

$ 23,037  

$ 75,651  

June 30, 2022

$ 58,948  

$ 22,483  

$ 45,006  

$ 3,933  

$ 130,370  

Accumulated amortization

( 23,847 )  

( 17,326 )  

( 3,427 )  

Balance, June 30, 2022

Amortization expense from continuing operations totaled $ 9.5 million, $ 11.8 million, and $ 11.6  million, respectively for the years ended June 30, 2022 , 2021 , and 

$ 35,101  

$ 22,483  

$ 27,680  

$ 85,770  

Amortization expense from continuing operations totaled $ 8.6 million, $ 9.5  million, and $ 11.8 million, respectively for the years ended June 30, 2023 , 2022 , and 

At June 30, 2023 , aggregate amortization expense is estimated to be (in thousands):

20,210  

$ 53,323  

Long-term debt is comprised of the following at June 30 ( in thousands):

Bank credit agreements

$ 175,000  

Total funded debt

175,000  

Issuance cost

( 1,559 )  

Total long-term debt

The Company's long-term debt matures in December 2023. 

$ 173,441  

$ 174,830  

The Company's long-term debt matures in February 

Bank Credit Agreements

During the second quarter of fiscal year 2019, the Company entered into an Amended and Restated Credit Agreement (“Credit Facility”, or “facility”). 

This five -year Credit Facility expires in December 2023 and has a borrowing limit of $ 500 million, which can be increased by an amount of up to $ 250 million, in accordance with specified conditions contained in the agreement. 

The facility also includes a $ 10 million sublimit for swing line loans and a $ 35 million sublimit for letters of credit.

During the third quarter of fiscal year 2023 ,  the Company entered into a Third Amended & Restated Credit Agreement which renewed the existing Credit Agreement for an additional 

five -year period (“Credit Facility”, or “facility”).

The facility has a borrowing limit of $ 500  million, which can be increased by an amount of up to $ 250  million, in accordance with specified conditions contained in the agreement.

The facility also includes a $ 10  million sublimit for swing line loans and a $ 35  million sublimit for letters of credit.

Under the terms of the Credit Agreement, we pay a variable rate of interest and a commitment fee on borrowed amounts as well as a commitment fee on unused amounts under the facility. 

35 unchanged sentences

Interest Rate Swaps

The Company’s effective swap agreements convert the base borrowing rate on $ 175 million of debt due under our revolving credit agreement from a variable rate equal to LIBOR to a weighted average fixed rate of 

The Company’s effective swap agreements convert the base borrowing rate on $ 175 million of debt due under our revolving credit agreement from a variable rate equal to one month Secured Overnight Financing Rate (SOFR) to a weighted average fixed rate of 

1.13 % at 

4 unchanged sentences

Interest Rate

25,000  

April 24, 2022

August 6, 2018

February 6, 2023

25,000  

August 6, 2023

March 23, 2020

February 23, 2023

100,000  

March 23, 2025

April 24, 2020

25,000  

April 24, 2025

February 24, 2023

25,000  

1 unchanged sentence

$ 10,235  

$ 8,420  

The Company reported no losses for the years ended June 30, 2023 , 

20 unchanged sentences

Prepaid expenses and other current assets

$ 10,235  

Prepaid expenses and other current assets

$ 8,420  

Foreign exchange contracts

2 unchanged sentences

$ 10,235  

$ 8,542  

Liability Derivatives

4 unchanged sentences

Accrued Liabilities

$ 3,096  

Foreign exchange contracts

1 unchanged sentence

Accrued Liabilities

$ 4,318  

The table below presents the amount of gain (loss) recognized in comprehensive income on our derivative financial instruments (effective portion) designated as hedging instruments and their classification within comprehensive income for the periods ended (in thousands):

2 unchanged sentences

$ 9,552  

$ 1,284  

Foreign exchange contracts

1 unchanged sentence

$ 6,130  

$ 9,932  

$ 3,356  

The table below presents the amount reclassified from accumulated other comprehensive income (loss) to net income for the periods ended (in thousands):

8 unchanged sentences

$ 1,964  

$ 2,287  

Interest expense

Foreign exchange contracts

( 557 )  

( 557 ) Other non-operating income

2 unchanged sentences

$ 1,730  

O n M arch 27, 2020, the CARES A ct was enacted to address the economic impact of the COVID - 19 pandemic in the U nited S tates.

