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Good morning, and welcome to the Standex Second Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Gary Farber of Affinity Growth Advisors. Please go ahead.
Thank you, Operator, and good morning. Please note that the presentation accompanying management's remarks can be found on the Investor Relations portion of the company's website at www.standex.com. Please refer to Standex's safe harbor statement on Slide 2. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations, and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's most recent annual report on Form 10-K, as well as other SEC filings and public announcements for a detailed list of risk factors.
In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBIT, which is earnings before interest and taxes, adjusted EBIT, which is EBIT excluding restructuring, purchase accounting, acquisition-related expenses, and one-time items, EBITDA, which is earnings before interest, taxes, depreciation and amortization, adjusted EBITDA, which is EBITDA excluding restructuring, purchase accounting, acquisition related expenses, and one-time items, EBITDA margin and adjusted EBITDA margin. We will also refer to other non-GAAP measures, including adjusted net income, adjusted income from operations, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow, and pro forma net debt-to-EBITDA. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measurement, and consistent historical comparison of the company's performance.
On the call today is Standex's Chairman, President and Chief Executive Officer, David Dunbar; and Chief Financial Officer and Treasurer, Ademir Sarcevic.
Thank you, Gary. Good morning, and welcome to our fiscal second quarter 2021 conference call. On today's call, I will provide commentary on our results and the trends we are seeing in our businesses. 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.
Now, if everyone can turn to Slide 3, key messages, I will discuss second quarter themes and results. 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 in fiscal 2021. Our total backlog realizable under one year was approximately $173 million at the end of the second quarter, an approximately 14% sequential increase. This reflected strength on the Electronics and Scientific segments, and the gradual market recovery that's 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 Remco Electronics is ahead of our initial plan, and we are effectively leveraging its complimentary 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 points reduction in tax rate year-on-year in second quarter of 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.
Please turn to Slide 4. 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 geographic recovery, with positive trends in electric vehicles, general automotive, appliances, and semiconductor equipment end markets. In particular, as shown on the picture in 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 Remco 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 Remco, 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.
Please turn to Slide 5 for a discussion of the Engraving segment. Revenue decreased just under 1% year-over-year to approximately $37.9 billion. And operating income was $6.5 million, or 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 software and 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 and 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, the 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 a growth opportunity.
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 Technology 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 and 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.
Please turn to Slide 8, Specialty Solutions. On a year-over-year basis, Specialty Solutions, revenue decreased approximately 17.8% to $22.8 million, with operating income at $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 food service industry and strong order trends in the refuse markets.
Supporting this outlook, our backlog realizable under a year, increased sequentially approximately $3.5 million or 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.
I'll now turn the call over to Ademir, who will discuss our quarterly results in greater detail.
Thank you, David, and good morning, everyone. 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 increase at our Electronics, Engraving, and Scientific segments, and we expect revenue growth to continue in the third quarter in four out of 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 rise in 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 up the national profile to 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.
Now, let's turn to Slide 9, second quarter 2021 income statement summary. 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 Remco 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 Technology segment, due to weakness in the aviation end market and the Specialty Solutions segment, due to weakness in the food service equipment and hospitality industries. Our recent Remco acquisition and foreign exchange impact, offset the organic revenue decline. Remco contributed approximately $6 million in 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 costs, 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 a 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 $1.05 in the second quarter of ’21, compared to $0.99 a year ago.
Please turn to Slide 10, second quarter ‘21 free cash flow. 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 delevered the balance sheet by approximately $9 million in the quarter.
Next, please turn to Slide 11, a summary of Standex’s capitalization structure and liquidity statistics, which remain strong. 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 at 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 continue 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's approximately $35 million left remaining on our current repurchase authorization. We also declared a 226th consecutive quarterly cash dividend in January 28 of $0.24. Finally, we continue to expect fiscal 2021 capital expenditures to be between approximately $25 million to $28 million.
I will now turn the call over to David to discuss our longer term financial framework and closing comments.
Thank you, Ademir. If everyone can please turn to Slide 12 for a discussion of the financial targets we're introducing today. 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 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%.
Please turn to Slide 13. We will continue to exercise discipline in our capital allocation process, as illustrated on 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.
Please turn to Slide 14 for some key takeaways. 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 of fiscal 2021. We also provided a longer-term financial outlook today, reflecting our meaningfully transformed portfolio, focus 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 transfer into financial performance.
Operator, I'll now open the line for questions.
We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Chris Howe of Barrington Research. Please go ahead.
Good morning, David and Ademir, and congrats on the quarter. Wanted to start with, you mentioned the incremental COVID-19 contribution remaining consistent at $10 million to 20 million, with a likelihood of coming in near the high end of that range. Of this incremental revenue contribution, I'm not sure if you've mentioned it before, but can you talk about margin for that incremental revenue? And as it relates again to the Scientific segment, a follow up is, the R&D and growth opportunities that you're reinvesting in, and any opportunities for pricing as we look at margin for the Scientific segment. Thanks.
