|Standex Sells Two Properties for $3.6 Million; Reports Progress on Low-Cost Manufacturing Initiative|
SALEM, N.H.--(BUSINESS WIRE)--Dec. 15, 2005--Standex International Corporation (NYSE:SXI) today announced that it has sold its former Air Distribution Products (ADP) manufacturing plant in Northglenn, Colorado and its Food Service Equipment manufacturing plant in Murfreesboro, Tennessee to separate buyers for a total of $3.6 million in cash. The manufacturing operations of both facilities are being transferred to Standex's new plant in Nogales, Mexico, as part of the Company's strategy to improve margins over the long term by focusing on low-cost manufacturing.
"The relocation of these operations to Mexico reflects our goal to lower the cost of high-volume, labor-intensive products and expand Standex's products into untapped markets and geographic territories," said Standex president and chief executive officer Roger Fix. "Proceeds from the sales will cover more than half of our initial investment in Nogales. Construction of the Mexican plant has been completed on schedule, and we have hired a team with deep experience in managing Maquiladora operations to run the facility. Initial production in Nogales is slated to begin in January, and we expect the labor savings realized through the transfer of this production to flow entirely to the bottom line.(1)"
The Northglenn manufacturing operation was closed in the third quarter of fiscal 2005 and the Company expects ADP to begin initial production in Mexico in our fiscal third quarter(1). "By initiating manufacturing operations in Mexico, we will reduce ADP's costs and enhance distribution lead time to our customers," Fix said. "We also expect the move will enable ADP to increase market share on the West Coast and in rapidly growing markets in the southwest regions of the U.S., where ADP previously lacked a significant presence.(1)" Standex's ADP Group is a leading supplier of galvanized pipe and fittings for the residential HVAC industry.
Standex plans to temporarily lease back the Murfreesboro facility, which manufactured and sold pumps for beverage dispensing systems, while manufacturing equipment is being transferred to Nogales. Standex's Food Service Equipment Group also has been transferring the production equipment from its recently acquired Kool Star business to Mexico. "In addition to cost savings, we anticipate that this move will provide opportunities for us to grow sales of Kool Star's products in the US and eventually Mexico," continued Fix (1). "We expect to complete the installation of the Kool Star equipment in December and begin initial production of walk-in coolers and freezers in January.(1) In addition, we expect to begin manufacturing food service merchandising and display cases in Mexico in the fourth fiscal quarter.(1)"
Standex International Corporation is a multi-industry manufacturer in five broad business segments: Food Service Equipment Group, Air Distribution Products Group, Engineered Products Group, Consumer Products Group and Engraving Group and with operations in the United States, Europe, Canada, Australia, Singapore, Mexico, Brazil and China. For additional information, visit the company's website at www.standex.com.
Safe Harbor Language
Statements in this news release include, or may be based upon, management's current expectations, estimates and/or projections about Standex's markets and industries. These statements are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may materially differ from those indicated by such forward-looking statements as a result of certain risks, uncertainties and assumptions that are difficult to predict. Among the factors that could cause actual results to differ are uncertainty in conditions and changes in the general domestic and international economic conditions, market demand, realization of the expected annual cost savings resulting from the completion and commencement of operations at the new facility in Mexico as well as the other factors discussed in the Annual Report of Standex on Form 10-K for the fiscal year ending June 30, 2005, which is on file with the Securities and Exchange Commission, and any subsequent periodic reports filed by the company with the Securities and Exchange Commission. In addition, any forward-looking statements represent management's estimates only as of the day made and should not be relied upon as representing management's estimates as of any subsequent date. While the company may elect to update forward-looking statements at some point in the future, the company and management specifically disclaim any obligation to do so, even if management's estimates change.
CONTACT: Standex International Corporation
SOURCE: Standex International Corporation