ESE 8-K
Esco Technologies Inc (ESE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Securities registered pursuant to section 12(b) of the Act:
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition |
Today, February 6, 2025, the Registrant is issuing a press release (furnished as Exhibit 99.1 to this report) announcing its fiscal 2025 first quarter financial and operating results. See Item 7.01, Regulation FD Disclosure, below.
| Item 5.07 | Submission of Matters to a Vote of Security Holders |
The 2025 Annual Meeting of the Registrant’s stockholders was held on February 4, 2025. Each of the 25,793,175 shares of common stock entitled to vote at the meeting was entitled to one vote on each matter voted on at the meeting. The affirmative vote of a majority of the shares represented in person or by proxy at the meeting was required to elect each director and to approve each of the other proposals considered at the meeting. The vote totals below are rounded down to the nearest whole share, and Broker Non-Votes are not considered to be entitled to vote on the matter in question and are therefore not counted in determining the number of votes required for approval.
At the meeting, there were 24,391,092 shares represented and entitled to vote on one or more matters at the meeting, or approximately 94.6% of the outstanding shares. The voting on each of the proposals was as follows:
Proposal 1 – Election of Directors (for terms expiring at the 2028Annual Meeting):
| Nominee | “For” | “Withhold” | Broker Non-Votes |
Percent of Shares Represented and Entitled to Vote on the Nominee Voting “For” |
Percent of all Outstanding Shares Voting “For” | |||||
| David A. Campbell | 23,724,425 | 80,428 | 586,238 | 99.7% | 92.0% | |||||
| Penelope M. Conner | 23,574,824 | 230,030 | 586,238 | 99.0% | 91.4% | |||||
| Gloria L. Valdez | 22,221,416 | 1,576,898 | 592,778 | 93.4% | 86.2% |
Because each nominee received a majority of the shares represented at the meeting and entitled to vote on the nominee, all of the nominees were duly elected.
Proposal 2 – Advisory vote on the resolution to approve the compensation of the Registrant’s executive officers (“Say on Pay”):
| “For” | “Against” | “Abstain” | Broker Non-Votes |
Percent of Shares Represented and Entitled to Vote on the Proposal Voting “For” |
Percent of all Outstanding Shares Voting “For” | |||||
| 23,540,436 | 257,874 | 6,542 | 586,238 | 98.9% | 91.3% |
Because the proposal received a majority of the shares represented at the meeting and entitled to vote on the matter, it was duly approved.
Proposal 3 – Ratification of the Registrant’s appointment of Grant Thornton LLP as the Registrant’s independent registered public accounting firm for the 2025fiscal year:
| “For” | “Against” | “Abstain” | Broker Non-Votes | Percent of Shares Represented and Entitled to Vote on the Proposal Voting “For” | Percent of all Outstanding Shares Voting “For” | |||||
| 24,371,595 | 16,945 | 2,551 | 0 | 99.9% | 94.5% |
Because the proposal received a majority of the shares represented at the meeting and entitled to vote on the matter, it was duly approved.
See also Item 8.01, Other Events, below.
| Item 7.01 | Regulation FD Disclosure |
Today, February 6, 2025, the Registrant is issuing a press release (furnished as Exhibit 99.1 to this report) announcing its fiscal 2025 first quarter financial and operating results. The press release will be posted on the Registrant’s investor website (https://investor.escotechnologies.com), although the Registrant reserves the right to discontinue that availability at any time.
The Registrant will conduct a related webcast conference call today at 4:00 p.m. Central Time. The conference call webcast will be available on the Registrant’s investor website (https://investor.escotechnologies.com). A slide presentation will be utilized during the call and will be posted on the website prior to the call. For those unable to participate, a webcast replay will be available after the call on the website, although the Registrant reserves the right to discontinue that availability at any time.
| Item 8.01 | Other Events |
Effective at the 2025 Annual Meeting, as previously approved and reported, Leon J. Olivier retired from the Board of Directors upon the expiration of his term as a director, and the authorized size of the Board of Directors was reduced from nine to eight directors.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit No. | Description of Exhibit | ||
| 99.1 | Press Release dated February 6, 2025 | ||
| 104 | Cover Page Inline Interactive Data File |
Other Matters
The information in this report furnished pursuant to Item 2.02 and Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (“Exchange Act”) or otherwise subject to the liabilities of that section, unless the Registrant incorporates it by reference into a filing under the Securities Act of 1933 as amended or the Exchange Act.