A mong other things, the CARES A ct allows a five -year carryback period for tax losses generated in 2019 through 2021.

T he J une 30, 2021 tax provision includes benefits of $ 0.2 million and $ 0.8 million from tax losses in the years ended J une 30, 2019 and J une 30, 2020, respectively, that the CARES A ct allows to be carried back to the years ended J une 30, 2014 and J une 30, 2015, when the U.S .

federal income tax rate was 35%.

tax law allows a 100%  dividend received deduction for foreign dividends and the Company has begun to bring back cash from foreign subsidiaries. 

However, the permanent reinvestment assertion must still be assessed and made regarding potential liabilities for foreign withholding taxes. 

As of June 30, 2022 , the Company maintained the assessment that previously undistributed earnings of certain foreign subsidiaries no longer meet the requirements for indefinite reinvestment under applicable accounting guidance. 

Therefore, the Company recognized deferred tax liabilities of approximately $ 1.0 million that relate to withholding taxes on the current earnings of various foreign subsidiaries. 

It is expected that deferred tax liabilities will continue to be recorded on current earnings in future periods from these subsidiaries. 

The Company maintains the permanent reinvestment assertion on earnings in certain foreign jurisdictions.

It is not practicable to estimate the amount of tax that might be payable on the remaining undistributed earnings.

The components of income from continuing operations before income taxes are as follows (in thousands):

30 unchanged sentences

$ 19,807  

$ 14,157  

A reconciliation from the U.S.

5 unchanged sentences

Impact of foreign operations

(2.6 %)  

Federal tax credits

3 unchanged sentences

Uncertain Tax Positions

( 0.1 )%  

Benefit from U.S.

tax loss carryback to prior years

( 1.8 %)  

Tax expense on Enginetics disposal

4 unchanged sentences

( 3.1 %)  

Tax expense on Procon Pumps disposal

Effective income tax provision

2 unchanged sentences

Changes in the effective tax rates from period to period may be significant as they depend on many factors including, but not limited to, size of the Company’s income or loss and any one -time activities occurring during the period.

The income tax provision from continuing operations for the fiscal year ended June 30, 2023 was impacted by the following items:

The Company's income tax provision from continuing operations for the fiscal year ended June 30, 2022 was impacted by the following items: (i) a tax provision of $ 4.3 million due to the mix of income in various jurisdictions, (ii) a tax benefit of $ 2.2 million related to Federal R&D credit and Foreign Tax Credit, (iii) a tax benefit of $ 1.3 million related to return-to-accrual adjustments to true-up prior-period provision amounts, and (iv) a tax expense of $ 1.0 million related to uncertain tax position.

2 unchanged sentences

federal income tax rate was 35%, (iii) a tax benefit of $ 0.8 million related to Federal R&D credits and Foreign Tax credits, (iv) a tax benefit of $ 1.7 million related to return to provision adjustments, and (v) tax expense of $ 1.2 million attributable to the divestiture of Enginetics Corporation during the year.

The Company's income tax provision from continuing operations for the fiscal year ended June 30, 2020 was impacted by the following items:

(i) a tax benefit of $ 1.2 million related to the Federal R&D credit, (ii) a tax provision of $ 1.4 million due to the mix of income in various jurisdictions, (iii) a tax benefit of $ 0.7 million related to the release of uncertain tax provision reserves, and (iv) a tax provision of $ 0.8 million related to GILTI.

Significant components of the Company’s deferred income taxes are as follows (in thousands):

4 unchanged sentences

( 4,773 )  

( 420 )  

Operating lease right-of-use-asset

7 unchanged sentences

Accrued expenses and reserves

12,653  

Lease liabilities

Section 174 Capitalization

Net operating loss and credit carry forwards

13 unchanged sentences

As of June 30, 2023 , the Company had gross state net operating loss ("NOL") and credit carry forwards of approximately $ 34.9 million and $ 4.9 million, respectively, which may be available to offset future state income tax liabilities and expire at various dates from 2023  through 2043.

