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What changed in STANDEX INTERNATIONAL CORP/DE/'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of STANDEX INTERNATIONAL CORP/DE/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+169 added−174 removedSource: 10-K (2023-08-04) vs 10-K (2022-08-05)

Top changes in STANDEX INTERNATIONAL CORP/DE/'s 2023 10-K

169 paragraphs added · 174 removed · 134 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

23 edited+13 added−6 removed42 unchanged
Biggest changeMarkets and Applications Spincraft products serve applications within the space, aviation, defense, energy, medical, and general industrial markets. ● The space market we serve is comprised of components for space launch systems including fuel tanks, tank domes, combustion liners, nozzles, and crew vehicle structures. ● The aviation market offerings include a large portfolio of components and assemblies including inlet ducts and lipskins. ● The defense market we serve covers a wide spectrum of metal applications including missile nose cones and fabrications, large dimension exhaust systems, navy-nuclear propulsion, and engine components for military aircraft ● Applications within the energy market include components and assemblies for new and MRO gas turbines, as well as solutions for oil & gas exploration operations 5 Customers Engineering Technologies components are sold directly to large space, aviation, defense, energy and medical companies, or suppliers to those companies.
Biggest changeMarkets and Applications Spincraft products serve applications within the space, aviation, defense, energy, medical, and general industrial markets. ● The space market we serve is comprised of components and assemblies for space launch vehicles, engines, crewed and uncrewed spacecraft and other space infrastructure. ● The aviation market offerings include a large portfolio of components and assemblies for commercial and private aircraft engines, nacelles and fuel systems. ● The defense market we serve covers a wide spectrum of applications including components for missiles, naval propulsion and structures, large dimension exhaust systems and military aircraft engine solutions. ● Applications within the energy market include components and assemblies for new and MRO gas turbines, as well as solutions for oil & gas exploration operations. 5 Brands This group's brand name is Spincraft.
Our growth strategy is to continue to develop and/or acquire new technologies to enhance surface textures that also allow our customers to introduce more sustainable manufacturing processes and reduce their own energy consumption. We are one company operating in 19 countries using a consistent approach to guarantee harmony on global programs in service of our customers.
Our growth strategy is to continue to develop and/or acquire technologies to enhance surface textures that also allow our customers to introduce more sustainable manufacturing processes and reduce their own energy consumption. We are one company operating in 19 countries using a consistent approach to guarantee harmony on global programs in service of our customers.
Federal focuses on the challenges of enabling retail and food service establishments to provide food and beverages that are fresh and appealing while at the same time providing for food safety, and energy efficiency. Our key differentiator is the ability to customize products to match customers’ décor within industry lead-time.
Federal Industries focuses on the challenges of enabling retail and food service establishments to provide food and beverages that are fresh and appealing while at the same time providing for food safety, and energy efficiency. Our key differentiator is the ability to customize products to match customers’ décor within industry lead-time.
Markets and Applications Federal custom designs and manufactures refrigerated, heated and dry merchandising display cases for bakery, deli, confectionary and packaged food products utilized in restaurants, convenience stores, quick-service restaurants, supermarkets, drug stores and institutions such as hotels, hospitals, and school cafeterias.
Markets and Applications Federal Industries custom designs and manufactures refrigerated, heated and dry merchandising display cases for bakery, deli, confectionary and packaged food products utilized in restaurants, convenience stores, quick-service restaurants, supermarkets, drug stores and institutions such as hotels, hospitals, and school cafeterias.
Brands Business unit names are Standex Electronics, Standex-Meder Electronics, Renco Electronics, Northlake Engineering, Agile Magnetics, Sensor Solutions, Standex Electronics Japan. Other associated brand names include the MEDER, KENT, and KOFU reed switch brands. Products Our sensing products employ reed switch, Hall effect, inductive, conductive and other technologies.
Brands Business unit names are Standex Electronics, Standex-Meder Electronics, Renco Electronics, Northlake Engineering, Agile Magnetics, Sensor Solutions, Standex Electronics Japan. Other associated brand names include the MEDER, KENT, and KOFU reed switch brands. Products and Services Our sensing products employ reed switch, Hall effect, inductive, conductive and other technologies.
Our fiscal year 2022 includes the twelve-month period from July 1, 2021 to June 30, 2022. 2 Our long-term business strategy is to create, improve, and enhance shareholder value by building more profitable, focused industrial platforms through our Standex Value Creation System.
Our fiscal year 2023 includes the twelve-month period from July 1, 2022 to June 30, 2023. 2 Our long-term business strategy is to create, improve, and enhance shareholder value by building more profitable, focused industrial platforms through our Standex Value Creation System.
Securities and Exchange Commission (the “SEC”) maintains an internet website at www.sec.gov that contains our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, and all amendments thereto. Standex’s internet website address is www.standex.com.
The U.S. Securities and Exchange Commission (the “SEC”) maintains an internet website at www.sec.gov that contains our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, and all amendments thereto. Standex’s internet website address is www.standex.com.
Standex competes on the basis of Customer Intimacy in which our teams work as extensions of our customers organizations to apply our expertise and technology to address needs with customer solutions. International Operations International operations are conducted at 41 locations, in Europe, Canada, China, Japan, India, Southeast Asia, Korea, Mexico, Brazil, and South Africa.
Standex competes on the basis of Customer Intimacy in which our teams work as extensions of our customers organizations to apply our expertise and technology to address needs with customer solutions. International Operations International operations are conducted at 37 locations, in Europe, Canada, China, Japan, India, Southeast Asia, Korea, Mexico, and South Africa.
Our products are utilized by OEMs on vehicles such as dump trucks, dump trailers, bottom dumps, garbage trucks (both recycling and rear loader), container roll off vehicles, hook lift trucks, liquid waste handlers, vacuum trucks, compactors, balers, airport catering vehicles, container handling equipment for airlines, lift trucks, yard tractors, and underground mining vehicles.
Custom Hoist products are utilized by OEMs on vehicles such as dump trucks, dump trailers, bottom dumps, garbage trucks (both recycling and rear loader), container roll off vehicles, hook lift trucks, liquid waste handlers, vacuum trucks, compactors, balers, airport catering vehicles, container handling equipment for airlines, lift trucks, yard tractors, and underground mining vehicles.
Ademir Sarcevic 47 Vice President and Chief Financial Officer of the Company since September 2019. Various positions over the years at Pentair plc from 2012 to September 2019 with increasing responsibility ending as Senior Vice President and Chief Accounting Officer. Alan J. Glass 58 Vice President, Chief Legal Officer and Secretary of the Company since April 2016.
Ademir Sarcevic 48 Vice President and Chief Financial Officer of the Company since September 2019. Various positions over the years at Pentair plc from 2012 to September 2019 with increasing responsibility ending as Senior Vice President and Chief Accounting Officer. Alan J. Glass 59 Vice President, Chief Legal Officer and Secretary of the Company since April 2016.
Specialty Solutions Specialty Solutions is a collection of three businesses: Federal Industries, Procon, and Custom Hoists. These businesses differentiate themselves in their respective markets by collaborating with customers to develop and deliver custom solutions. Federal Industries provides merchandising solutions to retail and food service customers whose revenue stream is enhanced through food presentation.
Specialty Solutions Specialty Solutions is comprised of two businesses: Federal Industries and Custom Hoists. These businesses differentiate themselves in their respective markets by collaborating with customers to develop and deliver custom solutions. Federal Industries provides merchandising solutions to retail and food service customers whose revenue stream is enhanced through food presentation.
Headquartered in Salem, New Hampshire, we have seven operating segments aggregated into five reportable segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions. Three operating segments are aggregated into Specialty Solutions.
Headquartered in Salem, New Hampshire, we have six operating segments aggregated into five reportable segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions. Two operating segments are aggregated into Specialty Solutions.
Long-Lived Assets Long-lived assets are described and discussed in the Notes to Consolidated Financial Statements under the caption “Long-Lived Assets.” Available Information Standex’s corporate headquarters are at 23 Keewaydin Drive, Salem, New Hampshire 03079, and our telephone number at that location is (603) 893-9701. The U.S.
There are no family relationships among any of the directors or executive officers of the Company. Long-Lived Assets Long-lived assets are described and discussed in the Notes to Consolidated Financial Statements under the caption “Long-Lived Assets.” Available Information Standex’s corporate headquarters are at 23 Keewaydin Drive, Salem, New Hampshire 03079, and our telephone number at that location is (603) 893-9701.
See the Notes to Consolidated Financial Statements for international operations financial data. Our net sales from continuing international operations increased from 41% in 2021 to 42% in 2022.
See the Notes to Consolidated Financial Statements for international operations financial data. Our net sales from continuing international operations decreased slightly from 42% in fiscal year 2022 to 39% in fiscal year 2023.
Sean Valashinas 51 Vice President, Chief Accounting Officer and Assistant Treasurer of the Company since October 2007. Paul Burns 49 Vice President of Strategy and Business Development since July 2015.
Sean Valashinas 52 Vice President, Chief Accounting Officer and Assistant Treasurer of the Company since October 2007.
Flexible design capability, a global supply chain and speed to market enable us to be successful in growing our business. Our team is dedicated to superior customer service through our technical engineering support and on-time delivery. Specialty Solutions Locations Specialty Solutions products are designed and/or manufactured in Hayesville, OH; Smyrna TN; Nogales, MX; Belleville, WI; Tianjin, China; and Mountmellick, Ireland.
