Overview 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 four operating and reportable segments. Please refer to Item 1. Business, above, for additional information regarding our segment structure and management strategy. 16 Table of Contents As part of our ongoing strategy: o On July 2, 2026, we acquired the remaining 9.9% interest in India-based Narayan Powertech (Narayan), a leading manufacturer of low voltage and medium voltage instrument transformers. o On March 9, 2026, we completed the divestiture of Federal Industries to a third party for cash proceeds of $68.3 million. The divestiture supports continued portfolio simplification and enables us to focus on larger businesses and fast growth end market opportunities. Post the divestiture, the Hydraulics business was combined with the Engraving business under the Engraving & Hydraulics segment, and the Engineering Technologies segment was re-named as the Aerospace & Defense (A&D) segment. We believe that this name change will improve understanding of the business and its end markets. As a result, the Company now reports under the four operating segments of Electronics, A&D, Scientific, and Engraving & Hydraulics. o On February 4, 2025, we acquired McStarlite Co. ("McStarlite"), a leading provider of complex sheet metal aerospace components, financed from our existing Credit Facility. Its results are reported in the A&D segment beginning in the third quarter of fiscal year 2025. o On November 18, 2024, we acquired Nascent Technology Manufacturing, which designs and produces high-reliability magnetics components for critical defense and industrial applications. Its results are reported in the Electronics segment beginning in the second quarter of fiscal year 2025. o On November 14, 2024, we acquired Custom Biogenic Systems, it specializes in the development and manufacturing of advanced cryogenic equipment, including unique isothermal freezers with dry liquid nitrogen technology, to the pharmaceutical and biobank end markets within life sciences. Its results are reported in the Scientific segment beginning in the second quarter of fiscal year 2025. o On October 28, 2024, we acquired the Amran/Narayan Group in cash and stock transactions. These transactions represented, at the time, a combined enterprise value of approximately $467.5 million, comprised of 85% cash and 15% in Standex common stock for Amran Instrument Transformers and 90.1% cash and 9.9% in Standex common stock for Narayan Powertech Pvt. Ltd. The 9.9% share exchange related to Narayan Powertech Pvt. Ltd. was subject to India regulatory approval. The cash consideration of the transactions was financed using cash-on-hand, existing credit facilities, and a $250 million 364-day term loan with existing lenders. We converted the 364-day term loan into an exercise of the accordion feature under our existing credit facilities. This acquisition significantly expands our sales in the fast-growing, high-margin electrical grid end market and our presence in India. Its results are reported in the Electronics segment beginning in the second quarter of fiscal year 2025. o On May 3, 2024, we acquired Sanyu Electric Pte Ltd, or SEPL, a privately held distributor of reed relays. Its results are reported in the Electronics segment. o On February 19, 2024, we acquired, through our subsidiary Standex Electronics Japan Corporation, privately-held, Japanese-based Sanyu Switch Co., Ltd (Sanyu). Sanyu designs and manufactures reed relays, test sockets, testing systems for semiconductor and other electronics manufacturing, and other switching applications. Its results are reported in the Electronics segment. o On July 31, 2023, we acquired 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. Its results will be reported in the Electronics segment. o In the third quarter of fiscal year 2023, we divested our Procon business for $75.0 million. This transaction reflected the continued simplification of our portfolio and enabled greater focus on managing our larger platforms and pursuing growth opportunities. Proceeds were deployed towards organic and inorganic initiatives and returning capital to shareholders. Its results were reported within our Specialty Solutions segment. In fiscal year 2023, we received $67.0 million cash consideration and recorded a pre-tax gain on the sale of $62.1 million in the Consolidated Financial Statements. Cash consideration received at closing excludes amounts held in escrow and was net of closing cash. As a result of these portfolio moves, we have transformed Standex to a company with a more focused group of businesses selling customized solutions to high value end markets via a compelling customer value proposition. The narrowing of the portfolio allows for greater management focus on driving operational disciplines and positions us well to use our cash flow from operations to invest selectively in our ongoing pipeline of organic and inorganic opportunities. 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. Restructuring expenses reflect costs associated with our efforts of continuously improving operational efficiency and expanding globally in order to remain competitive in our end-user markets. We incur costs for actions to size our businesses to a level appropriate for current economic conditions, improve our cost structure, enhance our competitive position and increase operating margins. Such expenses include costs for moving facilities to locations that allow for lower fixed and variable costs, external consultants who provide additional expertise starting up plants after relocation, downsizing operations because of changing economic conditions, and other costs resulting from asset redeployment decisions. Shutdown costs include severance, benefits, stay bonuses, lease and contract terminations, asset write-downs, costs of moving fixed assets, and moving and relocation costs. Vacant facility costs include maintenance, utilities, property taxes and other costs. Because of the diversity of the Company’s businesses, end user markets and geographic locations, management does not use specific external indices to predict the future performance of the Company, other than general information about broad macroeconomic trends. Each of our individual business units serves niche markets and attempts to identify trends other than general business and economic conditions which are specific to its business and which could impact their performance. Those units report pertinent information to senior management, which uses it to the extent relevant to assess the future performance of the Company. A description of any such material trends is described below in the applicable segment analysis. 