 In addition, the Company had foreign NOL carry forwards of approximately $4.6 million, $3.7  million which carry forward indefinitely and $0.9 million that carry forward for 10 years.

Under ASU 2016 - 09, Improvements to Employee Share-Based Payment Accounting, all excess tax benefits and tax deficiencies are recognized as income tax expense or benefit in the income statement. 

Accordingly, we recorded an income tax provision in the consolidated statements of income of $ 0.1  million during the fiscal year ended June 30, 2022 , for the shortfall of tax benefits related to equity compensation.

 In addition, the Company had foreign NOL carry forwards of approximately $ 3.2  million, all of which carry forward indefinitely.

Under ASU 2016 - 09, Improvements to Employee Share-Based Payment Accounting, all excess tax benefits and tax deficiencies are recognized as income tax expense or benefit in the statement of operations. 

Accordingly, we recorded an income tax provision in the consolidated statement of operation of $ 0.1  million during the fiscal year ended June 30, 2023 

for the shortfall of tax benefits related to equity compensation.

tax law allows a 100%  dividend received deduction for foreign dividends and the Company has begun to bring back cash from foreign subsidiaries. 

However, the permanent reinvestment assertion must still be assessed and made regarding potential liabilities for foreign withholding taxes. 

As of June 30, 2023, the Company maintained the assessment that previously undistributed earnings of certain foreign subsidiaries no longer meet the requirements for indefinite reinvestment under applicable accounting guidance. 

Therefore, the Company recognized deferred tax liabilities of approximately $ 1.7 million that relate to withholding taxes on the current earnings of various foreign subsidiaries. 

It is expected that deferred tax liabilities will continue to be recorded on current earnings in future periods from these subsidiaries. 

The Company maintains the permanent reinvestment assertion on earnings in certain foreign jurisdictions.

It is not practicable to estimate the amount of tax that might be payable on the remaining undistributed earnings.

The total provision (benefit) for income taxes included in the consolidated financial statements was as follows (in thousands):

10 unchanged sentences

$ 13,607  

The tax benefit for discontinued operations relates mostly to the write-off of deferred tax liabilities from the sale of the RSG Group, and the sale of the assets of Master-Bilt.

The changes in the amount of gross unrecognized tax benefits were as follows (in thousands):

7 unchanged sentences

( 208 )  

( 1,058 )  

( 77 )  

Ending Balance

2 unchanged sentences

$ 9,412  

At June 30, 2022 , we had $ 9.6  million of non-current liabilities for uncertain tax positions.

At June 30, 2023 , we had $ 9.5 million of non-current liabilities, included in accrued pension and other non-current liabilities on the consolidated balance sheet for uncertain tax positions.

We are not able to provide a reasonable estimate of the timing of future payments related to these obligations.

The Company increased its uncertain tax position during the year due to Federal and state R&D tax credit exposures.

The Company decreased its uncertain tax position during the year due to an assessment received from the Canada Revenue Agency regarding Canadian withholding tax exposures and due to statutes lapsing on state tax exposures.

The Company increased its uncertain tax position during the year due to state R&D tax credit exposures.

The Company decreased its uncertain tax position during the year due to the settlement of an assessment from the Canada Revenue Agency regarding Canadian withholding tax exposures and due to the reduction of federal R&D tax credit exposures.

If the unrecognized tax benefits in the table above were recognized in a future period, $ 9.5 million of the unrecognized tax benefit would impact the Company’s effective tax rate.

13 unchanged sentences

2023 and 

2021 , the company had $1.1 million and $ 0.8  million for accrued interest expense on unrecognized tax benefits.

2022 , the company had $ 1.2 million and $1.1 million for accrued interest expense on unrecognized tax benefits.

