Prompt:
Human: I hope you're doing well and staying safe.
It's now a little over a year since I joined SolarWinds.
The efforts of our team resulted in several highlights in our performance, which I'll go into shortly.
As many of you are also aware, we held our annual Analyst Day meeting on November 10, 2021.
During this virtual event, we described our portfolio and go-to-market plans for SolarWinds, our expanding market opportunity, which we believe will amount to approximately $60 billion by 2025; and our goal to achieve at least $1 billion in ARR by 2025, with a compounded annual subscription ARR growth north of 30% over that time period; and then building to EBITDA margins in the mid-40s.
We believe this combination of top line scale, growth and strong profitability will put us in a small group of public software companies with a similar financial profile.
As I mentioned earlier, we had several highlights in the fourth quarter of 2021.
I'll touch on some of the highlights before turning it over to Bart for more color on the fourth quarter, as well as our financial outlook for the first quarter and full year of 2022.
The continued relevance of our solutions, the execution abilities of our teams and the trust that our customers have in us were all on display during the fourth quarter.
For the fourth quarter, we delivered revenues of $186.7 million, above the high end of the range we provided of $180 million to $184 million.
Adjusted EBITDA was $78.4 million, representing an adjusted EBITDA margin of 42%, again, exceeding the high end of our outlook for the fourth quarter.
Customer retention remained our top priority throughout 2021, and we made great progress toward this goal in Q4.
Our trailing 12-month Q4 maintenance renewal rate of 88% was above the low- to mid-80% renewal rates we noted -- we expected in 2021.
Based on our customers' loyalty and strong execution of our customer and go-to-market teams, we expect to return to our retention rates to improve in 2022 and approach our historical best-in-class levels in the low-90% range.
Our continued focus on driving subscription-first resulted in an 18% year-over-year increase in subscription revenues in the fourth quarter, and we believe we are well-positioned to accelerate this level of growth moving forward.
For the full year, we delivered $719 million of GAAP revenues, representing flat year-over-year performance relative to 2020; and adjusted EBITDA of $303 million, representing a 42% EBITDA margin while growing subscription revenue 19% year over year on a GAAP basis.
We anticipate both our license and subscription revenues to grow in 2022, reflecting a recovery in sales to new and existing customers and further expanding our recurring revenue base.
Our focus on delivering simple, powerful and secure solutions, combined with our still very early efforts to build out our system integrator and enterprise go-to-market motions as a result -- has resulted in continued ASP expansion and an increasing number of large deals.
Specifically, our product and platform integrations combined with simplified packaging and pricing, delivered tremendous value to customers, resulting in multiple million dollar plus deals and an increasing number of $100,000 deals in 2021.
Our efforts to transition our customers to our new SolarWinds' observability offerings was well received in the second half of 2021.
While still very early, both customer adoption and subscription bookings have been very encouraging.
Customers are looking to leverage their on-premises deployments while seamlessly connecting to the cloud, and we are providing them with the solution to accomplish their goal while modernizing their deployments and helping them accelerate their digital transformations.
This subscription transformation to SolarWinds' observability will become a mainstay beginning in 2022.
Our AIOps capabilities are being delivered on the same platform, further bolstering our customers' productivity by helping them to manage their deployments more simply to isolate issues efficiently and to remediate them quickly.
We are unifying our application monitoring solutions to give customers even easier ways to deploy and consume them.
Application monitoring will become an integral part of our SolarWind's platform.
We believe our database monitoring solutions continue to lead the market with significant depth and breadth across functionality, platform and deployment support.
Our volume of $100,000-plus deals has continued to grow alongside our SolarWinds' velocity motion.
We intend to continue working closely with our hyperscaler partners like Azure and AWS to further accelerate our growth.
Our service desk solutions are ideally suited for the mid-market, and we are accelerating our integrations most recently with Microsoft Teams.
While we believe the stand-alone motion will continue to accelerate, our Service Desk solutions will become integral elements of the SolarWinds platform to support our automation and remediation capabilities.
We continue to take our commitment to building a safer and more secure customer environment very seriously.
To this end, we are working on all aspects of our Secure by Design initiative, which I detailed in 2021.
Our teams recently published a white paper on our next-generation build systems, that is a result of our efforts to set a new standard in secure software development to engage with and contribute to open source efforts and to share what we have learned to help secure software supply chain practices.
It is my hope that the entire industry will embrace these practices and together, we can enable our customers' digital transformation securely.
Once again, I will discuss our SolarWinds results on a stand-alone basis.
As most of you know, our spin of the N-able business was effective on July 19, 2021.
Therefore, their results are reflected as discontinued operations in our fourth quarter and full year financial results.
Also, a quick reminder that the guidance for the fourth quarter that I provided in October did not include any impact from N-able as the spin has been completed prior to the start of the fourth quarter.
In addition, our public filings will present N-able as discontinued operations in prior periods for better comparability.
At the start of 2021, we determined not to provide full year guidance, given the uncertainty we faced at that time as a result of the cyber incident, the ongoing impact of the COVID-19 pandemic and the potential timing of the spin-off of our N-able business.
As we discussed in our Q4 2020 earnings call, while we felt it was too early to predict a range of outcomes with our usual level of precision, we were encouraged by the recent customer engagements and focused on customer retention and maintaining renewal rates above 80%.
Reflecting back on the year, despite the significant challenges we faced, we are pleased with our performance and expect to improve upon it in 2022.
Although we had indicated that we expected maintenance renewal rates to be in the low- to mid-80s, we ended the year with renewal rates at approximately 88% for 2021.
We also saw new sales improve as we moved through the year in our commercial business, and our fourth quarter financial results reflect another quarter of improving execution.
That execution led to another quarter of better-than-expected financial results with total revenue ending at $186.7 million, well above the high end of our total revenue outlook of $180 million to $184 million.
For the fourth quarter of 2021, there was no impact to purchase accounting on revenue, so our GAAP total revenue is equivalent to the non-GAAP total revenue measure we have historically reported.
Total license and maintenance revenue was $152 million in the fourth quarter, which is a decrease of 3% from the prior year period.
Maintenance revenue was $119 million in the fourth quarter, which is a decrease of 3% from the prior year.
As we talked about at our Analyst Day, our maintenance revenue has been impacted by a combination of year-over-year declines in license sales for the past nine quarters and a reduction in our renewal rates in 2021.
The trend of lower license sales intensified with the introduction of subscriptions of our licensed products in the second quarter of 2020, as well as the cyber incident in December of 2020 as well.
We focus more of our efforts on longer-term customer success and retention.
As I mentioned earlier, we are encouraged by the fact that our renewal rates remained higher than our expectation of low- to mid-80s that we shared at the start of 2021.
On a trailing 12-month basis, our maintenance renewal rate is 88%.
Working with our customers has been a top priority this year, and our renewal rates reflect our focus on customers and the trust they place in our solutions and relationships.
Also consistent with recent quarters, we want to provide the in-quarter renewal rate for the fourth quarter, which currently stands at approximately 87%.
But believe it will be 88% by the end of the first quarter, which again is above our expectations at the start of the year.
For the fourth quarter, license revenue was $33.8 million, which represents a decline of approximately 2% as compared to the fourth quarter of 2020.
Our new license sales performance with commercial customers improved sequentially each quarter during the year.
On-premises subscription sales resulted in an approximately 8 percentage point headwind to our license revenue for the quarter.
Moving to our subscription revenue.
Fourth quarter subscription revenue was $34.4 million, up 18% year over year.
This increase is due to the additional subscription revenue from SentryOne products, as well as increased sales of our on-premises subscriptions as part of our early efforts to shift more of our business to subscription.
Total ARR reached approximately $631 million as of December 31, 2021, reflecting year-over-year growth of 1% and up slightly from our ending third quarter total ARR balance of $624 million.
Our subscription ARR of $134.7 million is an increase of more than 20% year over year and 3% sequentially from the third quarter.
Total GAAP revenue for the full year ended December 31, 2021, was $719 million.
Subscription revenue was $125 million of that total and represents growth of 19% year over year on a GAAP basis.
The growth was led by our continued focus on expanding our subscription offerings through our on-premises subscription sales, as well as sales of our database offerings, including the SentryOne products acquired in the fourth quarter of 2020.
Total license and maintenance revenue for the full year in 2021 decreased 3% year over year to $594 million.
Total maintenance revenue grew 2%, reaching $479 million.
License revenue for the full year was negatively impacted by a combination of the 2021 cyber incident and the impact of offering perpetual license products on a subscription basis, which we expect to yield more revenue over the full duration of a typical customer lifetime but negatively impacts license revenue and total revenue in the near-term.
We finished 2021 with 829 customers that have spent more than $100,000 with us in the last 12 months, which is a 5% improvement over the previous year.
We continue to supplement our traditional high-velocity, low-touch sales approach with targeted efforts to build larger relationships with our enterprise customers, which we spoke about at our Analyst Day in November.
