Esco Technologies Inc 10-Q for FY2026 Q1

Esco Technologies Inc (ESE)

10-Q 2026-02-09 For: 2025-12-31

Added on April 04, 2026

About this 10-Q

Esco Technologies Inc filed this 10-Q on February 9, 2026, covering the quarter ended December 31, 2025 (FY2026 Q1).

Headline figures

Quarter ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $289.66M; up 35.0% from $214.59M a year earlier
Net income: $28.69M; up 22.2% from net income of $23.47M a year earlier
Diluted EPS: $1.11; up 22.0% from $0.91 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 DRIVE, 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 January 31, 2026
Common stock, $.01 par value per share		25,895,762


	Three Months Ended
	December 31,
	2025		2024
Net sales	$	289,659	214,593
Costs and expenses:
Cost of sales		169,740	124,214
Selling, general and administrative expenses		61,207	54,969
Amortization of intangible assets		20,324	7,993
Interest expense, net		2,880	2,257
Other expenses (income), net		30	(637)
Total costs and expenses		254,181	188,796

Earnings before income taxes		35,478	25,797
Income tax expense		6,787	5,490
Net earnings from continuing operations	$	28,691	20,307
Earnings from discontinued operations, net of tax expense of $978		—	3,166
Net earnings		28,691	23,473

Earnings per share:
Basic – Continuing operations		1.11	0.79
– Discontinued operations		—	0.12
– Net earnings	$	1.11	0.91

Diluted – Continuing operations		1.11	0.79
– Discontinued operations		—	0.12
– Net earnings	$	1.11	0.91


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2025


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


		December 31,			September 30,
		2025			2025
ASSETS
Current assets:
Cash and cash equivalents		$	103,824			101,350
Accounts receivable, net of allowance for credit losses of $3,514 and $3,205, respectively			245,328			253,554
Contract assets, net			88,662			90,730
Inventories			227,153			217,807
Other current assets			24,686			25,065
Total current assets			689,653			688,506
Property, plant and equipment, net of accumulated depreciation of $192,611 and $186,796, respectively			171,810			172,493
Intangible assets, net of accumulated amortization of $307,289 and $286,965 respectively			706,383			723,973
Goodwill			767,375			761,931
Operating lease assets			46,592			47,707
Other assets			17,186			15,778
Total assets		$	2,398,999			2,410,388

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and short-term borrowings		$	20,511			20,000
Accounts payable			92,291			96,534
Contract liabilities, net			252,360			216,590
Accrued salaries			31,929			53,301
Income tax payable – current			60,478			62,007
Accrued other expenses			60,824			59,716
Total current liabilities			518,393			508,148
Deferred tax liabilities			115,776			112,390
Non-current operating lease liabilities			43,466			44,403
Other liabilities			35,500			38,576
Long-term debt			125,000			166,000
Total liabilities			838,135			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 30,952,504 and 30,886,024 shares, respectively			309			309
Additional paid-in capital			308,929			316,194
Retained earnings			1,400,530			1,373,911
Accumulated other comprehensive loss, net of tax			(1,829)			(2,468)
			1,707,939			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			1,560,864			1,540,871
Total liabilities and shareholders’ equity		$	2,398,999			2,410,388


	Three Months
	Ended December 31,
	2025	2024
Weighted Average Shares Outstanding — Basic	25,855	25,781
Dilutive Shares	27	53
Adjusted Shares — Diluted	25,882	25,834


	December 31,		September 30,
(In thousands)	2025		2025
Finished goods	$	51,803	52,644
Work in process		55,085	46,825
Raw materials		120,265	118,338
Total inventories	$	227,153	217,807


		December 31,			September 30,
(Dollars in thousands)		2025			2025
Goodwill		$	767,375		761,931

Intangible assets with determinable lives:
Patents
Gross carrying amount		$	7,611		7,607
Less: accumulated amortization			1,902		1,775
Net		$	5,709		5,832

Capitalized software
Gross carrying amount		$	140,746		138,144
Less: accumulated amortization			103,462		100,818
Net		$	37,284		37,326

Customer relationships
Gross carrying amount		$	625,477		625,535
Less: accumulated amortization			169,244		159,543
Net		$	456,233		465,992

Other
Gross carrying amount		$	76,914		76,991
Less: accumulated amortization			32,681		24,829
Net		$	44,233		52,162
Intangible assets with indefinite lives:
Trade names		$	162,924		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		—		—	0.4		0.4
Balance as of December 31, 2025	$	339.1		67.8	360.5		767.4


Quarter Ended December 31, 2025									Segment
(In thousands)		A&D			USG		Test		Total		Corporate			Total
Sales		$	143,829		87,484		58,346		289,659			—			289,659
Cost of sales			90,071		39,930		39,739		169,740			—			169,740
SG&A expense			15,533		26,043		9,652		51,228			9,979			61,207
Amortization of intangible assets			155		2,043		514		2,712			17,612			20,324
Other expense (income), net			83		(61)		399		421			(391)			30
Segment profit (loss)		$	37,987		19,529		8,042		65,558			(27,200)			38,358
Interest expense											$	2,880			2,880
Earnings before income taxes														$	35,478

Depreciation and amortization		$	3,282		4,080		1,456		8,818			17,675			26,493
Segment assets			368,902		278,132		197,594		844,628			1,554,371			2,398,999
Capital expenditures		$	3,912		1,570		373		5,855			47			5,902