17 Table of Contents We monitor a number of key performance indicators (“KPIs”) including net sales, income from operations, backlog, effective income tax rate, gross profit margin, and operating cash flow. A discussion of these KPIs is included below. We may also supplement the discussion of these KPIs by identifying the impact of foreign exchange rates, acquisitions, and other significant items when they have a material impact on a specific KPI. We believe the discussion of these items provides enhanced information to investors by disclosing their impact on the overall trend which provides a clearer comparative view of the KPI, as applicable. For discussion of the impact of foreign exchange rates on KPIs, the Company calculates the impact as the difference between the current period KPI calculated at the current period exchange rate as compared to the KPI calculated at the historical exchange rate for the prior period. For discussion of the impact of acquisitions, we isolate the effect on the KPI amount that would have existed regardless of our acquisition. Sales resulting from synergies between the acquisition and existing operations of the Company are considered organic growth for the purposes of our discussion. Unless otherwise noted, references to years are to fiscal years. Consolidated Results from Continuing Operations (in thousands): 2026 2025 2024 Net sales $ 891,597 $ 790,107 $ 720,635 Gross profit margin 41.7 % 39.9 % 39.1 % Restructuring costs 12,186 6,903 8,206 Deal related expenses 4,059 21,434 2,622 Other operating (income) expense, net - - 110 (Gain) loss on sale of business (57,085 ) - (274 ) Income from operations 193,584 93,549 101,738 Backlog (realizable within 1 year) $ 318,468 $ 245,596 $ 185,296 2026 2025 2024 Net sales $ 891,597 $ 790,107 $ 720,635 Components of change in sales: Effect of acquisitions 66,387 123,636 40,427 Effect of exchange rates 4,282 (343 ) (1,842 ) Effect of business divestitures (12,828 ) - (21,259 ) Organic sales change 43,649 (53,821 ) (37,739 ) Net Sales Net sales increased for fiscal year 2026 by $101.5 million, or 12.8% when compared to the prior year period. Acquisitions accounted for increased sales of $66.4 million, or 8.4%. Divestitures reduced sales by $12.8 million, or 1.6%. Organic sales increased by $43.6 million, or 5.5%, primarily due to increased sales into fast growth markets and contributions from new products. Sales included $263.8 million in the period attributed to fast growth markets. New products accounted for 5.3% of sales growth. Net sales increased for fiscal year 2025 by $69.5 million, or 9.6% when compared to the prior year period. Acquisitions accounted for increased sales of $123.6 million, or 17.2%. Organic sales decreased by $53.8 million, or 7.5%, due to general economic softness in Europe and North America in the Electronics segment, the impact of National Institutes of Health (NIH) funding cuts in the Scientific segment and continued softness in North America from delays in new platform rollout in the Engraving & Hydraulics segment. Sales included $184.2 million in the period attributed to fast growth markets. New products accounted for 2.5% of sales growth. We discuss our results and outlook for each segment below. Gross Profit Gross profit in fiscal year 2026 increased to $372.0 million, or a gross margin of 41.7%, as compared to $315.2 million, or a gross margin of 39.9%, for the prior year. The margin increase was a result of higher volume and the continued focus on pricing disciplines and productivity actions. Gross profit in fiscal year 2025 increased to $315.2 million, or a gross margin of 39.9%, as compared to $282.0 million, or a gross margin of 39.1%, for the prior year. This increase was a result of higher volume, productivity initiatives and impact of acquisitions partially offset by material inflation. Restructuring Costs During fiscal year 2026, we incurred restructuring expenses of $12.2 million, primarily related to facility rationalization activities and announced closure of four sites within our Engraving & Hydraulics segment as well as restructuring activities within our Electronics segment. We expect to continue seeing realization of the benefit of these restructuring actions into fiscal year 2027. 18 Table of Contents During fiscal year 2025, we incurred restructuring expenses of $6.9 million, primarily related to facility rationalization activities, and global headcount reductions mostly within our Engraving & Hydraulics segment. Deal Related Costs We incurred deal related expenses of $4.1 million and $21.4 million in fiscal year 2026 and 2025, respectively. Deal related costs typically consist of due diligence, advisory, legal, integration, and valuation activities associated with recent or pending acquisitions or divestitures transactions. Deal related costs were lower in fiscal year 2026 as compared to 2025 mainly due to 2025 acquisitions. Gain on Sale of Business During fiscal year 2026, we recorded a gain on the sale of the Federal Industries business of $57.1 million. The sale transaction and financial results of Federal Industries are classified as continuing operations in the consolidated financial statements. Income from Operations Income from operations for the fiscal year 2026 was $193.6 million, compared to $93.5 million during the prior year. The increase of $100.0 million, or 106.9%, is primarily due to the gain on the divestiture of Federal Industries, effects of recent acquisitions, productivity improvement initiatives, and lower purchase accounting and deal related costs, partially offset by an increase in administrative and research and development expenses. Income from operations for the fiscal year 2025 was $93.5 million, compared to $101.7 million during the prior year. The decrease of $8.2 million, or 8.0%, is primarily due to increase of acquisition costs and administrative expenses which more than offset the income from the increase in sales from recent acquisitions. Discussion of the performance of each of our reportable segments is fully explained in the segment analysis that follows. Interest