Our team is dedicated to superior customer service through our technical engineering support and on-time delivery. Specialty Solutions products are designed and/or manufactured in Hayesville, OH; Belleville, WI; and Tianjin, China.
Customers Scientific products are sold to medical and laboratory distributors, healthcare facilities, research universities, pharmaceutical companies, and pharmacies. Engineering Technologies Our Engineering Technologies Group is a provider of innovative, metal-formed solutions for OEM and Tier 1 manufacturers for use in their advanced engineering designs.
Engineering Technologies Our Engineering Technologies Group (ETG) is a provider of innovative, metal-formed solutions for OEM and Tier 1 manufacturers for use in their advanced engineering designs.
Our engineering expertise coupled with broad manufacturing capabilities and responsiveness to customer needs drives our top line growth opportunities. We leverage our full line of products for the construction markets in dump truck and trailer applications and deep expertise in the refuse market to expand into new adjacent markets, targeting the most challenging custom applications.
We leverage our full line of products for the construction markets in dump truck and trailer applications and deep expertise in the refuse market to expand into new adjacent markets, targeting the most challenging custom applications. Flexible design capability, a global supply chain and speed to market enable us to be successful in growing our business.
Financial Information about Geographic Areas Information regarding revenues from external customers attributed to the United States, all foreign countries and any individual foreign country, if material, is contained in the Notes to Consolidated Financial Statements, “Revenue from Contracts with Customers.” Number of Employees As of June 30, 2022, we employ approximately 3,800 employees of which approximately 1,200 are in the United States.
Financial Information about Geographic Areas Information regarding revenues from external customers attributed to the United States, all foreign countries and any individual foreign country, if material, is contained in the Notes to Consolidated Financial Statements, “Revenue from Contracts with Customers.” Human Capital Resources Standex International recognizes that its long, successful history and future opportunities are directly linked to dedicated, engaged and diverse employees that serve the Company in all business operations.
Annemarie Bell 58 Vice President, Chief Human Resources Officer since July 2021, Vice President of Human Resources from June 2019 to July 2021, Interim Vice President of Human Resources from October 2018 through June 2019; Vice President of Human Resources for four of Standex business units from October 2015 through October 2018 Flavio Maschera 60 Vice President, Chief Innovation & Technology Officer since October 2021; President of Standex Engraving from 2016 through 2021.
Annemarie Bell 59 Vice President, Chief Human Resources Officer since July 2021, Vice President of Human Resources from June 2019 to July 2021, Interim Vice President of Human Resources from October 2018 through June 2019; Vice President of Human Resources for four of Standex business units from October 2015 through October 2018 The executive officers are elected each year at the first meeting of the Board of Directors subsequent to the annual meeting of stockholders, to serve for one-year terms of office.
Custom Hoists' designs and manufactures single and double acting telescopic and piston rod hydraulic cylinders for original and aftermarket use in construction equipment, refuse, airline support, mining, oil and gas, and other material handling applications. We also sell specialty pneumatic cylinders and promote complete wet line kits, which are complete hydraulic systems that include a pump, valves, hoses and fittings.
Custom Hoists designs and manufactures single and double acting telescopic and piston rod hydraulic cylinders for original and aftermarket use in construction equipment, refuse, airline support, mining, oil and gas, and other material handling applications. Customers Specialty Solutions products are sold to OEMs, distributors, service organizations, aftermarket repair outlets, end-users, dealers, buying groups, consultants, government agencies and manufacturers.
Approximately 45% of our production workforce is situated in low-cost manufacturing regions such as Mexico and portions of Asia. 7 Executive Officers of Standex The executive officers of the Company as of June 30, 2022 are a s follows: Name Age Principal Occupation During the Past Five Years David Dunbar 60 President and Chief Executive Officer of the Company since January 2014.
We also launched our Women and Leadership Employee Resource Group in fiscal year 2023, which aims to continue increasing representation of women at all levels to contribute to the Company’s business success through relationships, and partnerships. 7 Executive Officers of Standex The executive officers of the Company as of June 30, 2023 are a s follows: Name Age Principal Occupation During the Past Five Years David Dunbar 61 President and Chief Executive Officer of the Company since January 2014.
However, due to the nature of our manufacturing operations and the types of products manufactured, expenditures for research and development are not significant to any individual segment or in the aggregate. Research and development costs are quantified in the Notes to Consolidated Financial Statements.
Research and development costs are quantified in the Notes to Consolidated Financial Statements.
Removed
This differentiator is used to target the convenience store, school cafeterias and quick-service restaurant segments. Procon is a global supplier of pump solutions to the beverage, water, medical, welding and ink markets. Through collaboration between our customers and our product development teams, we provide custom fluid pumping solutions to OEM manufacturers, and aftermarket distributors.
Added
Products and Services We manufacture and provide specialty-controlled temperature equipment purpose-built for the medical, scientific, pharmaceutical, biotech and industrial markets. Our comprehensive portfolio includes a range of innovative reach in cold storage solutions for medications, vaccines, blood products and patient samples. Customers Scientific products are sold to medical and laboratory distributors, healthcare facilities, research universities, pharmaceutical companies, and pharmacies.
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We manufacture globally, utilizing the latest techniques and processes to ensure the highest quality and acute attention to detail in order for our products to meet the demands of the applications and environmental conditions required by our customers. Custom Hoists is a supplier of engineered hydraulic cylinders that meet customer specific requirements for demanding applications.
Added
Products and Services ● Space: Fuel tanks and fuel tank domes, rocket engine components, crew vehicle and unmanned spacecraft structures and bulkheads ● Aviation: Nacelle inlet lipskins & ducts, engine components and fuel tank elements ● Defense: Missile nose cones & structures, naval propulsion components and structures, exhaust assemblies, and military aircraft engine & exhaust components ● Energy: Power generation turbine & other assemblies, oil & gas exploration connection components Customers Engineering Technologies components are sold directly to large space, aviation, defense, energy and medical companies, or suppliers to those companies.
Removed
Procon designs and manufactures custom fluid pump solutions that are sold into the global carbonation, coffee, and beer chilling beverage markets as well as reverse osmosis water treatment, medical, welding, and industrial ink-jet printer markets.
Added
This differentiator is used to target the convenience store, school cafeterias and quick-service restaurant segments. Custom Hoists is a supplier of engineered hydraulic cylinders that meet customer specific requirements for demanding applications. Our engineering expertise coupled with broad manufacturing capabilities and responsiveness to customer needs drives our top line growth opportunities.
Removed
Customers Specialty Solutions products are sold to OEMs, distributors, service organizations, aftermarket repair outlets, end-users, dealers, buying groups, consultants, government agencies and manufacturers. Working Capital Our primary source of working capital is the cash generated from continuing operations.
Added
Brands Federal Industries products are sold under the Federal brand. Custom Hoists products are sold under the Custom Hoist brand. Products and Services Federal Industries offers a selection of display cases, including innovative customization, for fresh food merchandising requirements.
Removed
About 200 of our U.S. employees are represented by unions.
Added
The following provides a description of key areas impacting our Company. Working Capital Our primary source of working capital is the cash generated from continuing operations.
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The executive officers are elected each year at the first meeting of the Board of Directors subsequent to the annual meeting of stockholders, to serve for one-year terms of office. There are no family relationships among any of the directors or executive officers of the Company.
Added
As of June 30, 2023, we employ approximately 3,800 employees of which approximately 1,200 are in the United States. About 200 of our U.S. employees are represented by unions. Wages and benefits are competitive with those of other manufacturers in the geographic areas in which our facilities are located.
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We strive to maintain open, two-way communication and build excellent relationships with both our non-union employee population and the various unions and works councils within our business segments. Employees participate in regular training programs appropriate for their responsibility and optional training programs have been developed for those who seek professional and personal growth opportunities.
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Our global Standex Safety Council, with representatives from all Standex sites, meets regularly, as we work continuously to enhance our safety culture and closely monitor our Total Recordable Incident Rate. The Company’s Chief Human Resources Officer meets regularly with the Chief Executive Officer to align Human Capital strategy, plan and initiatives with business strategy and goals.
Added
Our goal is to strive to provide a rewarding employee experience across the company. We continuously review our Human Capital Resources metrics, including safety metrics, turnover, and culture survey responses and associated action plans, to promote an emotionally and physically safe and inclusive working environment.
Added
Our LEAP performance management and development process places emphasis on both manager engagement and employee ownership. We regularly conduct employee engagement and satisfaction surveys, including our annual Culture Survey, completed in fiscal year 2023. Results from these surveys and engagement activities drive advances in senior management focus to continuously improve our culture and way of working.
Added
Standex hosts an annual meeting event in the first quarter of the fiscal year with the extended global leadership team, representative of all our business segments and corporate functions, in which participants join together to align on business and culture goals, participate in leadership development training, share best practices and build unity across the company.
Added
The Company established the Inclusion Advisory Council (IAC) as a collaboration of employee voices that helps to inform and align the company’s commitment to inclusivity and represents the diverse world in which we live and engage with our employees, communities, customers and shareholders. The IAC provides operational input and guidance to the Executive Leadership Team in three areas.
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First, the IAC sets global goals and objectives to promote inclusivity and diversity. Second, the IAC collaborates with Corporate Communications and the global Standex community to help develop internal and external communications highlighting the work and progress of the IAC. Finally, the IAC champions the adoption and implementation of IAC initiatives and projects within our respective businesses.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

15 edited+1 added−5 removed71 unchanged
Biggest changeIncreased prices or significant shortages of the commodities that we use in our businesses could result in lower net sales, profits and cash flows We purchase large quantities of steel, aluminum, refrigeration components, freight services, and other metal commodities for the manufacture of our products.
