ESE
$135.31
Esco Technologies
$1.85
1.39%
Earnings Details
Quarter September 2024
Thursday, November 14, 2024 4:15:00 PM
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Summary

ESCO Technologies Guides Revenue Below Estimates

Esco Technologies (ESE) reported Quarter September 2024 earnings of $1.46 per share on revenue of $298.5 million. The consensus earnings estimate was $1.43 per share. Revenue grew 9.5% on a year-over-year basis.

The company said it expects first quarter non-GAAP earnings of $0.68 to $0.75 per share. The current consensus earnings estimate is $0.75 per share for the quarter ending December 31, 2024. The company also said it expects fiscal 2025 non-GAAP earnings of $4.70 to $4.90 per share on revenue of $1.09 billion to $1.11 billion. The current consensus earnings estimate is $4.81 per share on revenue of $1.17 billion for the year ending September 30, 2025.

ESCO Technologies Inc designs and manufactures specialty filtration products including hydraulic filter elements and fluid control devices used in commercial aerospace applications, filter mechanisms used in micro-propulsion devices for satellites.

Results
Reported Earnings
$1.46
Earnings Whisper
-
Consensus Estimate
$1.43
Reported Revenue
$298.5 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

ESCO Reports Fourth Quarter and Fiscal 2024 Results

St. Louis, Nov. 14, 2024 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the fourth quarter and fiscal year ended September 30, 2024 (Q4 2024 and FY 2024, respectively).

Operating Highlights

  • Q4 2024 Sales increased $26 million (9.5 percent) to $299 million compared to $273 million in Q4 2023. Q4 organic sales increased $23 million (8.5 percent) and the MPE acquisition contributed $3 million (1.0 percent) of revenue in the quarter.   
  • FY 2024 Sales increased $71 million (7.4 percent) to $1.03 billion compared to $956 million in FY 2023. Organic sales increased $61 million (6.4 percent) and the MPE acquisition added $10 million (1.0 percent) of revenue growth for the full year.   
  • Q4 2024 GAAP EPS increased 6.5 percent to $1.32 per share compared to $1.24 per share in Q4 2023. Q4 2024 Adjusted EPS increased 16.8 percent to $1.46 per share compared to $1.25 per share in Q4 2023.
  • FY 2024 GAAP EPS increased 10.1 percent to $3.94 per share compared to $3.58 per share in FY 2023. FY 2024 Adjusted EPS increased 13.0 percent to $4.18 per share compared to $3.70 per share in FY 2023.
  • Q4 2024 Entered Orders decreased $51 million (14.9 percent) to $289 million (book-to-bill of 0.97x).
  • FY 2024 Entered Orders increased $100 million (9.7 percent) to $1.1 billion (book-to-bill of 1.10x), resulting in record year-end backlog of $879 million.
  • Net cash provided by operating activities was $72 million in Q4 2024 and $128 million for FY 2024 (an increase of $51 million compared to FY 2023).

Bryan Sayler, Chief Executive Officer and President, commented, “We finished the year strong with a solid Q4, highlighted by 9 percent sales growth, 130 basis points of Adjusted EBIT margin improvement, and a 17 percent increase in Adjusted EPS. It was great to see all three segments deliver sales growth and margin improvement in the quarter.   We were also able to offset the impacts of profitability erosion on Space development programs at VACCO through outstanding performance across our other businesses. PTI and Crissair in particular delivered excellent results in the quarter.   

“Overall, it was a great year as we delivered record financial performance and notably eclipsed the $1 billion mark on sales and orders.   I would like to thank our entire team for their hard work and dedication in achieving these excellent results. We could not deliver multiple record years in a row without the strong and engaged teams that exist across the Company.   

“As we enter 2025 there is a lot to be excited about across the company and we continue to see strong growth drivers in place across our core aerospace, Navy, and electric power end markets.”   