References to the Registrant’s web site address are included in this Form 8-K and the press release only as inactive textual references, and the Registrant does not intend them to be active links to its web site. Information contained on the Registrant’s web site does not constitute part of this Form 8-K or the press release.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 6, 2025
| ESCO TECHNOLOGIES INC. | ||
| By: | /s/David M. Schatz | |
| David M. Schatz | ||
| Senior Vice President, General Counsel and Secretary | ||
Exhibit 99.1
| NEWS FROM |  |
For more information contact:
Kate Lowrey - VP of Investor Relations
(314) 213-7277 / [email protected]
ESCO REPORTS FIRST QUARTER FISCAL 2025 RESULTS
- Q1 Sales increase 13% to $247 Million -
- Q1 GAAP EPS increases 54% to $0.91 -
- Q1 Adjusted EPS as defined in prior guidance increases 48% to $0.92 -
- Q1 Adjusted EPS excluding Acquisition Related Amortization increases 41% to $1.07 -
ST. LOUIS, February 6, 2025 – ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the first quarter ended December 31, 2024 (Q1 2025).
Operating Highlights
| · | Q1 2025 Sales increased $28.7 million (13.2 percent) to $247.0 million compared to $218.3 million in Q1 2024. |
| · | Q1 2025 Entered Orders were $275.0 million for a book-to-bill ratio of 1.11x, resulting in record backlog of $907 million. |
| · | Q1 2025 GAAP EPS increased 54 percent to $0.91 per share compared to $0.59 per share in Q1 2024. |
| · | Q1 2025 Adjusted EPS as defined in prior guidance increased 48 percent to $0.92 per share compared to $0.62 per share in Q1 2024. |
| · | Beginning in Q1 2025 we are excluding acquisition related amortization (which was $0.15 per share in Q1 2025) from our Adjusted EPS calculation. Q1 2025 Adjusted EPS excluding acquisition related amortization increased 41 percent to $1.07 per share compared to $0.76 per share in Q1 2024. |
| · | Net cash provided by operating activities was $34 million in Q1 2025, an increase of $25 million compared to the prior year period, as cash flow was positively impacted by higher net earnings and favorable working capital impacts. |
Bryan Sayler, Chief Executive Officer and President, commented, “Our fiscal year got off to an outstanding start as we delivered 13 percent top line growth, over 200 basis points of Adjusted EBITDA margin expansion, and a 41 percent increase in Adjusted EPS compared to the prior year. All three segments delivered solid revenue growth, highlighted by notable strength across our Navy, commercial aerospace and utility end-markets. It was also great to see our Test business deliver a solid quarter with improving order flow, double digit revenue growth, and over 500 basis points of margin expansion.
“The ESCO team continues to build upon our strong position in attractive markets to increase value across the enterprise. Overall, it was a great way to start the year, with continuing momentum across our end markets giving us the confidence to raise our full year earnings guidance.”