Biggest changeWe purchase large quantities of steel, aluminum, refrigeration components, freight services, and other metal commodities for the manufacture of our products. We also purchase significant quantities of relatively rare elements used in the manufacture of certain of our electronics products.
A deterioration in the domestic and international economic environment, whether by way of current inflationary conditions or potential recessionary conditions, could adversely affect our operating results, cash flow and financial condition. Current inflationary conditions in the United States, Europe and other parts of the world have increased virtually all of our costs including our cost of materials, labor and transportation.
A deterioration in the domestic and international economic environment, whether by way of current inflationary conditions or potential recessionary conditions, could adversely affect our operating results, cash flow and financial condition. Recent inflationary conditions in the United States, Europe and other parts of the world have increased virtually all of our costs including our cost of materials, labor and transportation.
Various uncertainties, including continued adverse conditions in the capital markets or changes in general economic conditions, could impact the future operating performance at one or more of our businesses which could significantly affect our valuations and could result in additional future impairments. The recognition of an impairment of a significant portion of goodwill would negatively affect our results of operations.
Various uncertainties, including adverse conditions in the capital markets or changes in general economic conditions, could impact the future operating performance at one or more of our businesses which could significantly affect our valuations and could result in additional future impairments. The recognition of an impairment of a significant portion of goodwill would negatively affect our results of operations.
Even the successful defense of legal proceedings may cause us to incur substantial legal costs and may divert management's time and resources away from our businesses. The costs of complying with existing or future environmental regulations, and of correcting any violations of these regulations, could impact our profitability.
Even the successful defense of legal proceedings may cause us to incur substantial legal costs and may divert management's time and resources away from our businesses. The costs of complying with existing or future environmental regulations, and of correcting any violations of these regulations, could impact adversely our profitability.
An expansion of the current war in Ukraine could adversely affect our results of operations and financial condition. To date, we have experienced minimal impacts on our businesses related to the ongoing war in Ukraine, beyond the general impact on global energy prices and other economic conditions.
An expansion of the war in Ukraine could adversely affect our results of operations and financial condition. To date, we have experienced minimal impacts on our businesses related to the ongoing war in Ukraine, beyond the general impact on global energy prices and other economic conditions.
The costs of curing violations or resolving enforcement actions that might be initiated by government authorities could be substantial. 12 The costs of complying with existing or future regulations applicable to our products, and of correcting any violations of such regulations, could impact our profitability.
The costs of curing violations or resolving enforcement actions that might be initiated by government authorities could be substantial. 12 The costs of complying with existing or future regulations applicable to our products, and of correcting any violations of such regulations, could adversely impact our profitability.
While we thus far have been largely successful in mitigating the impact of current inflationary conditions, we may be unable to continue to increase our own prices sufficiently to offset cost increases, and, to the extent that we are able to do so, we may not be able to maintain existing operating margins and profitability.
While we thus far have been largely successful in mitigating the impact of such inflationary conditions, we may be unable to continue to increase our own prices sufficiently to offset cost increases, and, to the extent that we are able to do so, we may not be able to maintain existing operating margins and profitability.
Our global operations subject us to international business risks. We operate in 41 locations outside of the United States in Europe, Canada, China, Japan, India, Singapore, Korea, Mexico, Brazil, Turkey, Malaysia, and South Africa.
Our global operations subject us to international business risks. We operate in 37 locations outside of the United States in Europe, Canada, China, Japan, India, Singapore, Korea, Mexico, Turkey, Malaysia, and South Africa.
These international business risks include: • fluctuations in currency exchange rates; • changes in government regulations; • restrictions on repatriation of earnings; • import and export controls; • political, social and economic instability; • potential adverse tax consequences; • difficulties in staffing and managing multi-national operations; • unexpected changes in zoning or other land-use requirements; • difficulties in our ability to enforce legal rights and remedies; and • changes in regulatory requirements.4 Failure to achieve expected savings and synergies could adversely impact our operating profits and cash flows.
These international business risks include: • fluctuations in currency exchange rates; • changes in government regulations; • restrictions on repatriation of earnings; • import and export controls; • political, social and economic instability; • potential adverse tax consequences; • difficulties in staffing and managing multi-national operations; • unexpected changes in zoning or other land-use requirements; • difficulties in our ability to enforce legal rights and remedies; and • changes in regulatory requirements.
Any of these risks could have a material adverse effect on our financial condition, results of operations and/or value of an investment in the Company. 8 The ongoing COVID-19 pandemic has, and could continue to adversely affect our revenues, operating results, cash flow and financial condition.
Any of these risks could have a material adverse effect on our financial condition, results of operations and/or value of an investment in the Company. 8 A pandemic or other global health crisis could adversely affect our revenues, operating results, cash flow and financial condition.
We focus on improving profitability through LEAN enterprise, low-cost sourcing and manufacturing initiatives, improving working capital management, developing new and enhanced products, consolidating factories where appropriate, automating manufacturing processes, diversification efforts and completing acquisitions which deliver synergies to stimulate sales and growth.
Failure to achieve expected savings and synergies could adversely impact our operating profits and cash flows. We focus on improving profitability through LEAN enterprise, low-cost sourcing and manufacturing initiatives, improving working capital management, developing new and enhanced products, consolidating factories where appropriate, automating manufacturing processes, diversification efforts and completing acquisitions which deliver synergies to stimulate sales and growth.
Our business and operations, and the operations of our suppliers, business partners and customers, have been, and are expected to continue to be adversely affected by the ongoing Coronavirus (or COVID-19) pandemic which is impacting worldwide economic activity including in many countries or localities in which we operate, sell, or purchase goods and services.
Our business and operations, and the operations of our suppliers, business partners and customers, were adversely affected by the Coronavirus (or COVID-19) pandemic which is impacted worldwide economic activity including in many countries or localities in which we operate, sell, or purchase goods and services.
We also purchase significant quantities of relatively rare elements used in the manufacture of certain of our electronics products. Historically, prices for commodities and rare elements have fluctuated, and we are unable to enter into long-term contracts or other arrangements to hedge the risk of price increases in many of these commodities.
Historically, prices for commodities and rare elements have fluctuated, and we are unable to enter into long-term contracts or other arrangements to hedge the risk of price increases in many of these commodities.
Difficulties or delays in research, development or production of new products and services or failure to gain market acceptance of new products and technologies may significantly reduce future net sales and adversely affect our competitive position.
Difficulties or delays in research, development or production of new products and services or failure to gain market acceptance of new products and technologies may significantly reduce future net sales and adversely affect our competitive position. Increased prices or significant shortages of the commodities that we use in our businesses could result in lower net sales, profits and cash flows.
The ultimate extent to which COVID-19 impacts our business will depend on the severity, location and duration of the spread of COVID-19, the actions undertaken by local and world governments and health officials to contain the virus or treat its effects, and the success of ongoing efforts distribute vaccines.
The ultimate extent to which any such circumstance impacts our business will depend on the severity, location and duration of the issue, the actions undertaken in response by local and world governments and health officials, and the success of medical efforts to address and mitigate the threat.
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There can be no assurance that COVID-19 will not impact our business generally as a result of the virus’ potential impact on delays in supply chain, production and/or purchases from our customers and timely payment from any customers who may be experiencing liquidity issues due to the pandemic.
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Any future pandemics or other global health crises could similarly have an adverse effect on our revenues, operating results, cash flow and financial condition.
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Due to the spread of COVID-19, we, at times, have modified our business practices, including employee travel restrictions, employee work locations, and cancellation of physical participation in non-critical meetings, events and conferences pursuant to applicable government guidelines.
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There is no certainty that such measures will be sufficient to mitigate the risks posed by COVID-19, which could adversely impact our ability to perform critical functions, such as the research and development of new products, the manufacture of our products, and the distribution and sale of our products.
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Moreover, while each of our operations has prepared business continuity plans to address COVID-19 concerns, in an effort to ensure that we are protecting our employees, continuing to operate our business and service our customers’ needs, there is no guarantee that such plans will anticipate or fully mitigate the various impacts the pandemic may have.
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While it is not possible at this time to estimate the scope and severity of the impact that COVID-19 will have on our operations, the continued spread of COVID-19, the measures taken by the governments of countries affected, actions taken to protect employees, actions taken to shut down or temporarily discontinue operations in certain locations, and the impact of the pandemic on various business activities in affected countries and the economy generally, could adversely affect our financial condition, results of operations and cash flows.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeFor the year ended June 30, 2022 , the approximate building space utilized by each segment is as follows: Area in Square Feet (in thousands) Segment Number of Locations Leased Owned Total Asia Pacific 4 119 32 151 EMEA (1) 3 34 66 100 Other Americas 1 - 56 56 United States 6 118 90 208 Electronics 14 271 244 515 Asia Pacific 13 402 - 402 EMEA (1) 13 182 70 252 Other Americas 3 90 - 90 United States 6 142 79 221 Engraving 35 816 149 965 United States 1 164 - 164 Scientific 1 164 - 164 EMEA (1) 1 83 - 83 United States 2 107 171 278 Engineering Technologies 3 190 171 361 Asia Pacific 1 76 - 76 EMEA (1) 1 16 - 16 Other Americas 1 19 - 19 United States 3 35 198 233 Specialty Solutions 6 146 198 344 United States 2 20 - 20 Corporate & Other 2 20 - 20 Total 61 1,607 762 2,369 (1) EMEA consists of Europe, Middle East and S.