We delivered a solid fourth quarter of non-GAAP profitability.
Fourth quarter adjusted EBITDA was $78.4 million, representing an adjusted EBITDA margin of 42%, exceeding the high end of the outlook for the quarter despite continuing to invest in our business.
And for the year ended December 31, 2021, adjusted EBITDA was $303 million, representing an adjusted EBITDA margin of 42% as well.
Excluded from adjusted EBITDA in the fourth quarter are one-time costs of approximately $9.3 million of cyber incident related remediation, containment, investigation and professional fees, net of insurance proceeds.
These one-time costs for the full year of 2021 totaled approximately $33.1 million net of insurance reimbursements.
These cyber incident-related costs are not included in the adjusted EBITDA, are one-time and nonrecurring.
They are separate and distinct from our Secure by Design initiatives, which are aimed at enhancing our IT security and supply chain processes.
Costs related to our Secure by Design initiatives are and will remain part of our recurring cost structure on a go-forward basis.
We expect one-time cyber incident-related costs to fluctuate in future quarters, but to overall, lower in future periods.
These one-time cyber costs are, however, difficult to predict.
Net leverage on December 31 was approximately 3.9 times our trailing 12-month adjusted EBITDA.
As a reminder, we retained the full amount of the $1.9 billion in term debt that we had prior to the spin-off of N-able.
Our cash balance was $732 million at the end of the fourth quarter, bringing our net debt to approximately $1.2 billion.
Our plan is to keep that cash on our balance sheet for the foreseeable future.
We intend to maintain flexibility as it relates to our cash on balance sheet.
Our debt matures in February of 2024, and we expect to reevaluate our level of gross debt and possible paydowns well in advance of that maturity date.
I will now walk you through our outlook before turning it back over to Sudhakar for some final thoughts.
We are providing guidance for the first quarter of 2022 and for the full year of 2022 for total revenue, adjusted EBITDA margins and earnings per share.
For the full year guidance of 2022, we expect total revenue to be in the range of $730 million to $750 million, representing year-over-year growth of 2% to 4%.
We expect our total revenue to be positively impacted by increases in our license revenue, as well as subscription revenue growth as a result of an increase in new sales in 2022 as compared to 2021.
We will lead with a subscription-first focus as it relates to new sales, and we'll also focus on migrating our maintenance customers to our observability products, which are sold as subscriptions, especially in the second half of the year when we expect that more of the functionality will be available.
We expect that our total revenue growth will be partially offset by a decline in maintenance revenue due to lower license sales over the past two years.
Adjusted EBITDA margin for the year is expected to be approximately 41%.
Non-GAAP fully diluted earnings per share is projected to be $1.01 to $1.08 per share, assuming an estimated 162.6 million fully diluted shares outstanding.
Our full year and first quarter guidance assumes a euro to dollar exchange rate of 1.13 down from the 1.16 we assumed for 2022 when we provided our initial 2022 outlook at our Analyst Day in November.
Even so, we are comfortable reaffirming the guidance we gave previously.
For the first quarter of 2022, we expect total revenue to be in the range of $173 million to $176 million, representing a year-over-year growth rate of flat to 1%.
Once again, we expect license and subscription revenue growth to be partially offset by a decline in maintenance revenue, which we expect to be down approximately 4% to 5% year over year.
Adjusted EBITDA margin for the first quarter is expected to be approximately 36%.
Our historical trend has been that the first quarter of the year is at a lower level of profitability due to several factors, including payroll taxes on year-end bonuses, higher levels of social security taxes.
In addition, the full impact of our Secure by Design initiatives that we discussed a year ago are now in place.
We expect our level of profitability to improve as we move through the year as has been the case historically as revenue increases and our investments scale.
As stated earlier, our outlook for the full year for adjusted EBITDA margins of approximately 41%.
Non-GAAP fully diluted earnings per share is projected to be $0.22 per share, assuming an estimated 160.5 million fully diluted shares outstanding.
And finally, our outlook for the first quarter assumes a non-GAAP tax rate of 22%, and we expect to pay approximately $6.5 million in cash taxes during the first quarter.
We also expect that maintenance renewal rates will improve and continue to get closer to historical levels in 2022.
As we think about our EBITDA margins for 2022, the costs associated with our Secure by Design initiatives, investments in transitioning our product portfolio to a greater subscription mix and our continued investments in our sales and marketing initiatives are factored into the margins for the year and while we expect margins to be consistent with 2021.
We believe we will return to accelerating margins again in the future, but in the near-term, we are committed to and excited about the investments in our business that we shared with you at our Analyst Day in November.
Finally, we believe our unlevered free cash flow conversion will improve in 2022 over 2021 and we expect to be in line with our fourth quarter 2021 levels.
I'm pleased with our strong Q4 performance, exceeding our outlook in both total revenue and adjusted EBITDA and with how we ended 2021.
We are executing our mission to help customers accelerate their business transformation via simple, powerful and secure solutions for multi-cloud environments.
I'm excited about accelerating our ability to serve our customers and to grow our business.
We expect to deliver strong license and subscription growth in 2022 via continued execution of our strategy.
In 2022, we will continue our journey of subscription growth with unified platforms, superior customer experiences, expanding go-to-market motions and a growing list of applications as the foundations for this growth.
We will continue to exercise discipline in how we invest in our business in order to deliver a unique combination of growth and profitability that we believe represents a compelling investment opportunity.
 Assistant:

Chosen response:
sees fy non-gaap earnings per share $1.01 to $1.08.
sees q1 revenue $173 million to $176 million.
sees fy revenue $730 million to $750 million.
q4 revenue rose 0.6 percent to $186.7 million.
sees q1 2022 non-gaap diluted earnings per share of $0.22.


Prompt:
Human: Our quarterly reports and our definitive proxy statements for the special meeting regarding the Indigo transactions all are filed with the Securities and Exchange Commission.
Although, we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance and actual results on developments may differ materially, and we are under no obligation to update them.
We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers.
We appreciate you joining us today and I hope that you're all safe and well.
His strategic perspective and disciplined approach really complement our existing strategy and our management team.
I look forward to working with both of these talented leaders as we continue to execute our strategy to enhance sustainable value for our shareholders.
Southwestern Energy's returns driven strategy focuses on creating sustainable value protecting financial strength, consistently delivering leading operational and financial results and pursuing opportunities to capture the benefits of increasing scale.
At the core of our strategy and value proposition is a commitment to the right people doing the right things.
Our success depends on the alignment and commitment of a fully engaged diverse and inclusive workforce nurtured by our high performing innovative and value-driven culture.
In the second quarter, we took additional steps to deliver further value enhancements from our strategy and action.
The highlight of the quarter was the announced acquisition of Indigo Natural Resources.
The integration planning process is going well and ahead of schedule.
The shareholder vote is set for August 27 and we expect to close shortly thereafter.
This transaction expands the scope and scale of our Company by combining core positions across the country's two premier natural gas basins and accelerates the delivery of key financial and strategic objectives.
Because of Indigo's low-cost structure and strong balance sheet, we expect to see immediate accretion to key financial metrics, including improvement in corporate returns and increase in free cash flow and the accelerated delivery of our deleveraging goal later this year.
Indigo furthers our sustainable value creation strategy by expanding our overall opportunity set and moderating risks to our business.
The expansion in the Haynesville adds Tier-1 dry gas inventory locations that complement our existing Appalachia inventory.
These locations are adjacent to premium gas markets including LNG and other growing demand centers.
Notably, the firm sales agreements and fixed basis differentials will expand the Company's margins and dampen its overall basis volatility.
SWN is well positioned to capture the many tangible benefits of scale that this transaction brings including cost economies, expanded inventory and further capital allocation optionality.
The benefits improve the sustainability of our free cash flow generation, particularly as commodity prices continue to improve.
We are on track to deliver the promised synergies at closing and furthermore we see the potential for additional value enhancements once the transaction closes from operational and commercial improvements, a strengthened credit self [Phonetic] profile and a lower cost of capital.
We are proven integrators and I'm confident that our new combined Haynesville team will find ways to deliver additional value from our newly integrated business.
SWN's commitment to sustainability goes beyond the economics of a scale-enhancing transaction like Indigo, it is the ultimate objective of our ESG strategy as well.
Responsibly sourced gas is one of our key initiatives.
This quarter, we implemented a basinwide program to certify and continuously monitor all of our Appalachia Basin unconventional wells through an agreement with Project Canary.
We have a long history with the firm as we've been marketing responsibly sourced gas for several years to end users in the Eastern United States.
We specifically selected a certification provider that utilizes a rigorous and comprehensive process.
The basinwide well certification process and site monitoring has begun and we have already installed continuous monitors at several operating sites across our Pennsylvania acreage enabling our operating teams to immediately address potential emissions should they occur.
Southwestern is a leading natural gas producer that is well positioned for a low-carbon future.
