ESCO Reports Second Quarter Fiscal 2024 Results
May 09 2024 - 3:15PM
ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today
reported its operating results for the second quarter ended March
31, 2024 (Q2 2024).
Operating Highlights
- Q2 2024 Sales increased $20.0 million (9 percent) to $249.1
million compared to $229.1 million in Q2 2023. Q2 organic sales
increased $17.8 million (8 percent) and the MPE acquisition
contributed $2.2 million (1 percent) of revenue in the
quarter.
- Q2 2024 GAAP EPS increased 30 percent to $0.90 per share
compared to $0.69 per share in Q2 2023. Q2 2024 Adjusted EPS
increased 24 percent to $0.94 per share compared to $0.76 per share
in Q2 2023.
- Q2 2024 Entered Orders decreased $12.5 million (5 percent)
compared to the prior year period to $239.1 million (book-to-bill
of 0.96x), resulting in ending backlog of $838 million.
- Net cash provided by operating activities was $19 million YTD,
an increase of $25 million compared to the prior year period, as
cash flow was positively impacted by lower accounts receivable
balances and higher earnings.
- Net debt (total borrowings less cash on hand) was $132 million,
resulting in a 0.86x leverage ratio and $553 million in liquidity
as of March 31, 2024.
Bryan Sayler, Chief Executive Officer and President, commented,
“Q2 was a solid quarter highlighted by both top and bottom-line
growth. Revenue grew 9 percent as we continue to see favorable
dynamics in our key aerospace, Navy and utility end markets. The
sales performance translated to the bottom line very well as
Adjusted EPS increased 24 percent compared to the prior year
quarter.”
Segment PerformanceAerospace & Defense
(A&D)
- Sales increased $15.7 million (16 percent) to $114.7 million in
Q2 2024 from $99.0 million in Q2 2023. Sales growth was
driven by strength across Navy, commercial aerospace, and defense
aerospace programs.
- Q2 2024 EBIT increased $4.6 million to $23.4 million from $18.8
million in Q2 2023. Adjusted EBIT increased $4.0 million in Q2 2024
to $23.6 million (20.6 percent margin) from $19.6 million (19.8
percent margin) in Q2 2023. Margin improvement was driven by
leverage on revenue growth and price increases, partially offset by
inflationary pressures and mix.
- Entered Orders increased $4 million (4 percent) to $116 million
in Q2 2024 compared to $112 million in Q2 2023. The
increase in orders was primarily driven by strength in OEM and
aftermarket orders for both commercial and defense aerospace. The
orders in the quarter resulted in a segment book-to-bill of 1.01x
and ending backlog of $562 million.
Utility Solutions Group (USG)
- Sales increased $8.1 million (10 percent) to $87.3 million in
Q2 2024 from $79.2 million in Q2 2023. Doble’s sales increased by
$6.3 million (10 percent) driven by a strong quarter for services
and cybersecurity/compliance (DUCe) solutions. NRG sales increased
$1.8 million (13 percent) driven by higher demand for solar
products.
- EBIT increased $3.5 million (25 percent) in Q2 2024 to $17.6
million (20.1 percent margin) from $14.1 million (17.8 percent
margin) in Q2 2023. There were no adjustments in either period.
Margin improvement was driven by mix from increased service
business, leverage on revenue growth, and price increases,
partially offset by inflationary pressures.
- Entered Orders decreased $6 million (7 percent) to $79 million
in Q2 2024. Orders were down slightly at Doble and continued to
moderate at NRG. NRG’S orders were extremely strong in
FY’23 driven by a unique surge related to large orders at extended
lead-times as customers managed supply chain concerns and order
activity related to Inflation Reduction Act spending. We expect
orders for the renewables business to rebound as the market digests
last year’s elevated activity level and new projects are defined
and implemented. The segment book-to-bill was 0.91x in
the quarter, resulting in ending backlog of $119 million.
RF Test & Measurement (Test)
- Sales decreased $3.9 million (8 percent) to $47.1 million in Q2
2024 from $51.0 million in Q2 2023. Organic sales decreased $6.1
million primarily related to lower wireless, filters and acoustic
volume, partially offset by $2.2 million of revenue related to the
MPE acquisition which was completed in Q1 2024. In line
with our prior communication, our Test segment’s revenue continued
to be somewhat soft in Q2. While sales were down compared to the
prior year, they increased 16 percent sequentially.