Segment Performance

Aerospace & Defense (A&D)

  • Q4 2024 sales increased $17 million (16.2 percent) to $124 million from $107 million in Q4 2023.   FY 2024 sales increased $56 million (14.2 percent) to $448 million from $392 million in FY 2023.   Sales growth in both the quarter and the year was driven by strength across Navy, commercial aerospace, and defense aerospace programs.  
  • Q4 2024 EBIT increased $4.7 million to $23.4 million from $18.7 million in Q4 2023. Adjusted EBIT increased $5.1 million in Q4 2024 to $24.2 million (19.4 percent margin) from $19.1 million (17.8 percent margin) in Q4 2023. FY 2024 EBIT increased $13.1 million to $84.7 million from $71.6 million in FY 2023. FY 2024 Adjusted EBIT increased $12.8 million to $85.9 million (19.2 percent margin) from $73.1 million (18.6 percent margin) in FY 2023. Leverage on higher volume and price increases more than offset margin erosion on certain space development contracts and inflationary pressures in both the quarter and the year.
  • Q4 2024 entered orders decreased $47 million (26.7 percent) to $130 million (book-to-bill of 1.05). Orders were lower in the quarter due to the timing of large Navy orders in the prior year Q4 (machining of Virginia Class Block V hull treatments and ejection valves). FY 2024 entered orders increased $96 million (20.6 percent) to $564 million (book-to-bill of 1.26). Growth in the year was driven by defense and commercial aerospace and large Navy orders (Virginia Class Block V additional hull treatments and QARMS), resulting in record year-end backlog of $600 million.

Utility Solutions Group (USG)

  • Q4 2024 sales increased $6 million (6.2 percent) to $108 million from $102 million in Q4 2023. Doble sales increased by $4.7 million (5.6 percent) and NRG sales increased by $1.7 million (8.6 percent). FY 2024 sales increased $27 million (7.8 percent) to $369 million from $342 million in FY 2023. Doble sales increased $19 million (6.8 percent) and NRG sales increased $8 million (12.2 percent) for the year. Sales growth in both the quarter and the year was driven by services and condition monitoring partially offset by lower protection testing at Doble and strong performance across our renewables product lines at NRG.
  • Q4 2024 EBIT and Adjusted EBIT both increased $2.4 million to $28.6 million (26.4 percent margin) from $26.2 million (25.7 percent margin) in Q4 2023. FY 2024 EBIT increased $9.2 million to $85.9 million from $76.7 million in FY 2023. FY 2024 Adjusted EBIT also increased $9.2 million to $86.1 million (23.3 percent margin) from $76.9 million (22.5 percent margin) in FY 2023. Adjusted EBIT increases for the quarter and year were largely driven by leverage on higher volumes and price increases, partially offset by inflationary pressures.
  • Q4 2024 entered orders increased $2 million (2.2 percent) to $100 million (book-to-bill of 0.92) as Doble orders decreased $5 million (5.4 percent) to $81 million and NRG orders increased $7 million (56.0 percent) to $19 million compared to the prior year quarter. FY 2024 entered orders increased $8 million (2.3 percent) to $356 million (book-to-bill of 0.96) resulting in year-end backlog of $120 million. For the year, Doble orders increased $11 million (3.9 percent) on increased electric utility spending and NRG orders decreased $3 million (4.3 percent) as the market moved beyond last year’s elevated activity related to the initial Inflation Reduction Act spending.

RF Test & Measurement (Test)

  • Q4 2024 sales increased $2 million (3.6 percent) to $66 million from $64 million in Q4 2023. Organic sales were down slightly, but more than offset by $2.8 million of revenue related to the MPE acquisition which was completed in Q1 2024.   FY 2024 sales decreased $12 million (5.3 percent) to $210 million.   Test’s revenues were somewhat soft throughout the year related to lower wireless sales and weakness in China. However, the addition of MPE and strength in medical shielding and T&M projects for Aerospace and Defense customers helped drive a return to year-over-year growth in the back half of the year.
  • Q4 2024 EBIT and Adjusted EBIT both increased $0.9 million to $12.0 million (18.3 percent margin) from $11.1 million (17.5 percent margin) in Q4 2023. Test’s record Q4 margin was driven by high-margin MPE content, cost reduction actions and price increases, partially offset by inflationary pressures. FY 2024 EBIT decreased $3.8 million to $28.6 million from $32.4 million in FY 2023. FY 2024 Adjusted EBIT decreased $3.3 million to $29.1 million (13.9 percent margin) from $32.4 million (14.6 percent margin) in FY 2023. For the year margin was impacted by lower sales of high-margin wireless and US filters volume and inflationary pressures, largely mitigated by price increases, cost reduction actions, and the addition of higher margin MPE content.
  • Q4 2024 entered orders decreased $5.5 million (8.5 percent) to $59 million. The decrease was primarily related to a large utility shielding order that was booked in Q4 2023. FY 2024 entered orders decreased $4 million to $213 million (book-to-bill of 1.02) resulting in year-end backlog of $159 million.   The decrease in orders for the year was primarily driven by lower wireless activity and delays on test and measurement projects in China.

