STANDEX INTERNATIONAL CORPORATION l SALEM, NH 03079 l TEL (603) 893-9701 l FAX (603) 893-7324 l WEB www.standex.com

Contact:

Thomas DeByle, CFO

FOR IMMEDIATE RELEASE

(603) 893-9701

e-mail:  InvestorRelations@Standex.com

STANDEX REPORTS 12.2% INCREASE IN SALES
FOR THIRD QUARTER OF FISCAL 2012

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GAAP Operating Income up 91% and Non-GAAP Operating Income Increases 19.8% Year over Year

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GAAP EPS from Continuing Ops Increases 95.7% and Non-GAAP EPS from Continuing Ops Grows 26.0%

SALEM, NH – May 1, 2012 . . . . Standex International Corporation (NYSE:SXI) today reported financial results for the third quarter of fiscal year 2012.

Results from Continuing Operations*

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Net sales increased 12.2% to $150.7 million from $134.3 million in the third quarter of fiscal 2011.

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Income from operations was $15.6 million, compared with $8.2 million in the third quarter of fiscal 2011.  Operating income for the third quarter of 2012 included pre-tax, $0.2 million of restructuring charges and a $4.8 million gain on the sale of real estate. The third quarter of fiscal 2011 included, pretax, $0.2 million of restructuring charges and $0.9 million in acquisition-related expenses. Excluding these items from both periods, the Company reported non-GAAP third-quarter fiscal 2012 operating income of $11.0 million compared with $9.2 million in the year-earlier quarter, an increase of 19.8%.

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Net income from continuing operations was $11.5 million, or $0.90 per diluted share, including, after tax, $0.2 million of restructuring charges, a $3.3 million gain on the sale of real estate and $0.3 million in non-recurring tax benefits. This compares with third quarter 2011 net income from continuing operations of $5.9 million, or $0.46 per diluted share, including, after tax, $0.1 million of restructuring charges, $0.6 million in acquisition-related expenses, and non-recurring tax benefits of $0.2 million.  Excluding the aforementioned items from both periods, net income from continuing operations increased 27.2% to $8.1 million, or $0.63 per diluted share, from $6.3 million, or $0.50 per diluted share, in the third quarter of fiscal 2011.  

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EBITDA (earnings before interest, income taxes, depreciation and amortization) was $19.0 million, compared with $11.2 million in the third quarter of fiscal 2011. Excluding the previously mentioned items from both periods, EBITDA increased 17.8% to $14.4 million from $12.3 million in the third quarter of fiscal 2011.

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Net working capital (defined as accounts receivable plus inventories less accounts payable) was $115.1 million at the end of the third quarter of 2012, compared with $107.1 million a year earlier. Working capital turns were 5.2 for the third quarter of fiscal 2012 and 5.0 for the third quarter of fiscal 2011.

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Net debt (defined as short-term debt plus long-term debt less cash) decreased to a record low $21.1 million at March 31, 2012 from $37.6 million at December 31, 2011.  The Company’s ratio of net debt to total capital was 7.6% at March 31, 2012 compared with 13.3% at December 31, 2011.

A reconciliation of net income, earnings per share and net income from continuing operations from reported GAAP amounts to non-GAAP amounts is included later in this release.

Third-Quarter Transactions

During the quarter Standex completed the sale of its Air Distribution Products (ADP) business to two wholly owned subsidiaries of Blue Wolf Capital Fund II, L.P. for a total transaction value of $16.1 million, including $13.1 million in cash and a note for $3 million secured by real estate sold as part of the transaction.  As the result of the ADP divestiture, Standex recorded an additional loss of $0.19 per share in discontinued operations in the third quarter.  The total loss recorded for the ADP divestiture in the second and third quarter is $1.28 per share.

Standex also sold its engraving facility in Sao Paulo, Brazil during the third quarter and plans to relocate its combined Brazilian Mold-Tech, roll engraving and machinery operations into a larger and better equipped leased facility. Standex sold the building for cash proceeds of $5.1 million and recorded a gain of $0.26 per diluted share in continuing operations.  The Company will be relocating the Brazilian engraving operation during the fourth quarter of fiscal 2012 and first quarter of fiscal 2013 and anticipates recording restructuring expense in the range of $0.03 to $0.04 per diluted share during those two quarters as the result of the relocation.