- EBIT decreased $1.7 million in Q2 2024 to $5.5 million from
$7.2 million in Q2 2023. Adjusted EBIT decreased $1.5 million in Q2
2024 to $5.7 million (12.2 percent margin) from $7.2 million (14.2
percent margin) in Q2 2023. Margin was impacted by lower volume and
inflationary pressures, largely mitigated by price increases and
cost reduction actions.
- Entered Orders decreased $11 million (21 percent) to $44
million in Q2 2024. The decrease was primarily related
to lower wireless demand and delays on a few large projects,
partially offset by higher OTC filter, MPE, and services orders.
The segment book-to-bill was 0.93x in the quarter, resulting in
ending backlog of $156 million.
Share Repurchase ProgramDuring Q2 2024, the
Company repurchased approximately 72,000 shares for $7.2
million.
Dividend PaymentThe next quarterly cash
dividend of $0.08 per share will be paid on July 19, 2024 to
stockholders of record on July 3, 2024.
Business Outlook – 2024 Year-to-date
performance has tracked to expectations and full year adjusted
earnings per share guidance is being maintained in the range of
$4.15 to $4.30 (12 to 16 percent growth). This represents ESCO’s
third year in a row of double-digit earnings growth. This outlook
is based on sales in line with our initial guidance range of $1.02
to $1.04 billion (7 to 9 percent annual growth). Management’s
expectation is for Q3 Adjusted EPS in the range of $1.16 to $1.22.
Conference CallThe Company will host a
conference call today, May 9, at 4:00 p.m. Central Time, to discuss
the Company’s Q2 2024 results. A live audio webcast and an
accompanying slide presentation will be available on ESCO’s
investor website. For those unable to participate, a webcast replay
will be available after the call on ESCO’s investor website.
Forward-Looking StatementsStatements in this
press release regarding Management’s intentions, expectations and
guidance for fiscal 2024, including restructuring and cost
reduction efforts, 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 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 selected 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 recently acquired businesses.
Non-GAAP Financial MeasuresThe 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 MonthsEndedMarch 31, 2024 |
|
Three MonthsEndedMarch 31, 2023 |
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
249,129 |
|
229,136 |
|
Cost and
Expenses: |
|
|
|
|
|
|
Cost of sales |
|
152,347 |
|
142,296 |
|
|
Selling, general
and administrative expenses |
|
55,097 |
|
53,877 |
|
|
Amortization of
intangible assets |
|
8,572 |
|
7,030 |
|
|
Interest
expense |
|
3,226 |
|
2,269 |
|
|
Other expenses
(income), net |
|
666 |
|
314 |
|
|
|
Total costs and
expenses |
|
219,908 |
|
205,786 |
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes |
|
29,221 |
|
23,350 |
|
Income tax
expense |
|
6,002 |
|
5,472 |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
23,219 |
|
17,878 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted -
GAAP |
$ |
0.90 |
|
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - As
Adjusted Basis |
$ |
0.94 |
(1 |
) |
0.76 |
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
Diluted average
common shares O/S: |
|
25,847 |
|
25,895 |
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Q2 2024 Adjusted EPS
excludes $0.04 per share of after-tax charges consisting of: $0.02
of MPE acquisition backlog charges and $0.02 of restructuring
