Esco Technologies Inc 10-Q for FY2025 Q3

Esco Technologies Inc (ESE)

10-Q 2025-08-11 For: 2025-06-30

Added on April 04, 2026

About this 10-Q

Esco Technologies Inc filed this 10-Q on August 11, 2025, covering the quarter ended June 30, 2025 (FY2025 Q3).

Headline figures

Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $296.34M; up 26.9% from $233.57M a year earlier
Net income: $26.07M; down 10.8% from net income of $29.23M a year earlier
Diluted EPS: $1.01; down 10.6% from $1.13 a year earlier

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MISSOURI	43-1554045
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

645 MARYVILLE CENTRE DR., SUITE 300
ST. LOUIS, MISSOURI	63141-5855
(Address of principal executive offices)	(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ESE	New York Stock Exchange

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


Class		Shares outstanding at July 31, 2025
Common stock, $.01 par value per share		25,824,688


	Three Months Ended
	June 30,
	2025		2024
Net sales	$	296,344	233,568
Costs and expenses:
Cost of sales		174,350	135,373
Selling, general and administrative expenses		62,042	51,013
Amortization of intangible assets		16,753	8,145
Interest expense, net		7,921	3,335
Other expenses (income), net		2,209	(264)
Total costs and expenses		263,275	197,602

Earnings before income taxes		33,069	35,966
Income tax expense		8,314	7,654
Earnings from continuing operations		24,755	28,312
Earnings from discontinued operations, net of tax expense of $599 and $288		1,310	918

Net earnings	$	26,065	29,230

Earnings per share:
Basic – Continuing operations	$	0.96	1.10
– Discontinued operations		0.05	0.04
– Net earnings	$	1.01	1.14

Diluted – Continuing operations		0.96	1.10
– Discontinued operations		0.05	0.03
– Net earnings	$	1.01	1.13



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO


	Nine Months Ended
	June 30,
	2025		2024

Net sales	$	742,714	645,621
Costs and expenses:
Cost of sales		431,068	378,427
Selling, general and administrative expenses		171,305	152,607
Amortization of intangible assets		32,735	24,585
Interest expense, net		12,373	9,228
Other expenses, net		1,947	404
Total costs and expenses		649,428	565,251

Earnings before income taxes		93,286	80,370
Income tax expense		21,841	17,040
Earnings from continuing operations		71,445	63,330
Earnings from discontinued operations, net of tax expense of $3,006 and $1,189		9,126	4,288

Net earnings	$	80,571	67,618

Earnings per share:

Basic – Continuing operations		2.77	2.46
– Discontinued operations	$	0.35	0.16
– Net earnings		3.12	2.62

Diluted – Continuing operations		2.76	2.46
– Discontinued operations		0.35	0.16
– Net earnings	$	3.11	2.62


	June 30,		September 30,
	2025		2024
ASSETS
Current assets:
Cash and cash equivalents	$	78,716		65,963
Accounts receivable, net of allowance for credit losses of $3,307 and $2,734, respectively		238,022		222,101
Contract assets		91,727		66,712
Inventories		237,110		195,465
Other current assets		32,596		21,027
Assets held for sale – current		76,552		97,381
Total current assets		754,723		668,649
Property, plant and equipment, net of accumulated depreciation of $182,511 and $171,444, respectively		167,236		149,251
Intangible assets, net of accumulated amortization of $266,382 and $234,281, respectively		745,079		403,524
Goodwill		760,555		529,935
Operating lease assets		46,796		37,476
Other assets		17,208		13,791
Assets held for sale – other		34,788		35,994
Total assets	$	2,526,385		1,838,620

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	20,000		20,000
Accounts payable		86,209		88,936
Contract liabilities		205,591		80,844
Accrued salaries		45,017		41,768
Accrued other expenses		65,518		55,807
Liabilities held for sale – current		74,505		62,499
Total current liabilities		496,840		349,854
Deferred tax liabilities		115,023		72,623
Non-current operating lease liabilities		43,633		34,810
Other liabilities		36,500		39,273
Long-term debt		505,000		102,000
Liabilities held for sale – other		2,775		2,710
Total liabilities		1,199,771		601,270
Shareholders’ equity:
Preferred stock, par value $.01 per share, authorized 10,000,000 shares		—		—
Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,881,459 and 30,809,483 shares, respectively		309		308
Additional paid-in capital		313,649		311,942
Retained earnings		1,157,325		1,082,950
Accumulated other comprehensive income (loss), net of tax		2,406		(10,775)
		1,473,689		1,384,425
Less treasury stock, at cost: 5,056,771 and 5,056,771 common shares, respectively		(147,075)		(147,075)
Total shareholders’ equity		1,326,614		1,237,350
Total liabilities and shareholders’ equity	$	2,526,385		1,838,620