We have a unique combination of a strong balance sheet, large scale Tier-1 operated assets, proven execution and ESG performance providing the means to deliver sustainable value creation.
We continue to believe disciplined consolidation and the benefits of scale are core to our strategy for driving shareholder value.
We remain committed to holding capital investment at maintenance capital levels and disciplined in our risk management strategy including hedging.
Over the next few quarters, we will further refine our capital allocation strategy including additional debt reduction and the potential return of capital to shareholders.
Operationally, 2Q was another active quarter and our teams continue to deliver results within our guidance ranges while ensuring the continued protection of our people and our operations from the ongoing challenges presented by COVID-19.
Our 2021 plan is on track and we look forward to operating in the Haynesville.
I'll start with some highlights from the quarter.
Total production was 276 Bcfe or 3 Bcfe per day.
This included 2.4 Bcf per day of gas representing 79% of total production and approximately 104,000 barrels per day of oil and NGLs flat to the first quarter and consistent with our maintenance capital program.
During the quarter, we averaged five drilling rigs, two in Pennsylvania, two in West Virginia and one in Ohio with two frac crews.
As planned, we invested $259 million of capital in the quarter and expect Q3 to trend lower with a further decrease in Q4.
The shaping of our maintenance capital investment in 2021 is consistent with our well-established approach of front-end loading and tapering in the second half of the year.
We brought 31 wells to sales in the quarter, drilled 23 and completed 19.
Costs on wells to sales were in line with the first quarter at $626 per foot with an average lateral length of approximately 14,000 feet.
While we are starting to see some inflationary impacts mainly related to diesel, steel and labor, due to our vertical integration proactive procurement strategy and operational efficiency gains, we continue to expect low-single-digit deflation in 2021.
In Southwest Appalachia, we brought online our first Ohio Utica dry gas pad and achieved our $100 per foot cost reduction goal with an average well cost of $728 per foot.
This three well pad had an average lateral length of approximately 13,700 feet and an average 30-day rate of 25 million cubic feet per day, all performing in line with expectations.
In Northeast Appalachia, we continue to drive operational efficiencies to reduce costs and enhance the capital program returns.
We placed 11 wells to sales in the quarter with an average well cost of $531 per foot at an average lateral length of approximately 11,600 feet.
These wells had an average 30-day rate of 14 million cubic feet per day.
As Bill mentioned, we are excited to join with our newest colleagues from Indigo and hit the ground running in the Haynesville.
We are currently doing our operational technical and HSE planning and we'll have a great operating team in place that represents a combination of employees from both Indigo and SWN.
Initially, we will be focused on incorporating current Haynesville best practices and then look to combine that knowledge with our own operational expertise.
I'm excited to join the team and help build on the momentum SWN has generated through its base business and acquisition progress.
As Bill mentioned earlier, this quarter, the Company accelerated delivery on its financial goals.
It generated free cash flow for the third consecutive quarter.
We're on track with the 2021 plan to generate meaningful annual free cash flow, expecting free cash flow generation to accelerate in the second half of this year.
Once the transaction closes, we will provide updated guidance to account for the addition of Indigo.
The solid quarterly financial results further improved our leverage ratio by almost half turn to 2.6 times.
Liquidity remains in good shape with just under $570 million in borrowings and $1.2 billion of capacity on a credit facility.
With the accretive acquisition of Indigo and current robust commodity price outlook, we expect to achieve our two-time sustainable leverage goal by late 2021.
The key part of achieving this financial strength has been SWNs commodity and basis hedging strategy, which is directly linked with Company's enterprise risk management strategy.
The Company incorporates balance sheet strength leverage, commodity and basis fundamentals and the benefits to the Company's financial strength resulting from acquisitions among other aspects in determining the level and instruments hedging that will be employed.
As a result of our basis hedging strategy, the Company maintained its full year guidance despite widening basis in Appalachia.
As we integrate Indigo and update our capital allocation strategy in the coming months, we continue to ensure that our commodity and risk management strategy and practice remains aligned with the Company's risk profile in our long-term value creation objectives.
 Assistant:

Chosen response:
qtrly total production 276 bcfe versus 201 bcfe.
maintains its full year 2021 price differential guidance before impact of indigo acquisition.


Prompt:
Human: With that, I'll now turn things over to Mike.
The dedication of our team is clearly visible through our excellent safety performance, where we achieved zero recordable injuries during the first quarter, a record for our company.
In the -- from the coronavirus front, we continue to take all necessary measures to ensure the health and safety of our workforce and have implemented policies and procedures that follow the guidelines established by the CDC, OSHA and local health and governmental authorities to protect our workforce and contractors.
Turning to our results.
In the quarter, we were extremely pleased with the operational performance that our team delivered across both our Coke and Logistics segments.
Our coke making operations returned to running at full capacity and our logistics operations saw a significant uptick in volume.
We achieved record-setting first quarter results with adjusted EBITDA of $70.6 million, a 14% improvement over Q1 2020.
We are also pleased with our initial performance in the foundry and export coke markets.
Our products are well received and we are excited about the possibilities in these markets in the future.
We will continue to work on optimizing our production and growing our market participation for these products.
A very encouraging development for our Logistics segment this quarter was the signing of a new take or pay agreement to handle iron ore pellets at CMT. As we discussed in our last call, we successfully tested this product during the fourth quarter of last year, which has resulted in a take or pay agreement and a new product for our logistics business.
Looking at our capital structure and deployment of cash in the first quarter, we reduced debt by $33 million during the quarter and continued to execute on our deleveraging initiative, while also maintaining our $0.06 per share quarterly dividend.
We are well on our way to achieving our long-term gross leverage target of 3 times or lower by the end of this year.
Overall, very strong operational and financial performance in the first quarter provides a solid foundation to build on for the rest of the year.
We now expect results at the top end of our 2021 guidance of $215 million to $230 million.
Turning to Slide 4.
Our first quarter net income attributable to SXC was $0.20 per share, up $0.14 versus the prior-year period, mainly driven by our Logistics segment performance.
Adjusted EBITDA came in at $70.6 million in the first quarter of 2021, up $8.5 million versus the first quarter of 2020.
The increase was primarily due to approximately 1.1 million tons of higher throughput volumes at our Logistics segment.
Turning to the detailed adjusted EBITDA bridge on Slide 5.
First quarter 2021 adjusted EBITDA was higher by $8.5 million or 14% over the prior year period.
Our coke operations performed well this quarter and results were reasonably consistent with the first quarter of 2020.
The majority of the period over period increase in adjusted EBITDA was driven by our Logistics segment and CMT saw a significant increase in coal export volumes driven by strong global demand and supported API2 pricing.
When adding in slightly favorable results in corporate and other, we ended first quarter at $70.6 million of adjusted EBITDA.
Turning to Slide 6 to discuss our Domestic Coke business performance in detail.
First quarter adjusted EBITDA per ton was $61 on 1,038,000 sales ton.
Our Domestic Coke fleet ramps back up to full capacity utilization during the first quarter of 2021 after the volume turned down in the second half of 2020.
Foundry and export sales complemented our long-term take-or-pay contracted sales and are expected to continue to do so for the rest of 2021.
As a reminder, foundry tons do not replace blast furnace tons on a ton per ton basis.
For example, due to differences in the production process, a single ton of foundry coke replaces approximately 2 tons of blast furnace coke leading to lower coke production in sales in the current quarter as compared to the first quarter of 2020.
Our coke plants continued their strong operational performance and disciplined cost management during the quarter, while producing and selling new products.
On the back of strong first quarter '21 -- 2021 performance, we are on track to achieve our full year Domestic Coke adjusted EBITDA per ton and production guidance.
Moving to Slide 7 to discuss our Logistics business.
The Logistics business generated $10.9 million of adjusted EBITDA during the first quarter of 2021 as compared to $3.3 million in the prior year period.
The increase in adjusted EBITDA is primarily due to higher throughput volumes at CMT. Our Logistics business handled 5.3 million tons of throughput volumes during the quarter as compared to 4.2 million tons during the prior-year period.
CMT handled 1.6 million more tons versus the prior-year period, mainly driven by higher coal exports and iron ore.
Increased global demand, strong API2 index pricing and increasing natural gas prices have resulted in higher thermal coal exports from the US.
We expect export volumes to remain strong in the second quarter.
Although our domestic terminals volumes were lower compared to the first quarter of 2020, it was more than offset by lower operating costs resulting from the cost savings initiatives implemented last year.
Given our very strong first quarter 2021 results and looking at the API2 forward curve, we now expect to deliver at the higher end or possibly even exceed our Logistics adjusted EBITDA guidance range of $20 million to $25 million.
We expect to handle approximately 5 million tons of coal at CMT as compared to our original guidance of 4 million to 5 million tons, along with 2.5 million to 3 million tons of other products for which the guidance remains unchanged.
The volume guidance for our domestic coal terminals also remains unchanged at approximately 10.5 million ton.
