Company: SXI
Filing Date: 2025-08-04
Form Type: 10-K
Source: 0001437749-25-024450
Chunk: 642

Company: STANDEX INTERNATIONAL CORP/DE/
Filing Date: 2025-08-04
Form: 10-K
Item: Item 7
Chunk 642
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415   72,034 

     ●  Amortization of inventory step-up to fair value assuming inventory turns within a two-month period; 

     ●  Amortization of definite-lived intangible assets recognized at fair value that exceed one year as if acquired  July 1, 2023; 

     ●  Non-recurring acquisition-related costs have been excluded from net income; 

     ●  Interest expense (including amortization of loan discount) on the Term Loan Credit Agreement entered into in connection with the acquisition as if the loan was obtained  July 1, 2023. The interest rate assumed for purposes of the pro forma financial information was 7.7% on average as the rate in agreement is a variable rate plus certain margins; an 

     ●  Income tax expense (benefit) was adjusted related to the above pro forma adjustments using an estimated tax rate of 22.6%. 

   With respect to each of the McStarlite and Amran/Narayan Group acquisitions, the estimated fair values of the indefinite lived tradenames were determined based on an income approach using the relief from royalty method, which assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of the tradenames assets. The cash flow projections the Company uses to estimate the fair value of the tradenames intangible assets involves several assumptions, including projected revenue growth, an estimated royalty rate, after-tax royalty savings expected from ownership of the tradenames, and a discount rate used to derive the estimated fair value of the tradenames.  The estimated fair value of the customer relationships intangible assets were determined based on the income approach using the multi-period excess earnings method, which measures the economic benefit indirectly by calculating the income attributable to an asset after appropriate returns are paid to complementary assets used in conjunction with the subject asset to produce the earnings associated with the subject asset, commonly referred to as contributory asset charges.  The fair value determination of the customer relationships intangible asset required us to make significant estimates and assumptions related to future cash flows and the selection of an appropriate discount rate to apply to future cash flows.
    
   The Company incurred acquisition-related costs of $14.2 million for the year ended  June 30, 2025, which is reported separately in the consolidated statements of operations.
    
   From the date of acquisition, the Amran/Narayan Group has contributed $84.4 million of net sales