	Three Months		Nine Months
	Ended June 30,		Ended June 30,
	2025	2024	2025	2024
Weighted Average Shares Outstanding — Basic	25,825	25,753	25,806	25,781
Dilutive Shares	93	87	70	63
Adjusted Shares — Diluted	25,918	25,840	25,876	25,844


	June 30,		September 30,
(In thousands)	2025		2024
Finished goods	$	59,755	46,586
Work in process		55,052	40,605
Raw materials		122,303	108,274
Total inventories	$	237,110	195,465


	June 30,		September 30,
(Dollars in thousands)	2025		2024
Goodwill	$	760,555	529,935

Intangible assets with determinable lives:
Patents
Gross carrying amount	$	7,566	2,638
Less: accumulated amortization		1,643	1,415
Net	$	5,923	1,223

Capitalized software
Gross carrying amount	$	135,564	126,721
Less: accumulated amortization		98,058	89,558
Net	$	37,506	37,163

Customer relationships
Gross carrying amount	$	627,932	330,328
Less: accumulated amortization		149,786	132,135
Net	$	478,146	198,193

Other
Gross carrying amount	$	77,441	15,182
Less: accumulated amortization		16,895	11,173
Net	$	60,546	4,009
Intangible assets with indefinite lives:
Trade names	$	162,958	162,936


(Dollars in millions)	USG		Test		A&D	Total
Balance as of September 30, 2024	$	356.9		67.4	105.6	529.9
Acquisition activity		—		—	222.7	222.7
Foreign currency translation		3.5		0.9	3.6	8.0
Balance as of June 30, 2025	$	360.4		68.3	331.9	760.6


	Three Months Ended June 30,			Nine Months Ended June 30,
	2025		2024	2025	2024
Common stock
Beginning balance		309	308	308	308
Stock plans		—	—	1	—
Ending balance		309	308	309	308

Additional paid-in-capital
Beginning balance		311,438	308,065	311,942	304,850
Stock plans		2,211	1,917	1,707	5,132
Ending balance		313,649	309,982	313,649	309,982

Retained earnings
Beginning balance		1,133,326	1,023,578	1,082,950	989,315
Net earnings common stockholders		26,065	29,230	80,571	67,618
Dividends paid		(2,066)	(2,060)	(6,196)	(6,185)
Ending balance		1,157,325	1,050,748	1,157,325	1,050,748

Accumulated other comprehensive income (loss)
Beginning balance		(20,670)	(19,300)	(10,775)	(23,969)
Foreign currency translation		23,076	(1,001)	13,181	3,668
Ending balance		2,406	(20,301)	2,406	(20,301)

Treasury stock
Beginning balance		(147,075)	(146,241)	(147,075)	(139,362)
Share repurchases		—	(810)	—	(7,689)
Ending balance		(147,075)	(147,051)	(147,075)	(147,051)

Total equity		1,326,614	1,193,686	1,326,614	1,193,686


Three months ended June 30, 2025
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	57,297	$	87,653	$	50,591	$	195,541
Government		79,027		4,704		17,072		100,803
Total revenues	$	136,324	$	92,357	$	67,663	$	296,344

Geographic location:
United States	$	94,518	$	63,062	$	36,188	$	193,768
International		41,806		29,295		31,475		102,576
Total revenues	$	136,324	$	92,357	$	67,663	$	296,344

Revenue recognition method:
Point in time	$	66,833	$	74,143	$	11,123	$	152,099
Over time		69,491		18,214		56,540		144,245
Total revenues	$	136,324	$	92,357	$	67,663	$	296,344


	Three Months			Nine Months
	Ended June 30,			Ended June 30,
(In thousands)	2025		2024	2025	2024
NET SALES
Aerospace & Defense	$	136,324	87,235	307,819	241,279
USG		92,357	90,277	269,784	260,570
Test		67,663	56,056	165,111	143,772
Consolidated totals	$	296,344	233,568	742,714	645,621

EBIT
Aerospace & Defense	$	36,577	20,150	78,246	55,919
USG		21,540	22,155	62,808	57,355
Test		10,732	9,292	21,523	16,613
Corporate (loss)		(27,859)	(12,296)	(56,918)	(40,289)
Consolidated EBIT		40,990	39,301	105,659	89,598
Less: Interest expense		(7,921)	(3,335)	(12,373)	(9,228)
Earnings before income taxes	$	33,069	35,966	93,286	80,370


	June 30,		June 30,
	2025		2024
Weighted-average remaining lease term
Operating leases	9.6	years	10.8	years
Finance leases	9.8	years	11.1	years
Weighted-average discount rate
Operating leases	4.75	%	4.58	%
Finance leases	4.73	%	4.69	%