CONTINGENCIES

7 unchanged sentences

MPC alleges that the sensors incorrectly activated a diagnostic code in vehicles for which MPC’s customer issued a service bulletin, resulting in significant warranty costs for MPC. During the fourth quarter of fiscal year 2022, the Company and MPC agreed to a full and comprehensive settlement of this matter.

As a result, the Company has recorded $ 5.7 million related to this litigation as accrued liabilities in the consolidated balance sheet and other operating expense in the consolidated statement of operations.

As a result in fiscal year 2022, the Company recorded $ 5.7 million related to this litigation reported in accrued liabilities in the consolidated balance sheet and other operating expense in the consolidated statement of operations.

During the first quarter of fiscal year 2023,  the liability was paid and the matter is considered settled.

stock-based compensation and purchase plans

2 unchanged sentences

The stock award program offers employees and directors the opportunity to earn shares of our stock over time, rather than options that give the employees and directors the right to purchase stock at a set price. 

The Company has stock plans for directors, officers and certain key employees. 

The Company has stock plans for directors, officers and certain key employees. The Company uses shares acquired through treasury stock repurchases for the issuance of shares of common stock for the settlement of awards under its stock-based compensation plans, with the net effect of these transactions accounting for the change in common stock outstanding.

Total compensation cost recognized in the consolidated statement of operations for equity based compensation awards was $ 11.7 million, $ 11.2  million, and $ 8.4  million for the years ended June 30, 2023 , 2022 , and 2021 , respectively, primarily within Selling, General, and Administrative Expenses. 

8 unchanged sentences

Restrictions on non-vested stock awards generally lapse between fiscal year 2024  and fiscal year 2026.

Compensation expense related to stock awards recognized was $ 5.0 million, $ 5.3 million, and $ 4.2 million, respectively, for fiscal years ended June 30, 2022 , 2021 , and 2020 . 

Compensation expense related to stock awards recognized was $ 4.8 million, $ 5.0  million, and $ 5.3  million, respectively, for fiscal years ended June 30, 2023 , 2022 , and 2021 . 

Substantially all awards are expected to vest.

1 unchanged sentence

Restricted Stock Awards

Weighted  

Outstanding, June 30, 2022

141,654  

$ 78.19  

55,781  

( 82,164 )  

( 11,335 )  

Outstanding, June 30, 2023

103,936  

$ 89.38  

Restricted stock awards granted during fiscal years 

2021  and 2020  had a weighted average grant date fair value of $ 59.57 , and $ 71.38 , respectively. 

2022  and 2021  had a weighted average grant date fair value of $ 104.37  and $ 59.57 , respectively. 

The grant date fair value of restricted stock awards is determined based on the closing price of the Company’s common stock on the date of grant. The fair value of awards vested during fiscal years 2023 , 

1 unchanged sentence

2021 was $ 7.4 million, $ 6.8 million and $ 2.8 million, respectively. 

As of June 30, 2022 , there was $ 3.6 million of unrecognized compensation costs related to awards expected to be recognized over a weighted-average period of 1.2 years.

As of June 30, 2023 , there was $ 3.5  million of unrecognized compensation costs related to awards expected to be recognized over a weighted-average period of 1.5 years.

Executive Compensation Program

9 unchanged sentences

The compensation expense associated with this incentive program is charged to income over the restriction period. 

The Company recorded compensation expense related to this program of $ 0.2 million, $ 0.4 million, and $ 0.3 million for the years ended June 

The Company recorded compensation expense related to this program of $ 0.2 million, $ 0.2  million, and $ 0.4 million for the years ended June 

30, 2023 , 

4 unchanged sentences

Risk-free interest rates

4.52 %  

0.46 %  

Expected life of option grants (in years)

Expected volatility of underlying stock

29.5 %  

46.7 %  

Expected quarterly dividends (per share)

$ 0.28  

$ 0.24  

$ 0.22  

Under the long-term component, grants of performance share units (“PSUs”) are made annually to key employees and the share units are earned based on the achievement of certain overall corporate financial performance targets over the performance period. 