charges (primarily severance) within the Test and A&D
segments. |
|
|
|
|
|
|
|
|
|
(2 |
) |
Q2 2023 Adjusted EPS
excludes $0.07 per share of after-tax charges consisting of: $0.04
of executive management transition costs at Corporate, $0.02 of CMT
acquisition inventory step-up charges and $0.01 of restructuring
charges within the A&D segment. |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
|
Condensed Consolidated Statements of Operations (Unaudited) |
|
(Dollars in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
Six MonthsEndedMarch 31, 2024 |
|
Six MonthsEndedMarch 31, 2023 |
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
467,443 |
|
434,637 |
|
Cost and
Expenses: |
|
|
|
|
|
|
Cost of sales |
|
286,498 |
|
268,679 |
|
|
Selling, general
and administrative expenses |
|
109,065 |
|
105,179 |
|
|
Amortization of
intangible assets |
|
16,440 |
|
13,891 |
|
|
Interest
expense |
|
5,893 |
|
3,927 |
|
|
Other expenses
(income), net |
|
872 |
|
712 |
|
|
|
Total costs and
expenses |
|
418,768 |
|
392,388 |
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes |
|
48,675 |
|
42,249 |
|
Income tax
expense |
|
10,287 |
|
9,644 |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
38,388 |
|
32,605 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted -
GAAP |
$ |
1.49 |
|
1.26 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - As
Adjusted Basis |
$ |
1.56 |
(1 |
) |
1.36 |
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
Diluted average
common shares O/S: |
|
25,846 |
|
25,919 |
|
|
|
|
|
|
|
|
|
|
(1 |
) |
YTD Q2 2024 Adjusted
EPS excludes $0.07 per share of after-tax charges consisting of:
$0.05 of MPE acquisition backlog and inventory step-up charges and
acquisition costs and $0.02 of restructuring charges (primarily
severance) within the Test and A&D segments. |
|
|
|
|
|
|
|
|
|
(2 |
) |
YTD Q2 2023 Adjusted
EPS excludes $0.10 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 and $0.02 of
restructuring charges within the A&D segment. |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
Condensed Business Segment Information (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
GAAP |
|
As Adjusted |
|
|
|
|
|
Q2 2024 |
|
Q2 2023 |
|
Q2 2024 |
|
Q2 2023 |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
Aerospace &
Defense |
$ |
114,701 |
|
|
98,982 |
|
|
114,701 |
|
|
98,982 |
|
|
|
USG |
|
87,309 |
|
|
79,161 |
|
|
87,309 |
|
|
79,161 |
|
|
|
Test |
|
47,119 |
|
|
50,993 |
|
|
47,119 |
|
|
50,993 |
|
|
|
|
Totals |
$ |
249,129 |
|
|
229,136 |
|
|
249,129 |
|
|
229,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT |
|
|
|
|
|
|
|
|
|
|
|
Aerospace &
Defense |
$ |
23,377 |
|
|
18,795 |
|
|
23,640 |
|
|
19,595 |
|
|
|
USG |
|
17,575 |
|
|
14,061 |
|
|
17,575 |
|
|
14,061 |
|
|
|
Test |
|
5,542 |
|
|
7,226 |
|
|
5,745 |
|
|
7,226 |
|
|
|
Corporate |
|
(14,047 |
) |
|
(14,463 |
) |
|
(13,262 |
) |
|
(12,963 |
) |
|
|
|
Consolidated EBIT |
|
32,447 |
|
|
25,619 |
|
|
33,698 |
|
|
27,919 |
|
|
|
|
Less: Interest expense |
|
(3,226 |
) |
|
(2,269 |
) |
|
(3,226 |
) |
|
(2,269 |
) |
|
|
|
Less: Income tax expense |
|
(6,002 |
) |
|
(5,472 |
) |
|
(6,290 |
) |
|
(6,001 |
) |
|
|
|
Net earnings |
$ |
23,219 |
|
|
17,878 |
|
|
24,182 |
|
|
19,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: Adjusted
net earnings of $24.2 million in Q2 2024 exclude $0.04 per share of
after-tax charges consisting of: $0.02 of MPE acquisition backlog