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2025 (excluding the nine months ended June 30, 2025)	$	2,007	561
2026		7,470	2,297
2027		7,225	2,357
2028		7,095	2,417
2029 and thereafter		38,434	14,053
Total minimum lease payments		62,231	21,685
Less: amounts representing interest		12,977	4,766
Present value of net minimum lease payments	$	49,254	16,919
Less: current portion of lease obligations		5,621	1,523
Non-current portion of lease obligations		43,633	15,396

ROU assets	$	46,796	12,566

Exhibit Number	Description	Document Location

3.1(a)	Restated Articles of Incorporation	Exhibit 3(a) to the Company’s Form 10-K for the fiscal year ended September 30, 1999

3.1(b)	Amended Certificate of Designation, Preferences and Rights of Series A Participating Cumulative Preferred Stock of the Registrant	Exhibit 4(e) to the Company’s Form 10-Q for the fiscal quarter ended March 31, 2000

3.1(c)	Articles of Merger effective July 10, 2000	Exhibit 3(c) to the Company’s Form 10-Q for the fiscal quarter ended June 30, 2000

3.1(d)	Amendment of Articles of Incorporation effective February 5, 2018	Exhibit 3.1 to the Company’s Form 8-K filed February 7, 2018

3.2	Bylaws	Exhibit 3.1 to the Company’s Form 8-K filed November 22, 2022

4.1(a)	Amended and Restated Credit Agreement dated August 30, 2023	Exhibit 10.1 to the Company’s Form 8-K filed September 6, 2023

4.1(b)	Amendment No. 1 to the Amended and Restated Credit Agreement dated August 30, 2023	Exhibit 10 (c) to the Company’s Form 10-K for the fiscal year ended September 30, 2024

31.1	Certification of Chief Executive Officer	Filed herewith

31.2	Certification of Chief Financial Officer	Filed herewith

32	Certification of Chief Executive Officer and Chief Financial Officer	Filed herewith

101.INS	XBRL Instance Document*	Submitted herewith

101.SCH	XBRL Schema Document*	Submitted herewith

101.CAL	XBRL Calculation Linkbase Document*	Submitted herewith

101.DEF	XBRL Definition Linkbase Document*	Submitted herewith

101.LAB	XBRL Label Linkbase Document*	Submitted herewith

101.PRE	XBRL Presentation Linkbase Document*	Submitted herewith

104	Cover Page Interactive Data File (contained in Exhibit 101)	Submitted herewith


Nine months ended June 30, 2025
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	151,756	$	261,581	$	124,831	$	538,168
Government		156,063		8,203		40,280		204,546
Total revenues	$	307,819	$	269,784	$	165,111	$	742,714

Geographic location:
United States	$	226,444	$	173,121	$	97,086	$	496,651
International		81,375		96,663		68,025		246,063
Total revenues	$	307,819	$	269,784	$	165,111	$	742,714

Revenue recognition method:
Point in time	$	166,191	$	216,423	$	32,522	$	415,136
Over time		141,628		53,361		132,589		327,578
Total revenues	$	307,819	$	269,784	$	165,111	$	742,714


Three months ended June 30, 2024
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	43,927	$	88,076	$	42,327	$	174,330
Government		43,308		2,201		13,729		59,238
Total revenues	$	87,235	$	90,277	$	56,056	$	233,568

Geographic location:
United States	$	69,228	$	54,063	$	32,575	$	155,866
International		18,007		36,214		23,481		77,702
Total revenues	$	87,235	$	90,277	$	56,056	$	233,568

Revenue recognition method:
Point in time	$	51,234	$	72,985	$	11,426	$	135,645
Over time		36,001		17,292		44,630		97,923
Total revenues	$	87,235	$	90,277	$	56,056	$	233,568


Nine months ended June 30, 2024
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	126,191	$	254,765	$	111,951	$	492,907
Government		115,088		5,805		31,821		152,714
Total revenues	$	241,279	$	260,570	$	143,772	$	645,621

Geographic location:
United States	$	190,264	$	165,789	$	82,370	$	438,423
International		51,015		94,781		61,402		207,198
Total revenues	$	241,279	$	260,570	$	143,772	$	645,621

Revenue recognition method:
Point in time	$	137,769	$	209,973	$	29,706	$	377,448
Over time		103,510		50,597		114,066		268,173
Total revenues	$	241,279	$	260,570	$	143,772	$	645,621

	ESCO TECHNOLOGIES INC.

	/s/ Christopher L. Tucker
	Christopher L. Tucker
	Senior Vice President and Chief Financial Officer
	(As duly authorized officer and principal accounting and financial officer of the registrant)

Dated: August 11, 2025

	/s/ Bryan H. Sayler
	Bryan H. Sayler
	President and Chief Executive Officer