9 unchanged sentences

Performance Stock Units

Weighted  

Non-vested, June 30, 2022

53,107  

$ 57.06  

$ 346,496  

142,170  

$ 72.68  

22,322  

52,972  

Exercised / vested

( 12,915 )  

$ 587,859  

( 53,224 )  

( 5,056 )  

( 14,875 )  

Non-vested, June 30, 2023

57,458  

$ 60.53  

$ 2,582,995  

127,043  

$ 79.66  

Restricted stock awards granted under the annual component of this program in fiscal years 

3 unchanged sentences

2022 and 

2020 had a weighted average grant date fair value of $ 58.81 , and $ 70.37 , respectively.

2021 had a weighted average grant date fair value of $ 102.61  and $ 58.81 , respectively.

The grant date fair value of the PSUs is determined based on the closing price of the Company’s common stock on the date of grant. The fair value of PSUs vested under the long-term component of this program during the fiscal years ended June 30, 2023 , 2022 , and 

2021 was $ 4.6 million, $ 0.4 million, and $ 0.7  million respectively.

The Company recognized compensation expense related to the PSUs of $ 6.0 million, $ 2.6  million, and $ 2.9 million for the fiscal years ended June 30, 2022 , 

The Company recognized compensation expense related to the PSUs of $ 6.7 million, $ 6.0 million, and $ 2.6  million for the fiscal years ended June 30, 2023 , 

2022  and 

2021 respectively based on the probability of the performance targets being met.

The total unrecognized compensation costs related to non-vested performance share units was $ 5.6 million at June 30, 2022 , which is expected to be recognized over a weighted average period of 1.0 years.

The total unrecognized compensation costs related to non-vested performance share units was $ 3.7 million at June 30, 2023 , which is expected to be recognized over a weighted average period of 0.8  years.

Employee Stock Purchase Plan

4 unchanged sentences

Shares of stock reserved for the plan were 42,012 at June 30, 2023 .

Shares purchased under this plan aggregated to 6,707  in fiscal year 2022 , 7,509 in 2021 , and 11,132  in 2020 , at an average price of $ 83.22 , $ 66.98 , and $ 52.57 , respectively.

Shares purchased under this plan aggregated to 6,256 in fiscal year 2023 , 6,707 in 2022 , and 7,509 in 2021 , at an average price of $ 91.78 , $ 83.22 , and $ 66.98 , respectively.

Accumulated Other Comprehensive Income (LosS)

1 unchanged sentence

Foreign currency translation adjustment

$ ( 74,373 )  

$ ( 67,679 )  

Unrealized pension losses, net of tax

( 92,761 )  

( 92,641 )  

Unrealized losses (gains) on derivative instruments, net of tax

$ ( 158,477 )  

$ ( 153,312 )  

$ ( 116,140 )

restructuring

The Company has undertaken a number of initiatives that have resulted in severance, restructuring, and related charges.

A summary of charges by initiative is as follows (in thousands):

Restructuring liabilities are included in accrued liabilities on the consolidated balance sheet. A summary of charges by initiative is as follows (in thousands):

Involuntary Employee

3 unchanged sentences

2023 Restructuring Initiatives

$ 2,361  

$ 2,574  

Prior Year Initiatives

Total expense

$ 2,817  

$ 1,014  

$ 3,831  

2022 Restructuring Initiatives

Prior Year Initiatives

$ 2,690  

$ 1,709  

$ 4,399  

Total expense

$ 2,690  

$ 1,709  

$ 4,399  

2021 Restructuring Initiatives

$ 1,313  

$ 1,975  

Prior Year Initiatives

Total expense

$ 2,239  

$ 1,239  

$ 3,478  

2023  Restructuring Initiatives

8 unchanged sentences

Additions and adjustments

( 1,257 )  

( 213 )  

Restructuring liabilities at June 30, 2023

$ 1,104  

Prior Year Restructuring Initiatives

2 unchanged sentences

third party assistance with analysis and implementation of these activities.

The Company expects to incur additional restructuring costs of approximately $ 1.7  million in fiscal year 2023  as the Company continues to focus its efforts to reduce cost and improve productivity across its businesses, particularly through headcount reductions, facility closures, and consolidations.