Okay. So for the first question, the margin, these are cabinets that are very similar, if not identical to some models we already sell. So the margins are going to be consistent with historic margins of that business. Obviously, with the volume, we leverage our fixed costs a bit. So, we'd see some pick up there. The question about R&D, I think as the year rolls on, we will be announcing some new products. We have a very active pipeline, and we'll be releasing those new products to get into some new product categories that are adjacent and very close to the core products in our business.
In terms of pricing the business takes a very thoughtful approach to pricing. Every model, we kind of take a look at where our product fits relative to competition. We have a good price to value relationship. We are somewhat dynamic in our pricing right now when it comes to delivery considerations. If customers call and need something quickly, or they need very high volume of parts we sometimes get priced for shorter delivery.
That's great. And another question I had, in regard to Specialty Solutions, you mentioned we're on a gradual recovery. In a scenario, perhaps as we look into fiscal Q4, let's say the timing works out and there's a full reopening within your end markets, how would you expect demand to come back in Specialty Solutions versus the relative end market recovery?
Well two of those businesses are tied to food equipment - food service equipment end markets. And the reopening would most dramatically affect them. And our working assumption has been that by Q4 of the calendar year, so November, December, the reopening is well underway and that those end markets return to kind of pre-COVID levels end of this calendar year or early next calendar year, and our businesses would follow. Now, within also just the hydraulics business, which is it back to pre-COVID levels already?
It's getting there. The end of Q4 is kind of where the - we project that by the time our fiscal Q4 comes around, that that business will be back more or less to pre-COVID levels.
So that's about half of specialty, the other half of the food service equipment businesses.
Okay. And lastly, because of the good news nature of the long-term outlook, three to five-year plan, I'm assuming inorganic growth during this time period will be additive, and perhaps push organic growth rates to the high to low teens potentially, depending on whether it's a tuck in or something more meaningful.
Yes. Exactly right. If you - several years ago when we gave guidance like this, we made an estimate of what our inorganic sales numbers would be, but it was impossible to predict. So we just took it out, and you're absolutely right. Any inorganic activity would be on top of that number.
And as you know, Chris, we have a pretty strong balance sheet and ability to react quickly on attractive inorganic opportunities. So, we project to continue to remain active.
Yes. I was - that's what I was kind of taking into consideration. There seems to be additional upside surrounding these longer term targets, because these large insured targets, I assume, are under the framework of the existing businesses. And there could, not saying there will, be even a more simplified portfolio in the many years to come. Yes. Thanks for taking my questions. That’s all I have.
The next question comes from Chris McGinnis of Sidoti & Company. Please go ahead.
Good morning. Thanks for taking my questions and nice quarter. I guess just to follow up on that. Just, can you talk about the M&A outlook at this point, what you're seeing in valuations? Are they picking up or how they've changed maybe through the pandemic and the opportunities you see out there Thanks.
Well, our - we have a very active pipeline, and a lot of the deals that we've done in the past, have been privately held companies, and have not been part of a process. And those are often the product of years of getting to know each other, relationship building, just a series of many, many contexts, phone calls and meetings. So those are going on as actively as ever. I would say in terms of - it's hard to say what's going on with multiples, because in our space, a lot of the deals we thought would be taking place in the last year, have kind of been put on hold as owners want to wait and see how the economy develops. So, I guess I don't have a perspective on multiple changes.
Sure. Okay, I appreciate that. And then just - I guess just for my clarification, just around the Scientific piece of the business, you talk about COVID. I thought that the product that you had wasn't as specific to COVID. So was that a - is that a new product offering or? Could you just expand on that a little bit? I thought it was more for flu vaccines when you were talking in previous calls. Thanks.
Well, last summer we had - we were reporting, we got a lot of orders in the summer for the just traditional flu season. But the cabinets that we sell for COVID storage are the same cabinets, or in some cases they're slightly different, but they're plus five degree, minus 20 degree. And I think where a lot of people get confused, I shouldn't say confused, but there's been so much press and coverage of the minus 70, minus 80 degree storage requirements for the Pfizer vaccine, and there was a real ramp up in that ultra low temperature storage for their production facilities, large warehouses, and distribution. And so everybody tended to think, Oh, COVID vaccine storage equals minus 70, minus 80.
But where we play is in the last mile of delivery. So the cabinets that get put into doctors’ offices and pharmacies, are minus 20 degrees, plus five. So even the Pfizer vaccine, it gets taken out of these minus 70 degree transportation containers, and it can be put in a minus 20 or plus five refrigerator or freezer for several days before it's administered. So the bulk of the products we're selling that are for COVID vaccine storage, are essentially the same product we've been selling for flu - seasonal flu storage.
Thanks for that clarification. I appreciate it. I wasn't aware of that. So I appreciate that. Just, it sounds good that on the engineering side, seems like it’s starting to come back maybe a little bit. Can you also just highlight just the commercial space markets, the kind of growth you're seeing with that business, just given all the kind of the action taking place in that market? Can you just talk about that outlook and how that's fairing? Thanks.