Turning to Slide 8 and our liquidity position for Q1.
As you can see from the chart, we ended the first quarter with a cash balance of approximately $54 million.
Cash flow from operating activities, generated close to $65 million due to strong operating performance and the timing of cash payments.
We spent $20.1 million on capex during the quarter, which included some carryover payments from last year.
We lowered our debt by $33 million during the quarter, with the majority of the reduction coming in the form of pay downs on our revolving credit facility.
We expect additional deleveraging to continue over the balance of the year as we continue to make good progress managing our balance sheet.
We also paid dividends worth $5.1 million at the rate of $0.06 per share during the quarter.
In total, we ended the quarter with a strong liquidity position of approximately $386 million.
Wrapping up on Slide 9.
As always, safety and operational performance is top of mind for our organization.
We want to continue our exceptional safety performance demonstrated in the first quarter, while focusing on successfully executing against our operating and capital plan in 2021.
As I mentioned earlier, we are pleased with the progress we have made during the first quarter on our foundry and export coke growth initiatives.
These additional sales, enable our coke fleet to run optimally at full capacity and we will continue to focus on further developing our customer base and participation in these markets.
From our Logistics business perspective, the new iron ore take-or-pay agreement is another step in the direction of revitalizing CMT as we continue our efforts to bring new products and customers.
The uptick in coal exports underpinned by the revised take-or-pay contract provides a strong foundation to further build upon at CMT. We again made good progress on our well established and well balanced capital allocation goals, continuing to bring down our debt balance is critical to stabilizing and strengthening our capital structure.
We will continue to evaluate capital needs of the business, our capital structure and the need to reward shareholders on a continuous basis and we'll make capital allocation decisions accordingly.
Finally, as I stated earlier, continued strength in steel and coal export markets combined with our excellent first quarter results leads us to comfortably project full-year results at the high end of our adjusted EBITDA guidance.
We will provide further updates to the guidance as we have more clarity about the second half of the year in our next earnings call.
With that, let's go ahead and open up the call for Q&A.
 Assistant:

Chosen response:
q1 earnings per share $0.20.
well positioned to achieve top end of full year 2021 adjusted ebitda guidance range of $215m to $230m.


Prompt:
Human: I will then review our segment performance.
Ademir will follow with a discussion of our consolidated results and financial position.
Finally, I will conclude with comments on our outlook and key takeaways.
Overall, fiscal first quarter results were ahead of our expectations on several fronts reflecting stronger-than-anticipated demand and solid operational execution, particularly at our Electronics, Engraving and Scientific segments.
Consolidated revenue increased 8.5% sequentially.
This is ahead of the outlook we provided previously of fiscal first quarter 2021 revenue being flat to slightly above the fourth quarter of 2020.
At the Electronics segment, revenue increased 23% sequentially and 18.6% year-on-year, reflecting positive trends in magnetics as well as contribution from the recent Renco acquisition.
Sequentially, Engraving operating margin increased 800 basis points to 16.1% due to cost efficiency and productivity initiatives on 15.1% revenue growth compared to fiscal fourth quarter 2020.
Finally, the Scientific segment reported its highest quarterly sales ever at $16.7 million.
Earlier this year, we divested our Refrigerated Solutions business and established Scientific as a stand-alone reporting segment, both actions advancing our strategy to build our higher-margin segments.
In particular, the Scientific segment's results reflected increased demand for seasonal flu vaccine storage as well as initial sales related to potential COVID-19 vaccines.
In addition, our Electronics new business opportunity pipeline is healthy at $56 million across a wide variety of end markets.
We expect the sales contribution from this pipeline to grow sequentially on an annual basis.
In Engraving, we see continued opportunity in the tool finishing and soft trim tool laneways globally.
We are leveraging these top line trends with stronger operating disciplines in all businesses, complemented by several financial initiatives.
We are on track to deliver over $7 million in savings in fiscal 2021 from the actions we announced in the third quarter of fiscal 2020.
We also began to implement tax savings initiatives in the quarter, including optimizing our foreign tax credits.
We expect our tax-related actions to result in cash savings of $2 million to $3 million in fiscal 2021.
As a result, our tax rate in fiscal '21 is expected to be approximately 22% or 500 basis points lower than fiscal 2020.
We also expect to realize $1.5 million in cash savings in fiscal '21 due to our previously announced floating-to-fixed-rate interest swaps.
We continue to maintain a strong financial position with a solid balance sheet and significant liquidity supported by consistent free cash flow generation.
Standex has -- had approximately $206 million of available liquidity at the end of the fiscal first quarter with a net debt-to-adjusted EBITDA ratio of 1.1.
During the quarter, we generated free cash flow of $4.4 million.
We also continued our cash repatriation efforts with approximately $8 million repatriated in the first quarter.
We expect to repatriate $35 million in total in fiscal '21, which would result in $74 million in cash repatriated over the past two fiscal years.
In sum, we are off to a solid start and expect continued growth and margin improvements as we move through fiscal '21.
Our financial flexibility will continue to strengthen through free cash flow generation, cash repatriation and new tax initiatives.
In our fiscal second quarter of '21, we expect consolidated revenue to be flat to slightly above the first quarter with a slight-to-moderate increase in segment operating margin.
Electronics segment revenue increased $8.7 million or 18.6% year-on-year, reflecting a 3.9% organic growth rate with strength in the Magnetics product line and $5.9 million from the recent Renco acquisition or approximately 12.6%.
The balance of the revenue increase is related to foreign currency impact.
Adjusted operating income increased approximately $1 million or 12.7% year-on-year, reflecting operating leverage on the revenue growth, productivity initiatives and Renco Electronics' profit contribution, partially offset by inflationary material cost increases.
Our new business opportunities funnel has increased to $56 million and is expected to deliver $11 million of incremental sales in FY '21 across a broad range of end markets, including industrial, electrical vehicles, safety systems and military.
We are also very pleased with the pace of integration of our sales channels with Remco.
In three months, we've identified over $1 million of cross-selling opportunities in each other's accounts, ahead of our expectations.
In terms of our second quarter fiscal 2021 outlook, we expect revenue to be sequentially slightly higher and operating margin to be sequentially similar to the fiscal first quarter.
Our outlook assumes improvement in European and North American markets with Asia results slightly below fiscal first quarter of '21.
Revenue decreased approximately $2 million or 5.3% year-over-year, and operating income was lower by approximately $600,000 or 10.2%.
The results reflected the impact of COVID-19 on our end markets, partially mitigated by productivity and expense savings in the quarter.
However, sequentially from Q4 fiscal '20, Engraving reported a significant improvement as revenue increased 15.1% and operating margin improved 800 basis points, reflecting an overall increase in the level of customer activity combined with cost efficiency and productivity initiatives, which will continue with the segment.
Laneway sales are recovering quickly from Q4, growing by 27% sequentially to $11.7 million, nearly back to pre-COVID levels on strength in tool finishing offering and soft trim tools.
I'm pleased to see the progress our North American Engraving business has made improving labor management through standard work and better capacity planning.
Our Corporate VP of Operations, hired in February, is collaborating with business management to improve operating procedures and drive efficiencies.
In addition, the completion of our global ERP platform will allow additional analysis and improved performance management across all major global sites to further drive consistent performance.
As far as second quarter outlook on a sequential basis, Standex expects a slight revenue increase and continued improvement in operating margin in the fiscal second quarter of '21.
The expected revenue growth reflects an increased level of customer activity due to new automotive launches, along with continued introduction of soft trim tools and tool finishing offerings.
We expect to see continued margin improvement from the volume increase, combined with continued cost efficiencies and productivity initiatives.
Turning to slide six, the Scientific segment.
Scientific segment revenue increased approximately $1.9 million or 13% year-on-year, reflecting organic growth in end markets, especially retail pharmaceutical chains.
The sales growth reflects distribution and storage of vaccine for the coming flu season as well as a few initial orders for COVID vaccine storage.
Operating income increased approximately $400,000 or 10% year-over-year, reflecting revenue growth, partially offset with reinvestments in the business for future growth opportunities.
The picture highlights our under-counter cabinet used for storage of refrigerated and frozen medications and vaccines.
Standex is well positioned with strong distribution channels for a leading role in a potential COVID-19 vaccine rollout.
In the second quarter, we expect to see a sequential and year-on-year revenue increase, driven primarily by continued positive trends in retail pharmaceutical chains and clinical end markets, and accelerated by the expected rollout of a national COVID vaccine.
We expect operating margin to slightly improve, reflecting volume increase, balanced with reinvestment for future growth opportunities.
Looking further, we expect Scientific revenue growth sequentially and year-on-year in fiscal '21 with approximately $10 million to $20 million of incremental sales to support COVID vaccine storage.
Turning to the Engineering Technologies segment on slide seven.
As expected, Engineering Technologies had a challenging quarter.
Revenue and operating income decreased $7 million or 28.4% and $2.9 million or 86% year-on-year, respectively.
