Esco Technologies Inc 10-Q for FY2026 Q2

Esco Technologies Inc (ESE)

10-Q 2026-05-11 For: 2026-03-31

Added on May 11, 2026

About this 10-Q

Esco Technologies Inc filed this 10-Q on May 11, 2026, covering the quarter ended March 31, 2026 (FY2026 Q2).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $309.34M; up 33.5% from $231.78M a year earlier
Net income: $34.73M; up 11.9% from net income of $31.03M a year earlier
Diluted EPS: $1.34; up 11.7% from $1.20 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 April 30, 2026
Common stock, $.01 par value per share		25,907,172


	Three Months Ended
	March,
	2026		2025
Net sales	$	309,341	231,777
Costs and expenses:
Cost of sales		178,026	132,504
Selling, general and administrative expenses		62,830	54,294
Amortization of intangible assets		20,420	7,989
Interest expense, net		2,399	2,195
Other expenses (income), net		1,802	375
Total costs and expenses		265,477	197,357

Earnings before income taxes		43,864	34,420
Income tax expense		10,308	8,037
Earnings from continuing operations		33,556	26,383
Earnings from discontinued operations, net of tax expense of $363 and $1,429		1,177	4,650

Net earnings	$	34,733	31,033

Earnings per share:
Basic – Continuing operations	$	1.29	1.02
– Discontinued operations		0.05	0.18
– Net earnings	$	1.34	1.20

Diluted – Continuing operations	$	1.29	1.02
– Discontinued operations		0.05	0.18
– Net earnings	$	1.34	1.20


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026


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


		Six Months Ended
		March 31,
		2026			2025

Net sales		$	599,000		446,370
Costs and expenses:
Cost of sales			347,766		256,718
Selling, general and administrative expenses			124,037		109,263
Amortization of intangible assets			40,744		15,982
Interest expense, net			5,279		4,452
Other expenses (income), net			1,832		(262)
Total costs and expenses			519,658		386,153

Earnings before income taxes			79,342		60,217
Income tax expense			17,095		13,527
Earnings from continuing operations			62,247		46,690
Earnings from discontinued operations, net of tax expense of $363 and $2,407			1,177		7,816

Net earnings		$	63,424		54,506

Earnings per share:

Basic – Continuing operations		$	2.40		1.81
– Discontinued operations			0.05		0.30
– Net earnings		$	2.45		2.11

Diluted – Continuing operations		$	2.40		1.81
– Discontinued operations			0.05		0.30
– Net earnings		$	2.45		2.11


		March 31,			September 30,
		2026			2025
ASSETS
Current assets:
Cash and cash equivalents		$	92,252			101,350
Accounts receivable, net of allowance for credit losses of $3,644 and $3,205, respectively			256,835			253,554
Contract assets			103,532			90,730
Inventories			237,090			217,807
Other current assets			37,084			25,065
Total current assets			726,793			688,506
Property, plant and equipment, net of accumulated depreciation of $197,427 and $186,796, respectively			170,860			172,493
Intangible assets, net of accumulated amortization of $327,709 and $286,965, respectively			682,372			723,973
Goodwill			761,181			761,931
Operating lease assets			48,977			47,707
Other assets			15,622			15,778
Total assets		$	2,405,805			2,410,388

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		$	20,000			20,000
Accounts payable			106,677			96,534
Contract liabilities			269,402			216,590
Accrued salaries			38,936			53,301
Income tax payable - current			5,619			62,007
Accrued other expenses			59,731			59,716
Total current liabilities			500,365			508,148
Deferred tax liabilities			115,140			112,390
Non-current operating lease liabilities			45,707			44,403
Other liabilities			34,173			38,576
Long-term debt			125,000			166,000
Total liabilities			820,385			869,517
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 30,963,943 and 30,886,024 shares, respectively			310			309
Additional paid-in capital			312,304			316,194
Retained earnings			1,433,192			1,373,911
Accumulated other comprehensive income (loss), net of tax			(13,311)			(2,468)
			1,732,495			1,687,946
Less treasury stock, at cost: 5,056,771 and 5,056,771 common shares, respectively			(147,075)			(147,075)
Total shareholders’ equity			1,585,420			1,540,871
Total liabilities and shareholders’ equity		$	2,405,805			2,410,388