charges and $0.02 of restructuring charges (primarily severance)
within the Test and A&D segments. |
|
|
|
|
|
|
|
|
|
|
|
|
Note 2: Adjusted
net earnings of $19.6 million in Q2 2023 exclude $0.07 per share of
after-tax charges consisting of: $0.04 of executive management
transition costs at Corporate, $0.02 of CMT acquisition inventory
step-up charges and $0.01 of restructuring charges within the
A&D segment. |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Reconciliation to Net earnings: |
|
|
|
|
|
Q2 2024 - |
|
Q2 2023 - |
|
|
|
|
|
Q2 2024 |
|
Q2 2023 |
|
As Adjusted |
|
As Adjusted |
|
Consolidated EBITDA |
$ |
46,550 |
|
|
38,162 |
|
|
47,174 |
|
|
40,462 |
|
|
Less:
Depr & Amort |
|
(14,103 |
) |
|
(12,543 |
) |
|
(13,476 |
) |
|
(12,543 |
) |
|
Consolidated EBIT |
|
32,447 |
|
|
25,619 |
|
|
33,698 |
|
|
27,919 |
|
|
Less:
Interest expense |
|
(3,226 |
) |
|
(2,269 |
) |
|
(3,226 |
) |
|
(2,269 |
) |
|
Less:
Income tax expense |
|
(6,002 |
) |
|
(5,472 |
) |
|
(6,290 |
) |
|
(6,001 |
) |
|
Net
earnings |
$ |
23,219 |
|
|
17,878 |
|
|
24,182 |
|
|
19,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
Condensed Business Segment Information (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
GAAP |
|
As Adjusted |
|
|
|
|
|
YTD |
|
YTD |
|
YTD |
|
YTD |
|
|
|
|
|
Q2 2024 |
|
Q2 2023 |
|
Q2 2024 |
|
Q2 2023 |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
Aerospace &
Defense |
$ |
209,434 |
|
|
181,965 |
|
|
209,434 |
|
|
181,965 |
|
|
|
USG |
|
170,293 |
|
|
150,206 |
|
|
170,293 |
|
|
150,206 |
|
|
|
Test |
|
87,716 |
|
|
102,466 |
|
|
87,716 |
|
|
102,466 |
|
|
|
|
Totals |
$ |
467,443 |
|
|
434,637 |
|
|
467,443 |
|
|
434,637 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT |
|
|
|
|
|
|
|
|
|
|
|
Aerospace &
Defense |
$ |
40,040 |
|
|
31,331 |
|
|
40,303 |
|
|
32,330 |
|
|
|
USG |
|
35,200 |
|
|
30,192 |
|
|
35,320 |
|
|
30,192 |
|
|
|
Test |
|
7,321 |
|
|
12,637 |
|
|
7,797 |
|
|
12,637 |
|
|
|
Corporate |
|
(27,993 |
) |
|
(27,984 |
) |
|
(26,557 |
) |
|
(25,691 |
) |
|
|
|
Consolidated EBIT |
|
54,568 |
|
|
46,176 |
|
|
56,863 |
|
|
49,468 |
|
|
|
|
Less: Interest expense |
|
(5,893 |
) |
|
(3,927 |
) |
|
(5,893 |
) |
|
(3,927 |
) |
|
|
|
Less: Income tax expense |
|
(10,287 |
) |
|
(9,644 |
) |
|
(10,815 |
) |
|
(10,401 |
) |
|
|
|
Net earnings |
$ |
38,388 |
|
|
32,605 |
|
|
40,155 |
|
|
35,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: Adjusted
net earnings of $40.2 million in YTD 2024 exclude $0.07 per share
of after-tax charges consisting of: $0.05 of MPE acquisition
backlog and inventory step-up charges and acquisition costs and
$0.02 of restructuring costs (primarily severance) within the Test
and A&D segments. |
|
|
|
|
|
|
|
|
|
|
|
|
Note 2: Adjusted
net earnings of $35.1 million in YTD 2023 exclude $0.10 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 and $0.02 of restructuring charges within the
A&D segment. |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Reconciliation to Net earnings: |
|
|
|
|
|
YTD |
|
YTD |
|
|
|
|
|
YTD |
|
YTD |
|
Q2 2024 - |
|
Q2 2023 - |
|
|
|
|
|
Q2 2024 |
|
Q2 2023 |
|
As Adj |
|
As Adj |
|
Consolidated EBITDA |
$ |
82,123 |
|
|
71,086 |
|
|
83,582 |
|
|
74,378 |
|
|
Less:
Depr & Amort |
|
(27,555 |
) |
|
(24,910 |
) |
|
(26,719 |
) |
|
(24,910 |
) |
|
Consolidated EBIT |
|
54,568 |
|
|
46,176 |
|
|
56,863 |
|
|
49,468 |
|
|
Less:
Interest expense |
|
(5,893 |
) |
|
(3,927 |
) |
|
(5,893 |
) |
|
(3,927 |
) |
|
Less:
Income tax expense |
|
(10,287 |
) |
|
(9,644 |
) |
|
(10,815 |
) |
|
(10,401 |
) |
|
Net
earnings |
$ |
38,388 |
|
|
32,605 |
|
|
40,155 |
|
|
35,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
March 31,2024 |
|
September 30,2023 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
59,436 |
|
41,866 |
|
Accounts
receivable, net |
|
187,535 |
|
198,557 |
|
Contract
assets |
|
139,303 |
|
138,633 |
|
Inventories |
|
211,338 |
|
184,067 |
|
Other current
assets |
|
24,310 |
|
17,972 |
|
|
Total current assets |
|
621,922 |
|
581,095 |
|
Property, plant
and equipment, net |
|
161,811 |
|
155,484 |
|
Intangible assets,
net |
|
414,872 |
|
392,124 |
|
Goodwill |
|
535,661 |
|
503,177 |
|
Operating lease
assets |
|
38,322 |
|
39,839 |
|
Other assets |
|
11,603 |
|
11,495 |
|
|
|
$ |
1,784,191 |
|
1,683,214 |
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
Current maturities
of long-term debt |
$ |
20,000 |
|
20,000 |
|
Accounts
payable |
|
81,961 |
|
86,973 |
|
Contract
liabilities |
|
107,357 |
|
112,277 |
|
Other current
liabilities |
|
79,612 |
|
95,401 |
|
|
Total current liabilities |
|
288,930 |
|
314,651 |
|
Deferred tax
liabilities |
|
80,648 |
|
75,531 |
|
Non-current
operating lease liabilities |
|
35,444 |
|
36,554 |
|
Other
liabilities |
|
41,759 |
|
43,336 |
|
Long-term
debt |
|
171,000 |
|
82,000 |
|
Shareholders'
equity |
|
1,166,410 |
|
1,131,142 |
|
|
|
$ |
1,784,191 |
|
1,683,214 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
Consolidated Statements of Cash Flows (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
Six MonthsEndedMarch 31, 2024 |
|
Six MonthsEndedMarch 31, 2023 |
Cash flows from operating
activities: |
|
|
|
|
Net earnings |
$ |
38,388 |
|
|
32,605 |
|
Adjustments to reconcile net
earnings to net cash |
|
|
|
|
provided (used) by operating
activities: |
|
|
|
|
Depreciation and
amortization |
|
27,555 |
|
|
24,910 |
|
Stock compensation expense |
|
4,144 |
|
|
5,309 |
|
Changes in assets and
liabilities |
|
(47,869 |
) |
|
(67,140 |
) |
Effect of deferred taxes |
|
(2,981 |
) |
|
(1,145 |
) |
Net cash provided (used) by
operating activities |
|
19,237 |
|
|
(5,461 |
) |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
Acquisition of business, net of
cash acquired |
|
(56,179 |
) |
|
(17,901 |
) |
Capital expenditures |
|
(16,301 |
) |
|
(10,305 |
) |
Additions to capitalized
software |
|
(5,912 |
) |
|
(5,918 |
) |
Net cash used by investing
activities |
|
(78,392 |
) |
|
(34,124 |
) |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
Proceeds from long-term debt |
|
154,000 |
|
|
68,000 |
|
Principal payments on long-term
debt and short-term borrowings |
|
(65,000 |
) |
|
(60,000 |
) |
Dividends paid |
|
(4,125 |
) |
|
(4,128 |
) |
Purchases of common stock into
treasury |
|
(7,189 |
) |
|
(12,217 |
) |
Other |
|
(1,432 |
) |
|
(2,374 |
) |
Net cash provided (used) by
financing activities |
|
76,254 |
|
|
(10,719 |
) |
|
|
|
|
|
Effect of exchange rate changes
on cash and cash equivalents |
|
471 |
|
|
801 |
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents |
|
17,570 |
|
|
(49,503 |
) |
Cash and cash equivalents,
beginning of period |
|
41,866 |
|
|
97,724 |
|
Cash and cash equivalents, end of
period |
$ |
59,436 |
|
|
48,221 |
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
Other Selected Financial Data (Unaudited) |
(Dollars in thousands) |
|
Backlog And Entered Orders - Q2 2024 |
|
A&D |
|
USG |
|
Test |
|
Total |
|