The Company expects to incur additional restructuring costs of approximately $ 5.0 million in fiscal year 2024  as the Company continues to focus its efforts to reduce cost and improve productivity across its businesses, particularly through headcount reductions, facility closures, and consolidations.

Activity in the reserves related to prior year restructuring initiatives is as follows (in thousands):

3 unchanged sentences

Restructuring liabilities at June 30, 2022

$ 1,045  

$ 1,740  

Additions and adjustments

( 1,501 )  

( 1,304 )  

Restructuring liabilities at June 30, 2023

5 unchanged sentences

Additions and adjustments

( 1,684 )  

( 1,024 )  

Restructuring liabilities at June 30, 2022

$ 1,045  

$ 1,740  

The Company’s total restructuring expenses by segment are as follows (in thousands):

3 unchanged sentences

Fiscal Year 2023

Engineering Technologies

Specialty Solutions

$ 1,048  

Corporate and Other

Total expense

$ 2,817  

$ 1,014  

$ 3,831  

Fiscal Year 2022

3 unchanged sentences

Total expense

$ 2,690  

$ 1,709  

$ 4,399  

Fiscal Year 2021

3 unchanged sentences

Total expense

$ 2,239  

$ 1,239  

$ 3,478  

Employee Benefit Plans

2 unchanged sentences

The Company’s pension plan for U.S.

employees is frozen for substantially all employees and participants in the plan have ceased accruing future benefits.

employees is frozen for substantially all employees and participants in the plan have ceased accruing future benefits. Obligations under the Company's defined benefit plan operated in Ireland have been transferred to the buyer of the Procon business as part of the divestiture.

Net periodic benefit cost for U.S.

11 unchanged sentences

Recognized net actuarial loss

( 57 )  

Amortization of prior service cost (benefit)

16 unchanged sentences

Interest cost

Actuarial loss (gain)

Actuarial gain

( 8,625 )  

21 unchanged sentences

( 4,855 )  

( 8,161 )  

Employer contribution

3 unchanged sentences

( 1,391 )  

Foreign currency exchange rate

Foreign currency exchange rate & other changes

( 2,741 )  

7 unchanged sentences

$ ( 41,974 )  

$ ( 3,204 )  

Amounts recognized in the consolidated balance sheets consist of:

13 unchanged sentences

$ ( 41,974 )  

$ ( 3,204 )  

Unrecognized net actuarial loss

12 unchanged sentences

2023 and 2022 , respectively.

The estimated actuarial net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $4.2  million.

Plan Assets and Assumptions

56 unchanged sentences

Discount rate

1.4 %- 5.0 % 0.73 - 3.00 % 0.99 - 2.90 %

1.48 % - 5.60 % 1.4 % - 5.0 % 0.73 % - 3.00 %  

Rate of compensation increase

2 unchanged sentences

Discount rate

0.73 %- 3.0 % 0.99 - 2.90 % 0.31 - 3.70 %

1.37 % - 5.6 % 0.73 % - 3.0 % 0.99 % - 2.90 %  

Expected return on assets

2.05 %- 6.8 % 1.40 - 6.90 % 2.30 - 7.00 %

2.80 % - 6.65 % 2.05 % - 6.8 % 1.40 % - 6.90 %  

Rate of compensation increase

6 unchanged sentences

The discount rate is determined by matching our expected benefit payments from a stream of AA- or higher bonds available in the marketplace, adjusted to eliminate the effects of call provisions.

Expected benefit payments for all plans during the next five years are as follows: 

2023, $17.6  million;

2024, $17.5  million;

2025, $17.5  million;

2026, $17.3  million;

2027, $17.2  million and five years thereafter, $83.2  million.

The Company expects to make $0.5  million of contributions to its pension plans in 2023.

Expected benefit payments for all plans during the next five fiscal years are as follows:  

2024, $ 17.6 million;

2025, $ 17.6 million;

2026, $ 17.5 million;

2027, $ 17.3 million;

2028, $ 17.4 million and years thereafter, $ 81.7 million.

