1)     Management Statement

As of September 30, 2026, Standex International Corporation (“Standex” or the “Company”) is a diversified industrial manufacturer in four broad business segments: Electronics, Aerospace & Defense, Scientific, and Engraving & Hydraulics with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Turkey, India, and China. The accompanying consolidated financial statements include the accounts of Standex International Corporation and its subsidiaries and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). During the third quarter of fiscal 2026, the Company sold its Federal Industries display merchandising business. This business was previously a part of the Specialty Solutions segment. Following this divestiture, the Company realigned its businesses and made organizational changes to better allocate resources to support changes to its business strategy. This resulted in combining the Hydraulics business which was previously a part of the Specialty Solutions segment with the Engraving business to form the Engraving & Hydraulics segment. Additionally, the Engineering Technologies segment was renamed as the Aerospace & Defense segment to better reflect the markets served by this segment. Following these changes, the Company reviewed the quantitative and qualitative characteristics of its remaining businesses and determined that it has four reportable segments as noted in Note 15. Accordingly, all periods presented have been revised to reflect the new reportable segments. The Other segment included in Note 15 includes the results of the Company's divested Federal Industries display merchandising business.

All intercompany accounts and transactions have been eliminated in consolidation. Noncontrolling interests in subsidiaries related to Standex’s ownership interests of less than 100% are reported as Noncontrolling interests in the consolidated balance sheets. The results of noncontrolling ownership interests held by Standex are reported as Net income attributable to redeemable noncontrolling interests in the consolidated statements of operations.

The Company considers events or transactions that occur after the balance sheet date, but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated subsequent events through the date and time the consolidated financial statements were issued.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the results of operations for the three months ended September 30, 2026 and 2025, the cash flows for the three months ended September 30, 2026 and 2025, and the financial position of Standex at September 30, 2026. The interim results are not necessarily indicative of results for a full year. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The unaudited condensed consolidated financial statements and notes do not contain information which would substantially duplicate the disclosures contained in the audited annual consolidated financial statements and notes for the year ended June 30, 2026. The condensed consolidated balance sheet at June 30, 2026 presented herein was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The financial statements contained herein should be read in conjunction with the Annual Report on Form 10-K and in particular, the audited consolidated financial statements for the year ended June 30, 2026. Unless otherwise noted, references to years are to the Company’s fiscal years. Currently, the fiscal year end is June 30. For further clarity, the Company's fiscal year 2027 includes the twelve-month period from July 1, 2026 to June 30, 2027.

The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. Estimates are based on historical experience, actuarial estimates, current conditions and various other assumptions that are believed to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when they are not readily apparent from other sources. These estimates assist in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Changes in underlying assumptions or conditions could cause estimates to differ which would impact the financial statements. The estimates and assumptions used in the preparation of the consolidated financial statements have considered the implications on the Company of ongoing global events and related economic impacts. As a result, there is heightened volatility and uncertainty around tariff actions, supply chain performance, labor availability, and customer demand. However, the magnitude of such impact on the Company’s business and its duration is uncertain. The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of  September 30, 2026 and the issuance date of this quarterly report on Form 10-Q.

Research and development expenditures are expensed as incurred. Total research and development costs, which are classified under selling, general, and administrative expenses, were $6.6 million and $6.2 million for the three months ended  September 30, 2026 and 2025, respectively.

Deal related costs include costs related to acquired businesses and other pending acquisitions. These costs consist of (i) deferred compensation arrangements and (ii) deal related professional service fees and expenses, including financial advisory, legal, accounting, and other outside services incurred in connection with integration and acquisition activities, and regulatory matters related to acquired entities. These costs do not include purchase accounting expenses, which the Company defines as acquired backlog and the step-up of inventory to fair value, or the amortization of the acquired intangible assets. Deal related costs for the three months ended September 30, 2026 and 2025 were $0.4 million and $0.4 million, respectively. 

During the first quarter of fiscal 2027, the Company entered into a lease agreement for a new manufacturing facility in Missouri City, Texas. The initial lease term is approximately 10 years and is expected to commence upon substantial completion of the facility, which is currently under construction. The lease provides for aggregate base rental payments of approximately $24.1 million over the initial lease term and includes two five-year renewal options. The Company has not recognized a right-of-use asset or lease liability related to the lease as of September 30, 2026 because the lease has not commenced.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards had or may have a material impact on its consolidated financial statements or disclosures. 

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. This ASU provides guidance to expand disclosures related to the disaggregation of income statement expenses. This ASU also requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. ASU 2025-01 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. This ASU will be effective for the Company’s Form 10-K for fiscal 2028 and Form 10-Q filed thereafter. The Company is currently evaluating the impact this ASU may have on its financial statement disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This ASU introduces five targeted improvements to better align hedge accounting with entities’ risk management activities. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. The amendments in this ASU are required to be applied on a prospective basis for all hedging relationships. The Company is currently evaluating the impact this ASU may have on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software related to accounting for internal-use software costs. The amendments in this update improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, though early adoption is permitted. The Company is currently in the process of evaluating the effects of this pronouncement on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Narrow-Scope Improvements (“ASU 2025-11”). The guidance in ASU 2025-11 amends ASC Topic 270, Interim Reporting, to provide clarity on the current interim reporting requirements and to require entities to disclose events since the end of the last annual reporting period that have a material impact on the entity through the addition of the disclosure principle. The standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. Upon adoption, ASU 2025-11 may be applied prospectively or retrospectively. The Company is currently evaluating when it will adopt the ASU 2025-11 and the impact that the adoption may have on its consolidated financial statements, including related footnote disclosures.