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Note 1 - Management Statement
 6 Months Ended
Dec. 31, 2017
Notes to Financial Statements  
Business Description and Basis of Presentation [Text Block]
1
)
       
Management Statement
 
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the results of operations for the
three
and
six
months ended
December 31, 2017
and
2016,
the cash flows for the
six
months ended
December 31, 2017
and
2016
and the financial position of Standex International Corporation (“Standex”, the “Company”, “we”, “us”, or “our”), at
December 31, 2017.
The interim results are
not
necessarily indicative of results for a full year. The following unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the company believes that the disclosures made are adequate to make the information
not
misleading. The unaudited condensed consolidated financial statements and notes do
not
contain information which would substantially duplicate the disclosures contained in the audited annual consolidated financial statements and notes for the year ended
June 30, 2017.
The condensed consolidated balance sheet at
June 30, 2017
was derived from audited financial statements, but does
not
include all disclosures required by accounting principles generally accepted in the United States of America. The financial statements contained herein should be read in conjunction with the Annual Report on Form
10
-K and in particular the audited consolidated financial statements for the year ended
June 30, 2017.
Certain prior period amounts have been reclassified to conform to the current period presentation. Unless otherwise noted, references to years are to the Company’s fiscal years.
 
On
December 22, 2017,
the Tax Cuts and Jobs Act
(the “Act”) was passed which resulted in the Company recording provisional estimates related to foreign earnings and changes in the revaluation of deferred taxes in our consolidated financial statements. Other changes implemented by the Act will
not
impact the Company until the fiscal year ending
June 30, 2019.
There have been
no
other significant changes in our reported financial position, results of operations, cash flows or to our critical accounting policies that were disclosed in our Annual Report on Form
10
-K for the fiscal year ended
June 30, 2017
that have had a significant impact on our consolidated financial statements or notes herein.
 
The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. We evaluated subsequent events through the date and time our unaudited condensed consolidated financial statements were issued.
 
During the
fourth
quarter of fiscal
2017,
we adopted Accounting Standards Update (ASU)
2016
-
09
requiring the recognition of excess tax benefits as a component of income tax expense which were historically recognized in equity.
As required, the fiscal results for the
three
and
six
months ended
December 31, 2016
have been recast to include a tax benefit of
$0.2
million and
$0.6
million, respectively. In addition, the ASU requires a prospective update to the treasury method of calculating weighted average diluted shares outstanding resulting in the inclusion of additional shares in our diluted EPS calculation for the
three
and
six
months ended
December 31, 2016.
 
Recently Issued Accounting Pronouncements
 
In
May 2014,
the Financial Accounts Standards Board ("FASB") issued ASU
No.
2014
-
09,
Revenue from Contracts with Customers
. This update amends the current guidance on revenue recognition related to contracts with customers. Under ASU
No.
2014
-
09,
an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.
In early
2016,
the FASB issued additional updates: ASU
No.
2016
-
10,
2016
-
11
and
2016
-
12.
These updates provide further guidance and clarification on specific items within the previously issued update.
The Company anticipates it will adopt Topic
606
under the modified retrospective method and will only apply this method to contracts that are
not
completed as of the date of adoption. Application of this method will result in a cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings at the date of initial application for any open contracts as of the adoption date.
 
The C
ompany has established a global steering committee with a project plan to analyze the impact of this standard. The assessment phase of the project plan is on-going and includes identifying the various revenue streams, initiating contract reviews and reviewing current accounting policies and practices to identify potential differences that would result from the application of the standard. This assessment includes (
1
) utilizing questionnaires to assist with the identification of revenue streams, (
2
) performing sample contract analyses for each revenue stream identified, (
3
) assessing the noted differences in recognition and measurement that
may
result from adopting this new standard, (
4
) performing detailed analyses of contracts with larger customers, and (
5
) developing plans to test transactions for consistency with contract provisions that affect revenue recognition. The committee is currently analyzing the impact of the standard on its contract portfolio by reviewing a sample of its contracts to identify potential differences that would result from applying the requirements of the new standard. The committee also continues to analyze the impact of requirements for combining contracts, performance obligations, and variable consideration. The global steering committee is apprising both management and the audit committee of project status on a recurring basis. Following the completion of the assessment phase, the Company will initiate efforts to redesign impacted processes, policies, controls and disclosures, as necessary. The Company has
not
yet finalized its assessment of the impact of Topic
606,
but expects to adopt this standard, as required, for the Company’s interim and annual reporting periods beginning
July 1, 2018.
The Company does
not
expect to early adopt.
 