Expense Interest expense for fiscal year 2026 was $30.7 million, an increase of $6.8 million as compared to the prior year. The increase in interest expense in fiscal 2026 was primarily due to longer period over which the debt was outstanding in fiscal 2026. Interest expense for fiscal year 2025 was $23.9 million, an increase of $19.3 million as compared to the prior year. The increase in interest expense in fiscal 2025 was due to increased debt to fund fiscal 2025 acquisitions. Our effective interest rate in fiscal 2026 was 5.71% as compared to 6.38% for the fiscal year 2025. The reduction in effective interest rate was on account of favorable interest rates in fiscal 2026 and a favorable interest rate swap. Income Taxes The income tax provision from continuing operations for the fiscal year ended June 30, 2026 was $34.3 million, or an effective rate of 21.02% compared to $11.1 million, or an effective rate of 16.11%, for the year ended June 30, 2025, and $21.5 million, or an effective rate of 22.6%, for the year ended June 30, 2024. 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, 2026 was impacted by the following items: (i) a tax provision of $8.1 million due to the mix of income in various jurisdictions, (ii) tax benefits of $4.3 million primarily related to foreign tax credits of $1.8 million, as well as Federal R&D tax credits of $2.5 million and (iii) a tax benefit of $5.0 million primarily related to the release of the valuation allowance on Federal capital loss carryforwards. The income tax provision from continuing operations for the fiscal year ended June 30, 2025 was impacted by the following items: (i) a tax provision of $5.8 million due to the mix of income in various jurisdictions, (ii) tax benefits of $4.7 million related to foreign tax credits of $2.1 million, as well as Federal R&D tax credits of $2.5 million, (iii) a tax provision of $1.8 million related to officers’ compensation, (iv) a tax provision of $3.0 million related to cash repatriation, and (v) a tax benefit of $9.1 million (inclusive of $1.2 million of interest) related to the release of a Sec. 965 toll tax uncertain tax position due to the lapse of statute of limitations. The income tax provision from continuing operations for the fiscal year ended June 30, 2024 was impacted by the following items: (i) a tax provision of $3.1 million due to the mix of income in various jurisdictions, (ii) tax benefits of $2.8 million related to foreign tax credits of $0.7 million, as well as Federal R&D tax credits of $2.1 million, (iii) a tax provision of $3.8 million related to officers’ compensation, and (iv) a tax benefit of $3.8 million relating to share-based compensation. On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 (“OBBBA”) which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The OBBBA did not have a material impact on the Company’s financial statements for fiscal year 2026. The Organization for Economic Co-operation and Development (OECD) and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the "Inclusive Framework") have put forth Pillar Two proposals that ensure a minimal level of taxation. Several countries in which the Company operates, including several European Union member states, have adopted domestic legislation to implement the Inclusive Framework's global corporate minimum tax rate of fifteen percent. This legislation became effective for the Company beginning June 1, 2024. Based on the Company's analysis of Pillar Two provisions, these tax law changes did not have a material impact on the Company's financial statements for fiscal year 2026. On January 5, 2026, the OECD Inclusive Framework members approved changes to the model rules, including the introduction of a “side by side” rule which would exempt U.S.-parented companies from certain aspects of the global minimum tax regime. The updated model rules will need to be incorporated into local tax legislation to be effective. We do not expect the new rules to have a material impact on our consolidated financial statements. 19 Table of Contents Capital Expenditures Our capital spending is focused on growth initiatives, cost reduction activities, and upgrades to extend the capabilities of our capital assets. In general, we anticipate our capital expenditures over the long-term will be approximately 4 to 5% of net sales. During fiscal year 2026, capital expenditures were $25.2 million or 2.8% of net sales, as compared to $28.8 million, or 3.6%, of net sales in the prior year. We expect 2027 capital spending to be between $45 million and $55 million. Backlog Backlog includes all active or open orders for goods and services. Backlog also includes any future deliveries based on executed customer contracts, so long as such deliveries are based on agreed upon delivery schedules. Backlog orders are not necessarily an indicator of future sales levels because of variations in lead times and customer production demand pull systems, with the exception of A&D. Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties. Due to the nature of long-term agreements in the A&D segment, the timing of orders and delivery dates can vary considerably resulting in significant backlog changes from one period to another. Backlog orders are as follows (in thousands): As of June 30, 2026 As of June 30, 2025 Total Backlog under Total Backlog under Backlog 1 year Backlog 1 year Electronics $ 207,025 $ 194,267 $ 144,971 $ 121,276 Aerospace & Defense 144,315 95,024 91,025 82,273 Scientific 3,386 3,386 3,974 3,974 Engraving & Hydraulics 27,198 25,791 32,554 32,122 Other - - 5,951 5,951 Total $ 381,924 $ 318,468 $ 278,475 $ 245,596 Total backlog realizable within one year increased $72.9 million, or 29.7% to $318.5 million at June 30, 2026 from $245.6 million at June 30, 2025. Changes in backlog under 1 year are as follows (in thousands): As of June 30, 2026 Backlog under 1 year, prior year period $ 245,596 Components of change in backlog: Organic change 78,823 Effect of acquisitions - Effect of divestitures (5,951 ) Backlog under 1 year, current period $ 318,468 Segment Analysis (in thousands) Overall Outlook Looking forward to fiscal year 2027, barring any unforeseen economic, global trade, or tariff related disruptions, we expect mid to high single digit sales growth, driven by high single digit to low double-digit organic growth, partially offset by the impact of the Federal divestiture and