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. The UK government is currently assessing the transaction, and we are optimistic that the assessment will be positively resolved. Our current expectation would be to close the transaction in our second 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.

Business Outlook – 2025
Management expects growth in sales, Adjusted EBIT, and Adjusted EBITDA across each of the Company’s business segments in 2025. Our FY 2025 guidance excludes the impacts of:

  • SM&P – the SM&P acquisition is expected to close in Q2 FY’25 and our guidance will be adjusted after the closing.
  • Our ongoing strategic review of the Space business at VACCO.

Management’s expectations for growth in 2025 compared to 2024:

  • Net sales are expected to grow 6 to 8 percent to a range of $1.09 to $1.11 billion on a consolidated basis, with A&D growing 7 to 9 percent, USG growing 7 to 9 percent, and Test growing 3 to 5 percent.
  • Adjusted EBIT is expected to increase approximately 12 to 15 percent with Adjusted EBIT margins increasing to 15.3 to 15.7 percent of sales.
  • Adjusted EBITDA is expected to increase approximately 10 to 13 percent with Adjusted EBITDA margins increasing to 20.5 to 21.0 percent of sales.
  • The effective income tax rate is expected to be in the range of 23.0 to 23.5 percent in 2025.
  • FY 2025 Adjusted EPS is expected to increase 12 to 17 percent to a range of $4.70 to $4.90 per share.
  • Management expects Q1 2025 Adjusted EPS to increase 10 to 21 percent compared to the prior year first quarter and to be in the range of $0.68 - $0.75 per share. Consistent with prior years, revenues and Adjusted EPS are expected to grow sequentially throughout the year.

VACCO Space Business Strategic Review
The Company is in the process of conducting a strategic review of alternatives for the Space business at VACCO. The intent is to optimize ESCO’s portfolio of businesses and create value for ESCO shareholders. This decision was made as part of our continual strategic portfolio analysis, which is focused on positioning the Company to serve high-growth markets that have high-margin potential. As we conduct this review, we remain committed to executing on our current Space programs and serving the needs of our customers. VACCO operates two distinct product lines today, Space and Defense. As this review has evolved, our key consideration has become the feasibility of splitting these two businesses apart.

There is no deadline or definitive timetable for completion of the strategic alternatives review process and there can be no assurance that this process will result in the Company pursuing a transaction or any other strategic outcome. The Company does not intend to make any further public comment regarding the review of strategic alternatives for the Space business at VACCO until it has been completed or the Company determines that a disclosure is required or otherwise deemed appropriate.

Share Repurchase Program
The Company did not repurchase any shares of stock during Q4 2024. During FY 2024 the Company repurchased approximately 80,000 shares for $8 million.

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on January 17, 2025 to stockholders of record on January 2, 2025.  

2025 Annual Meeting
The 2025 Annual Meeting of the Company’s shareholders will be held on February 4, 2025.

Conference Call
The Company will host a conference call today, November 14, at 4:00 p.m. Central Time, to discuss the Company’s Q4 2024 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, 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 release, 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, 2023 and the following: the timing and outcome, if any, of the Company’s strategic alternatives review for the Space business at VACCO; 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.

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
September 30,
2024
 Three Months
Ended
September 30,
2023
 
         
Net Sales $298,533 272,647 
Cost and Expenses:     
 Cost of sales 178,808 164,424 
 Selling, general and administrative expenses 59,995 56,555 
 Amortization of intangible assets 8,219 7,930 
 Interest expense 6,019 2,347 
 Other expenses (income), net 1,450 199 
  Total costs and expenses 254,491 231,455 
         
Earnings before income taxes 44,042 41,192 
Income tax expense 9,779 9,195 
         
  Net earnings$34,263 31,997 
         
 Earnings Per Share (EPS)     
         
  Diluted - GAAP$1.32 1.24 
         
  Diluted - As Adjusted Basis$1.46(1)1.25(2)
         
  Diluted average common shares O/S: 25,854 25,862 
         
(1)Q4 2024 Adjusted EPS excludes $0.14 per share of after-tax charges consisting primarily of $0.09 of debt financing and $0.03 of acquisition costs at Corporate related to the pending SM&P acquisition that was announced in July 2024, and $0.02 of restructuring charges (primarily severance) in the A&D segment.
         
