UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 7, 2007
ESCO TECHNOLOGIES INC.
(Exact Name of Registrant as Specified in Charter)
Missouri 1-10596 43-1554045
(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation) File Number) Identification No.)
9900A Clayton Road, St. Louis, Missouri 63124-1186
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 314-213-7200
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2 (b) under the
Exchange Act (17 CFR 240.14d-2 (b))
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the
Exchange Act (17 CFR 240.113d-4 (c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Today, August 7, 2007, the Registrant is issuing a press release (Exhibit 99.1
to this report) announcing its fiscal year 2007 third quarter financial and
operating results. See Item 7.01, Regulation FD Disclosure below.
ITEM 7.01 REGULATION FD DISCLOSURE
Today, the Registrant is issuing a press release announcing its fiscal year 2007
third quarter financial and operating results, and will conduct a related
Webcast conference call at 4:00 p.m. central time. This press release is
furnished herewith as Exhibit 99.1, and will be posted on the Registrant's
website located at http://www.escotechnologies.com. It can be viewed through the
-------------------------------
"Investor Relations" page of the website under the tab "Press Releases,"
although the Registrant reserves the right to discontinue that availability at
any time.
NON-GAAP FINANCIAL MEASURES
The press release furnished herewith as Exhibit 99.1 contains financial measures
and financial terms not calculated in accordance with generally accepted
accounting principles in the United States of America ("GAAP") in order to
provide investors and management with an alternative method for assessing the
Registrant's operating results in a manner that is focused on the performance of
the Registrant's ongoing operations. The Registrant has provided definitions
below for the non-GAAP financial measures utilized in the press release,
together with an explanation of why management uses these measures, and why
management believes that these non-GAAP financial measures are useful to
investors. The press release uses the non-GAAP financial measures of "EBIT",
"EBIT margin" and "Test segment EBIT-Operational".
The Registrant defines "EBIT" as earnings before interest and taxes. The
Registrant defines "EBIT margin" as EBIT as a percent of net sales. The
Registrant's management evaluates the performance of its operating segments
based on EBIT and EBIT margin, and believes that EBIT and EBIT margin are useful
to investors to demonstrate the operational profitability of the Registrant's
business segments by excluding interest and taxes, which are generally accounted
for across the entire Registrant on a consolidated basis. EBIT is also one of
the measures used by management in determining resource allocations within the
Registrant and incentive compensation.
The Registrant defines "Test segment EBIT-Operational" as Test segment EBIT
excluding the costs related to the adverse arbitration judgment and associated
legal costs involving a dispute over a 2005 U.S. government project.
The presentation of the information described above is intended to supplement
investors' understanding of the Registrant's operating performance. The
Registrant's non-GAAP financial measures may not be comparable to other
companies' non-GAAP financial performance measures. Furthermore, these measures
are not intended to replace net earnings (loss), cash flows, financial position,
comprehensive income (loss), or any other measure as determined in accordance
with GAAP.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit No. Description of Exhibit
99.1 Press Release dated August 7, 2007
OTHER MATTERS
The information in this report, including Exhibit 99.1, shall not be deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 as
amended ("Exchange Act") or otherwise subject to the liabilities of that
section, unless the Registrant incorporates it by reference into a filing under
the Securities Act of 1933 as amended or the Exchange Act.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ESCO TECHNOLOGIES INC.
Dated: August 7, 2007 /s/ G.E. Muenster
G.E. Muenster
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.1 Press Release dated August 7, 2007
EXHIBIT 99.1
NEWS FROM ESCO TECHNOLOGIES
For more information contact: For media inquiries:
Patricia K. Moore David P. Garino
Director, Investor Relations (314) 982-0551
ESCO Technologies Inc.
(314) 213-7277
ESCO ANNOUNCES THIRD QUARTER RESULTS
------------------------------------
St. Louis, MO, August 7, 2007 - ESCO Technologies Inc. (NYSE: ESE) today
announced its results for the third quarter ended June 30, 2007.
Within this release, references to "quarters" and "year-to-date" relate to
the fiscal quarters and nine month periods ended June 30 for the respective
fiscal years noted.
As described in the Company's May 22, 2007 release, the 2007 third quarter
net earnings and earnings per share were negatively impacted by a $2.3 million,
or $0.06 per share non-recurring charge within the Test segment related to an
arbitration ruling involving a dispute with the general contractor over the
installation of a shielded communication room in an international location which
was completed in 2005 for the U.S. Government.
Including the $0.06 charge noted above, net earnings for the 2007 third
quarter were $8.9 million, or $0.33 per share compared to net earnings of $11.2
million, or $0.42 per share for the third quarter of 2006. Excluding this
charge, earnings per share would have been $0.39 per share for the 2007 third
quarter.
Net earnings for the nine months of fiscal 2007 were $17.1 million, or
$0.65 per share compared to $20.7 million or $0.78 per share for the nine months
of fiscal 2006. Excluding the $0.06 per share charge, earnings per share would
have been $0.71 per share for the nine months of fiscal 2007.