	Three Months			Six Months
	Ended March 31,			Ended March 31,
	2026	2025		2026		2025
Weighted Average Shares Outstanding — Basic	25,902	25,816		25,877		25,798
Dilutive Shares	36	61		32		57
Adjusted Shares — Diluted	25,938	25,877		25,909		25,855


	March 31,		September 30,
(In thousands)	2026		2025
Finished goods	$	50,740	52,644
Work in process		63,243	46,825
Raw materials		123,107	118,338
Total inventories	$	237,090	217,807


		March 31,			September 30,
(Dollars in thousands)		2026			2025
Goodwill		$	761,181		761,931

Intangible assets with determinable lives:
Patents
Gross carrying amount		$	7,618		7,607
Less: accumulated amortization			2,030		1,775
Net		$	5,588		5,832

Capitalized software
Gross carrying amount		$	143,307		138,144
Less: accumulated amortization			106,097		100,818
Net		$	37,210		37,326

Customer relationships
Gross carrying amount		$	620,238		625,535
Less: accumulated amortization			178,987		159,543
Net		$	441,251		465,992

Other
Gross carrying amount		$	76,331		76,991
Less: accumulated amortization			40,595		24,829
Net		$	35,736		52,162
Intangible assets with indefinite lives:
Trade names		$	162,587		162,661


(Dollars in millions)	A&D		Test	USG		Total
Balance as of September 30, 2025	$	334.0	67.8	360.1		761.9
Acquisition activity and other		5.1	—	—		5.1
Foreign currency translation		(3.3)	(0.9)	(1.6)		(5.8)
Balance as of March 31, 2026	$	335.8	66.9	358.5		761.2


Three Months Ended March 31, 2026									Segment
(In thousands)		A&D			USG		Test		Total
Net Sales		$	150,310		93,529		65,502			309,341

Cost of sales			90,200		43,343		44,482
SG&A expense			16,976		24,871		10,235
Amortization of intangible assets			161		2,035		508
Other expenses (income), net			6		794		1,504
Segment profit (loss)		$	42,967		22,486		8,773			74,226

Depreciation and Amortization		$	3,465		4,126		1,465			9,056
Segment Assets		$	402,119		280,735		196,281			879,135
Capital Expenditures		$	5,542		1,062		618			7,222

Reconciliation of segment profit to Earnings before Income Taxes

Segment profit total from above									$	74,226
Less:
Unallocated Corporate SG&A and Other expense (income), net										(10,247)
Unallocated amortization of intangible assets										(17,716)
Interest expense, net										(2,399)
Earnings before Income Taxes									$	43,864

Reconciliation of segment depreciation and amortization to consolidated totals

Segment Depreciation and Amortization									$	9,056
Add: Corporate Depreciation and Amortization										17,781
Consolidated totals									$	26,837

Reconciliation of segment assets to consolidated totals

Segment Assets total									$	879,135
Add:
Goodwill not allocated to segments										761,181
Acquired intangible assets not allocated to segments										639,574	(1)
Other unallocated amounts										125,915
Consolidated totals									$	2,405,805


Reconciliation of segment capital expenditures to consolidated totals

Segment Capital Expenditures	$	7,222
Add: Corporate Capital Expenditures		10
Consolidated totals	$	7,232