Segment Performance
Aerospace & Defense (A&D)
| · | Sales increased $19.6 million (21 percent) to $114.3 million in Q1 2025 from $94.7 million in Q1 2024. The Q1 increase was driven by strength in Navy and commercial aerospace, partially offset by lower defense aerospace. |
| · | Q1 2025 EBIT and Adjusted EBIT both increased $4.9 million to $21.6 million (18.9 percent margin) from $16.7 million (17.6 percent margin) in Q1 2024. Margin improvement was driven by leverage on higher volume and price increases, partially offset by inflationary pressures and mix. |
| · | Entered Orders decreased $51 million (30 percent) to $121 million in Q1 2025 compared to $172 million in Q1 2024. The decrease in orders was primarily driven by large Navy orders for Virginia Class Block V surface hull tiles and Block VI long lead material procurement for the Light-Weight Wide Aperture Array (LWWAA) in Q1 2024, partially offset by higher Q1 2025 Navy ejection valve and spares orders. Orders in the quarter resulted in a segment book-to-bill of 1.06x and record ending backlog of $607 million. |
Utility Solutions Group (USG)
| · | Sales increased $3.7 million (4 percent) to $86.7 million in Q1 2025 from $83.0 million in Q1 2024. Doble’s sales increased by $7.9 million (12 percent) driven by a strong quarter for offline and protection testing products and services. NRG sales decreased $4.2 million (22 percent) due to moderation in renewable energy projects in the quarter. |
| · | EBIT increased $2.9 million in Q1 2025 to $20.5 million from $17.6 million in Q1 2024. Adjusted EBIT increased $2.8 million to $20.5 million (23.6 percent margin) from $17.7 million (21.4 percent margin) in Q1 2024. Margin was favorably impacted by leverage on higher volume, price increases, and mix, partially offset by inflationary pressures. |
| · | Entered Orders increased $13 million (16 percent) to $90 million in Q1 2025. Doble orders increased by $10 million (15 percent) on strength across their product portfolio and highlighted by a $4.3 million order for offline test equipment at Phenix. NRG orders increased by $3 million in the quarter. The segment book-to-bill was 1.03x in the quarter and resulted in an ending backlog of $123 million. |
RF Test & Measurement (Test)
| · | Sales increased $5.5 million (13 percent) to $46.1 million in Q1 2025 from $40.6 million in Q1 2024. Sales growth primarily related to higher U.S. shielding, Test and Measurement in EMEA, and MPE filter sales. |
| · | EBIT increased $2.6 million in Q1 2025 to $4.4 million from $1.8 million in Q1 2024. Adjusted EBIT increased $2.8 million in Q1 2025 to $4.9 million (10.6 percent margin) from $2.1 million (5.1 percent margin) in Q1 2024. Margin was favorably impacted by leverage on higher volume, price increases, and cost reduction efforts, partially offset by inflationary pressures and mix. |
| · | Entered Orders increased $20 million (43 percent) to $65 million in Q1 2025. The increase was driven by a strong quarter for EMC Test & Measurement, A&D, and medical and industrial shielding orders. The segment book-to-bill was 1.41x in the quarter and resulted in ending backlog of $177 million. |
Business Outlook – 2025
Beginning in Q1 2025, acquisition related amortization will be excluded from our Adjusted Earnings calculation. Our current assessment of FY 2025 acquisition related amortization does not include the impact of the pending SM&P acquisition. The initial fiscal 2025 guidance issued in our November press release is revised as follows:
| Guidance Range | ||||||||
| November FY 2025 Adjusted EPS Guidance | $ | 4.70 | $ | 4.90 | ||||
| Acquisition Related Amortization | $ | 0.60 | $ | 0.60 | ||||
| Revised November FY 2025 Adjusted EPS Guidance | $ | 5.30 | $ | 5.50 | ||||
Due to strong market conditions and continued improvement in operational performance, we are raising our full-year guidance by $0.25 to a range of $5.55 to $5.75 (16 to 21 percent growth over the prior year) from $5.30 to $5.50. This guidance is in line with our initial revenue guidance range of $1.09 to $1.11 billion (6 to 8 percent annual growth).
| Guidance Range | ||||||||
| Revised November FY 2025 Adjusted EPS Guidance | $ | 5.30 | $ | 5.50 | ||||
| Guidance Increase | $ | 0.25 | $ | 0.25 | ||||
| Revised FY 2025 Adjusted EPS Guidance | $ | 5.55 | $ | 5.75 | ||||
Management’s current expectation is for Q2 Adjusted EPS in the range of $1.20 to $1.30, which represents 10 to 19 percent growth over the prior year quarter.