Sales
- -----
Third quarter 2007 sales were $137.5 million, or 11.2 percent higher than
third quarter 2006 sales of $123.6 million with all three operating segments
contributing to the growth. Fiscal 2007 year-to-date sales were $365.4 million,
or 8.4 percent higher than the $337.1 million of sales in the 2006 year-to-date
period.
Communications sales of $53.9 million increased $4.7 million, or 9.6
percent in the 2007 third quarter compared to the third quarter of 2006,
primarily due to: $3.7 million of additional sales at Hexagram; $1.1 million of
additional software installations at Nexus; $0.9 million of additional hardware
deliveries at DCSI; partially offset by a $1.0 million decrease in sales at
Comtrak. Hexagram's sales increased 53.2 percent in the 2007 third quarter
primarily due to the ramp-up of advanced metering projects at PG&E and in Kansas
City. DCSI's sales increased in the 2007 third quarter due to: higher COOP
sales; additional sales to IOU customers such as Duke Energy, EDESur and Florida
Power & Light; partially offset by lower sales to TXU. In the 2007 third
quarter, DCSI sales to COOP and public power (Municipal) customers were $28.8
million compared to $25.0 million in the third quarter of 2006. The sales
decrease at Comtrak was the result of the timing of product deliveries which
slipped to the fourth quarter. Year-to-date 2007 Communications sales increased
$21.6 million, or 19.4 percent compared to 2006.
Filtration sales of $49.0 million increased $6.4 million, or 15.0 percent
during the third quarter of 2007 as compared to 2006, primarily driven by: a
$2.7 million increase in defense spares and space products at VACCO; a $2.3
million increase in commercial aerospace sales at PTI; and higher medical and
commercial product sales at Filtertek. Year-to-date Filtration sales increased
$6.5 million, or 5.0 percent in 2007 compared to 2006, with PTI's sales
increasing $4.6 million, or 13.6 percent, reflecting the continued strength of
the commercial aerospace market, and VACCO and Filtertek both having sales
increases resulting from higher demand in the defense spares and commercial end
markets, respectively.
Test segment sales of $34.6 million increased $2.8 million, or 8.8 percent,
during the third quarter of 2007 compared to 2006 as a result of additional
chamber installations and component deliveries. Year-to-date sales of $96.7
million increased modestly over the $96.5 million in 2006 year-to-date sales due
to timing delays experienced earlier in 2007. Earnings Before Interest and Taxes
(EBIT)
- ------
On a segment basis, items that impacted EBIT dollars and EBIT as a percent
of sales ("EBIT margin") during the third quarter of fiscal 2007 included the
following.
In the Communications segment, EBIT for the 2007 third quarter was $8.6
million (16.0 percent of sales), compared to $11.4 million (23.2 percent of
sales) in the 2006 third quarter. The primary factors driving the $2.8 million
decrease in EBIT dollars in 2007 include a $3.9 million decrease at DCSI
resulting from additional TNG software amortization, engineering / new product
development costs, and PG&E program support costs. EBIT at Hexagram and Nexus
increased a combined $1.6 million as a result of the additional sales volume.
The 2007 year-to-date Communications segment EBIT of $11.9 million decreased
$8.2 million compared to 2006 primarily at DCSI due to TNG amortization in 2007
of $4.5 million compared to $1.2 million in 2006, higher SG&A costs and
additional PG&E program support costs.
In the Filtration segment, the 2007 third quarter EBIT was $6.9 million
(14.1 percent of sales) compared to $5.2 million (12.2 percent of sales) in the
prior year third quarter. The $1.7 million increase in EBIT was due to: a $1.2
million increase at PTI related to an increase in commercial aerospace sales; a
$1.1 million increase at VACCO related to the additional sales volume noted
above; partially offset by a $0.6 million decrease at Filtertek resulting from
higher raw material and overhead costs. Year-to-date Filtration EBIT of $15.1
million increased $1.1 million over 2006 year-to-date driven by the higher sales
at PTI and VACCO.
The Test segment EBIT was unfavorably impacted by $2.6 million of total
costs associated with the arbitration judgment related to a 2005 U.S. Government
project discussed in the May 22, 2007 release. These costs included the $2.3
million adverse judgment and approximately $0.3 million of legal costs
associated with defending this dispute. EBIT, including the $2.3 million
judgment, was $2.0 million (5.8 percent of sales) in the third quarter of 2007
compared to $4.0 million (12.6 percent of sales) in 2006, and 2007 year-to-date
EBIT including the $2.6 million of total costs was $8.2 million compared to
$11.3 million. Without the arbitration costs, 2007 third quarter EBIT would have
been $4.3 million, or 12.4 percent, and year-to-date EBIT would have been $10.8
million, or 11.2 percent.