	Six Months Ended
	March 31,
	2026		2025
Cash flows from operating activities:
Net earnings	$	63,424	54,506
Adjustments to reconcile net earnings to net cash provided by operating activities:
(Earnings) loss from discontinued operations, net of tax		(1,177)	(7,816)
Depreciation and amortization		53,330	26,041
Stock compensation expense		6,565	5,323
Changes in assets and liabilities		7,304	(30,033)
Effect of deferred taxes		5,176	(1,714)
Net cash provided by operating activities – continuing operations		134,622	46,307
Net cash (used) provided by operating activities – discontinued operations		(59,340)	11,968
Net cash provided by operating activities		75,282	58,275
Cash flows from investing activities:
Acquisition of business, net of cash acquired		(10,232)	—
Capital expenditures		(13,134)	(14,864)
Additions to capitalized software and other		(4,801)	(5,465)
Net cash used by investing activities – continuing operations		(28,167)	(20,329)
Net cash provided (used) by investing activities – discontinued operations		1,540	(486)
Net cash used by investing activities		(26,627)	(20,815)
Cash flows from financing activities:
Proceeds from long-term debt		110,000	66,000
Principal payments on long-term debt		(151,000)	(100,000)
Dividends paid		(4,144)	(4,130)
Other		(10,644)	(6,146)
Net cash used by financing activities – continuing operations		(55,788)	(44,276)
Net cash used by financing activities – discontinued operations		—	—
Net cash used by financing activities		(55,788)	(44,276)
Effect of exchange rate changes on cash and cash equivalents		(1,965)	(1,750)
Net decrease in cash and cash equivalents		(9,098)	(8,566)
Cash and cash equivalents, beginning of period		101,350	65,963
Cash and cash equivalents, end of period	$	92,252	57,397

Supplemental cash flow information:
Interest paid	$	4,958	8,821
Income taxes paid (including state and foreign)	$	67,862	20,232


	March 31,		September 30,
(In thousands)	2026		2025
Revolving credit facility	$	45,000	25,000
Incremental facility (Term loan A)		100,000	161,000
Total borrowings	$	145,000	186,000
Current portion of long-term debt		(20,000)	(20,000)
Total long-term debt, less current portion	$	125,000	166,000


Three months ended March 31, 2026
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	55,937		89,982		55,229		201,148
Government		94,373		3,547		10,273		108,193
Total revenues	$	150,310		93,529		65,502		309,341

Geographic location:
United States	$	99,609		58,873		40,584		199,066
International		50,701		34,656		24,918		110,275
Total revenues	$	150,310		93,529		65,502		309,341

Revenue recognition method:
Point in time	$	69,877		75,227		15,188		160,292
Over time		80,433		18,302		50,314		149,049
Total revenues	$	150,310		93,529		65,502		309,341


Six months ended March 31, 2026
(In thousands)		A&D			USG		Test		Total
Customer type:
Commercial		$	101,733			175,721		101,546		379,000
Government			192,406			5,292		22,302		220,000
Total revenues		$	294,139			181,013		123,848		599,000

Geographic location:
United States		$	192,396			119,597		77,066		389,059
International			101,743			61,416		46,782		209,941
Total revenues		$	294,139			181,013		123,848		599,000

Revenue recognition method:
Point in time		$	136,412			143,515		27,304		307,231
Over time			157,727			37,498		96,544		291,769
Total revenues		$	294,139			181,013		123,848		599,000


Reconciliation of segment capital expenditures to consolidated totals

Segment Capital Expenditures	$	13,077
Add: Corporate Capital Expenditures		57
Consolidated totals	$	13,134


Three Months Ended March 31, 2025					Segment
(In thousands)	A&D		USG	Test	Total
Net Sales	$	89,627	90,767	51,383		231,777

Cost of sales		54,603	43,422	34,609
SG&A expense		10,594	24,343	9,699
Amortization of intangible assets		328	2,018	454
Other expenses (income), net		(115)	205	252
Segment profit (loss)	$	24,217	20,779	6,369		51,365

Depreciation and Amortization	$	2,836	3,864	1,354		8,054
Segment Assets	$	283,061	280,884	173,481		737,426
Capital Expenditures	$	3,489	3,596	1,635		8,720

Reconciliation of segment profit to Earnings before Income Taxes

Segment profit total from above					$	51,365
Less:
Unallocated Corporate SG&A and Other expense (income), net						(9,561)
Unallocated amortization of intangible assets						(5,189)
Interest expense, net						(2,195)
Earnings before Income Taxes					$	34,420