Biggest changeFor the year ended June 30, 2023 , the approximate building space utilized by each segment is as follows: Area in Square Feet (in thousands) Segment Number of Locations Leased Owned Total Asia Pacific 4 133 31 164 EMEA (1) 3 - 125 125 Other Americas 1 - 56 56 United States 6 148 60 208 Electronics 14 281 272 553 Asia Pacific 11 443 - 443 EMEA (1) 13 181 70 251 Other Americas 3 90 - 90 United States 6 142 79 221 Engraving 33 856 149 1,005 United States 1 164 - 164 Scientific 1 164 - 164 EMEA (1) 1 83 - 83 United States 2 107 171 278 Engineering Technologies 3 190 171 361 Asia Pacific 1 76 - 76 United States 2 33 198 231 Specialty Solutions 3 109 198 307 United States 2 20 - 20 Corporate & Other 2 20 - 20 Total 56 1,620 790 2,410 (1) EMEA consists of Europe, Middle East and S.
Item 2. Properties We operate a total of 61 facilities including manufacturing plants, service centers, and warehouses located throughout the United States, Europe, Canada, Southeast Asia, Korea, Japan, China, India, Brazil, South Africa, and Mexico. The Company owns 16 of the facilities and the others are leased.
Item 2. Properties We operate a total of 56 facilities including manufacturing plants, service centers, and warehouses located throughout the United States, Europe, Canada, Southeast Asia, Korea, Japan, China, India, Brazil, South Africa, and Mexico. The Company owns 16 of the facilities and the others are leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAdditional information regarding our equity compensation plans is presented in the Notes to Consolidated Financial Statements under the caption “Stock-Based Compensation and Purchase Plans” and Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Issuer Purchases of Equity Securities (1) Quarter Ended June 30, 2022 Period (a) Total Number of Shares (or units) Purchased (b) Average Price Paid per Share (or unit) (c) Total Number of Shares (or units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Appropriate Dollar Value) of Shares (or units) that May Yet Be Purchased Under the Plans or Programs April 1 - April 30, 2022 - $ - - $ 100,648 May 1 - May 31, 2022 107,314 93.16 107,314 90,651 June 1 - June 30, 2022 - - - 90,651 TOTAL 107,314 $ 93.16 107,314 $ 90,651 (1) The Company has a Stock Buyback Program (the “Program”) which was originally announced on January 30, 1985 and most recently amended on April 28, 2022.
Biggest changeAdditional information regarding our equity compensation plans is presented in the Notes to Consolidated Financial Statements under the caption “Stock-Based Compensation and Purchase Plans” and Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Issuer Purchases of Equity Securities (1) Quarter Ended June 30, 2023 Period (a) Total Number of Shares (or units) Purchased (b) Average Price Paid per Share (or unit) (c) Total Number of Shares (or units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Appropriate Dollar Value) of Shares (or units) that May Yet Be Purchased Under the Plans or Programs April 1 - April 30, 2023 242 $ 122.44 242 $ 72,086 May 1 - May 31, 2023 50,000 137.46 50,000 65,213 June 1 - June 30, 2023 628 141.47 628 65,124 TOTAL 50,870 $ 137.44 50,870 $ 65,124 (1) The Company has a Stock Buyback Program (the “Program”) which was originally announced on January 30, 1985 and most recently amended on April 28, 2022.
The Company is not obligated to acquire a particular number of shares, and the program may be discontinued at any time at the Company’s discretion. 16 The following graph compares the cumulative total stockholder return on the Company’s Common Stock as of the end of each of the last five fiscal years, with the cumulative total stockholder return on the Standard & Poor’s Small Cap 600 (Industrial Segment) Index and on the Russell 2000 Index, assuming an investment of $100 in each at their closing prices on June 30, 2017 and the reinvestment of all dividends.
The Company is not obligated to acquire a particular number of shares, and the program may be discontinued at any time at the Company’s discretion. 16 The following graph compares the cumulative total stockholder return on the Company’s Common Stock as of the end of each of the last five fiscal years, with the cumulative total stockholder return on the Standard & Poor’s Small Cap 600 (Industrial Segment) Index and on the Russell 2000 Index, assuming an investment of $100 in each at their closing prices on June 30, 2018 and the reinvestment of all dividends.
Item 5. Market for Standex Common Stock Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market in which the Common Stock of Standex is traded is the New York Stock Exchange under the ticker symbol “SXI”. The approximate number of stockholders of record on July 31, 2022 was 1,247.
Item 5. Market for Standex Common Stock Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market in which the Common Stock of Standex is traded is the New York Stock Exchange under the ticker symbol “SXI”. The approximate number of stockholders of record on July 31, 2023 was 1,170 .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

84 edited+21 added−29 removed68 unchanged
Biggest changeThe 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.
Biggest changeThe 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.
Gross Profit Gross profit in fiscal year 2022 increased to $269.9 million, or a gross margin of 36.7% as compared to $241.3 million, or a gross margin of 36.8% in fiscal year 2021.
Gross profit in fiscal year 2022 increased to $269.9 million, or a gross margin of 36.7% as compared to $241.3 million, or a gross margin of 36.8% in fiscal year 2021.
Income from Operations Income from operations for the fiscal year 2022 was $88.3 million, compared to $59.2 million during the prior year.
Income from operations for the fiscal year 2022 was $88.3 million, compared to $59.2 million during the prior year.
This estimate is based upon effective interest rates as of June 30, 2022 and excludes any interest rate swaps which are assets to us. See Item 7A for further discussions surrounding interest rate exposure on our variable rate borrowings. Post-retirement benefits and pension plan contribution payments represents future pension payments to comply with local funding requirements.
This estimate is based upon effective interest rates as of June 30, 2023 and excludes any interest rate swaps which are assets to us. See Item 7A for further discussions surrounding interest rate exposure on our variable rate borrowings. Post-retirement benefits and pension plan contribution payments represents future pension payments to comply with local funding requirements.
The U.S. discount rate of 5.0% 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.
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.
A twenty-five-basis point change in our discount rate, holding all other assumptions constant, would have no impact on 2022 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.
A twenty-five-basis point change in our discount rate, holding all other assumptions constant, would have no impact on 2023 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.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 seven operating segments that aggregate to five reportable segments. Please refer to Item 1.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 six operating segments that aggregate to five reportable segments. Please refer to Item 1.
We have evaluated the current and long-term cash requirements of our defined benefit and defined contribution plans as of June 30, 2022 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 evaluated the current and long-term cash requirements of our defined benefit and defined contribution plans as of June 30, 2023 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.
Therefore, no impairment charges were recorded in connection with our annual assessment during the fourth quarter of fiscal year 2022. Cost of Employee Benefit Plans – We provide a range of benefits to certain retirees, including pensions and some postretirement benefits.
Therefore, no impairment charges were recorded in connection with our annual assessment during the fourth quarter of fiscal year 2023. Cost of Employee Benefit Plans – We provide a range of benefits to certain retirees, including pensions and some postretirement benefits.
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 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 $0.5 million per year.
The Company expects to make contributions during fiscal year 2023 of $0.2 million and $0.2 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.
The Company expects to make contributions during fiscal year 2024 of $0.2 million and $0.2 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.
The expected return on plan assets assumption of 6.7% 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.
The expected return on plan assets assumption of 6.5% 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.
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 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.
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.
Summary of Accounting Policies” for information regarding the effect of recently issued accounting pronouncements on our consolidated statements of operations, comprehensive income, stockholders’ equity, cash flows, and notes for the year ended June 30, 2022.
Summary of Accounting Policies” for information regarding the effect of recently issued accounting pronouncements on our consolidated statements of operations, comprehensive income, stockholders’ equity, cash flows, and notes for the year ended June 30, 2023.
Organic sales increased by $0.9 million, or 0.6%, as a result of timing of projects. The sales increase was offset by foreign exchange impacts of $1.6 million, or 1.1%. Income from operations in fiscal year 2022 decreased by $0.7 million, or 3.0%, when compared to the prior year, reflecting geographic mix, partially offset by productivity initiatives.
Organic sales increased by $0.9 million, or 0.6%, as a result of timing of projects. The sales increase was offset by foreign exchange impacts of $1.6 million, or 1.1%. Income from operations in fiscal year 2022 decreased by $0.7 million, or 3.0%, when compared to the prior year. The decrease reflected geographic mix, partially offset by productivity initiatives.
Adjusted EBIT per the Credit Facility specifically excludes extraordinary and certain other defined items such as cash restructuring and acquisition 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, 2022, the Company’s Interest Coverage Ratio was 16.03:1.
Adjusted EBIT per the Credit Facility specifically excludes extraordinary and certain other defined items such as cash restructuring and acquisition 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, 2023, the Company’s Interest Coverage Ratio was 20.61:1.
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, 2022, the Company’s Leverage Ratio was 0.98:1. As of June 30, 2022, we had borrowings under our facility of $175.0 million.
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, 2023, the Company’s Leverage Ratio was 0.84:1. As of June 30, 2023, we had borrowings under our facility of $175.0 million.
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 2022, the Company determined that the fair value of the seven reporting units substantially exceeded their respective carrying values.
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 2023, the Company determined that the fair value of the six reporting units substantially exceeded their respective carrying values.
The loss included a $7.6 million impairment of goodwill assigned to the entirety of the Engineering Technologies segment and a $5.4 million write-down of intangible assets. Acquisition Related Expenses We incurred acquisition related expenses of $1.6 million and $0.9 million in fiscal year 2022 and 2021, respectively.