Quarter Ended December 31, 2024									Segment
(In thousands)		A&D			USG		Test		Total		Corporate			Total
Sales		$	81,868		86,660		46,065		214,593			—			214,593
Cost of sales			53,513		39,338		31,363		124,214			—			124,214
SG&A expense			10,868		25,916		9,050		45,834			9,135			54,969
Amortization of intangible assets			213		2,072		622		2,907			5,086			7,993
Other expense (income), net			(178)		(1,155)		608		(725)			88			(637)
Segment profit (loss)		$	17,452		20,489		4,422		42,363			(14,309)			28,054
Interest expense											$	2,257			2,257
Earnings before income taxes														$	25,797

Depreciation and amortization		$	2,650		3,888		1,375		7,913			5,058			12,971
Segment assets			267,549		280,071		163,352		710,972			959,720			1,670,692
Capital expenditures		$	2,464		1,990		670		5,124			—			5,124


	Three Months Ended December 31,
	2025		2024
Common stock
Beginning balance	$	309	308
Stock plans		—	1
Ending balance		309	309

Additional paid-in-capital
Beginning balance		316,194	311,942
Stock plans		(7,265)	(3,799)
Ending balance		308,929	308,143

Retained earnings
Beginning balance		1,373,911	1,082,950
Net earnings common stockholders		28,691	23,473
Dividends paid		(2,072)	(2,064)
Ending balance		1,400,530	1,104,359

Accumulated other comprehensive income (loss)
Beginning balance		(2,468)	(10,775)
Foreign currency translation		639	(18,028)
Ending balance		(1,829)	(28,803)

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

Total equity	$	1,560,864	1,236,933


(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	45,796	$	85,739	$	46,317	$	177,852
Government		98,033		1,745		12,029		111,807
Total revenues	$	143,829	$	87,484	$	58,346	$	289,659

Geographic location:
United States	$	92,786	$	60,724	$	36,482	$	189,992
International		51,043		26,760		21,864		99,667
Total revenues	$	143,829	$	87,484	$	58,346	$	289,659

Revenue recognition method:
Point in time	$	66,534	$	68,289	$	9,217	$	144,040
Over time		77,295		19,195		49,129		145,619
Total revenues	$	143,829	$	87,484	$	58,346	$	289,659


(In thousands)		A&D			USG		Test		Total
Customer type:
Commercial		$	45,755		$	84,279	$	36,349	$	166,383
Government			36,113			2,381		9,716		48,210
Total revenues		$	81,868		$	86,660	$	46,065	$	214,593

Geographic location:
United States		$	65,314		$	59,917	$	28,630	$	153,861
International			16,554			26,743		17,435		60,732
Total revenues		$	81,868		$	86,660	$	46,065	$	214,593

Revenue recognition method:
Point in time		$	46,995		$	69,278	$	9,791	$	126,064
Over time			34,873			17,382		36,274		88,529
Total revenues		$	81,868		$	86,660	$	46,065	$	214,593


		Three Months Ended		Three Months Ended
		December 31,		December 31,
		2025		2024
Weighted-average remaining lease term
Operating leases		9.1	years	8.5	years
Finance leases		9.5	years	10.2	years
Weighted-average discount rate
Operating leases		4.7	%	4.4	%
Finance leases		4.7	%	4.7	%


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2026(excluding the three months ended December 31, 2025)	$	6,056	1,723
2027		7,824	2,357
2028		7,696	2,417
2029		6,234	2,478
2030 and thereafter		33,708	11,575
Total minimum lease payments		61,518	20,550
Less: amounts representing interest		12,098	4,379
Present value of net minimum lease payments	$	49,420	16,171
Less: current portion of lease obligations		5,954	1,584
Non-current portion of lease obligations	$	43,466	14,587

ROU assets	$	46,592	11,822

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(a)	Form of Restricted Share Unit (RSU) Awards to Executive Officers under 2018 Omnibus Incentive Plan (FY 2026)	Filed herewith

10.1(b)	Form of Performance Share Unit (PSU) Awards to Executive Officers under 2018 Omnibus Incentive Plan (FY 2026)	Filed herewith

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: February 9, 2026


Performance Period:	The three-year period beginning on October 1, 20 and ending on September 30, 20 .

Performance Measures:	EBITDA and Return on Invested Capital (“ROIC”). See Performance Goal Table below and related Notes.

Vesting Date:	The last trading day of the month in which the Committee approves the resolution certifying (i) the performance achieved for each Performance Measure relative to the Performance Goal, and (ii) the rTSR Modifier, if applicable. The Committee will review the level of achievement of the Performance Goals and the applicability of the rTSR Modifier generally at the Committee meeting most closely following the end of the Performance Period. Any earned portion of the award will be converted into shares of Company Stock and distributed as soon as administratively feasible after the vesting date.

rTSR Modifier:	When applicable, the Relative Total Shareholder Return (“rTSR”) Modifier will be applied to the number of the Shares earned by achievement of the Performance Goals. See rTSR Modifier Table below and related Notes.

Performance Measure	Weight (Percent of Target Award	Performance Level	Performance Goals	PSU Conversion Rate into Shares as Percent of Target
EBITDA (See Note A)	__%	Below Threshold	Achieve less than __% of EBITDA target	0%
				Threshold	Achieve __% of EBITDA target	50%
				Target	Cumulative EBITDA through Performance Period = $___M	100%
				Maximum	Achieve ___% of EBITDA target	200%
ROIC (See Note B)	__%	Below Threshold	Achieve less than __% of ROIC target	0%
				Threshold	Achieve __% of ROIC target	50%
				Target	ROIC = __% for FY 20__	100%
				Maximum	Achieve __% of ROIC target	200%


Company’s TSR Rank compared to Peer Group	rTSR Modifier
Below 25^th percentile	0.__
25^th – 75^th percentile	1.0 (i.e. no modifier will be applied)
Above 75^th percentile	1.__

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