The Company expects to make $ 10.2 million of contributions to its pension plans in fiscal year 2024.

The Company operates defined benefit plans in Germany and Japan which are unfunded.

28 unchanged sentences

Yes/Implemented

Oct-22 - May-25

$ 1,264  

6 unchanged sentences

The Company, at the discretion of the Board of Directors, may make contributions on behalf of our employees under the plans.

Company contributions were $ 2.9  million, $ 2.9 million, and $ 3.7 million for the years ended June 30, 2022 , 2021 , and 2020 , respectively.

Company contributions were $ 3.0 million, $ 2.9 million, and $ 2.9 million for the years ended June 30, 2023 , 2022 , and 2021 , respectively.

At June 30, 2023 , the salaried plan holds approximately 88,000 shares of Company common stock, representing approximately 4.6 % of the holdings of the plan.

14 unchanged sentences

Specialty Solutions –

an aggregation of three operating segments that manufacture and sell refrigerated, heated and dry merchandizing display cases, custom fluid pump solutions, and single and double acting telescopic and piston rod hydraulic cylinders.

an aggregation of two operating segments that manufacture and sell refrigerated, heated and dry merchandizing display cases, and single and double acting telescopic and piston rod hydraulic cylinders.

The Procon business was included in the Specialty Solutions Segment through the date of divestiture in the third quarter of fiscal year 2023.

Net sales include only transactions with unaffiliated customers and include no significant intersegment or export sales. 

11 unchanged sentences

Depreciation and Amortization

$ 305,872  

$ 304,290  

$ 253,369  

$ 11,737  

$ 11,803  

$ 13,159  

152,067  

146,255  

147,016  

10,561  

11,140  

74,924  

83,850  

79,421  

Engineering Technologies

81,079  

78,117  

75,562  

Specialty Solutions

127,106  

122,827  

100,864  

Corporate and Other

$ 741,048  

$ 735,339  

$ 656,232  

$ 28,474  

$ 29,697  

$ 33,241  

Income (Loss) From Operations

12 unchanged sentences

18,240  

13,740  

Engineering Technologies

8 unchanged sentences

( 3,478 )  

Loss on sale of business

Gain (loss) on sale of business

62,105  

( 14,624 )  

Acquisition related costs

2 unchanged sentences

( 931 )  

Other operating expense

Other operating income (expense)

( 5,745 )  

15 unchanged sentences

( 1,131 )  

( 473 )  

Income from continuing operations before income taxes

5 unchanged sentences

Identifiable Assets

$ 133,432  

$ 136,969  

$ 384,333  

$ 378,581  

76,583  

76,250  

262,960  

256,115  

15,454  

104,593  

114,177  

Engineering Technologies

36,293  

35,928  

120,176  

118,723  

Specialty Solutions

48,280  

57,757  

Corporate & Other

104,587  

$ 264,821  

$ 267,906  

$ 1,024,929  

$ 934,439  

Tangible Long-lived assets

United States

57,087  

$ 61,540  

34,741  

32,334  

33,608  

29,736  

Other Americas

$ 130,937  

$ 128,584  

EMEA consists primarily of Europe, Middle East and S.

On February 28, 2023 ,  the Company divested its Procon pumps business (“Procon”) to Investindustrial, a leading European investment and advisory group.

Procon generated approximately $ 21.2  million in revenue in the first eight months of fiscal year 2023 .

 Procon, which is reported within the Specialty Solutions Group, was divested in order to focus on the continued simplification of the Company’s portfolio and enable greater focus on managing larger platforms and pursuing growth opportunities. 

The Company received $ 67.0  million cash consideration at closing, which is presented as an investing cash flow for fiscal year 2023.

  Cash consideration received at closing excludes amounts held in escrow and is net of closing cash.

The Company recorded a pre-tax gain on sale of the business of $ 62.1  million.

The operating unit's goodwill balance of $ 0.2  million was written off as a part of the transaction.

The sale transaction and financial results of Procon are classified as continuing operations in the Consolidated Financial Statements.