The loss included a $7.6 million impairment of goodwill assigned to the entirety of the Engineering Technologies segment and a $5.4 million write-down of intangible assets. Acquisition Related Costs We incurred acquisition related expenses of $0.6 million and $1.6 million in fiscal year 2023 and 2022, respectively.
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. 26 Cash Flow Net cash provided by continuing operating activities for the year ended June 30, 2022 was $78.1 million compared to net cash provided by continuing operating activities of $81.9 million in the prior year.
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. 26 Cash Flow Net cash provided by continuing operating activities for the year ended June 30, 2023 was $90.8 million compared to net cash provided by continuing operating activities of $78.1 million in the prior year.
During fiscal year 2022, capital expenditures were $23.9 million or 3.2% of net sales, as compared to $21.4 million, or 3.3%, of net sales in the prior year. We expect 2023 capital spending to be between $35 million and $40 million. Backlog Backlog includes all active or open orders for goods and services.
During fiscal year 2023, capital expenditures were $24.3 million or 3.3% of net sales, as compared to $23.9 million, or 3.2%, of net sales in the prior year. We expect 2024 capital spending to be between $35 million and $40 million. Backlog Backlog includes all active or open orders for goods and services.
At June 30, 2022, the underlying policies had a cash surrender value of $11.1 million and are reported net of loans of $5.1 million for which we have the legal right of offset. These amounts are reported net on our balance sheet.
At June 30, 2023, the underlying policies had a cash surrender value of $11.7 million and are reported net of loans of $5.0 million for which we have the legal right of offset. These amounts are reported net on our balance sheet.
In order to manage our interest rate exposure on these borrowings, we are party to $175.0 million of active floating to fixed rate swaps. These swaps convert our interest payments from LIBOR to a weighted average rate of 1.18%. The effective rate of interest for our outstanding borrowings, including the impact of the interest rate swaps, was 2.53%.
In order to manage our interest rate exposure on these borrowings, we are party to $175.0 million of active floating to fixed rate swaps. These swaps convert our interest payments from SOFR to a weighted average rate of 1.13%. The effective rate of interest for our outstanding borrowings, including the impact of the interest rate swaps, was 2.97%.
U.S. defined benefit plan contributions of $0.2 million were made during fiscal year 2022 compared to $7.8 million during fiscal year 2021.There are no required contributions to the United States funded pension plan for fiscal year 2023.
U.S. defined benefit plan contributions of $0.2 million were made during fiscal year 2023 compared to $0.2 million during fiscal year 2022. There are required contributions of $9.8 million to the United States funded pension plan for fiscal year 2024.
As of June 30, 2022, the Company has used $5.1 million against the letter of credit sub-facility and had the ability to borrow $312.6 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.
As of June 30, 2023, the Company has used $3.0 million against the letter of credit sub-facility and had the ability to borrow $371.5 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.
Organic sales increased $56.1 million, or 22.2%, reflecting a broad-based geographical recovery with continued strong demand for all product groups as well as new business opportunities, including the impact of a COVID-19 lockdown in China in the fourth fiscal quarter. Acquisitions in fiscal year 2022 added $1.9 million, or 0.8% in sales.
Net sales in fiscal year 2022 increased 50.9 million, or 20.1%, when compared to the prior year. Organic sales increased $56.1 million, or 22.2%, reflecting a broad-based geographical recovery with continued strong demand for all product groups as well as new business opportunities, including the impact of a COVID-19 lockdown in China in the fourth fiscal quarter.
The Company's net debt to capital percentage changed to 12.3% as of June 30, 2022 from 11.1% in the prior year. At June 30, 2022, we expect to pay estimated interest payments of $10.8 million within the next five years.
The Company's net (cash) debt to capital percentage changed to (3.8)% as of June 30, 2023 from 12.3% in the prior year. At June 30, 2023, we expect to pay estimated interest payments of $7.9 million within the next five years.
The fair value of the Company's U.S. defined benefit pension plan assets was $157.9 million at June 30, 2022, as compared to $212.6 million as of June 30, 2021. We participate in two multi-employer pension plans and sponsor six defined benefit plans including two in the U.S. and one in the U.K., Germany, Ireland, and Japan.
The fair value of the Company's U.S. defined benefit pension plan assets was $142.1 million at June 30, 2023, as compared to $157.9 million as of June 30, 2022. We participate in two multi-employer pension plans and sponsor five defined benefit plans including two in the U.S. and one each in the U.K., Germany and Japan.
Discussion of the performance of each of our reportable segments is fully explained in the segment analysis that follows. Interest Expense Interest expense for the fiscal year 2022 was $5.9 million a decrease of $0.1 million as compared to the prior year.
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 2023 was $5.4 million a decrease of $0.5 million as compared to the prior year. Our effective interest rate was 2.97%.
Organic sales increased $22.9 million, or 22.7%. Increased sales volume is primarily due to a continued recovery in the Pumps and Merchandising businesses and pricing actions, partially offset by the impact of a temporary work stoppage which was resolved during the first quarter.
Net sales for fiscal year 2022 increased $22.0 million, or 21.8%, when compared to the prior year. Organic sales increased $22.9 million, or 22.7%. Increased sales volume was primarily due to a continued recovery in the Pumps and Merchandising businesses and pricing actions, partially offset by the impact of a temporary work stoppage which was resolved during the first quarter.
Changes in backlog under 1 year are as follows (in thousands): As of June 30, 2022 Backlog under 1 year, prior year period $ 210,491 Components of change in backlog: Organic change 43,504 Effect of acquisitions 2,253 Backlog under 1 year, current period $ 256,248 Segment Analysis (in thousands) Overall Outlook Looking forward to fiscal year 2023, we expect to be well-positioned, with anticipated continued improvement in key financial metrics, supported by productivity initiatives.
Changes in backlog under 1 year are as follows (in thousands): As of June 30, 2023 Backlog under 1 year, prior year period $ 256,248 Components of change in backlog: Organic change (10,817 ) Effect of divestitures (7,381 ) Backlog under 1 year, current period $ 238,050 Segment Analysis (in thousands) Overall Outlook Looking forward to fiscal year 2024, we expect to be well-positioned, with anticipated continued improvement in key financial metrics, supported by productivity initiatives.
Scientific 2022 compared to 2021 2021 compared to 2020 (in thousands except % % percentages) 2022 2021 Change 2021 2020 Change Net sales $83,850 $79,421 5.6% $79,421 $57,523 38.1% Income from operations 17,861 18,240 (2.1%) 18,240 13,740 32.8% Operating income margin 21.3% 23.0% 23.0% 23.9% Net sales in fiscal year 2022 increased by $4.4 million, or 5.6% when compared to the prior year.
Scientific 2023 compared to 2022 2022 compared to 2021 (in thousands except % % percentages) 2023 2022 Change 2022 2021 Change Net sales $74,924 $83,850 (10.6%) $83,850 $79,421 5.6% Income from operations 17,109 17,861 (4.2%) 17,861 18,240 (2.1%) Operating income margin 22.8% 21.3% 21.3% 23.0% Net sales in fiscal year 2023 decreased by $8.9 million, or 10.6% when compared to the prior year.
Our primary sources of cash are cash flows from continuing operations and borrowings under the facility. We expect that fiscal year 2023 depreciation and amortization expense will be between $20.0 and $21.0 million and $7.0 and $9.0 million, respectively.
Our primary sources of cash are cash flows from continuing operations and borrowings under the facility. We expect that fiscal year 2024 depreciation and amortization expense will be between $22.0 million and $24.0 million and $8.0 million and $10.0 million, respectively.
Restructuring Charges During fiscal year 2022, we incurred restructuring expenses of $4.4 million, primarily related to productivity improvements, facility rationalization activities, and global headcount reductions within our Engraving and Electronics segments.
Restructuring Costs During fiscal year 2023, we incurred restructuring expenses of $3.8 million, primarily related to productivity improvements, facility rationalization activities, and global headcount reductions primarily within our Engraving and Electronics segments and Corporate headquarters.
Net cash provided by continuing operating activities for the year ended June 30, 2021 was $81.9 million compared to net cash provided by continuing operating activities of $54.7 million in the prior year. We generated $94.7 million from income statement activities and generated $4.4 million of cash to fund working capital decreases.
Net cash provided by continuing operating activities for the year ended June 30, 2022 was $78.1 million compared to net cash provided by continuing operating activities of $81.9 million in the prior year. We generated $101.7 million from income statement activities and used $23.1 million of cash to fund working capital increases.
Corporate, Restructuring and Other 2022 compared to 2021 2021 compared to 2020 (in thousands except % % percentages) 2022 2021 Change 2021 2020 Change Corporate $ (34,413) $ (29,674) 16.0% $ (29,674) $ (29,599) 0.3% Loss on sale of business - (14,624) (100.0%) (14,624) - 100.0% Restructuring (4,399) (3,478) 26.5% (3,478) (4,669) (25.5%) Acquisition related expenses (1,618) (931) 73.8% (931) (1,759) (47.1%) Other operating expense (5,745) - 100.0% - - - Corporate expenses in fiscal year 2022 increased $4.7 million, or 16% when compared to the prior year, primarily due to employee related compensation accruals and research and development costs.