Reconciliation of segment depreciation and amortization to consolidated totals

Segment Depreciation and Amortization					$	8,054
Add: Corporate Depreciation and Amortization						5,016
Consolidated totals					$	13,070

Reconciliation of segment assets to consolidated totals

Segment Assets total					$	737,426
Add:
Goodwill not allocated to segments						526,258
Acquired intangible assets not allocated to segments						348,607
Other unallocated amounts						83,871
Consolidated totals					$	1,696,162


Six Months Ended March 31, 2025					Segment
(In thousands)	A&D		USG	Test	Total
Net Sales	$	171,495	177,427	97,448		446,370

Cost of sales		108,116	82,760	65,972
SG&A expense		21,462	50,259	18,749
Amortization of intangible assets		541	4,090	1,076
Other expenses (income), net		(293)	(950)	860
Segment profit (loss)	$	41,669	41,268	10,791		93,728

Depreciation and Amortization	$	5,486	7,752	2,729		15,967
Segment Assets	$	283,061	280,884	173,481		737,426
Capital Expenditures	$	5,922	5,585	2,505		14,012

Reconciliation of segment profit to Earnings before Income Taxes

Segment profit total from above					$	93,728
Less:
Unallocated Corporate SG&A and Other expense (income), net						(18,784)
Unallocated amortization of intangible assets						(10,275)
Interest expense, net						(4,452)
Earnings before Income Taxes					$	60,217

Reconciliation of segment depreciation and amortization to consolidated totals

Segment Depreciation and Amortization					$	15,967
Add: Corporate Depreciation and Amortization						10,074
Consolidated totals					$	26,041

Reconciliation of segment assets to consolidated totals

Segment Assets total					$	737,426
Add:
Goodwill not allocated to segments						526,258
Acquired intangible assets not allocated to segments						348,607
Other unallocated amounts						83,871
Consolidated totals					$	1,696,162


	Three Months Ended March 31,			Six Months Ended March 31,
	2026		2025	2026	2025
Common stock
Beginning balance	$	309	309	309	308
Stock plans		1	—	1	1
Ending balance	$	310	309	310	309

Additional paid-in-capital
Beginning balance	$	308,929	308,143	316,194	311,942
Stock plans		3,375	3,295	(3,890)	(504)
Ending balance	$	312,304	311,438	312,304	311,438

Retained earnings
Beginning balance	$	1,400,530	1,104,359	1,373,911	1,082,950
Net earnings common stockholders		34,733	31,033	63,424	54,506
Dividends paid		(2,071)	(2,066)	(4,143)	(4,130)
Ending balance	$	1,433,192	1,133,326	1,433,192	1,133,326

Accumulated other comprehensive income (loss)
Beginning balance	$	(1,829)	(28,803)	(2,468)	(10,775)
Foreign currency translation		(11,482)	8,133	(10,843)	(9,895)
Ending balance	$	(13,311)	(20,670)	(13,311)	(20,670)

Treasury stock
Beginning balance	$	(147,075)	(147,075)	(147,075)	(147,075)
Share repurchases		—	—	—	—
Ending balance	$	(147,075)	(147,075)	(147,075)	(147,075)

Total equity	$	1,585,420	1,277,328	1,585,420	1,277,328


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2026 (excluding the six months ended March 31, 2026)	$	4,240	1,150
2027		8,306	2,357
2028		8,132	2,417
2029		6,647	2,478
2030 and thereafter		37,651	11,575
Total minimum lease payments		64,976	19,977
Less: amounts representing interest		13,092	4,191
Present value of net minimum lease payments	$	51,884	15,786
Less: current portion of lease obligations		6,177	1,616
Non-current portion of lease obligations		45,707	14,170

ROU assets	$	48,977	11,450

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 10.1(c) to the Company’s Form 10-K for the fiscal year ended September 30, 2024

10.1	Twelfth Amendment and Restatement of Employee Stock Purchase Plan, effective January 30, 2026	Exhibit 10.1 to the Company’s Form 8-K filed February 5, 2026

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

	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: May 11, 2026

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