The first quarter results reflected the economic impact of COVID-19 on the commercial aviation market, especially engine parts manufacturing.
However, we continue to experience positive trends in the unmanned segment of the space industry and defense sales.
In our second quarter, we expect revenue to be sequentially similar to the first quarter as a result of continued weakness in the Aviation end market.
Operating margin is expected to increase slightly sequentially despite Aviation end market trends as a result of productivity initiatives, and cost reduction activities, which are ongoing.
We are pleased to show the progress of our efforts to expand capacity in our Billerica plant using lean processes.
As a result of set of time reduction, improved layouts and process improvements, we have increased throughput 20%, positioning us well to support continued growth in our space end markets and deliver higher margins.
Specialty Solutions revenue and operating income decreased year-on-year, although is in line with our expectations that results would be sequentially similar to the fiscal fourth quarter of 2020.
Revenue decreased approximately $6.2 million or 19.7% year-over-year.
The decrease was primarily associated with the economic impact of COVID-19 on several end markets, including the food service equipment and hospitality industries at the Pumps and Merchandising businesses and the dump markets at Hydraulics.
Operating income decreased approximately $1.7 million or 30.9% year-over-year, reflecting lower volume, partially mitigated by cost reduction efforts.
To partially offset these trends, we pursued additional opportunities focused on strengthening the segment's margin profile.
We continue to allocate hydraulics capacity to higher-value opportunities, particularly aftermarket sales.
We have also closed a Pumps operation in Ireland and outsourced the components previously manufactured there to save approximately $1 million annually.
The other end markets are down from the effect of COVID-19.
The businesses continued to utilize our growth discipline processes to work with customers on promising future opportunities.
The example pictured here is a pump control system that houses eight pumps along with the electronic controls and diagnostics.
This is a good example of the business using a structured approach to explore new growth opportunities in an inexpensive manner.
As far as outlook, in fiscal quarter -- the second quarter 2021, we expect revenue and operating margin to decline slightly sequentially due to normal seasonality and the lower number of shipping days in the quarter.
First, I will provide a few key financial takeaways from our fiscal first quarter 2021 results.
Overall, results were ahead of our expectations, specifically revenue at Electronics and Scientific segments was higher than anticipated.
Strength in the Magnetics product line at our Electronics segment and vaccine-related storage demand at our Scientific segment benefited results in the quarter.
In addition, our cost efficiency and operational initiatives, which will continue throughout the fiscal year, are providing a tailwind to our results.
As previously communicated, we are well positioned to deliver over $7 million in annual savings related to cost actions.
Our financial position remains strong with substantial liquidity and low leverage, complemented by consistent cash flow generation and ongoing cash repatriation efforts.
In addition, we have also implemented several initiatives in the area of tax planning and interest expense that will further add to our cash position.
On a consolidated basis, total revenue declined 3% year-on-year to $151.3 million.
This reflects organic revenue decline of 8.2% year-on-year, mostly due to the economic impact of the COVID-19 pandemic.
As we expected, this impact was felt primarily at Engineering Technologies segment due to weakness in the Aviation end market, and at the Specialty Solutions segment due to weakness in the food service equipment and hospitality industries.
The Renco acquisition, which closed in early July, contributed revenue of $5.9 million or a 3.8% offset to the organic revenue decline.
In addition, FX contributed 1.4% offset to the organic revenue decline.
Gross margin decreased 70 basis points, primarily due to a decline in volume and increased material costs year-on-year, mostly in Electronics.
On a sequential basis, gross margin increased 290 basis points reflecting cost outcome productivity actions and favorable product mix.
Our adjusted operating margin was 11% compared to 11.3% a year ago.
Interest expense decreased approximately $600,000 year-on-year mostly due to lower overall interest rate as a result of the variable-to-fixed-rate swap we implemented in the fiscal third quarter of 2020.
In addition, the tax rate of 22% in the quarter represents 580 basis points decrease year-on-year, largely due to various tax planning strategies we have started to implement.
Adjusted earnings per share were $0.96 in the first quarter of 2021 compared to $0.91 in the first quarter of 2020.
We remain a consistent generator of free cash flow.
We reported free cash flow of $4.4 million compared to $2.8 million in the first quarter of 2020.
This increase primarily reflects a lower capital spending with $4.8 million in the first quarter of 2021 compared to $6.7 million a year ago.
Capital investments in the first quarter of '21 were focused on maintenance, safety and our highest priority growth initiatives.
Standex had net debt of $106.2 million at the end of September compared to $80.3 million at the end of June of 2020.
Increase in net debt is due to the Renco acquisition, which was financed with cash on hand.
Net debt for the first quarter of 2021 consisted primarily of long-term debt of $200 million and cash and cash equivalents of $93.7 million, out of which $75.7 million was held back for in subs.
We also had approximately $206 million of available liquidity at the end of September.
The company's net debt-to-adjusted EBITDA leverage was 1.1 with a net debt-to-total capital ratio of 18.2%, and interest coverage ratio of approximately 9.9 times.
We also continue to proactively identify opportunities to further add to our financial strength.
We have started to implement several tax planning and saving initiatives, including implementation of strategies to optimize U.S. tax cost on global intangible low tax income, implementation of various foreign tax credit optimization strategies that are expected to provide us the ability to utilize additional credit, and the filing for amended returns to take advantage of regulations that have recently been finalized.
As a result, our tax rate in fiscal 2021 is expected to be approximately 22% or 500 basis points lower than fiscal 2020.
We expect these actions will result in cash savings of $2 million to $3 million in fiscal 2021.
We also expect approximately $1.5 million in annual interest expense savings due to the previously announced floating-to-fixed-rate interest swaps.
We also repatriated $8 million in the first quarter and expect to repatriate $35 million this fiscal year.
From a capital allocation perspective, we had an active quarter.
Earlier in the quarter, we announced the acquisition of Renco Electronics for approximately $28 million, which was financed with cash on hand.
We also repurchased approximately 87,000 shares for $5.1 million in the quarter.
There's approximately $38 million remaining under the Board's current repurchase authorization.
We declared our 225th consecutive quarterly dividend of $0.24 per share, a year -- a 9% year-over-year increase.
And finally, we expect capital expenditures to be approximately $25 million to $28 million compared to a prior expected range of between $28 million to $30 million and actual expenditures of $19 million in fiscal 2020.
In the second quarter of fiscal 2021, we expect consolidated revenue to be flat to slightly above the first quarter of 2021 with a slight-to-moderate increase in operating margin.
Several assumptions underpin this outlook.
We expect the Electronics and Engraving segments to have a slight sequential revenue increase due to an increased level of customer activity.
At Scientific, we expect a moderate sequential revenue increase as end market momentum builds to prepare for vaccine delivery.
Engineering Technologies revenue is expected to be similar to fiscal first quarter 2021 as commercial aviation markets stabilize, with a slight increase in operating margin from productivity and cost reduction activities.
At Specialty Solutions, we expect revenue and operating margin to decrease slightly, primarily due to seasonality and a lower number of shipping days in the quarter.
In general, we expect continued growth and margin improvement as we move through fiscal 2021.
In addition, we see attractive growth opportunities across the businesses.
In the near term, we anticipate the opportunity for COVID-19 vaccine storage to be between $10 million and $20 million in the fiscal year.
The growing funnel of opportunities in Electronics will deliver an incremental $11 million in sales in the fiscal year.
Previous cost actions complete and expected to deliver over $7 million in savings in fiscal '21.
Operational excellence initiatives are gaining momentum across all businesses.
We are also strengthening financial flexibility with strong free cash flow generation, continued cash repatriation and new tax initiatives.
In sum, we're very well positioned to further build our higher-margin business segments into more significant platforms with customized, differentiated solutions, supported by deep technical and applications expertise.
 Assistant:

Chosen response:
cost actions on track to deliver over $7 million in savings in fiscal 2021.
qtrly adjusted earnings per share $0.96.
in fiscal q2 2021, standex expects consolidated company revenue to be flat to slightly above fiscal q1 2021.
in fiscal q2 2021, company expects moderate sequential revenue increase at scientific as vaccine storage demand rises.
qtrly net sales $151.3 million versus $156.0 million.


Prompt:
Human: I'm very pleased with our first quarter results which reflected solid financial performance and an expanding pipeline of growth opportunities.
Standex is a stronger company today as a result of well-executed portfolio moves and a higher level of performance of our businesses.
We continue to have a favorable outlook for fiscal 2022, and look forward to further successfully executing on our growth strategy.
Revenue and consolidated adjusted operating margin increased significantly year-on-year in fiscal first quarter 2022 as we leveraged positive demand trends and converted new business opportunities from our pipeline.
Consolidated organic revenue growth of approximately 17% year-on-year reflected strength at our Electronics and Scientific segment.
Electronics revenue increased approximately 37% year-on-year, primarily due to a broad-based geographical recovery with continued solid demand for relays in renewable energy and electric vehicle applications along with positive trends in transportation, appliance, test and measurement and distribution end-markets.