Corporate, Restructuring and Other 2023 compared to 2022 2022 compared to 2021 (in thousands except % % percentages) 2023 2022 Change 2022 2021 Change Corporate $ (35,207) $ (34,413) 2.3% $ (34,413) $ (29,674) 16.0% Gain (loss) on sale of business 62,105 - 100.0% - (14,624) 100.0% Restructuring costs (3,831) (4,399) (12.9%) (4,399) (3,478) 26.5% Acquisition related costs (557) (1,618) (65.6%) (1,618) (931) 73.8% Other operating income (expense), net 611 (5,745) 100.0% (5,745) - - Corporate expenses in fiscal year 2023 increased $0.8 million, or 2.3%, when compared to the prior year, primarily due to employee related compensation accruals and research and development costs.
Specialty Solutions 2022 compared to 2021 2021 compared to 2020 (in thousands except % % percentages) 2022 2021 Change 2021 2020 Change Net sales $122,827 $100,864 21.8% $100,864 $113,935 (11.5%) Income from operations 15,579 14,358 8.5% 14,358 18,546 (22.6%) Operating income margin 12.7% 14.2% 14.2% 16.3% Net sales for fiscal year 2022 increased $22.0 million, or 21.8% when compared to the prior year.
Specialty Solutions 2023 compared to 2022 2022 compared to 2021 (in thousands except % % percentages) 2023 2022 Change 2022 2021 Change Net sales $127,106 $122,827 3.5% $122,827 $100,864 21.8% Income from operations 25,368 15,579 62.8% 15,579 14,358 8.5% Operating income margin 20.0% 12.7% 12.7% 14.2% Net sales for fiscal year 2023 increased $4.3 million, or 3.5% when compared to the prior year.
Engineering Technologies 2022 compared to 2021 2021 compared to 2020 (in thousands except % % percentages) 2022 2021 Change 2021 2020 Change Net sales $78,117 $75,562 3.4% $75,562 $104,047 (27.4%) Income from operations 8,776 6,164 42.4% 6,164 14,027 (56.1%) Operating income margin 11.2% 8.2% 8.2% 13.5% Net sales in fiscal year 2022 increased $2.6 million or 3.4% when compared to the prior year.
Engineering Technologies 2023 compared to 2022 2022 compared to 2021 (in thousands except % % percentages) 2023 2022 Change 2022 2021 Change Net sales $81,079 $78,117 3.8% $78,117 $75,562 3.4% Income from operations 11,050 8,776 25.9% 8,776 6,164 42.4% Operating income margin 13.6% 11.2% 11.2% 8.2% Net sales in fiscal year 2023 increased $3.0 million, or 3.8%, when compared to the prior year.
Engraving 2022 compared to 2021 2021 compared to 2020 (in thousands except % % percentages) 2022 2021 Change 2021 2020 Change Net sales $146,255 $147,016 (0.5%) $147,016 $143,736 2.3% Income from operations 21,825 22,510 (3.0%) 22,510 20,493 9.8% Operating income margin 14.9% 15.3% 15.3% 14.3% Net sales in fiscal year 2022 decreased by $0.8 million, or 0.5%, compared to the prior year.
Engraving 2023 compared to 2022 2022 compared to 2021 (in thousands except % % percentages) 2023 2022 Change 2022 2021 Change Net sales $152,067 $146,255 4.0% $146,255 $147,016 (0.5%) Income from operations 25,462 21,825 16.7% 21,825 22,510 (3.0%) Operating income margin 16.7% 14.9% 14.9% 15.3% Net sales in fiscal year 2023 increased by $5.8 million, or 4.0%, compared to the prior year.
The income tax provision from continuing operations for the fiscal year ended June 30, 2022 was $19.8 million, or an effective rate of 24.4% compared to $14.2 million, or an effective rate of 26.9% for the year ended June 30, 2021, and $13.1 million, or an effective rate of 24.2% for the year ended June 30, 2020.
Interest expense for fiscal year 2022 was $5.9 million a decrease of $0.1 million as compared to the prior year. 21 Income Taxes 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.
In general, for fiscal year 2023, we expect: ● continued growth in transportation markets from electric vehicle programs, both the ramp up of existing business and new business opportunities, including sensors for chargers plugs and soft trim growth; ● vaccine storage demand to decline after record COVID-19 related surge in fiscal year 2021 and early fiscal year 2022, countered by a return of demand from universities and research institutions; ● commercial aviation and defense end markets to remain strong with double digit sales increase from the prior year based on current program expectations; ● space markets to remain attractive, with an anticipated moderate volume decline due to timing of production versus launch; ● refuse and dump end markets to remain stable while being supported by investments in the U.S. infrastructure bill; ● strong Merchandising and Pumps business to benefit from return to pre-COVID-19 demand levels in food service equipment markets.
In general, for fiscal year 2024, we expect: ● continued growth in transportation markets from electric vehicle program with a ramp up of new business opportunities, including sensors for charger plugs and soft trim growth; ● vaccine storage demand to remain stable after the record COVID-19 related surge in fiscal year 2021 and early fiscal year 2022; ● commercial aviation and defense end markets demand to increase based on current program expectations; ● space markets to remain attractive, with volume to slightly increase from fiscal year 2023 due to new product development for existing customers; ● refuse and dump end markets to remain stable while being supported by investments in the U.S. infrastructure bill; ● stable demand levels in food service equipment markets.
During fiscal year 2021, we incurred restructuring expenses of $3.5 million, primarily related to productivity improvements, facility rationalization activities, and global headcount reductions within our Engraving and Specialty Solutions segments. Loss on Sale of Business We recorded a pre-tax loss on sale of the Enginetics business of $14.6 million for fiscal year 2021.
During fiscal year 2022, we incurred restructuring expenses of $4.4 million, primarily related to productivity improvements, facility rationalization activities, and global headcount reductions within our Engraving and Electronics segments. (Gain) Loss on Sale of Business We recorded a pre-tax gain on sale of the Procon business of $62.1 million for fiscal year 2023.
Consolidated Results from Continuing Operations (in thousands): 2022 2021 2020 Net sales $ 735,339 $ 656,232 $ 604,535 Gross profit margin 36.7 % 36.8 % 35.6 % Restructuring costs 4,399 3,478 4,669 Acquisition related expenses 1,618 931 1,759 Other operating expense 5,745 - - Loss on sale of business - (14,624 ) - Income from operations 88,294 59,165 60,528 Backlog (realizable within 1 year) $ 256,248 $ 210,491 $ 152,304 2022 2021 2020 Net sales $ 735,339 $ 656,232 $ 604,535 Components of change in sales: Effect of acquisitions 1,918 25,554 11,635 Effect of exchange rates (9,874 ) 14,471 (6,089 ) Effect of business divestitures (9,239 ) (3,633 ) - Organic sales change 96,302 15,305 (40,942 ) Net sales increased for fiscal year 2022 by $79.1 million or 12.1% when compared to the prior year.
Unless otherwise noted, references to years are to fiscal years. 19 Consolidated Results from Continuing Operations (in thousands): 2023 2022 2021 Net sales $ 741,048 $ 735,339 $ 656,232 Gross profit margin 38.5 % 36.7 % 36.8 % Restructuring costs 3,831 4,399 3,478 Acquisition related expenses 557 1,618 931 Other operating (income) expense, net (611 ) 5,745 - (Gain) loss on sale of business (62,105 ) - 14,624 Income from operations 171,089 88,294 59,165 Backlog (realizable within 1 year) $ 238,050 $ 256,248 $ 210,491 2023 2022 2021 Net sales $ 741,048 $ 735,339 $ 656,232 Components of change in sales: Effect of acquisitions 1,919 1,918 25,554 Effect of exchange rates (23,902 ) (9,874 ) 14,471 Effect of business divestitures (11,947 ) (9,239 ) (3,633 ) Organic sales change 39,639 96,302 15,305 Net sales increased for fiscal year 2023 by $5.7 million, or 0.8%, when compared to the prior year period.
Income from operations for fiscal year 2022 increased $1.2 million, or 8.5%, when compared to the prior year primarily as a result of increased sales volume in the Pumps and Merchandising businesses, partially offset by higher costs of labor, including the temporary work stoppage in the first quarter and higher raw material and ocean freight costs. 25 In the first quarter of fiscal year 2023, on a sequential basis, we expect revenue to be similar and operating margin to slightly increase reflecting end market demand trends and the impact of pricing and productivity initiatives.
Income from operations for fiscal year 2022 increased $1.2 million, or 8.5%, when compared to the prior year primarily as a result of increased sales volume in the Pumps and Merchandising businesses, partially offset by higher costs of labor, including the temporary work stoppage in the first quarter and higher raw material and ocean freight costs.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses, (“SG&A”) for the fiscal year 2022 were $169.9 million, or 23.1% of sales compared to $163.1 million, or 24.8% of sales during the prior year.
SG&A expenses during the period were primarily impacted by increased research and development spending to drive future product initiatives. Selling, general, and administrative expenses, (“SG&A”) for the fiscal year 2022 were $169.9 million, or 23.1% of sales compared to $163.1 million, or 24.8% of sales during the prior year.
Electronics 2022 compared to 2021 2021 compared to 2020 (in thousands except % % percentages) 2022 2021 Change 2021 2020 Change Net sales $304,290 $253,369 20.1% $253,369 $185,294 36.7% Income from operations 70,428 46,600 51.1% 46,600 29,749 56.6% Operating income margin 23.1% 18.4% 18.4% 16.1% 23 Net sales in fiscal year 2022 increased $50.9 million, or 20.1%, when compared to the prior year.
Electronics 2023 compared to 2022 2022 compared to 2021 (in thousands except % % percentages) 2023 2022 Change 2022 2021 Change Net sales $305,872 $304,290 0.5% $304,290 $253,369 20.1% Income from operations 68,979 70,428 (2.1%) 70,428 46,600 51.1% Operating income margin 22.6% 23.1% 23.1% 18.4% 23 Net sales in fiscal year 2023 increased $1.6 million, or 0.5%, when compared to the prior year.