Beginning Backlog
- 1/1/24 |
$ |
560,893 |
|
|
127,439 |
|
|
159,436 |
|
|
847,768 |
|
|
Entered
Orders |
|
116,110 |
|
|
79,025 |
|
|
43,937 |
|
|
239,072 |
|
|
Sales |
|
|
(114,701 |
) |
|
(87,309 |
) |
|
(47,119 |
) |
|
(249,129 |
) |
|
Ending Backlog -
3/31/24 |
$ |
562,302 |
|
|
119,155 |
|
|
156,254 |
|
|
837,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog And Entered Orders - YTD Q2 2024 |
|
A&D |
|
USG |
|
Test |
|
Total |
|
Beginning Backlog
- 10/1/23 |
$ |
484,069 |
|
|
133,459 |
|
|
154,834 |
|
|
772,362 |
|
|
Entered
Orders |
|
287,667 |
|
|
155,989 |
|
|
89,136 |
|
|
532,792 |
|
|
Sales |
|
|
(209,434 |
) |
|
(170,293 |
) |
|
(87,716 |
) |
|
(467,443 |
) |
|
Ending Backlog -
3/31/24 |
$ |
562,302 |
|
|
119,155 |
|
|
156,254 |
|
|
837,711 |
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES |
Reconciliation of Non-GAAP Financial Measures (Unaudited) |
|
|
|
|
EPS – Adjusted
Basis Reconciliation – Q2 2024 |
|
|
|
EPS – GAAP Basis – Q2
2024 |
$ |
0.90 |
|
Adjustments (defined
below) |
|
0.04 |
|
EPS – As Adjusted Basis – Q2
2024 |
$ |
0.94 |
|
|
|
|
|
Adjustments
exclude $0.04 per share consisting of: $0.02 of MPE acquisition
backlog |
|
|
charges and $0.02 of
restructuring charges (primarily severance) within the Test |
|
|
|
and A&D segments in the
second quarter of 2024. |
|
|
|
The $0.04 of EPS adjustments
per share consists of $1,251K of pre-tax charges |
|
|
|
offset by $288K of tax benefit
for net impact of $963K. |
|
|
|
|
|
|
EPS – Adjusted
Basis Reconciliation – Q2 2023 |
|
|
|
EPS – GAAP Basis – Q2
2023 |
$ |
0.69 |
|
Adjustments (defined
below) |
|
0.07 |
|
EPS – As Adjusted Basis – Q2
2023 |
$ |
0.76 |
|
|
|
|
|
Adjustments
exclude $0.07 per share consisting of executive management
transition costs |
|
at Corporate, CMT
acquisition inventory step-up charges and restructuring charges
within |
|
the A&D segment in the
second quarter of 2023. |
|
|
|
The $0.07 of EPS adjustments
per share consists of $2,300K of pre-tax charges |
|
|
|
offset by $529K of tax benefit
for net impact of $1,771K. |
|
|
|
|
|
|
EPS – Adjusted
Basis Reconciliation – YTD Q2 2024 |
|
|
|
EPS – GAAP Basis – YTD Q2
2024 |
$ |
1.49 |
|
Adjustments (defined
below) |
|
0.07 |
|
EPS – As Adjusted Basis – YTD
Q2 2024 |
$ |
1.56 |
|
|
|
|
|
Adjustments
exclude $0.07 per share consisting of: $0.05 of MPE acquisition
backlog |
|
|
and inventory
step-up charges and acquisition costs, and $0.02 of restructuring
charges |
|
|
(primarily
severance) within the Test and A&D segments in the first six
months of 2024. |
|
The $0.07 of EPS adjustments
per share consists of $2,295K of pre-tax charges |
|
|
|
offset by $528K of tax benefit
for net impact of $1,767K. |
|
|
|
|
|
|
EPS – Adjusted
Basis Reconciliation – YTD Q2 2023 |
|
|
|
EPS – GAAP Basis – YTD Q2
2023 |
$ |
1.26 |
|
Adjustments (defined
below) |
|
0.10 |
|
EPS – As Adjusted Basis – YTD
Q2 2023 |
$ |
1.36 |
|
|
|
|
|
Adjustments
exclude $0.10 per share consisting of executive management
transition costs |
|
at Corporate, CMT
acquisition inventory step-up charges and restructuring charges
within |
|
the A&D segment in the
first six months of 2023. |
|
|
|
The $0.10 of EPS adjustments
per share consists of $3,292K of pre-tax charges |
|
|
|
offset by $757K of tax benefit
for net impact of $2,535K. |
|
|
SOURCE ESCO
Technologies Inc.Kate Lowrey, Vice President of Investor Relations,
(314) 213-7277
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