In
November 2015,
the FASB issued ASU Update
2015
-
17,
Income Taxes (Topic
740
): Balance Sheet Classification of Deferred Taxes
, as part of its simplification initiatives. This update requires deferred tax liabilities and assets to be classified as non-current on the consolidated condensed balance sheet for fiscal years beginning after
December 15, 2016,
and interim periods within those annual periods. Early application is permitted. An entity can elect adoption prospectively or retrospectively to all periods presented. We have adopted ASU
2015
-
17
prospectively. As a result, we have presented all deferred tax assets and liabilities as noncurrent on our consolidated balance sheet as of
December 31, 2017,
but have
not
reclassified current deferred assets and liabilities on our consolidated balance sheet as of
June 30, 2017.
There was
no
impact on our results of operations as a result of the adoption of ASU
2015
-
17.
 
In
February 2016,
the FASB issued ASU
2016
-
02,
Leases (Topic
842
)
. ASU
2016
-
02
increases transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. For leases with a term of
twelve
months or less, a lessee is permitted to make an accounting policy election by class of underlying asset
not
to recognize lease assets and liabilities. ASU
2016
-
02
is effective for fiscal years beginning after
December 15, 2018.
While we are continuing to assess the effect of the adoption, we currently believe the most significant potential changes relate to (i) recognition of right-of-use assets and lease liabilities on our balance sheet for equipment and real estate operating leases, and (ii) the derecognition of existing assets and liabilities for certain sale-leaseback transactions that currently do
not
qualify for sale accounting. The Company anticipates the adoption will have a material impact on the Company’s consolidated financial statements due to the materiality of the underlying leases subject to the new guidance, however are unable to quantify that effect until our analysis is complete.
 
In
January 2017,
the FASB issued ASU
2017
-
04,
Simplifying the Test for Goodwill Impairment
, which simplifies the accounting for goodwill impairments by eliminating step
two
from the goodwill impairment test.  Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.  ASU
2017
-
04
also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity's testing of reporting units for goodwill impairment. It further clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.  ASU
2017
-
04
is effective for annual or any interim goodwill impairment tests in fiscal years beginning after
December 15, 2019. 
The Company is currently assessing the potential impact of the adoption of ASU
2017
-
04
on our consolidated financial statements.
 
In
March 2017,
the FASB issued ASU
2017
-
07,
Compensation-Retirement Benefits (Topic
715
): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be stated separately from service cost and outside of operating income. This guidance is effective for fiscal years beginning after
December 15, 2017 (
fiscal
2019
for the Company) and interim periods within those annual periods. The amendment is to be applied retrospectively. The Company is in the preliminary stages of assessing the potential impact of the adoption of ASU
2017
-
07
on our consolidated financial statements.
 
In
August 2017,
the FASB issued ASU
2017
-
12,
Derivatives and Hedging (Topic
815
); Targeting Improvements to Accounting for Hedging Activities
, which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and to make certain targeted improvements to simplify the application of hedge accounting guidance. The new guidance requires additional disclosures including cumulative basis adjustments for fair value hedges and the effect of hedging on individual income statement line items. This guidance is effective for fiscal years beginning after
December 15, 2018 (
fiscal
2020
for the Company), and interim periods within those fiscal years. The amendment is to be applied prospectively. The Company is in the preliminary stages of assessing the potential impact of the adoption of ASU
2017
-
12
on our consolidated financial statements.