Yes, I mean, no secret, there was a lot of activity and we have a great position with our Billerica plant and the domes for the tanks on large rockets. The - how to quantify this. We see that the number of launches, if you take everything in NASA’s planning and the traditional demand for space over the next five years, add to that the new commercial ventures like Amazon putting up their network of satellites, for example, will virtually double space activity over the next five years, space launches. And the end market for our products, will follow that same trajectory. And our sales in the space, have been in the mid-20s to 30 kind of year in, year out for many years. And so, we see that.
And I guess just thinking about it, would you need to invest and expand to accommodate that growth, or can Billerica handle and support almost a doubling effect?
We would have to make some investments. It depends on when those different projects hit. But yes, there would be some additional investment.
Okay, great. And then just, I know you just put it out, but just on that 20% EBITDA margin range, how high can you get in - with the current portfolio, and what would be the main drivers in getting to that - maybe to a higher end of the number?
Well, let's get the 20 first, 20% first, because it's no secret. I mean, you look at our big businesses. Electronics, so we're consistently saying, well, very competent. It is a 20% EBIT business. So you have the (door), you're in the low to mid-20s. Engravings is 20% EBIT, a few points of (door) there. Scientific. So those businesses, as they grow, obviously they're already in the - so I understand where your question is coming from. But our path to get above 20% in the next three to five is, we put this rhodium issue behind us once and for all over the next couple of years, where Jim Hooven is working very closely with the Engraving group on labor efficiency, which will improve the consistency and predictability there.
And we're starting to put in place some exciting kind of back office infrastructure so that we can become more efficient with G&A over the coming years. And so that will certainly power us to the 20% EBITDA. And then - when I came here, the target that I picked up from Roger, which you recall, he said, 15% EBITDA. We got there after a couple of years. We raised it to 17. We’re basically there now. So we continually raise these targets as the business matures and our performance dictates.
No, great job on the quarter. Good luck in Q3, and thanks for taking my questions.
The next question comes from Chris Moore of CJS Securities. Please go ahead.
Good morning, guys. The 7 million in savings that you're on track for, roughly how much of that was kind of recognized in the first half of the year?
Yes, Chris. I think as we've said previously, most of that - most of the readout would be kind of sort of first three quarters of this fiscal year. So I would probably tell you within the first six months, maybe two thirds of that $7 million has been recognized already.
Got it. Thanks. Talking a lot about the three segments, 20% operating margin. Potential Scientific is already there. Safe to say that the path to 20% is probably a little clearer for Electronics than Engraving right now? Or quicker for now?
I wouldn't say - I think the Engraving team has a clear idea what they need to do, and it’s primarily labor efficiency and driving their best practices consistently around the world. So, with Electronics, it's more focused on that one single item of rhodium. So it's maybe a little more simple in that way.
Got it. And the EV opportunity within Electronics, can you just remind me, roughly how much of auto is in Electronics at this point in time?
Total auto is in kind of the low 20%, between the sensors we sell and what goes through distribution. And for example, this last quarter, our sales into EV applications was about $2 million in that business. So it's not a huge number now, but it's growing fast. I mean, you look at the projections for electric vehicles, our current content and those vehicles that we're on, is about twice our content on - compared to a traditional combustion engine vehicle. And there's some additional applications we're pursuing that could increase the content beyond that. So even though it's a relatively small number, it provides a healthy portion of the growth that Electronics will see in the next five years.
Got it. That's helpful. Fiscal ‘22, obviously a long way away. Big picture, when you look to the segments, from what we're talking about, Electronics appears to be in very good shape. Of course revenue and margin standpoint, ETG and Specialty are certainly going to be helped as COVID winds down. Scientific, it seems like the one put and take there would be the COVID refrigeration sales that you had in ‘21. So I guess the question is, do you have any thoughts in terms of that COVID revenue continuing into ‘22 or any thoughts there?
Yes. So the - just to kind of put some numbers around this. When we first estimated that $10 million to $20 million number, it was based on - the numbers are - there's about 30,000 retail pharmacies in America, about 100,000 physicians’ offices, 35,000 hospitals, clinics, urgent care facilities. And we estimated how many of those sites would be adding storage. We know what our market share is in those segments. And I would tell you that our communication that we anticipate being towards the upper end of that 20 million. That would be on pace to outfit about one-third of the pharmacies with a storage unit. So the question then would be, once we get into the summer and in our new fiscal year, will there be a continued build out of that last mile of vaccine distribution into the remaining pharmacies and clinics and urgent care? And it's, frankly, premature for us to say.
Got it. Very helpful. I'll jump back in line. Thanks guys.
This concludes our question-and-answer session. I would like to turn the conference back over to David Dunbar for any closing remarks.
Thank you. In closing, we made solid progress in the fiscal second quarter, and expect continued improvement in the second half of fiscal 2021. Long-term outlook is reflective of the significant transformation we’ve accomplished at Standex in the past few years. I want to thank everyone today for their interest in Standex and allowing us the opportunity to discuss with you our results and accomplishments in our fiscal second quarter. Last and not least, I want to thank all of our employees. It's a pleasure to get up every day, work together, and transform this company. And I thank our shareholders for your continued support. We look forward to speaking with you again on our third quarter fiscal 2021 call. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.