Magnetics Business & Technology - November/December 2020 - 25

INDUSTRY NEWS
current challenges, thereby partially compensating for a decline
in the Classic segment of 14.4% to €41.2 million.
Management said it expects that its forecast of full-year revenues in the range between €180 and €200 million and a positive
margin of up to 5% will be reached at the lower end of each
range. This is based on the expectation that the economy, after
the economic low point in the second quarter of 2020, will slightly
recover in the further course of the year and that the COVID-19
pandemic will not worsen further.
Standex International, based in
Salem, NH and parent company
of Standex Electronics, Agile
Magnetics and Renco Electronics, reported a company-wide
decline in revenues of 17.4% for the recent quarter, dropping
from $168.7 million a year ago to $139.4 million this year. The
12-month tally was 5.5% decline from $639.9 million for the full
year ago compared to $604.5 for the fiscal year just concluded.
For its electronics segment which includes the magnetics business, the recent quarter's revenues fell from $49.7 million to
$44.8 million, a 10% decrease in revenue from its fourth quarter a year ago as both North American and European markets
reflected weakness in end markets due to the economic impact
of the pandemic. The decline was partially offset by a modest
recovery in Asian end markets.
Looking ahead, the company said it expects an increase in revenue due to positive trends in its existing magnetics product line
as well as a contribution from the recently closed Renco acquisition in fiscal first quarter 2021. It also anticipates improvement in
operating margin reflecting continued cost and productivity initiatives combined with limited incremental impact from sequentially
flat reed switch raw material costs.

fiscal first quarter 2021, Standex expects consolidated company
revenue to be flat to slightly above fiscal fourth quarter 2020 and
total segment operating margin to increase.
For TDK, the Japan-based global
provider of electronic components and ferrite materials, the
company's first quarter ending
June 30, saw an 8.1% decline in revenues from $3.0 billion a
year ago to $2.8 billion this year. Profit declined 15% from $140
million to $122 million.
During the first three months of fiscal 2021, the global economy
was adversely affected by the COVID-19 becoming a pandemic
and a severe worsening in relations between the U.S. and China,
the company related. The electronics market, which has a large
bearing on the consolidated performance of TDK, was significantly affected by these events. Production volume in automobiles, smartphones, and hard disk drives was substantially lower
than the previous year. On the other hand, demand expanded for
notebook PCs and tablets as more people worked and studied at
home. Demand grew strongly for fifth-generation mobile communication system (5G) base stations, especially in China, where
infrastructure is being proactively upgraded.
Breaking things down by business sector, its magnetic applications segment experienced a 31% drop in revenues to $354
million. Sensor applications segment fell 19% to $136 million.
Passive components which includes inductive devices fell 14% to
$781 million.

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"I am very proud of the performance of our employees in this very
challenging environment. They displayed great dedication, creativity and resilience to safely deliver on customer commitments.
Our global teams continue to collaborate at a high level. I believe
Standex will exit this environment as a stronger company," commented David Dunbar, president and CEO.
"Overall, fourth quarter results were largely in line with our
expectations. Since the end of April, our end markets have
exhibited a gradual increase in the level of customer activity that
has continued into our first quarter. Besides continued steady
free cash flow generation in the quarter which further contributed
to our financial strength, we remained very active in transforming
the portfolio.
"In July, we announced the acquisition of Renco Electronics, a
leading U.S.-based custom magnetics manufacturer. Renco is
a great fit deepening our significant engineering and technical
expertise as well as providing us with a highly complementary
customer base and end markets. We expect Renco to be accretive to our earnings in fiscal 2021 and additive to consolidated
free cash flow."
A position of strong liquidity enabled Standex to fund the Renco
acquisition entirely from cash on hand, noted Dunbar. "We will
continue to utilize our strong financial position to execute on
our active pipeline of organic and inorganic opportunities." In
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Magnetics Business & Technology - November/December 2020

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