unfavorable foreign exchange. We plan to release over 20 new products which are projected to contribute approximately 300 bps of incremental growth. Sales from fast growth markets are expected to grow approximately 20% year-on-year to greater than $310 million. In fiscal year 2027, the Company is on track to further reduce its net debt to EBITDA ratio, positioning the Company well to fund future organic and inorganic opportunities. In general, for fiscal year 2027, we expect: ● growth of new product sales as recently launched products ramp up and additional launches are introduced; ● continued growth in the high margin electrical grid market; ● continued strength in defense end markets as new platforms continue to ramp; ● space markets to remain attractive, with modest volume increases expected from ongoing customer development; ● scientific cold storage demand to improve with partial recovery in NIH funding; ● continued stability in hybrid and electric vehicle programs despite softness in general automotive end markets and planned new platform launches; ● general industrial end markets to recover. 20 Table of Contents Electronics Group 2026 compared to 2025 2025 compared to 2024 (in thousands except % % percentages) 2026 2025 Change 2025 2024 Change Net sales $ 475,036 $ 400,130 18.7 % $ 400,130 $ 321,956 24.3 % Income from operations 121,339 87,927 38.0 % 87,927 64,030 37.3 % Operating income margin 25.5 % 22.0 % 22.0 % 19.9 % Net sales in fiscal year 2026 increased by $74.9 million, or 18.7%, when compared to the prior year. The full year benefit of fiscal year 2025 acquisitions added $44.0 million, or 11.0% to net sales in 2026. Organic sales increased by $31.1 million, or 7.8%, due to increased sales into fast growth markets and increased new product sales. The foreign currency impact decreased sales by $0.3 million, or 0.1% as compared to the prior year. Income from operations in the fiscal year 2026 increased by $33.4 million, or 38.0%, when compared to the prior year. The operating income increase was the result of higher volume, pricing initiatives and product mix, partially offset by growth investments. Net sales in fiscal year 2025 increased by $78.2 million, or 24.3%, when compared to the prior year. Acquisitions added $104.4 million, or 32.4% to net sales in 2025. Organic sales decreased by $26.8 million, or 8.3%, due to general market softness in Europe and North America. Declines occurred across most markets, particularly industrial applications, transportation and utilities. The foreign currency impact increased sales by $0.6 million, or 0.2%. The Amran Narayan acquisition took place in the fiscal year 2025 while the fiscal year 2024 acquisitions included Minntronix, Sanyu and SEPL. Income from operations in the fiscal year 2025 increased by $23.9 million, or 37.3%, when compared to the prior year. Acquisitions contributed $25.8 million income from operations. Pricing, and productivity initiatives, and favorable product mix were partially offset by lower core volume. Aerospace & Defense Group 2026 compared to 2025 2025 compared to 2024 (in thousands except % % percentages) 2026 2025 Change 2025 2024 Change Net sales $ 135,031 $ 102,595 31.6 % $ 102,595 $ 83,476 22.9 % Income from operations 21,952 15,428 42.3 % 15,428 15,216 1.4 % Operating income margin 16.3 % 15.0 % 15.0 % 18.2 % Net sales in fiscal year 2026 increased by $32.4 million, or 31.6%, when compared to the prior year. The sales increase was attributable to the full year benefit of the acquisition of McStarlite which added $17.5 million or 17.1% to revenue and an organic sales increase of $14.5 million or 14.1% driven by increased project activity in the defense end markets. Foreign currency impact increased net sales by $0.4 million or 0.4% as compared to the prior year. Income from operations in fiscal year 2026 increased by $6.5 million, or 42.3%, when compared to the prior year. The increase in operating income was a result of higher volume and project mix. Net sales in fiscal year 2025 increased by $19.1 million, or 22.9%, when compared to the prior year. Sales increase was attributable to the acquisition of McStarlite which added $11.6 million to revenue and an organic sales increase of $5.8 million, or 8.6% driven by growth in the space and aviation end markets. Income from operations in fiscal year 2025 increased by $0.2 million, or 1.4% primarily related to the McStarlite acquisition. This growth is attributed to increased sales volume across the aviation markets and space markets combined with the McStarlite acquisition, and productivity initiatives. Scientific Group 2026 compared to 2025 2025 compared to 2024 (in thousands except % % percentages) 2026 2025 Change 2025 2024 Change Net sales $ 75,748 $ 72,380 4.7 % $ 72,380 $ 68,931 5.0 % Income from operations 18,035 17,470 3.2 % 17,470 19,000 (8.1% ) Operating income margin 23.8 % 24.1 % 24.1 % 27.6 % Net sales in fiscal year 2026 increased by $3.4 million, or 4.7% when compared to the prior year, due primarily to an $4.8 million or 6.6% full year benefit from the Custom Biogenic Systems acquisition, partially offset by an organic decline of $1.4 million or 2.0% from lower demand at academic and research institutions that were impacted by NIH funding cuts. Income from operations in fiscal year 2026 increased by $0.6 million, or 3.2%, when compared to the prior year due to contribution from the acquisition partially offset by organic decline. 