| Guidance Range | ||||||||
| Q2 2025 Adjusted EPS Guidance (prior methodology) | $ | 1.05 | $ | 1.15 | ||||
| Acquisition Related Amortization | $ | 0.15 | $ | 0.15 | ||||
| Q2 2025 Adjusted EPS Guidance | $ | 1.20 | $ | 1.30 | ||||
SM&P Acquisition
As announced on July 8, 2024, ESCO has agreed to acquire the Signature Management & Power (SM&P) business of Ultra Maritime for a purchase price of $550 million. The closing of the transaction is subject to certain conditions, including the completion of the regulatory approval processes in the United States (US) and the United Kingdom (UK). The US closing conditions have been met. We are in the final stages of the UK government assessment of the transaction and we are optimistic that the assessment will be positively resolved in the near term. Our current expectation would be to close the transaction either in our second or early in our third fiscal quarter. SM&P’s sole source product offerings will add significant scale to the ESCO Navy business, providing increased content on domestic Navy submarine and surface ship programs and expansion into vital UK and AUKUS navy platforms.
Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on April 17, 2025 to stockholders of record on April 2, 2025.
Conference Call
The Company will host a conference call today, February 6, at 4:00 p.m. Central Time, to discuss the Company’s Q1 2025 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website.
Forward-Looking Statements
Statements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2025, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.
Investors are cautioned that such statements are only predictions and speak only as of the date of this presentation, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and the following: the timing and outcome, if any, of the Company’s strategic alternatives review of VACCO and its Space business; of the Company’s pending acquisition of SM&P; the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components or supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses.
Non-GAAP Financial Measures
The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.
EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation, and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.
About ESCO
ESCO is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products for the aviation, Navy, space, and process markets worldwide and composite-based products and solutions for Navy, defense, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit the Company’s website at www.escotechnologies.com.
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
| Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | |||||||
| Net Sales | $ | 247,026 | 218,314 | |||||
| Cost and Expenses: | ||||||||
| Cost of sales | 148,642 | 134,151 | ||||||
| Selling, general and administrative expenses | 58,784 | 53,968 | ||||||
| Amortization of intangible assets | 7,993 | 7,868 | ||||||
| Interest expense | 2,257 | 2,667 | ||||||
| Other (income) expenses, net | (591 | ) | 206 | |||||
| Total costs and expenses | 217,085 | 198,860 | ||||||
| Earnings before income taxes | 29,941 | 19,454 | ||||||
| Income tax expense | 6,468 | 4,285 | ||||||
| Net earnings | $ | 23,473 | 15,169 | |||||
| Earnings Per Share (EPS) | ||||||||
| Diluted - GAAP | $ | 0.91 | 0.59 | |||||
| Diluted - As Adjusted Basis | $1.07 | (1) | 0.76 | (2) | ||||
| Diluted average common shares O/S: | 25,834 | 25,846 | ||||||
| (1) | Q1 2025 Adjusted EPS excludes $0.16 per share of after-tax charges consisting primarily of $0.01 of restructuring charges within the Test segment and acquisition related costs at Corporate and $0.15 of acquisition related amortization. |
| (2) | Q1 2024 Adjusted EPS excludes $0.17 per share of after-tax charges consisting primarily of $0.03 of MPE acquisition inventory step-up and backlog charges and acquisition related costs and $0.14 of acquisition related amortization. |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
| GAAP | As Adjusted | |||||||||||||||
| Q1 2025 | Q1 2024 | Q1 2025 | Q1 2024 | |||||||||||||
| Net Sales | ||||||||||||||||
| Aerospace & Defense | $ | 114,301 | 94,733 | 114,301 | 94,733 | |||||||||||
| USG | 86,660 | 82,984 | 86,660 | 82,984 | ||||||||||||
| Test | 46,065 | 40,597 | 46,065 | 40,597 | ||||||||||||
| Totals | $ | 247,026 | 218,314 | 247,026 | 218,314 | |||||||||||
| EBIT | ||||||||||||||||
| Aerospace & Defense | $ | 21,596 | 16,663 | 21,622 | 16,663 | |||||||||||
| USG | 20,489 | 17,625 | 20,489 | 17,745 | ||||||||||||
| Test | 4,422 | 1,779 | 4,887 | 2,052 | ||||||||||||
| Corporate | (14,309 | ) | (13,946 | ) | (9,310 | ) | (8,600 | ) | ||||||||
| Consolidated EBIT | 32,198 | 22,121 | 37,688 | 27,860 | ||||||||||||
| Less: Interest expense | (2,257 | ) | (2,667 | ) | (2,257 | ) | (2,667 | ) | ||||||||
| Less: Income tax expense | (6,468 | ) | (4,285 | ) | (7,730 | ) | (5,605 | ) | ||||||||
| Net earnings | $ | 23,473 | 15,169 | 27,701 | 19,588 | |||||||||||
Note 1: Adjusted net earnings of $27.7 million in Q1 2025 exclude $4.2 million (or $0.16 per share) of after-tax charges consisting primarily of restructuring charges within the Test segment and acquisition related costs at Corporate, and acquisition related amortization.