(2)Q4 2023 Adjusted EPS excludes $0.01 per share of after-tax restructuring charges primarily at Westland (severance and asset write-off).

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Operations (Unaudited) 
(Dollars in thousands, except per share amounts) 
   
     Year Ended
September 30,
2024
 Year Ended
September 30,
2023
 
         
Net Sales $1,026,759 956,033 
Cost and Expenses:     
 Cost of sales 622,741 580,377 
 Selling, general and administrative expenses 224,015 217,110 
 Amortization of intangible assets 32,804 28,953 
 Interest expense 15,247 8,769 
 Other expenses (income), net 2,063 1,877 
  Total costs and expenses 896,870 837,086 
         
Earnings before income taxes 129,889 118,947 
Income tax expense 28,008 26,402 
         
  Net earnings$101,881 92,545 
         
 Earnings Per Share (EPS)     
         
  Diluted - GAAP$3.94 3.58 
         
  Diluted - As Adjusted Basis$4.18(1)3.70(2)
         
  Diluted average common shares O/S: 25,872 25,879 
         
(1)FY 24 Adjusted EPS excludes $0.24 per share of after-tax charges consisting primarily of $0.09 of debt financing and $0.06 of acquisition costs at Corporate related to the pending SM&P acquisition that was announced in July 2024; $0.05 of restructuring charges (primarily severance) in the A&D, Test and USG segments; and $0.04 of MPE acquisition backlog and inventory step-up charges.
         
(2)FY 23 Adjusted EPS excludes $0.12 per share of after-tax charges consisting of $0.06 of executive management transition costs at Corporate, $0.02 of CMT acquisition inventory step-up charges, $0.03 of restructuring charges within the A&D segment and $0.01 of Corporate acquisition related costs.

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
   
    GAAP As Adjusted 
    Q4 2024 Q4 2023 Q4 2024 Q4 2023 
Net Sales          
 Aerospace & Defense$124,291  107,009  124,291  107,009  
 USG 108,491  102,148  108,491  102,148  
 Test 65,751  63,490  65,751  63,490  
  Totals$298,533  272,647  298,533  272,647  
            
EBIT           
 Aerospace & Defense$23,351  18,647  24,170  19,075  
 USG 28,563  26,179  28,593  26,242  
 Test 12,015  11,115  12,015  11,115  
 Corporate (13,868) (12,402) (12,955) (12,402) 
  Consolidated EBIT 50,061  43,539  51,823  44,030  
  Less: Interest expense (6,019) (2,347) (2,969) (2,347) 
  Less: Income tax expense (9,779) (9,195) (10,886) (9,308) 
  Net earnings$34,263  31,997  37,968  32,375  
               
Note 1: Adjusted net earnings of $38.0 million in Q4 2024 exclude $3.7 million (or $0.14 per share) of after-tax charges consisting primarily of $0.12 of debt financing and acquisition costs at Corporate related to the pending SM&P acquisition that was announced in July 2024 and $0.02 of restructuring charges (primarily severance) in the A&D segment.
            
Note 2: Adjusted net earnings of $32.4 million in Q4 2023 exclude $0.4 million (or $0.01 per share) of after-tax restructuring charges primarily at Westland (severance and asset write-off)
            
EBITDA Reconciliation to Net earnings:     Q4 2024 Q4 2023 
    Q4 2024 Q4 2023 As Adjusted As Adjusted 
Consolidated EBITDA$64,112  56,363  65,874  56,854  
Less: Depr & Amort (14,051) (12,824) (14,051) (12,824) 
Consolidated EBIT 50,061  43,539  51,823  44,030  
Less: Interest expense (6,019) (2,347) (2,969) (2,347) 
Less: Income tax expense (9,779) (9,195) (10,886) (9,308) 
Net earnings$34,263  31,997  37,968  32,375  
            