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 Facility, we will pay a variable rate of interest and a fee on borrowed amounts as well as a commitment fee on unused amounts under the facility.
Under the terms of the Credit Facility, we will pay a variable rate of interest and a fee on borrowed amounts as well as a commitment fee on unused amounts under the facility.
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, 2022, we expect to pay estimated post-retirement benefit payments of $170.4 million. See "Item 8.
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.
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.
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 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, 2022.
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, 2023. Obligations under our defined benefit plan operated in Ireland have been transferred to the buyer of the Procon business as part of the divestiture.
Acquisition related expenses typically consist of due diligence, integration, and valuation expenses incurred in connection with recent or pending acquisitions. Other Operating Expense We incurred expense of $5.7 million in fiscal year 2022 related to a litigation accrual. Refer to Part II, Item 8, Note 12, "CONTINGENCIES," in the Notes to the Consolidated Financial Statements for details.
Acquisition related costs typically consist of due diligence, integration, and valuation expenses incurred in connection with recent or pending acquisitions. Other Operating (Income) Expense, Net We incurred expense of $5.7 million in fiscal year 2022 related to a litigation accrual.
In the first quarter of fiscal year 2023, on a sequential basis, we expect a moderate to significant decrease in revenue reflecting timing of projects and a slight decrease in operating margin, with productivity initiatives mostly offsetting the impact of the volume decline. Net sales in fiscal year 2021 decreased $28.5 million or 27.4% when compared to the prior year.
In the first quarter of fiscal year 2024, on a sequential basis, we expect a significant decrease in revenue reflecting timing of projects and a slight to moderate decrease in operating margin, with productivity initiatives mostly offsetting the impact of volume decline and higher mix of development projects.
Fair values were determined primarily by discounting estimated future cash flows at a weighted average cost of capital of 10.4%. 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.
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.
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.
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 11.5%.
Financial Statements and Supplementary Data, Note 16. Employee Benefit Plans" for additional information regarding these obligations. At June 30, 2022, we had $39.2 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, 2023, we expect to pay estimated post-retirement benefit payments of $10.2 million during fiscal year 2024. See "Item 8. Financial Statements and Supplementary Data, Note 16. Employee Benefit Plans" for additional information regarding these obligations. At June 30, 2023, we had $33.8 million of operating lease obligations. See "Item 8. Financial Statements and Supplementary Data, Note 20.
The increase in other operating expense in fiscal year 2022 reflects a $5.7 million litigation accrual. Discontinued Operations In pursing 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.
Discontinued Operations In pursing 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, 2022 2021 2020 Net sales $ - $ - $ 111,841 Gain (loss) on sale of business $ - $ - $ (19,996 ) Transaction fees - - (1,933 ) Profit (loss) before taxes $ (113 ) $ (2,620 ) $ (23,439 ) Benefit (provision) for taxes 24 550 2,613 Net income (loss) from discontinued operations $ (89 ) $ (2,070 ) $ (20,826 ) Liquidity and Capital Resources At June 30, 2022, our total cash balance was $104.8 million, of which $94.2 million was held outside of the United States.
Activity related to discontinued operations is as follows (in thousands): Year Ended June 30, 2023 2022 2021 Profit (loss) before taxes $ (204 ) $ (113 ) $ (2,620 ) Benefit (provision) for taxes 43 24 550 Net income (loss) from discontinued operations $ (161 ) $ (89 ) $ (2,070 ) Liquidity and Capital Resources At June 30, 2023, our total cash balance was $195.7 million, of which $98.6 million was held outside of the United States.
Due to the nature of long-term agreements in the Engineering Technologies segment, the timing of orders and delivery dates can vary considerably resulting in significant backlog changes from one period to another. 22 Backlog orders are as follows (in thousands): As of June 30, 2022 As of June 30, 2021 Total Backlog under Total Backlog under Backlog 1 year Backlog 1 year Electronics $ 179,778 $ 149,247 $ 121,488 $ 118,322 Engraving 19,794 14,250 20,076 13,401 Scientific 4,356 4,356 5,872 5,871 Engineering Technologies 49,990 43,644 68,375 46,350 Specialty Solutions 47,569 44,751 31,356 26,547 Total $ 301,487 $ 256,248 $ 247,167 $ 210,491 Total backlog realizable within one year increased $45.8 million, or 21.7% to $256.3 million at June 30, 2022 from $210.5 million at June 30, 2021.
Due to the nature of long-term agreements in the Engineering Technologies segment, the timing of orders and delivery dates can vary considerably resulting in significant backlog changes from one period to another. 22 Backlog orders are as follows (in thousands): As of June 30, 2023 As of June 30, 2022 Total Backlog under Total Backlog under Backlog 1 year Backlog 1 year Electronics $ 150,061 $ 129,911 $ 179,778 $ 149,247 Engraving 36,817 31,434 19,794 14,250 Scientific 2,506 2,506 4,356 4,356 Engineering Technologies 63,769 52,565 49,990 43,644 Specialty Solutions 21,749 21,634 47,569 44,751 Total $ 274,902 $ 238,050 $ 301,487 $ 256,248 Total backlog realizable within one year decreased $18.2 million, or 7.1% to $238.1 million at June 30, 2023 from $256.3 million at June 30, 2022.
The following table sets forth our capitalization at June 30: 2022 2021 Long-term debt $ 174,830 $ 199,490 Less cash and cash equivalents 104,844 136,367 Net debt 69,986 63,123 Stockholders' equity 499,343 506,425 Total capitalization $ 569,329 $ 569,548 Stockholders’ equity decreased year over year by $7.1 million, primarily as a result of $43.6 million of cash returned to shareholders in the form of dividends and stock repurchases, offset by current year net income of $61.4 million.
The following table sets forth our capitalization at June 30: 2023 2022 Long-term debt $ 173,441 $ 174,830 Less cash and cash equivalents 195,706 104,844 Net (cash) debt (22,265 ) 69,986 Stockholders' equity 607,449 499,343 Total capitalization $ 585,184 $ 569,329 Stockholders’ equity increased year over year by $108.1 million, primarily as a result of current year net income of $139.0 million offset by $38.5 million of cash returned to shareholders in the form of dividends and stock repurchases.
Favorable foreign exchange impacts of $6.6 million, or 4.6%, for the period were offset by organic sales declines of $3.3 million, or 2.3%, as a result of the regional timing of automotive projects. Income from operations in fiscal year 2021 increased by $2.0 million, or 9.8%, when compared to the prior year.
Organic sales increased by $14.3 million, or 9.8%, as a result of timing of customer projects. The organic sales increase was partially offset by foreign exchange impacts of $8.5 million, or 5.8%. Income from operations in fiscal year 2023 increased by $3.6 million, or 16.7%, when compared to the prior year.
The foreign currency impact decreased sales by $7.1 million, or 2.8%. Income from operations in the fiscal year 2022 increased $23.8 million, or 51.1%, when compared to the prior year. The operating income increase was the result of organic sales growth, various pricing actions and cost saving initiatives, partially offset by material and freight cost increases.
Income from operations in the fiscal year 2023 decreased $1.4 million, or 2.1%, when compared to the prior year. The operating income decrease was the result of inflationary impacts, mix and foreign exchange offset partially by organic sales growth and various cost saving initiatives.
At June 30, 2022 , we had $9.6 million of non-current liabilities for uncertain tax positions.
Leases" for additional information regarding these obligations. At June 30, 2023 , we had $9.5 million of non-current liabilities for uncertain tax positions.
The Company’s annual test for impairment is performed using a May 31st measurement date. We have identified seven reporting units for impairment testing: Electronics, Engraving, Scientific, Engineering Technologies, Procon, Federal, and Hydraulics.
The Company’s annual test for impairment is performed using a May 31st measurement date. We have identified six reporting units for impairment testing: Electronics, Engraving, Scientific, Engineering Technologies, 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).
The operating income increase was the result of organic sales growth, product line mix, various cost savings initiatives, and the impact of the Renco acquisition, offset by inflationary material cost increases.
The operating income increase was the result of organic sales growth, various pricing actions and cost saving initiatives, partially offset by material and freight cost increases.
Results of RSG in current and prior periods have been classified as discontinued operations in the Consolidated Financial Statements. 18 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.
Renco’s results are reported within our Electronics segment beginning in fiscal year 2021. 18 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 net sales increase reflects overall growth in end markets, such as pharmaceutical channels, clinical settings, and academic laboratories, including continued strong demand for cold storage surrounding COVID-19 vaccine distribution and the general market recovery as well as pricing actions. 24 Income from operations in fiscal year 2022 decreased by $0.4 million, or 2.1%, reflecting higher freight costs and investments in new product development, offset by revenue growth and pricing actions.
The net sales increase reflected overall growth in end markets, such as pharmaceutical channels, clinical settings, and academic laboratories, including continued strong demand for cold storage surrounding COVID-19 vaccine distribution and the general market recovery as well as pricing actions.
During fiscal year 2023, we anticipate returning $30.0 million to $35.0 million of foreign cash, however, the amount and timing of cash repatriation during 2023 will be dependent upon foreign exchange rates and each business unit’s operational needs including requirements to fund working capital, capital expenditure, and jurisdictional tax payments.
During fiscal years 2023, 2022 and 2021, we repatriated $29.1 million, $30.8 million, and $37.6 million of our cash previously held outside of the United States, respectively. 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.