Management Comments on the Quarter

“Standex’s solid top-line results for the third quarter demonstrate the success of our organic growth initiatives and acquisition strategy,” said President and Chief Executive Officer Roger Fix. “We reported strong year-over-year sales growth of 12.2%, which included organic growth of 10.4%, acquisition growth of 2.3%, and a 0.5% negative foreign exchange effect. All five of our reporting segments reported year-over-year sales increases. The significant leverage in our operating model has enabled us to increase profitability, generate cash and strengthen our balance sheet.  Non-GAAP operating income was up 19.8%, with four of the five groups reporting double-digit year-over-year growth, and non-GAAP EPS increased 26.0%.  In addition, as a result of selling ADP and the Brazilian engraving facility, coupled with strong cash flow from operations, we generated $11.0 million in free cash during the quarter and lowered our net debt to a record low of $21.1 million.”

Segment Review

After a review of Standex’s reporting segments following the sale of its ADP Group, beginning with the third quarter of fiscal 2012 the Company will be reporting the financial results of its Electronics and Hydraulics businesses as two separate segments. Electronics and Hydraulics had previously been reported as one combined segment.  

Food Service Equipment Group sales increased 5.6% year-over-year, with operating income declining 5.5%.    

“Strong demand at both the quick serve and national chain restaurant markets drove robust sales at the Refrigerated Solutions Group,” said Fix. “The dollar store segment grew and contributed to revenues, while sales to the retail drug store segment continued to be down year over year. We are excited about the introduction of new products that demonstrate the innovative solutions we provide to customers. Refrigerated Solutions profitability improved versus prior year, and we are encouraged that as of the end of the third quarter, the majority of the inefficiencies related to the Kool-Star relocation are behind us.¹”    

“At Cooking Solutions, we are still seeing soft demand from the retail grocery segment in the UK as a result of macro-economic conditions,” added Fix.  “In addition, sales are down at several of our quick serve chain customers in the US. At the same time, there was an increase in domestic sales through our dealer channels, and the overall booking and sales environment began to improve in the last month of the quarter. On the bottom line, in addition to the volume deleveraging, Cooking Solutions margins were negatively affected by higher warranty costs, pricing pressure in some segments of the cooking line, and product mix weighted toward the lower-margin dealer channel.”  

Engraving Group sales increased 9.3% year-over-year, with 32.5% growth in operating income.

“Mold-Tech operations in North America, China and Europe drove Standex Engraving’s excellent top- and bottom-line performance in the third quarter,” said Fix. “Offsetting somewhat the strong Mold-Tech demand from automotive OEMs was soft demand for roll engraving and machinery as a result of the ongoing downturn in the US housing sector and economic conditions in Brazil and Europe.  We are making progress with our emerging economy strategy and are focused on building infrastructure in Asia Pacific, China and South America as evidenced by the relocation of our Brazilian engraving operation to a larger facility.  We continue to be excited by the long-term prospects for this business.¹”  

Engineering Technologies Group sales increased 70.7% year-over-year, with a 97.2% increase in operating income.   

“Our Metal Spinners acquisition continued to contribute significantly to Engineering Technologies Group sales and profitability,” said Fix.  “Demand at Metal Spinners was driven by sales of products used in construction of offshore deepwater floating platforms, particularly in Brazil and the Congo.  At our legacy Spincraft business, we began to see improved demand in the land-based turbine market although visibility remains limited. Aerospace sales for the third quarter were up year-over-year, and we are excited by our long-term prospects in both unmanned and manned space flight programs.¹  We already have secured orders through 2015 from the United Launch Alliance, or ULA, for unmanned space flight opportunities.”  

The Electronics Products Group reported 3.0% year-over-year sales growth, with operating income increasing 19.7%.