Scientific segment revenue increased approximately 29% year-on-year driven by retail pharmacies, clinical laboratory, and academic institution end-markets.
Consolidated adjusted operating margin of 13.4% was a 250 basis point year-on-year increase and represented our second consecutive quarter of delivering our highest consolidated margin in Standex's history.
Our results also reinforce the benefit of our continued investment in end-markets that had healthy growth prospects and where we can incorporate our innovative solutions and strong customer value proposition.
Sequentially, total company backlog realizable in under one year increased approximately 12%, with strength, particularly at the Electronics, Specialty Solutions and Engraving segments.
At the Electronics segment, the new business opportunity pipeline continues to grow and we are seeing positive trends in such end-markets as electric and heavy duty vehicles, defense, industrial and aerospace.
In addition, Renco Electronics, which we acquired a little over a year ago is contributing to the growth of our opportunity pipeline as we realized sales synergies from cross-selling opportunities in our expanded customer base.
At the Scientific segment; we are also introducing a new product family, blood bank refrigerators and plasma freezers leveraging our expertise in life sciences and refrigeration to expand into adjacent markets.
Execution on our active form of productivity and efficiency initiatives is further adding to our success.
We are driving manufacturing and supply chain productivity with actions including new lean programs and mitigating inflationary trends through price realization and value engineering.
In addition, our reed switch production and material substitution project at the Electronics segment continues to mitigate some of the material inflation we are seeing, and remains on-track to be substantially complete by the end of fiscal 2020.
We continue to have significant financial flexibility to pursue new organic and inorganic growth opportunities given our strong balance sheet and liquidity position and consistent cash flow generation.
Ademir will discuss our financial performance in greater detail later in the call.
In regard to our financial outlook, we are off to a solid start to the fiscal year and continue to expect stronger financial performance year-on-year in fiscal 2022.
In the second quarter, we expect revenue and operating margin to increase slightly compared to fiscal first quarter 2022 and significantly compared to the year ago quarter.
Revenue increased approximately $20.6 million or 37.2% year-on-year, including 36.1% organic growth reflecting continued broad-based geographic and end-market strength, as well as a 1.1% positive contribution from foreign exchange.
Operating income increased approximately $9.1 million or 100% year-on-year due to operating leverage associated with revenue growth and productivity initiatives, partially offset by increased raw material and freight costs.
Looking ahead, we have a very active new business opportunity funnel for approximately $61 million, which is expected to deliver first year sales of $19 million with positive trends across all major geographic areas and business units, and are well positioned to further capture additional customer business.
Electronics backlog realizable under a year sequentially increased approximately $13 million or 11% in fiscal first quarter 2002.
The picture on Slide 4 highlights the success of our customer intimacy sales model in moving up the value stack in a customer's product.
In this example, we addressed a customer application in 2015 by supplying a packaged reed switch.
This led to the opportunity to develop an entire sensor in 2018 which expanded by incorporating additional functions in 2021.
As our collaboration evolved, so does our value provided reinforcing the importance of our strong technical and applications expertise.
Regarding our fiscal second quarter 2022 outlook, we expect a slight sequential decrease in Electronics revenue and operating margin, reflecting a lower number of production and shipping days and product mix in the quarter.
Year-on-year revenue decreased approximately $1.2 million or 3.4% and operating income was nearly $1 million lower or 17% decrease due to the timing of projects and geographic mix, partially offset by productivity actions.
Laneway sales of approximately $14.9 million represented a 27% increase year-on-year, including a positive demand outlook for soft trim tools, laser engraving and tool finishing.
Sequentially, backlog realizable under a year increased $5.9 million or approximately 44% in fiscal first quarter 2002.
The picture highlighted on Slide 5 shows the Tesla Model Y version.
Through cross regional collaboration within the segment, and based upon our soft trim proprietary technology, we were able to supply two sets of tools, substantially faster than our competitors production capability, further driving our growth opportunity in the China market.
In fiscal second quarter 2022, we expect a slight sequential increase in Engraving segment revenue and operating margin.
This is due to the timing of projects, regional mix and demand for soft trim tooling complemented by the impact of additional productivity initiatives.
Turning to Slide 6, the Scientific segment.
Revenue increased approximately $4.9 million or 29.2% year-on-year reflecting positive trends at pharmaceutical channels, clinical laboratories and academic institutions.
Operating income increased approximately $0.4 million or 10.6% year-on-year due to volume growth and pricing initiatives, balanced with investments to support future growth opportunities and higher freight costs.
Sequentially, backlog realizable under a year increased $1.6 million or approximately 27% in fiscal first quarter in fiscal 2022.
Significant orders in the quarter were placed to support replacement of ageing cabinets from retail pharmacy locations, a phenomenon we expect to expand as our installed base grows.
As highlighted on Slide 6, we have applied our growth discipline processes in a two-year development project to leverage our expertise and intellectual property in life sciences and refrigeration into adjacent product categories, and are introducing a new product family; blood bank refrigerators and plasma freezers.
This product launch includes two sizes of refrigerators and freezers designed for hospitals, blood banks and other medical, clinical and research facilities.
These products comply with all relevant industry requirements, including those from the FDA and the Association for the Advancement of blood biotherapies.
In fiscal second quarter 2022 we expect Scientific revenue and operating margin to be similar to our first quarter reflecting continued demand for vaccine storage accompanied by the return of demand from traditional end segments and pricing actions, partially offset by increased freight costs.
Turning to the Engineering Technologies segment on Slide 7.
First quarter revenue at $17.6 million was similar year-on-year due to positive trends in the space end-market balanced with the absence of the recently divested Enginetics and the economic impact of COVID-19 on this segments end-markets.
Operating income increased approximately $0.4 million, representing a 91.7% increase year-on-year, reflecting product mix and ongoing productivity initiatives offset by a $1.1 million one-time project-related charge.
We have an active new business opportunity pipeline in both, space and aviation.
In addition, as highlighted on Slide 7, our opportunities are also expanding international defense end-markets.
As shown here, we are collaborating with customers to develop bulk head assembly and additional solutions for domestic and international armored vehicles, and I've also captured customer wins to develop nose-cone [Phonetic] adjacent products in next-generation missile program.
Regarding our outlook; in fiscal second quarter 2022, we expect revenue to be sequentially similar with positive commercial aviation and defense trends, partially offset by project timing in the space end-market.
However, we expect a significant increase in operating margin due to project mix, productivity initiatives and the absence of the one-time project-related charge which occurred in the first quarter.
On a year-on-year basis, Specialty Solutions revenue increased approximately $0.2 million, or slightly under 1%, and operating income decreased $1.1 million or 27.9%.
First quarter results reflected end-market recovery, particularly in foodservice markets, offset by the impact of a prior work stoppage which has since been resolved.
In addition, we experienced material inflation which we are seeking to recover through pricing actions.
We have a very strong backlog position realizable under a year, which sequentially increased $8.7 million or approximately 33% in the first quarter.
We also continue to expand our merchandizing product portfolio.
Highlighted on Slide 8 is the recently launched Vision Series available in heated, refrigerated and non-refrigerated options.
Developed through Standex's GDP plus growth process, this is a ground-up redesign of our core product.
The new version of this product has several attractive features including modern styling with a very viewable and accessible product area.
The Vision Series can accommodate a significant amount of food product in a highly efficient footprint and is capable of running under a variety of conditions, including high temperature and humidity.
In regard to our second quarter Specialty Solutions outlook, we expect a moderate sequential increase in revenue and operating margin due to execution on our strong backlog position and the absence of the financial impact of the prior work stoppage.
We continue to focus on recovering material inflation through pricing actions.
First, I will provide a few key takeaways from our fiscal first quarter 2022 results which exhibited strength across several important metrics.
Organic revenue growth of approximately 17% year-on-year reflected solid demand trends at Electronics and Scientific segments.
In addition, we continue to see overall healthy order trends across the company as we enter our fiscal second quarter.
From a margin standpoint, adjusted consolidating operating margin of 13.4% increased both, sequentially and year-on-year, and represented our second consecutive quarter of highest margin in Standex's history.
The strong operating performance reflects several factors including effectively leveraging volume growth, realizing the benefits of price and productivity actions, and the positive impact of our prior strategic portfolio moves.
Also, our financial strength is supported by consistent free cash flow generation, which increased year-on-year.
In summary, we are entering our fiscal second quarter with positive order trends, active funnel of productivity initiatives, and an expectation for continued solid cash generation in fiscal 2022, all further adding to our strong financial position.
On a consolidated basis total revenue increased 16.1% year-on-year from $151.3 million in fiscal first quarter 2021 to $175.6 million this quarter.
This revenue increase primarily reflected strong organic growth at the Electronics and Scientific segments, and a positive contribution from foreign exchange.