Income from operations for the fiscal year 2021 was $59.2 million, compared to $60.5 million during the prior year.
Income from Operations Income from operations for the fiscal year 2023 was $171.1 million, compared to $88.3 million during the prior year.
We generated $101.7 million from income statement activities and used $23.1 million of cash to fund working capital increases. Cash flow used in investing activities for the year ended June 30, 2022 totaled $31.0 million.
We generated $116.6 million from income statement activities and used $18.2 million of cash to fund working capital and other balance sheet account increases. Cash flow provided by investing activities for the year ended June 30, 2023 totaled $41.6 million.
Business, above, for additional information regarding our segment structure and management strategy. As part of our ongoing strategy: o In the third quarter of fiscal year 2022, we acquired Sensor Solutions, a designer and manufacturer of customized standard magnetic sensor products including hall effect switch and latching sensors, linear and rotary sensors, and specialty sensors.
Cash consideration received at closing excludes amounts held in escrow and was net of closing cash. o In the third quarter of fiscal year 2022, we acquired Sensor Solutions, a designer and manufacturer of customized standard magnetic sensor products including hall effect switch and latching sensors, linear and rotary sensors, and specialty sensors.
In the first quarter of fiscal year 2023, we expect a slight sequential decrease in revenue and operating margin due to project mix partially offset by operational improvements. Net sales in fiscal year 2021 increased by $3.3 million or 2.3% compared to the prior year.
In the first quarter of fiscal year 2024, on a sequential basis, we expect similar revenue and operating margin. Net sales in fiscal year 2022 increased by $4.4 million, or 5.6% when compared to the prior year.
This increase is a result of organic sales increases, productivity initiatives and targeted prices increases, partially offset by raw material and ocean freight cost headwinds, a one-time project related charge at Engineering Technologies, along with production decreases due to a temporary work stoppage in our Specialty Solutions segment which was resolved during the first quarter. 20 Gross profit in fiscal year 2021 increased to $241.3 million, or a gross margin of 36.8% as compared to $215.5 million, or a gross margin of 35.6% in fiscal year 2020.
Gross profit increases were partially offset by increased costs of sales of $50.4 million which included a one-time project related charge at Engineering Technologies of $0.8 million, along with production decreases due to a temporary work stoppage in our Specialty Solutions segment which was resolved during the first quarter. 20 Selling, General, and Administrative Expenses Selling, general, and administrative expenses, (“SG&A”) for the fiscal year 2023 were $172.3 million, or 23.3% of sales, compared to $169.9 million, or 23.1% of sales, during the prior year period.
Capital Structure During the second quarter of fiscal year 2019, the Company entered into a five-year Amended and Restated Credit Agreement (“credit agreement”, or “facility”). The facility has a borrowing limit of $500 million and can be increased by an amount of up to $250 million, in accordance with specified conditions contained in the agreement.
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.
The $1.4 million decrease, or 2.3% is primarily due to the loss on sale of the Enginetics business of $14.6 million along with material inflation, partially offset by income from organic sales increases and pricing actions, along with cost reduction activities and productivity improvement initiatives implemented in all of our businesses.
The increase of $82.8 million, or 93.8%, is primarily due to the divestiture of the Procon business for a gain of $62.1 million as well as income from organic sales increases and pricing actions, along with cost reduction activities and productivity improvement initiatives, partially offset by foreign currency, material inflation, and increased logistics and labor costs.
Net sales for fiscal year 2021 decreased $13.1 million, or 11.5% when compared to the prior year. Organic sales declined $13.6 million, or 11.9%, partially offset by positive foreign exchange impacts of $0.5 million, or 0.5%.
Acquisitions had a $1.9 million, or 0.3%, positive impact on sales, offset by negative impacts on sales for divestitures of $11.9 million, or 1.9%, and foreign currency of $23.9 million, or 3.3%. Net sales increased for fiscal year 2022 by $79.1 million or 12.1% when compared to the prior year.
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.
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.
This increase is a result of organic sales increases, productivity initiatives and targeted prices increases, offset by raw material and ocean freight cost headwinds, along with business mix.
This increase was a result of organic sales increases of $96.3 million, productivity initiatives and targeted prices increases to offset approximately $38 million of inflationary impacts in the areas of ocean freight, raw material, and labor.
In the first quarter of fiscal year 2023, on a sequential basis, we expect slight revenue and operating margin decrease due to lower COVID vaccine storage demand. Net sales in fiscal year 2021 remained relatively flat compared to the prior year.
Operating income increased due to sales increases in Display Merchandising, pricing actions and the impact of the labor work stoppage in two plants during the prior year. 25 In the first quarter of fiscal year 2024, on a sequential basis, we expect a slight decrease in revenue and operating margin.
In the first quarter of fiscal year 2023, on a sequential basis, we expect a moderate increase in revenue due to continued positive end market demand trends and some recovery of sales deferred due to the COVID-19 lockdown in China. We also expect a slight sequential increase in operating margin reflecting the sales increase partially offset by product mix.
In the first quarter of fiscal year 2024, on a sequential basis, we expect slightly higher revenue primarily due to the recently announced acquisition and continued strength in our fast growth end markets, partially offset by continued slow recovery in China and Europe. Sequentially, we expect similar operating margin.
Net sales in fiscal year 2021 increased 68.1 million, or 36.7%, when compared to the prior year as organic sales increased $35.9 million, or 3.6%. The Renco Electronics acquisition added $25.6 million or 13.8%. The foreign currency impacted increased sales by $6.6 million, or $6.5%.
Acquisitions in fiscal year 2022 added $1.9 million, or 0.8% in sales. The foreign currency impact decreased sales by $7.1 million, or 2.8%. Income from operations in the fiscal year 2022 increased $23.8 million, or 51.1% when compared to the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−0 removed9 unchanged
Biggest changeThe Engineering Technologies, Specialty Solutions, and Electronics segments are all sensitive to price increases for steel and aluminum products, other metal commodities such as rhodium and copper, and petroleum-based products. In the past year, we have experienced price fluctuations for a number of materials including rhodium, steel, and other metal commodities.
Biggest changeThe Engineering Technologies, Specialty Solutions, and Electronics segments are all sensitive to price increases for steel and aluminum products, other metal commodities such as rhodium and copper, and petroleum-based products. We continue to experience price fluctuations for a number of materials including rhodium, steel, and other metal commodities.
Our primary translation risk is with the Euro, British Pound Sterling, Peso, Japanese Yen and Chinese Yuan. A hypothetical 10% appreciation or depreciation of the value of any these foreign currencies to the U.S. Dollar at June 30, 2022, would not result in a material change in our operations, financial position, or cash flows.
Our primary translation risk is with the Euro, British Pound Sterling, Peso, Japanese Yen and Chinese Yuan. A hypothetical 10% appreciation or depreciation of the value of any these foreign currencies to the U.S. Dollar at June 30, 2023, would not result in a material change in our operations, financial position, or cash flows.
As of June 30, 2022, no one customer accounted for more than 5% of our consolidated outstanding receivables or of our sales. Commodity Prices The Company is exposed to fluctuating market prices for all commodities used in its manufacturing processes.
As of June 30, 2023, no one customer accounted for more than 5% of our consolidated outstanding receivables or of our sales. Commodity Prices The Company is exposed to fluctuating market prices for all commodities used in its manufacturing processes.
Our interest rate exposure is limited primarily to interest rate changes on our variable rate borrowings and is mitigated by our use of interest rate swap agreements to modify our exposure to interest rate movements. At June 30, 2022, we have $175.0 million of active floating to fixed rate swaps with terms ranging from one to four years.
Our interest rate exposure is limited primarily to interest rate changes on our variable rate borrowings and is mitigated by our use of interest rate swap agreements to modify our exposure to interest rate movements. At June 30, 2023, we have $175.0 million of active floating to fixed rate swaps with terms ranging from one to three years.
We hedge our most significant foreign currency translation risks primarily through cross currency swaps and other instruments, as appropriate. 31 Interest Rate The Company’s effective interest rate on borrowings was 2.53% and 2.59% at June 30, 2022 and 2021, respectively.
We hedge our most significant foreign currency translation risks primarily through cross currency swaps and other instruments, as appropriate. 31 Interest Rate The Company’s effective interest rate on borrowings was 2.97% and 2.53% at June 30, 2023 and 2022, respectively.
However, any such losses or gains would generally be offset by corresponding gains and losses, respectively, on the related hedged asset or liability. At June 30, 2022 and 2021, the fair value, in the aggregate, of the Company’s open foreign exchange contracts was a liability of $0.6 million and $2.8 million respectively.
However, any such losses or gains would generally be offset by corresponding gains and losses, respectively, on the related hedged asset or liability. At June 30, 2023 and 2022, the fair value, in the aggregate, of the Company’s open foreign exchange contracts was a liability of $1.7 million and $0.6 million respectively.
These swaps convert our interest payments from LIBOR to a weighted average rate of 1.18%. At June 30, 2022, the fair value, in the aggregate, of the Company’s interest rate swaps were assets of $8.4 million. At June 30, 2021, the fair value, in the aggregate, of the Company’s interest rate swaps were liabilities of $3.1 million.
These swaps convert our interest payments from SOFR to a weighted average rate of 1.13%. At June 30, 2023, the fair value, in the aggregate, of the Company’s interest rate swaps were assets of $10.2 million. At June 30, 2022, the fair value, in the aggregate, of the Company’s interest rate swaps were assets of $8.4 million.

Other SXI 10-K year-over-year comparisons