Company: SXI
Filing Date: 2025-08-04
Form Type: 10-K
Source: 0001437749-25-024450
Chunk: 725

Company: STANDEX INTERNATIONAL CORP/DE/
Filing Date: 2025-08-04
Form: 10-K
Item: Item 4
Chunk 725
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-qualified defined contribution plan) or speculation is strictly prohibited.  The Company has no majority-owned subsidiaries that are excluded from the consolidated financial statements. Further, we have no interests in or relationships with any special purpose entities. 

Exchange Risk

We are exposed to both transactional risk and translation risk associated with exchange rates.  The transactional risk is mitigated, in large part, by natural hedges developed with locally denominated debt service on intercompany accounts and the fact that most of our foreign currency sales are transacted in their functional currency.  We also mitigate certain of our foreign currency exchange rate risks by entering into forward foreign currency contracts from time to time.  The contracts are used as a hedge against anticipated foreign cash flows, such as loan payments, customer remittances, and materials purchases, and are not used for trading or speculative purposes.  The fair values of the forward foreign currency exchange contracts are sensitive to changes in foreign currency exchange rates, as an adverse change in foreign currency exchange rates from market rates would decrease the fair value of the contracts.  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, 2025 and 2024, the fair value, in the aggregate, of the Company’s open foreign exchange contracts was a liability of less than $0.1million and liability of $0.1 million respectively. 

Our primary translation risk is with the Euro, British Pound Sterling, Peso, Japanese Yen, Chinese Yuan, and Indian Rupee.  A hypothetical 10% appreciation or depreciation of the value of any these foreign currencies to the U.S. Dollar at June 30, 2025, would not result in a material change in our operations, financial position, or cash flows.  We hedge our most significant foreign currency translation risks primarily through cross-currency swaps and other instruments, as appropriate.

Interest Rate

The Company’s effective interest rate on borrowings was 6.38% and 2.46% at June 30, 2025 and 2024, respectively.  Our interest rate exposure is limited primarily to interest rate changes on our variable rate borrowings. From time to time, we use interest rate swap agreements to modify our exposure to interest rate movements. At June 30, 2025, we did not have any outstanding interest rate swaps. At June 30,