21 Table of Contents Net sales in fiscal year 2025 increased by $3.4 million, or 5.0% when compared to the prior year, due to benefit from the Custom Biogenic Systems acquisition, mostly offset by an organic decline from lower demand at academic and research institutions that were impacted by NIH funding cuts. Income from operations in fiscal year 2025 decreased by $1.5 million or 8.1%, when compared to the prior year due to organic decline partially offset by contribution from the acquisition and price and productivity initiatives. Engraving & Hydraulics Group 2026 compared to 2025 2025 compared to 2024 (in thousands except % % percentages) 2026 2025 Change 2025 2024 Change Net sales $ 182,329 $ 179,303 1.7 % $ 179,303 $ 206,034 (13.0% ) Income from operations 27,404 25,173 8.9 % 25,173 37,044 (32.0% ) Operating income margin 15.0 % 14.0 % 14.0 % 18.0 % Net sales in fiscal year 2026 increased by $3.0 million, or 1.7%, compared to the prior year. Organic sales decreased by $1.1 million, or 0.6%, primarily as a result of general market softness. Foreign exchange impacts increased sales by $4.1 million, or 2.3% as compared to prior year. Income from operations in fiscal year 2026 increased by $2.2 million, or 8.9%, when compared to the prior year. The operating income increase was supported by higher sales and the realization of previously announced productivity initiatives and restructuring actions. Net sales in fiscal year 2025 decreased by $26.7 million or 13.0% compared to the prior year. Organic sales decreased by $25.3 million, primarily as a result of delays in new platform rollouts in North America. Foreign exchange impacts reduced sales by $1.4 million, or 0.9%. Income from operations in fiscal year 2025 decreased by $11.9 million, or 32.0%, when compared to the prior year primarily as a result of lower demand in North America, partially offset by productivity actions. Other 2026 compared to 2025 2025 compared to 2024 (in thousands except % % percentages) 2026 2025 Change 2025 2024 Change Net sales $ 23,453 $ 35,699 (34.3% ) $ 35,699 $ 40,238 (11.3% ) Income from operations 4,046 7,315 (44.7% ) 7,315 9,295 (21.3% ) Operating income margin 17.3 % 20.5 % 20.5 % 23.1 % Net sales in fiscal year 2026 decreased by $12.2 million, or 34.3%, when compared to the prior year quarter primarily due to divestiture timing. Income from operations in fiscal year 2026 decreased by $3.3 million, or 44.7%, when compared to the prior year quarter, due to divestiture timing and higher tariff costs which have been partly offset by increased pricing. Net sales in fiscal year 2025 decreased by $4.5 million, or 11.3%, when compared to the prior year period primarily due to general market softness in the Display Merchandising business. Income from operations in fiscal year 2025 decreased by $2.0 million, or 21.3%, when compared to the prior year period, due to lower volumes. Corporate 2026 compared to 2025 2025 compared to 2024 (in thousands except % % percentages) 2026 2025 Change 2025 2024 Change Corporate - Income from operations $ (40,032 ) $ (31,427 ) 27.4 % $ (31,427 ) $ (32,183 ) (2.3% ) Gain (loss) on sale of business 57,085 - 0.0 % - 274 (100.0% ) Restructuring costs (12,186 ) (6,903 ) 76.5 % (6,903 ) (8,206 ) (15.9% ) Deal related costs (4,059 ) (21,434 ) (81.1% ) (21,434 ) (2,622 ) 717.5 % Other operating income (expense), net - - 0.0 % - (110 ) (100.0% ) Corporate expenses in fiscal year 2026 increased by $8.6 million, or 27.4%, when compared to the prior year, primarily due to increase in variable compensation and employee medical costs. Corporate expenses in fiscal year 2025 decreased by $0.8 million, or 2.3%, when compared to the prior year, primarily due to reduction in incentive compensation. The gain on sale of business, restructuring costs, deal related costs and other operating income (expense), net have been discussed above in the Company Overview. 22 Table of Contents Discontinued Operations In pursuing our business strategy, the Company may divest certain businesses. Future divestitures may be classified as discontinued operations based on their strategic significance to the Company. Activity related to discontinued operations is as follows (in thousands): Year Ended June 30, 2026 2025 2024 (Loss) before taxes $ (182 ) $ (53 ) $ (654 ) Benefit for taxes 38 11 137 Net (loss) from discontinued operations $ (144 ) $ (42 ) $ (517 ) Liquidity and Capital Resources At June 30, 2026, our total cash balance was $178.7 million, of which $150.6 million was held outside of the United States. The amount and timing of cash repatriation is dependent upon foreign exchange rates and each business unit’s operational needs including requirements to fund working capital, capital expenditure, and jurisdictional tax payments. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to capital controls; however, those balances are generally available without legal restrictions to fund ordinary business operations. Cash Flow Net cash provided by continuing operating activities for the year ended June 30, 2026 was $89.9 million compared to net cash provided by continuing operating activities of $69.6 million in the prior year. We generated $120.6 million from income statement activities and used $23.8 million of cash to fund working capital and other balance sheet account increases. Cash provided by investing activities for the year ended June 30, 2026 totaled $43.1 million. We used $25.2 million for capital expenditures. We generated $68.3 million from the sale of business. Cash used in financing activities for the year ended June 30, 2026 was $56.6 million and included proceeds from borrowings of $75.0 million, payment of debt of $110.0 million, stock repurchases of $4.4 million and cash paid for dividends of $16.2 million. Net cash provided by continuing operating activities for the year ended June 30, 2025 was $69.6 million compared to net cash provided by continuing operating activities of $93.3 million in the prior year. We generated $102.0 million from income statement activities and used $12.9 million of cash to fund working capital and other balance sheet account increases. Cash flow used in investing activities for the year ended June 30, 2025 totaled $503.4 million. We used $478.9 million for the purchase of acquisitions in the fiscal year, $28.3 million was used for capital expenditures. We generated $3.5 million in the fiscal year proceeds from life insurance policies. Cash provided by financing activities for the year ended June 30, 2025 was $380.5 million and included proceeds from borrowings of $792.3 million, payment of debt of $389 million, stock repurchases of $9.9 million and cash paid for dividends of $15.0 million. We sponsor a number of defined benefit and defined contribution retirement plans. The U.S. pension plan is frozen for all participants. We have evaluated the current and long-term cash requirements of these plans, and our existing sources of liquidity are expected to be sufficient to cover required contributions under ERISA and other governing regulations. The fair value of the Company's U.S. defined benefit pension plan assets was $149.7 million at June 30, 2026, as compared to $146.4 million as of June 30, 2025. We participate in two multi-employer pension plans and sponsor six defined benefit plans including two in the U.S. and Japan and one each in