    
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
   
    GAAP As Adjusted 
    FY 2024 FY 2023 FY 2024 FY 2023 
Net Sales          
 Aerospace & Defense$448,175  392,443  448,175  392,443  
 USG 369,061  342,320  369,061  342,320  
 Test 209,523  221,270  209,523  221,270  
  Totals$1,026,759  956,033  1,026,759  956,033  
            
EBIT           
 Aerospace & Defense$84,747  71,643  85,917  73,070  
 USG 85,918  76,722  86,143  76,915  
 Test 28,629  32,395  29,110  32,395  
 Corporate (54,158) (53,044) (51,079) (50,531) 
  Consolidated EBIT 145,136  127,716  150,091  131,849  
  Less: Interest expense (15,247) (8,769) (12,197) (8,769) 
  Less: Income tax expense (28,008) (26,402) (29,849) (27,353) 
  Net earnings$101,881  92,545  108,045  95,727  
               
Note 1: Adjusted net earnings of $108.0 million in FY 2024 exclude $6.2 million (or $0.24 per share) of after-tax charges consisting primarily of $0.15 of debt financing and acquisition costs at Corporate related to the pending SM&P acquisition that was announced in July 2024; $0.05 of restructuring charges (primarily severance) in the A&D, Test and USG segments; and $0.04 of MPE acquisition backlog and inventory step-up charges.
            
Note 2: Adjusted net earnings of $95.7 million in FY 2023 exclude $3.2 million (or $0.12 per share) of after-tax charges consisting of $0.06 of executive management transition costs at Corporate, $0.02 of CMT acquisition inventory step-up charges, $0.03 of restructuring charges within the A&D segment, and $0.01 of Corporate acquisition related costs.
            
EBITDA Reconciliation to Net earnings:     FY 2024 FY 2023 
    FY 2024 FY 2023 As Adjusted As Adjusted 
Consolidated EBITDA$200,545  178,239  204,664  182,372  
Less: Depr & Amort (55,409) (50,523) (54,573) (50,523) 
Consolidated EBIT 145,136  127,716  150,091  131,849  
Less: Interest expense (15,247) (8,769) (12,197) (8,769) 
Less: Income tax expense (28,008) (26,402) (29,849) (27,353) 
Net earnings$101,881  92,545  108,045  95,727  
            

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
   
    September 30,
2024
 September 30,
2023
       
Assets     
 Cash and cash equivalents$65,963 41,866
 Accounts receivable, net 240,680 198,557
 Contract assets 130,534 138,633
 Inventories 209,164 184,067
 Other current assets 22,308 17,972
  Total current assets 668,649 581,095
 Property, plant and equipment, net 170,596 155,484
 Intangible assets, net 407,602 392,124
 Goodwill 539,899 503,177
 Operating lease assets 37,744 39,839
 Other assets 14,130 11,495
   $1,838,620 1,683,214
       
Liabilities and Shareholders' Equity    
 Current maturities of long-term debt$20,000 20,000
 Accounts payable 98,371 86,973
 Contract liabilities 124,845 112,277
 Other current liabilities 106,638 95,401
  Total current liabilities 349,854 314,651
 Deferred tax liabilities 75,333 75,531
 Non-current operating lease liabilities 34,810 36,554
 Other liabilities 39,273 43,336
 Long-term debt 102,000 82,000
 Shareholders' equity 1,237,350 1,131,142
   $1,838,620 1,683,214

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
     
  Year Ended September 30,
2024
 Year Ended September 30,
2023
Cash flows from operating activities:    
Net earnings$101,881  92,545 
Adjustments to reconcile net earnings to net cash    
provided by operating activities:    
Depreciation and amortization 55,409  50,523 
Stock compensation expense 8,599  8,910 
Changes in assets and liabilities (29,385) (68,821)
Effect of deferred taxes (8,962) (6,267)
Net cash provided by operating activities 127,542  76,890 
     
Cash flows from investing activities:    
Acquisition of business, net of cash acquired (56,383) (17,694)
Capital expenditures (36,166) (22,377)
Additions to capitalized software (12,090) (12,397)
Net cash used by investing activities (104,639) (52,468)
     