Note 2: Adjusted net earnings of $19.6 million in Q1 2024 exclude $4.4 million (or $0.17 per share) of after-tax charges consisting primarily of MPE acquisition inventory step-up and backlog charges and acquisition related costs, and acquisition related amortization.
| EBITDA Reconciliation to Net earnings: | Adjusted | Adjusted | ||||||||||||||
| Q1 2025 | Q1 2024 | Q1 2025 | Q1 2024 | |||||||||||||
| Consolidated EBITDA | $ | 46,005 | 35,573 | 46,498 | 36,408 | |||||||||||
| Less: Depr & Amort | (13,807 | ) | (13,452 | ) | (8,810 | ) | (8,548 | ) | ||||||||
| Consolidated EBIT | 32,198 | 22,121 | 37,688 | 27,860 | ||||||||||||
| Less: Interest expense | (2,257 | ) | (2,667 | ) | (2,257 | ) | (2,667 | ) | ||||||||
| Less: Income tax expense | (6,468 | ) | (4,285 | ) | (7,730 | ) | (5,605 | ) | ||||||||
| Net earnings | $ | 23,473 | 15,169 | 27,701 | 19,588 | |||||||||||
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
| December 31, 2024 | September 30, 2024 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 71,284 | 65,963 | |||||
| Accounts receivable, net | 202,661 | 240,680 | ||||||
| Contract assets | 131,404 | 130,534 | ||||||
| Inventories | 219,383 | 209,164 | ||||||
| Other current assets | 20,779 | 22,308 | ||||||
| Total current assets | 645,511 | 668,649 | ||||||
| Property, plant and equipment, net | 168,468 | 170,596 | ||||||
| Intangible assets, net | 396,302 | 407,602 | ||||||
| Goodwill | 532,312 | 539,899 | ||||||
| Operating lease assets | 38,710 | 37,744 | ||||||
| Other assets | 13,761 | 14,130 | ||||||
| $ | 1,795,064 | 1,838,620 | ||||||
| Liabilities and Shareholders' Equity | ||||||||
| Current maturities of long-term debt | $ | 20,000 | 20,000 | |||||
| Accounts payable | 75,881 | 98,371 | ||||||
| Contract liabilities | 129,737 | 124,845 | ||||||
| Other current liabilities | 90,491 | 106,638 | ||||||
| Total current liabilities | 316,109 | 349,854 | ||||||
| Deferred tax liabilities | 75,520 | 75,333 | ||||||
| Non-current operating lease liabilities | 36,400 | 34,810 | ||||||
| Other liabilities | 38,102 | 39,273 | ||||||
| Long-term debt | 92,000 | 102,000 | ||||||
| Shareholders' equity | 1,236,933 | 1,237,350 | ||||||
| $ | 1,795,064 | 1,838,620 | ||||||
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
| Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net earnings | $ | 23,473 | 15,169 | |||||
| Adjustments to reconcile net earnings to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation and amortization | 13,807 | 13,452 | ||||||
| Stock compensation expense | 2,524 | 2,180 | ||||||
| Changes in assets and liabilities | (7,151 | ) | (22,539 | ) | ||||
| Effect of deferred taxes | 1,521 | 484 | ||||||
| Net cash provided by operating activities | 34,174 | 8,746 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisition of business, net of cash acquired | - | (56,179 | ) | |||||
| Capital expenditures | (5,208 | ) | (7,848 | ) | ||||
| Additions to capitalized software | (2,587 | ) | (2,942 | ) | ||||
| Net cash used by investing activities | (7,795 | ) | (66,969 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from long-term debt | 42,000 | 99,000 | ||||||
| Principal payments on long-term debt and short-term borrowings | (52,000 | ) | (29,000 | ) | ||||