the U.K. and Germany. The Company’s pension plan is frozen for U.S. employees and participants in the plan ceased accruing future benefits. Our primary U.S. defined benefit plan is not 100% funded under ERISA rules at June 30, 2026. U.S. defined benefit plan contributions of $6.6 million were made during fiscal year 2026 compared to $7.6 million during fiscal year 2025. There are required contributions of $4.6 million to the United States funded pension plan for fiscal year 2027. The Company expects to make contributions during fiscal year 2027 of $0.1 million and $0.3 million to its unfunded defined benefit plans in the U.S. and Germany, respectively. Any subsequent plan contributions will depend on the results of future actuarial valuations. We have evaluated the current and long-term cash requirements of our defined benefit and defined contribution plans as of June 30, 2026 and determined our operating cash flows from continuing operations and available liquidity are expected to be sufficient to cover the required contributions under ERISA and other governing regulations. We have an insurance program in place to fund supplemental retirement income benefits for three retired executives. Current executives and new hires are not eligible for this program. At June 30, 2026, the underlying policies had a cash surrender value of $7.0 million and are reported net of loans of $2.7 million for which we have the legal right of offset. These amounts are reported net on our balance sheet. Capital Structure 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 agreement”, or “facility”) with a borrowing limit of $500 million. Under the terms of the Credit Facility, we pay interest on borrowed amounts based on a variable rate of interest and a credit spread based on quarterly reported leverage and a commitment fee on unused amounts under the facility. The amount of the commitment fee depends upon both the undrawn amount remaining available under the facility and the Company’s funded debt to EBITDA (as defined in the agreement) ratio at the last day of each quarter. Funds borrowed under the facility may be used for the repayment of debt, working capital, capital expenditures, acquisitions (so long as certain conditions, including a specified funded debt to EBITDA leverage ratio is maintained), and other general corporate purposes. 23 Table of Contents During the second quarter of fiscal year 2025, we entered into a $250 million 364-day term loan with existing lenders. Also, during the period, we converted the 364-day term loan into an exercise of the accordion feature under our existing credit facilities. In connection with the conversion of the loan, the Company entered into a Second Amendment to Third Amended and Restated Credit Agreement. This amendment expanded the total available credit under the Revolving Credit Agreement from $500 million to $825 million. As of June 30, 2026, the Company has used $3.1 million against the letter of credit sub-facility and had the ability to borrow $148.4 million under the facility based on our current trailing twelve-month EBITDA. The facility contains customary representations, warranties and restrictive covenants, as well as specific financial covenants. The Company’s current financial covenants under the facility are as follows: Interest Coverage Ratio - The Company is required to maintain a ratio of Earnings Before Interest and Taxes, as Adjusted (“Adjusted EBIT per the Credit Facility”), to interest expense for the trailing twelve months of at least 2.75:1. Adjusted EBIT per the Credit Facility specifically excludes extraordinary and certain other defined items such as cash restructuring and deal related charges up to the lower of $20.0 million or 10% of EBITDA. The facility allows for unlimited non-cash charges including purchase accounting and goodwill adjustments. At June 30, 2026, the Company’s Interest Coverage Ratio was 4.97:1. Leverage Ratio- The Company’s ratio of funded debt to trailing twelve month Adjusted EBITDA per the Credit Facility, calculated as Adjusted EBIT per the Credit Facility plus depreciation and amortization, may not exceed 3.5:1. Under certain circumstances in connection with a Material Acquisition (as defined in the Facility), the Facility allows for the leverage ratio to go as high as 4.0:1 for a four-fiscal quarter period. At June 30, 2026, the Company’s Leverage Ratio was 2.41:1. As of June 30, 2026, we had borrowings under our facility of $518.2 million. The effective rate of interest for our outstanding borrowings is 5.71%. Our primary cash requirements in addition to day-to-day operating needs include interest payments, capital expenditures, acquisitions, share repurchases, and dividends. Our primary sources of cash are cash flows from continuing operations and borrowings under the facility. We expect that fiscal year 2027 depreciation and amortization expense will be between $18.0 million and $20.5 million and $10.5 million and $12.5 million, respectively. The following table sets forth our capitalization at June 30: 2026 2025 Long-term debt $ 517,950 $ 552,515 Less cash and cash equivalents 178,734 104,542 Net (cash) debt 339,216 447,973 Stockholders' equity 755,214 711,677 Total capitalization $ 1,094,430 $ 1,159,650 Stockholders’ equity increased year over year by $43.5 million, primarily as a result of current year net income of $104.6 million, stock based compensation of $8.8 million and unamortized pension benefit of $7.4 million, offset by an unfavorable foreign exchange translation loss of $43.4 million, an adjustment to noncontrolling interest of $17.4 and dividend payment of $16.1 million. The Company's net (cash) debt to capital percentage changed to 31.0% as of June 30, 2026 from 38.6% in the prior year. At June 30, 2026, we expect to pay estimated interest payments of $141 million within the next five years. This estimate is based upon the loan balance, interest rate, and credit spread as of June 30, 2026 through August 17, 2026 and the adjusted credit spread due to year end leverage ratio change from August 18, 2026. See Item 7A for further discussions surrounding interest rate exposure on our variable rate borrowings. Post-retirement benefits and pension plan contribution payments represent future pension payments to comply with local funding requirements. Our policy is to fund domestic pension liabilities in accordance with the minimum