Revenue growth was partially offset by the divestiture of Enginetics business which occurred in the third quarter of fiscal 2021 and trends at the Engraving segment, which reflect the timing of projects.
Enginetics contributed approximately $3 million in revenue in the fiscal first quarter of 2021.
On a year-on-year basis, our adjusted operating margin increased 250 basis points to 13.4%, reflecting operating leverage associated with revenue growth and the readout of price and productivity actions.
This was partially offset by a $1.1 million one-time project related charge at Engineering Technologies segment, and the financial impact of work stoppage in the Specialty Solutions segment which has since been resolved.
As expected, our tax rate increased to 25% compared to 22% in the first quarter of 2021.
We expect that second quarter tax rate will be similar to the first quarter rate, and that the overall tax rate for fiscal 2022 to be in the 24% range.
Adjusted earnings per share was $1.34 in the first quarter of 2022 compared to $0.96 a year ago.
We generated free cash flow of approximately $8.1 million in the first quarter of 2022 compared to free cash flow of $4.4 million in the first quarter of 2021.
We continue to successfully execute on our financial initiative with working capital turns of 5.6 times, representing a 33% increase year-on-year.
Standex had net debt of $68.9 million at the end of September compared to $63.1 million at the end of June, reflecting free cash flow of approximately $8.1 million offset by $9.5 million of stock repurchases along with dividends and changes in foreign exchange.
Our net debt for fiscal first quarter of 2022 consisted primarily of long-term debt of $199.6 million.
Cash and cash equivalents totaled $130.7 million, with approximately $102 million held by foreign subs.
We had approximately $267 million of available liquidity at the end of September.
Our net debt to adjusted EBITDA leverage ratio was approximately 0.58 times, with a net debt to total capital ratio of 11.8%.
We expect that we will repatriate approximately $35 million in cash in fiscal 2022.
From a capital allocation perspective, we repurchased approximately 97,000 shares for $9.5 million in fiscal first quarter 2022, with approximately $12.5 million remaining on our current repurchase authorization.
We also declared our 229th consecutive quarterly cash dividend on October 28th of $0.96 per share, approximately 8% increase over the prior four quarterly dividend payments.
Finally, we expect capital expenditures of approximately $25 million to $30 million in fiscal 2022.
In fiscal '22, we expect stronger financial performance year-on-year as we execute on the positive end-market trends we are seeing, and further drive ongoing productivity initiatives across our significantly strengthened portfolio.
Underpinning this outlook is a very active pipeline of growth opportunities with a positive trajectory in our new business opportunity funnel and new product introductions.
We are leveraging the significant number of growth opportunities in front of us through ongoing manufacturing and supply chain productivity actions including initiatives such as new lean programs and mitigating inflationary trends through price realization and cost consolidation efforts.
Our strong balance sheet and liquidity position and consistent free cash flow generation position us very well to pursue both, organic and inorganic growth opportunities, and we remain opportunistic and disciplined in allocating capital.
As highlighted by some of the order trends discussed today, our approach is resonating with customers reflecting the strength of our deep technical and applications expertise and innovative solutions and reinforcing the value of our high quality businesses.
 Assistant:

Chosen response:
qtrly net sales $175.6 million versus $151.3 million.
qtrly adjusted earnings per share $1.34.
in fiscal q2 2022, company expects revenue and operating margin to increase slightly compared to fiscal q1 2022.


Prompt:
Human: I will then review our segment performance and outlook.
Ademir will follow with a discussion of our consolidated results and financial position.
Finally, I will conclude with comments on the longer-term financial framework we are introducing today and conclude with takeaways.
We're very pleased with our fiscal second quarter results.
We had solid revenue growth at Electronics and Scientific segments year-on-year, while our Engraving segment margin improved sequentially.
At Electronics nearly half of the 31% year-on-year revenue increase reflected organic growth with positive trends in electric vehicles, general automotive, appliances and semiconductor equipment.
Scientific revenue continued to grow at a double-digit rate with a 16% year-on-year increase driven by strong demand for COVID vaccine storage.
We now believe that COVID related storage demand is likely to be at the higher end of our previously indicated $10 million to $20 million range in fiscal 2021.
At the Engraving segment, margin improved approximately 100 basis points sequentially due to favorable geographic mix, productivity and cost actions.
Looking forward, our portfolio has never been in better condition and that's reflected in our outlook.
We exited the second quarter with several positive trends positioning us well for a stronger second half and fiscal 2021.
Our total backlog realizable under one year was approximately $173 million at the end of the second quarter and approximately 14% sequential increase.
This reflected strength in the Electronics and Scientific segments and a gradual market recovery at Specialty Solutions.
We are also actively engaged with our customers on emerging global opportunities in end markets such as electric vehicles, renewable energy and 5G.
In addition, the integration of Renco Electronics is ahead of our initial plan and we are effectively leveraging its complementary customer base and end markets.
We also saw continued progress on our productivity and finance initiatives.
We are on track for over $7 million in annual savings in fiscal 2021 from cost actions and are implementing additional productivity and efficiency initiatives, which will provide further opportunity heading into fiscal 2022.
At the Electronics segment while we are addressing rhodium material inflation with price actions in the near term, we are also implementing new manufacturing processes over the next two years, which will allow us to offer customers a choice of switches with rhodium or other materials removing our exposure to rhodium inflation once and for all.
Finally, our previously announced interest expense and tax rate initiatives resulted in an approximate 15% reduction in interest expense and 510 basis point reduction in tax rate year-on-year in the second quarter fiscal 2021.
We also further strengthened our financial profile in the quarter providing significant flexibility to pursue our portfolio of organic and inorganic growth opportunities.
We generated strong free cash flow of $17 million in the second quarter and through the first half of fiscal 2021 have achieved 95% free cash flow to net income conversion rate.
During the quarter we also repatriated approximately $17 million from foreign subsidiaries and are on track to achieve our previously announced $35 million repatriation target in fiscal 2021.
We ended the quarter with a net debt to adjusted EBITDA ratio of 0.9 times, and approximately $200 million in available liquidity.
In regard to our fiscal third quarter 2021 outlook, we expect a moderate sequential revenue and operating margin improvement compared to fiscal second quarter 2021 results.
This reflects a sequential revenue increase at Electronics, Scientific, Engineering Technologies and Specialty Solutions segments.
Engraving revenue is expected to decline sequentially reflecting both geographic mix and timing of projects, but return to growth in fiscal fourth quarter 2021 both sequentially and year-on-year.
I will begin to discuss our segment financial performance starting with Electronics.
In the second quarter Electronics segment revenue increased approximately $14.3 million or 31.2% year-on-year to $60.1 million, supported by organic revenue growth of approximately 15%.
Organic growth reflected a broad based geographical recovery with positive trends in electric vehicles, general automotive, appliances and semiconductor equipment end markets.
In particular, as shown in the picture on Slide 4, we have a growing portfolio of content for the electric vehicle market including relays, planar transformers and coolant level and charging position sensors.
The recent Renco acquisition also contributed to our revenue growth in the quarter with approximately $6 million in incremental revenue contribution year-on-year.
Electronics operating income increased approximately $2.2 million or 28.1% year-on-year from operating leverage associated with revenue growth, productivity initiatives and profit contribution from Renco, partially offset by increased raw material prices.
Our new business opportunity funnel has increased to $56 million across a broad range of markets and is expected to deliver $12 million of incremental sales in fiscal 2021.
Sequentially in the third quarter, we expect a moderate increase in Electronics revenue and operating margin.
We expect further growth for relays in renewable energy and electric vehicle applications as well as recovery in reed switch demand in transportation end markets.
Our near-term backlog is very healthy with backlog realizable under a year increasing $15 million or 25% sequentially in the fiscal second quarter.
Revenue decreased just under 1% year-over-year to approximately $37.9 million and operating income was $6.5 million or a 6% year-over-year decrease.
The results reflected the economic impact of COVID-19 on our end markets, partially mitigated by productivity and expense savings in the quarter.
Sequentially, revenue increased 2.5% excluding foreign exchange and operating margin improved approximately 100 basis points to 17.1%, reflecting favorable geographic mix and our productivity and cost actions.
Laneway sales increased approximately 9% sequentially to $12.9 million focused around soft trim tools, laser engraving and tool finishing.
As highlighted to the left, we have further innovated our customer design process given the global travel restrictions due to the pandemic.
Intensive customer collaboration is at the heart of the customer intimacy model in all of our businesses and was slowed by COVID-related restrictions.
By utilizing high-definition cameras and 3D software, we have created a remote approval process to enable customer engagement and design approvals despite global travel restrictions, allowing us to further the design process while maintaining a high degree of client engagement.
Sequentially in our third fiscal quarter, we expect a slight revenue decline and a moderate decline in operating margin at Engraving, reflecting geographic mix and project timing.
In our fiscal fourth quarter 2021, we expect an increase in revenue and operating margin sequentially and year-on-year.
Turning to Slide 6 and Scientific segment.