Cash flows from financing activities:    
Proceeds from long-term debt 217,000  103,000 
Principal payments on long-term debt and short-term borrowings (197,000) (154,000)
Dividends paid (8,246) (8,252)
Purchases of common stock into treasury (7,998) (12,401)
Debt issuance costs (2,988) (1,826)
Other (1,541) (4,851)
Net cash used by financing activities (773) (78,330)
     
Effect of exchange rate changes on cash and cash equivalents 1,967  (1,950)
     
Net increase (decrease) in cash and cash equivalents 24,097  (55,858)
Cash and cash equivalents, beginning of period 41,866  97,724 
Cash and cash equivalents, end of period$65,963  41,866 

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
   
Backlog And Entered Orders - Q4 2024 A&D USG Test Total
 Beginning Backlog - 7/1/24$594,742  128,890  165,027  888,659 
 Entered Orders 129,931  99,544  59,368  288,843 
 Sales  (124,291) (108,491) (65,751) (298,533)
 Ending Backlog - 9/30/24$600,382  119,943  158,644  878,969 
           
           
           
Backlog And Entered Orders - FY 2024 A&D USG Test Total
 Beginning Backlog - 10/1/23$484,069  133,459  154,834  772,362 
 Entered Orders 564,488  355,545  213,333  1,133,366 
 Sales  (448,175) (369,061) (209,523) (1,026,759)
 Ending Backlog - 9/30/24$600,382  119,943  158,644  878,969 

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
   
EPS – Adjusted Basis Reconciliation – Q4 2024   
 EPS – GAAP Basis – Q4 2024$1.32 
 Adjustments (defined below) 0.14 
 EPS – As Adjusted Basis – Q4 2024$1.46 
     
 Adjustments exclude $0.14 per share consisting of after-tax charges primarily of $0.09 of 
 debt financing and $0.03 of acquisition costs at Corporate related to the pending SM&P 
 acquisition, and $0.02 of restructuring charges (primarily severance) in the A&D segment. 
 The $0.14 of EPS adjustments per share consists of $4.8 million of pre-tax charges   
 offset by $1.1 million of tax benefit for net impact of $3.7 million.   
     
EPS – Adjusted Basis Reconciliation – FY 2024   
 EPS – GAAP Basis – FY 2024$3.94 
 Adjustments (defined below) 0.24 
 EPS – As Adjusted Basis – FY 2024$4.18 
     
 Adjustments exclude $0.24 per share of after-tax charges consisting primarily   
 of $0.09 of debt financing and $0.06 of acquisition costs at Corporate related to   
 the pending SM&P acquisition, $0.05 of restructuring charges (primarily severance)   
 in the A&D, Test and USG segments, and $0.04 of MPE acquisition backlog   
 and inventory step-up charges.   
 The $0.24 of EPS adjustments per share consists of $8.0 million of pre-tax charges   
 offset by $1.8 million of tax benefit for net impact of $6.2 million.   
     
EPS – Adjusted Basis Reconciliation – Q4 2023   
 EPS – GAAP Basis – Q4 2023$1.24 
 Adjustments (defined below) 0.01 
 EPS – As Adjusted Basis – Q4 2023$1.25 
     
 Adjustments exclude $0.01 per share consisting of after-tax restructuring   
 charges primarily at Westland (severance and asset write-off).   
 The $0.01 of EPS adjustments per share consists of $0.5 million of pre-tax charges   
 offset by $0.1 million of tax benefit for net impact of $0.4 million.   
     
EPS – Adjusted Basis Reconciliation – FY 2023   
 EPS – GAAP Basis – FY 2023$3.58 
 Adjustments (defined below) 0.12 
 EPS – As Adjusted Basis – FY 2023$3.70 
     
 Adjustments exclude $0.12 per share of after-tax charges consisting of executive   
 management transition costs at Corporate, CMT acquisition inventory step-up charges,  
 restructuring charges within the A&D segment and Corporate acquisition related costs.  
 The $0.12 of EPS adjustments per share consists of $4.1 million of pre-tax charges   
 offset by $0.9 million of tax benefit for net impact of $3.2 million.   

   
SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277


Source: ESCO Technologies Inc.