and maximum limits imposed by the Employee Retirement Income Security Act of 1974 ("ERISA"), federal income tax laws and the funding requirements of the Pension Protection Act of 2006. At June 30, 2026, we expect to pay estimated post-retirement benefit payments of $5.0 million during fiscal year 2027. See "Item 8. Financial Statements and Supplementary Data, Note 16. Employee Benefit Plans" for additional information regarding these obligations. At June 30, 2026, we had $48.3 million of operating lease obligations. See "Item 8. Financial Statements and Supplementary Data, Note 20. Leases" for additional information regarding these obligations. At June 30, 2026, we had a $64.0 million obligation to purchase noncontrolling interest. The noncontrolling interest was purchased in July 2026. Additionally, we had $2.2 million of non-current liabilities for uncertain tax positions. We are not able to provide a reasonable estimate of the timing of future payments related to these obligations. Other Matters Tariff – Several of our segments may be impacted by ongoing tariff actions. While we cannot predict the impact of potential new tariffs on global trade and economic growth, our regional presence, strong customer relationships, and our disciplined approach to pricing and productivity actions position us well to manage through these challenges. We monitor the regulatory environment and continue to make adjustments whenever it is deemed necessary. Most of our supply chain is strategically located to service regional demand. We plan to continue to invest in our key strategic growth priorities while closely managing our cost structure and driving productivity and pricing actions and seeking alternate sources of supply to further reduce the impact of tariffs as appropriate. Inflation – Certain of our expenses, such as wages and benefits, occupancy costs, freight and equipment repair and replacement, are subject to normal inflationary pressures. Inflation for medical costs can impact both our employee benefit costs as well as our reserves for workers' compensation claims. We monitor the inflationary rate and make adjustments to reserves whenever it is deemed necessary. Our ability to control worker compensation insurance medical cost inflation is dependent upon our ability to manage claims and purchase insurance coverage to limit the maximum exposure for us. Each of our segments is subject to the effects of changing raw material costs caused by the underlying commodity price movements. We have experienced price fluctuations for a number of materials including rhodium, steel, and other metal commodities. These materials are some of the key elements in the products manufactured in these segments. Wherever possible, we will implement price increases to offset the impact of changing prices. The ultimate acceptance of these price increases will be impacted by our affected divisions’ respective competitors and the timing of their price increases. In general, we do not enter into purchase contracts that extend beyond one operating cycle. While Standex considers our relationship with our suppliers to be good, there can be no assurances that we will not experience any supply shortage. 24 Table of Contents Foreign Currency Translation – Our primary functional currencies used by our non-U.S. subsidiaries are the Euro, British Pound Sterling (Pound), Japanese (Yen), Mexican Peso, Chinese (Yuan), and Indian (Rupee). Defined Benefit Pension Plans – We record expenses related to these plans based upon various actuarial assumptions such as discount rates and assumed rates of returns. The Company’s pension plan is frozen for all eligible U.S. employees and participants in the plan ceased accruing future benefits. Environmental Matters – To the best of our knowledge, we believe that we are presently in substantial compliance with all existing applicable environmental laws and regulations and do not anticipate any instances of non-compliance that will have a material effect on our future capital expenditures, earnings or competitive position. Seasonality – We are a diversified business with generally low levels of seasonality. Employee Relations – The Company has labor agreements with four union locals in the United States and various European employees belong to European trade unions. Critical Accounting Policies The Consolidated Financial Statements include accounts of the Company and all of our subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements. Although, we believe that materially different amounts would not be reported due to the accounting policies described below, the application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We have listed a number of accounting policies which we believe to be the most critical. Revenue Recognition – Most of the Company’s contracts have a single performance obligation which represents, the product or service being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation and/or extended warranty. Additionally, most of the Company’s contracts offer assurance type warranties in connection with the sale of a product to customers. Assurance type warranties provide a customer with assurance that the product complies with agreed-upon specifications. Assurance type warranties do not represent a separate performance obligation. In general, the Company recognizes revenue at the point in time control transfers to their customer based on predetermined shipping terms. Revenue is recognized over time under certain long-term contracts within the A&D and Engraving & Hydraulics groups for highly customized customer products that have no alternative use and in which the contract specifies the Company has a right to payment for its costs, plus a reasonable margin. For products recognized over time, the transfer of control is measured pro rata, based upon current estimates of costs to complete such contracts. Losses on contracts are fully recognized in the period in which the losses become determinable. Revisions in profit estimates are reflected on a cumulative basis in the period in which the basis for such revision becomes known. Collectability of Accounts Receivable – Accounts Receivable are reduced by an allowance for amounts that represent management's best estimate of estimated losses over the life of the underlying asset. Our estimate for the allowance for credit loss accounts related to trade receivables