Scientific segment revenue increased 16.1% year-on-year to $17.9 million largely due to positive trends at retail pharmaceutical chains and medical distribution companies, much of it associated with the demand for COVID vaccine storage.
Operating income increased 4.4% year-on-year to $4.2 million reflecting the volume increase balanced with investments to support our growth opportunities.
Sequentially in the fiscal third quarter, we expect a moderate to strong increase in revenue and operating margin to be slightly ahead of second fiscal quarter 2021.
This reflects volume growth driven by continued COVID-19 vaccine storage demand balanced with reinvestment in the business for R&D and growth opportunities.
The segment's backlog realizable under a year increased approximately $4 million or 65% sequentially compared to fiscal first quarter 2021.
We expect COVID vaccine storage demand to come in at the high end of our previously indicated $10 million to $20 million sales range in fiscal 2021.
Turning to the Engineering Technologies segment on Slide 7.
On a year-over-year basis, Engineering Technologies revenue and operating income decreased approximately 33.9% and 60.2% to $17.5 million and $1.4 million respectively.
As expected, the revenue and operating income decrease reflected the economic impact of COVID-19 on the commercial aviation market, especially engine parts manufacturing.
On a sequential basis, segment operating margin increased approximately 500 basis points on a similar revenue level to fiscal first quarter 2021 as a result of product mix and our ongoing productivity actions.
Besides the early stages of recovery in our aviation end markets that we are seeing, we are also well positioned for continued space end market growth.
In addition to projected government launch forecasts to support NASA and national security, we also have significant opportunities in commercial space markets.
In the fiscal third quarter on a sequential basis, we expect a moderate increase in revenue, primarily due to the early stages of recovery in the commercial aviation end market.
We expect operating margin to be sequentially similar to the second quarter due to higher sales mix of lower margin engine parts business, partially offset by productivity initiatives.
On a year-over-year basis, Specialty Solutions revenue decreased approximately 17.8% to $22.8 million and operating income of $3.2 million or a 26% year-on-year decrease.
As expected, the revenue and operating income decline reflected the economic impact of COVID-19 pandemic on this segment's end markets.
Sequentially, in our fiscal third quarter, we expect a moderate sequential increase in revenue and operating margin reflecting a gradual recovery in the foodservice industry and strong order trends in the refuse markets.
Supporting this outlook, our backlog realizable under a year increased sequentially approximately $3.5 million for 35% compared to Q1 fiscal 2021, reflecting ongoing recovery in food service equipment and refuse end markets.
From a strategy standpoint, our emphasis on shifting hydraulics manufacturing capacity toward higher-margin aftermarket opportunities continues with aftermarket revenue increasing 15% year-on-year.
The hydraulics business is also a potential beneficiary from a potential infrastructure bill with increased investment in roads and bridges.
First, I will provide a few key financial takeaways from our fiscal second quarter 2021 results.
We realized sequential improvement on several fronts during the quarter.
First revenue increased at our Electronics, Engraving and Scientific segments and we expect revenue growth to continue in the third quarter in four out of our five reporting segments.
From a margin standpoint adjusted EBIT margin also improved sequentially reflecting revenue growth, the impact of our cost efficiency and productivity actions, partially offset by continued rising raw material costs, primarily at our Electronics segment.
We continue to focus our efforts on productivity actions and are on track to realize savings of over $7 million in fiscal '21 related to our previously announced cost actions.
In addition, we further strengthened our financial profile through initiatives focused on free cash flow generation, reduced interest expense and tax rate and continued cash repatriation.
We also generated approximately $17 million of free cash flow in the second quarter.
We had approximately 95% free cash flow to net income conversion rate to the first half of fiscal 2021.
On a consolidated basis, total revenue increased 1.7% year-on-year and 3.3% sequentially.
Year-on-year revenue increase reflected contribution from our recent Renco acquisition and foreign exchange, partially offset by the economic impact of COVID-19.
Organic revenue declined 4.3% year-on-year, much of it due to the impact of the pandemic.
As we expected COVID-19 economic impact was most evident at the Engineering Technologies segment due to weakness in the aviation end market and the Specialty Solutions segment to weakness in the food service equipment and hospitality industries.
Our recent Renco acquisition and foreign exchange impact offset the organic revenue decline.
Renco contributed approximately $6 million to revenue or 3.9% offset to the organic revenue decline on a consolidated basis.
In addition, FX contributed a 2% increase to year-on-year revenue growth.
On year-on-year basis our adjusted EBIT margin declined by 60 basis points to 11.4%.
This decline was primarily due to the economic impact of COVID-19 pandemic, increased raw material cost and increases in research and development initiatives offset by cost and productivity actions.
On a sequential basis adjusted EBIT margin increased 40 basis points.
Interest expense decreased approximately 17% year-on-year primarily due to lower overall interest rate as a result of the previously implemented variable to fixed rate swaps.
In addition, our tax rate of 20.9% in the second quarter of 2021 was largely due to various tax optimization strategies we began to implement earlier in the fiscal year.
For fiscal 2021 we continue to expect approximately 22% tax rate.
This assumes a tax rate in the mid 20% range in the third quarter and a tax rate in the low 20% range in the fourth quarter of 2021.
Adjusted earnings per share was a $1.05 in the second quarter of '21 compared to $0.99 a year ago.
We continue to consistently generate free cash flow with a conversion to net income of over 140% in the second quarter of '21.
We reported free cash flow of $17 million inclusive of $4.8 million pension payment, compared to $3.6 million a year ago.
This free cash flow increase reflected solid working capital performance as we deleveraged the balance sheet by approximately $9 million in the quarter.
Standex had net debt of $90.9 million at the end of December, compared to $106.2 million at the end of September.
Net debt for the second quarter of '21 consisted primarily of long-term debt of $200 million and cash and equivalents of approximately $109 million with approximately $80 million held by foreign subs.
Our financial strength was evident in several of our key metrics.
Standex net debt to adjusted EBITDA leverage ratio was approximately 0.9 at the end of the second quarter with a net debt to total capital ratio of 15.4%.
The Company's interest coverage ratio increased sequentially to approximately 10.3 times.
We had approximately $200 million of available liquidity at the end of the second quarter and continued to repatriate cash with approximately $17 million repatriated during the quarter.
We remain on plan to repatriate approximately $35 million in fiscal '21.
From a capital allocation perspective, we repurchased approximately 36,000 shares for $2.5 million.
There is approximately $35 million left remaining on our current repurchase authorization.
We also declared our 226th consecutive quarterly cash dividend on January 28 of $0.24.
Finally, we continue to expect fiscal 2021 capital expenditures to be between approximately $25 million to $28 million.
Over the past few years we have meaningfully transformed our portfolio around high-quality businesses with attractive growth and margin profiles as well as strong end markets and customer value propositions.
As a result of these substantial changes, our portfolio has never been in a better position.
We believe it is now appropriate to provide a longer term, that is three to five-year, financial outlook.
Specifically, we are targeting mid-single digit consolidated organic revenue growth on a compound annual basis.
Our outlook assumes a continued macroeconomic recovery.
Our businesses are well positioned to grow in exciting areas such as electric vehicles, renewable energy, smart grid, space commercialization, vaccine storage and 5G.
We also have an active new product development process for our business, particularly in Electronics, Scientific and Engraving segments.
We are targeting an adjusted EBITDA margin in excess of 20% compared to the 16.4% we reported in fiscal 2020.
A few productivity initiatives to highlight include improving our Electronics cost position by implementing new manufacturing processes to address rising raw material prices, ongoing operational excellence actions to further standardize operating discipline across business units and continuing to fully leverage our G&A structure.
We believe a free cash flow conversion ratio of 100% is achievable under these assumptions, particularly, given our continued working capital focus.
Finally, it is our expectation that with this financial performance and disciplined capital allocation, we will increase our return on invested capital to above 12%.
We will continue to exercise discipline in our capital allocation process as illustrated in this page.
We have recently increased our hurdle for internal growth investments to over 20% IRR.
In addition, we will continue to buy back our shares on an opportunistic basis.
We expect a moderate revenue and operating margin improvement in fiscal third quarter 2021 compared to fiscal second quarter 2021 results and are well positioned for a stronger second half fiscal 2021.
We also provided a longer-term financial outlook today reflecting our meaningfully transformed portfolio focused around businesses with attractive growth and margin profiles as well as strong end market and customer value propositions.
Our substantial financial flexibility allows us to be opportunistic with an active pipeline of organic and inorganic growth opportunities.
Our ongoing productivity and efficiency initiatives provide further opportunity to leverage these trends for improved financial performance.
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Chosen response:
compname reports qtrly adjusted earnings per share of $1.05.
previous cost actions remain on track.
introducing longer term financial performance targets.
qtrly adjusted earnings per share $1.05.
expects to repatriate $35 million in fiscal 2021.
expects fiscal year 2021 capital expenditures between approximately $25 million to $28 million.