“The success of our cost-reduction initiatives to mitigate the effect of relatively flat sales on profitability drove the double-digit increase in operating income in the third quarter,” continued Fix. “Toward the end of the quarter, orders for reed switches in China and Asia Pacific began to improve. While the increase in reed switch bookings did not contribute to third-quarter sales, we do expect to benefit from this trend beginning in the fourth quarter.¹ Furthermore, we have a number of new product and customer program launches that we expect to have a measurable effect on Electronics revenues in fiscal 2013 which began to ship in the third quarter and will continue to phase in over the next several quarters.¹  With the anticipated increase in revenues, we expect to leverage our lower cost structure to drive profitable growth in the Electronics Group in the coming year.¹”  

The Hydraulics Products Group reported 24.2% year-over-year sales growth, with operating income increasing 124.1%.

“We continued to see a strong recovery in the North American dump trailer systems business,” said Fix.  “In addition, sales into the refuse handling sector were also solid as our efforts to penetrate that market in the US are progressing well. In addition, we are capitalizing on growth in emerging markets as we experienced strong sales in Mexico, South America, Thailand, Australia and the Middle East.  We also continued to ramp up our China facility to export telescopic and rod cylinders to all of our major geographic markets.  On the bottom line, we leveraged our low cost structure into a triple-digit increase in operating income, and we have significant opportunities for further profitability as we execute on our growth plans.¹”

Business Outlook

“We are cautiously optimistic about the majority of our end markets as we approach the beginning of a new fiscal year,¹” said Fix.  “The success of our organic initiatives has enabled us to take share in our markets and we are excited about the launch of many new products and programs that should perpetuate this success in fiscal 2013 and beyond.¹  As a result of our increased profitability and cash flow generation we have repositioned our balance sheet and have the necessary liquidity to augment our organic growth with strategic bolt-on acquisitions. At the same time, we will continue to focus on cost-reduction initiatives and operational efficiencies to improve our operating leverage and accelerate profitability.”

Conference Call Details

Standex will host a conference call for investors today, Tuesday, May 1, at 10:00 a.m. ET.  On the call, Roger Fix, president and CEO, and Thomas DeByle, CFO, will review the Company’s financial results and business and operating highlights.  Investors interested in listening to the webcast should log on to the “Investor Relations” section of Standex’s website, located at www.standex.com.  The Company's slide show accompanying the webcast audio also can be accessed via its website.  To listen to the playback, please dial (888) 286-8010 in the U.S. or (617) 801-6888 internationally; the passcode is 93961179.  The replay also can be accessed in the “Investor Relations” section of the Company’s website, located at www.standex.com.   

Use of Non-GAAP Financial Measures

EBITDA, which is "Earnings Before Interest, Taxes, Depreciation and Amortization," non-GAAP income from operations, non-GAAP net income from continuing operations and free cash flow are non-GAAP financial measures and are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States.  Standex believes that such information provides an additional measurement and consistent historical comparison of the Company's performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

About Standex

Standex International Corporation is a multi-industry manufacturer in five broad business segments: Food Service Equipment Group, Engineering Technologies Group, Engraving Group, Electronics Products Group, and Hydraulics Products Group with operations in the United States, Europe, Canada, Australia, Singapore, Mexico, Brazil, Argentina, Turkey, South Africa, India and China. For additional information, visit the Company's website at www.standex.com.

¹ 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 the impact of implementation of government regulations and programs affecting our businesses, unforeseen legal judgments, fines or settlements, uncertainty in conditions in the financial and banking markets, general domestic and international economy including more specifically increases in raw material costs, the ability to substitute less expensive alternative raw materials, the heavy construction vehicle market, the ability to continue to successfully implement productivity improvements, increase market share, access new markets, introduce new products, enhance our presence in strategic channels, the successful expansion and automation of manufacturing capabilities and diversification efforts in emerging markets, the ability to continue to achieve cost savings through lean manufacturing, cost reduction activities, and low cost sourcing, effective completion of plant consolidations, successful completion and integration of future acquisitions and the other factors discussed in the Annual Report of Standex on Form 10-K for the fiscal year ending June 30, 2011, 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.