| Dividends paid | (2,064 | ) | (2,064 | ) | ||||
| Purchases of common stock into treasury | - | - | ||||||
| Other | (6,031 | ) | (1,432 | ) | ||||
| Net cash (used) provided by financing activities | (18,095 | ) | 66,504 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (2,963 | ) | 1,249 | |||||
| Net increase in cash and cash equivalents | 5,321 | 9,530 | ||||||
| Cash and cash equivalents, beginning of period | 65,963 | 41,866 | ||||||
| Cash and cash equivalents, end of period | $ | 71,284 | 51,396 | |||||
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
| Backlog And Entered Orders - Q1 2025 | A&D | USG | Test | Total | ||||||||||||
| Beginning Backlog - 10/1/24 | $ | 600,382 | 119,943 | 158,644 | 878,969 | |||||||||||
| Entered Orders | 120,606 | 89,574 | 64,825 | 275,005 | ||||||||||||
| Sales | (114,301 | ) | (86,660 | ) | (46,065 | ) | (247,026 | ) | ||||||||
| Ending Backlog - 12/31/24 | $ | 606,687 | 122,857 | 177,404 | 906,948 | |||||||||||
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
| EPS – Adjusted Basis Reconciliation – Q1 2025 | ||||
| EPS – GAAP Basis – Q1 2025 | $ | 0.91 | ||
| Adjustments (defined below) | 0.16 | |||
| EPS – As Adjusted Basis – Q1 2025 | $ | 1.07 | ||
Adjustments exclude $0.16 per share consisting primarily of $0.01 of restructuring charges within the Test segment and acquisition related costs at Corporate and $0.15 of acquisition related amortization. The $0.16 of EPS adjustments per share consists of $5,490K of pre-tax charges offset by $1,262K of tax benefit for net impact of $4,228K.
| EPS – Adjusted Basis Reconciliation – Q1 2024 | ||||
| EPS – GAAP Basis – Q1 2024 | $ | 0.59 | ||
| Adjustments (defined below) | 0.17 | |||
| EPS – As Adjusted Basis – Q1 2024 | $ | 0.76 | ||
Adjustments exclude $0.17 per share consisting primarily of $0.03 of MPE acquisition inventory step-up and backlog charges and acquisition related costs and $0.14 of acquisition related amortization. The $0.17 of EPS adjustments per share consists of $5,739K of pre-tax charges offset by $1,320K of tax benefit for net impact of $4,419K.
| EPS – Adjusted Basis Reconciliation – Q2 2025 Guidance | Low | High | ||||||
| EPS – GAAP Basis – Q2 2025 | $ | 1.05 | 1.15 | |||||
| Adjustments (defined below) | 0.15 | 0.15 | ||||||
| EPS – As Adjusted Basis – Q2 2025 | $ | 1.20 | 1.30 | |||||
Adjustments exclude an estimated $0.15 of acquisition related amortization. The estimated $0.15 of EPS adjustment per share consists of $5.0 million of pre-tax charges offset by $1.15 million of tax benefit for net impact of $3.85 million.
| EPS – Adjusted Basis Reconciliation – FY 2025 Guidance | Low | High | ||||||
| EPS – GAAP Basis – FY 2025 | $ | 4.94 | 5.14 | |||||
| Adjustments (defined below) | 0.61 | 0.61 | ||||||
| EPS – As Adjusted Basis – FY 2025 | $ | 5.55 | 5.75 | |||||
Adjustments exclude $0.61 per share consisting primarily of $0.01 of restructuring charges within the Test segment and acquisition related costs at Corporate and an estimated $0.60 of acquisition related amortization. The estimated $0.61 of EPS adjustments per share consists of $20.5 million of pre-tax charges offset by $4.7 million of tax benefits for net impact of $15.8 million.