includes evaluation of specific accounts where we have information that the customer may have an inability to meet its financial obligation together with a detailed review of the collectability of pooled assets based on a combination of qualitative and quantitative factors. Realizability of Inventories – Inventories are valued at the lower of cost or market. The Company regularly reviews inventory values on hand using specific aging categories and records a write down for obsolete and excess inventory based on historical usage and estimated future usage. As actual future demand or market conditions may vary from those projected by management, adjustments to inventory valuations may be required. Realization of Goodwill – Goodwill and certain indefinite-lived intangible assets are not amortized but instead are tested for impairment at least annually and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying amount of the asset. The Company’s annual test for impairment is performed using a May 31st measurement date. We have identified four reporting units for impairment testing: Electronics, A&D, Scientific, Engraving & 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). This method uses various assumptions that are specific to each individual reporting unit in order to determine the fair value. In addition, the Company compares the estimated aggregate fair value of its reporting units to its overall market capitalization. Our annual impairment testing at each reporting unit relied on assumptions surrounding general market conditions, short-term growth rates, a terminal growth rate of 2.5%, and detailed management forecasts of future cash flows prepared by the relevant reporting unit. Fair values were determined primarily by discounting estimated future cash flows at a weighted average cost of capital of 9.89%. During our annual impairment testing, we evaluated the sensitivity of our most critical assumption, the discount rate, and determined that a 100-basis point change in the discount rate selected would not have impacted the test results. Additionally, the Company could reduce the terminal growth rate from its current 2.5% to 1.0% and the fair value of all reporting units would still exceed their carrying value. While we believe that our estimates of future cash flows are reasonable, changes in assumptions could significantly affect our valuations and result in impairments in the future. The most significant assumption involved in the Company’s determination of fair value is the cash flow projections of each reporting unit. As a result of our annual assessment in the fourth quarter of fiscal year 2026, the Company determined that the fair value of the four reporting units substantially exceeded their respective carrying values. Therefore, no impairment charges were recorded in connection with our annual assessment during the fourth quarter of fiscal year 2026. Cost of Employee Benefit Plans – We provide a range of benefits to certain retirees, including pensions and some postretirement benefits. We record expenses relating to these plans based upon various actuarial assumptions such as discount rates, assumed rates of return, compensation increases and turnover rates. The expected return on plan assets assumption of 6.35% in the U.S. is based on our expectation of the long-term average rate of return on assets in the pension funds and is reflective of the current and projected asset mix of the funds and considers the historical returns earned on the funds. We have analyzed the rates of return on assets used and determined that these rates are reasonable based on the plans’ historical performance relative to the overall markets as well as our current expectations for long-term rates of returns for our pension assets. The U.S. discount rate of 5.6% reflects the current rate at which pension liabilities could be effectively settled at the end of the year. 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. We review our actuarial assumptions, including discount rate and expected long-term rate of return on plan assets, on at least an annual basis and make modifications to the assumptions based on current rates and trends when appropriate. Based on information provided by our actuaries and other relevant sources, we believe that our assumptions are reasonable. 25 Table of Contents The cost of employee benefit plans includes the selection of assumptions noted above. A twenty-five-basis point change in the U.S. expected return on plan assets assumptions, holding our discount rate and other assumptions constant, would increase or decrease pension expense by approximately $0.4 million per year. A twenty-five-basis point change in our discount rate, holding all other assumptions constant, would have no impact on 2026 pension expense as changes to amortization of net losses would be offset by changes to interest cost. In future years, the impact of discount rate changes could yield different sensitivities. See the Notes to the Consolidated Financial Statements for further information regarding pension plans. Business Combinations - The accounting for business combinations requires estimates and judgments as to expectations for future cash flows of the acquired business and the allocation of those cash flows to identifiable intangible assets in determining the estimated fair values for assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed, are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the consolidated financial statements could result in a possible impairment of the intangible assets and goodwill or require acceleration of the amortization expense of finite-lived intangible assets. Allocations of the purchase price for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization of the purchase price allocation. During this measurement period, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. All changes that do not qualify as measurement period adjustments are included in current period earnings. Recently Issued Accounting Pronouncements See "Item 8. Financial Statements and Supplementary Data, Note 1. Summary of Accounting Policies” for information regarding the effect of recently issued accounting pronouncements on our consolidated statements of operations, comprehensive income, redeemable noncontrolling interest and stockholders’ equity, cash flows, and notes for the year ended June 30, 2026 .