On March 31, 2021, the Company divested Enginetics Corporation (“Enginetics”), its jet engine components business, to Enjet Aero, LLC, a privately-held aerospace engine component manufacturing company.

5 unchanged sentences

In pursuing our business strategy, the Company continues to divest certain businesses and record activities of these businesses as discontinued operations.

During the third quarter of fiscal 2020, in order to focus its financial assets and managerial resources on its remaining portfolio of businesses, the Company entered into a definitive agreement to sell the Refrigerated Solutions Group, consisting of the Master-Bilt and NorLake operating segments, to Ten Oaks Group for a cash purchase price of $ 10.6  million, subject to post-closing adjustments and various transaction fees.

The Refrigerated Solutions Group was a part of the Company's Food Service Equipment segment, and manufactured refrigerated cabinets and walk-ins for customers food service and retail end markets.

The transaction closed on April 16, 2020 and resulted in a pre-tax loss of $ 20.0 million less related transaction expenses of $ 1.9 million.

The Company reported a tax benefit related to the loss on sale of $ 2.6 million.

Activity related to the Refrigerated Solutions Group and other discontinued operations for the years ended is as follows (in thousands):

Activity related to discontinued operations for the most recent three fiscal years is as follows (in thousands):

Year Ended June 30,

Gain (loss) on sale of business

Transaction fees

Profit (loss) before taxes

$ ( 204 )  

$ ( 113 )  

Benefit (provision) for taxes

Net income (loss) from discontinued operations

$ ( 161 )  

$ ( 89 )  

In the normal course of its business, the Company enters into various leases as the lessee, primarily related to certain transportation vehicles, facilities, office space, and machinery and equipment.

These leases have remaining lease terms between one and fifty-six years, some of which may include options to extend the leases or options to terminate the leases.

These leases have remaining lease terms between one and fifty-five years, some of which may include options to extend the leases or options to terminate the leases.

Some lease arrangements require variable payments that are dependent on usage, output, or index-based adjustments. 

3 unchanged sentences

Operating lease right-of-use-asset

$ 33,273  

$ 39,119  

Current accrued liabilities

$ 8,036  

$ 7,891  

Operating lease long-term liabilities

25,774  

31,357  

Total lease liability

$ 33,810  

$ 39,248  

The components of lease costs are as follows (in thousands):

2 unchanged sentences

Operating lease cost

$ 10,391  

$ 11,153  

Variable lease cost

Net lease cost

$ 11,756  

$ 12,525  

Maturity of lease liability

2 unchanged sentences

Operating Leases

$ 8,863  

Present value of lease liabilities

$ 33,810  

The weighted average remaining lease term and discount rates are as follows:

8 unchanged sentences

Operating cash outflows from operating leases

$ 9,553  

$ 10,960  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Standex International Corporation and subsidiaries (the "Company") as of June 30, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for the each of the two years in the period ended June 30, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Standex International Corporation and subsidiaries (the "Company") as of June 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for the each of the three years in the period ended June 30, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control —

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 5, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 4, 2023 expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

29 unchanged sentences

evaluated management’s ability to achieve the estimates of total costs and profit at completion by comparing the estimates to management’s work plans, engineering specifications, and supplier contracts, and performing corroborating inquiries with the Company’s project managers and engineers;

tested the accuracy and completeness of the costs incurred to date for the performance obligation to supporting documentation

tested the accuracy and completeness of the costs incurred to date for the performance obligation to supporting documentation; and

tested the mathematical accuracy of management’s calculation of revenue for the contract.

4 unchanged sentences

We have served as the Company’s auditor since 2020.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Standex International Corporation

Opinion on the financial statements

We have audited the consolidated balance sheet of Standex International Corporation  and subsidiaries (the “Company”) as of June 30, 2020 (not presented herein), and the related consolidated statements of operations, comprehensive income, changes in stockholders’

equity, and cash flows for the year then ended (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for the year ended June 30, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We served as the Company’s auditor from 2015 to 2020.

Boston, Massachusetts

August 25, 2020

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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 8. Financial Statements and Supplementary Data