Corporate operating costs included in EBIT were $4.4 million in the third
quarter of 2007 compared to $4.6 million in the 2006 third quarter. The 2007
year-to-date Corporate costs are $3.1 million higher than 2006 due, in part, to
the absence of the $1.8 million gain in 2006 from a previously divested defense
subsidiary, higher stock option expenses and tax-related professional fees.
Effective Tax Rate
- ------------------
The effective tax rate in the third quarter of 2007 was 33.3 percent
compared to 31.3 percent in the third quarter of 2006. Year-to-date tax rates
were 22.6 percent and 42.0 percent in the 2007 and 2006 periods, respectively.
The year-to-date 2007 rate was favorably impacted by research credits recognized
earlier in the year, and the 2006 rate was unfavorably impacted by the
repatriation of certain foreign cash balances.
New Orders
- ----------
New orders received in the 2007 third quarter were $146.4 million
(book-to-bill of 106 percent) compared to $109.1 million (book-to-bill of 88
percent) received in the 2006 third quarter.
Backlog at June 30, 2007 was $316.5 million, which increased $63.1 million
since the beginning of the fiscal year and $8.9 million during the third
quarter.
New orders received in the third quarter of 2007 compared to the third
quarter of 2006, respectively, were: in Filtration, $54.5 million and $49.6
million; in Communications, $61.7 million and $29.7 million; and in Test, $30.3
million and $29.8 million.
Cash
- ----
At June 30, 2007, the Company had $21.9 million in cash compared to $36.8
million in cash at September 30, 2006. The $14.9 million decrease in cash in the
first nine months of 2007 reflects $22.7 million spent on software upgrades
(primarily TNG), $13.2 million spent on capital equipment, and $1.3 million of
additional payments (earn out) related to the Hexagram acquisition.
Inventories increased $8.7 million during the 2007 third quarter to support
the significant sales growth planned for the fourth quarter, primarily relating
to the PG&E contract.
Stock Repurchase Program
- ------------------------
Under the terms of the stock repurchase program authorized in August 2006,
the Company spent $10 million in July 2007 to repurchase 265,000 shares in the
open market.
Chairman's Commentary - 2007 Third Quarter
- ------------------------------------------
Vic Richey, Chairman and Chief Executive Officer, commented, "Our third
quarter operating performance was consistent with our expectations. In addition,
our full year EPS guidance remains in the range established at the beginning of
the year, although at the lower end of the range due to the unfavorable
arbitration judgment in the Test segment which cost us $0.06 per share. In spite
of the recent challenges we have faced, we remain on track to deliver solid
operating performance in all three segments in 2007.
"Entered orders continue to be a bright spot for us as our third quarter
orders again exceeded our sales which brings our year-to-date book-to-bill to
117 percent. The strength of our current backlog positions us well to meet the
significant sales and earnings growth projected for the fourth quarter."
Business Outlook
- ----------------
Statements contained in the preceding and following paragraphs are based on
current expectations. Statements that are not strictly historical are considered
forward-looking, and actual results may differ materially.
The Business Outlook described below does not include the impact of
potential acquisitions or divestitures, but does include the amortization of
identifiable intangible assets related to Nexus and Hexagram, as well as the
amortization of the TNG software.
Additionally, refer to the "Business Outlook - 2007" section of the
November 14, 2006 earnings release for a comprehensive discussion of "Purchase
Accounting - Identifiable Intangible Assets," "TNG Software Amortization," and
the "PG&E Contract."
The 2007 revenue and EPS estimates described below include approximately
$20 million of sales and approximately $8 million of EBIT related to DCSI's
portion of the PG&E contract which is subject to revenue deferral until delivery
of TNG version 3.0 is achieved. Version 3.0 is currently expected to be
delivered in September 2007, at which time the Company expects to recognize the
cumulative deferred revenue on the units delivered up to that date.
During the 2007 third quarter, PG&E announced its plans to request
information and proposals from a small group of vendors in order to evaluate
such vendors' ability to address potential future functionality requirements for
the electric portion of its service territory currently included in DCSI's
contract. In July 2007, PG&E issued requests for proposals to a group of
vendors, including the Company for PG&E's electric requirements. PG&E's current
activities will impact the timing and / or receipt of future orders from PG&E
for its electric deployment, and until PG&E completes this evaluation and
determines whether it will modify its AMI project plan, the Company cannot
estimate the total value or the timing of orders that may be received under the
current DCSI contract.
Earnings Per Share - 2007
- -------------------------
Including the impact of the $0.06 per share charge recorded in the third
quarter of fiscal 2007 related to the Test segment arbitration judgment,
Management expects the 2007 EPS to be in the range of $1.50 to $1.55 per share,
which also includes approximately $9.0 million of pretax amortization expense,
or $0.21 per share, related to purchase accounting intangible assets and TNG
software.
Stock option expense for 2007, which is included in the EPS guidance, is
still expected to be in the range of $0.10 to $0.12 per share, or $0.03 to $0.04
per quarter.
The effective tax rate for the fourth quarter of fiscal 2007 is expected to
remain at 39 percent. Due to the tax research credits favorably impacting the
tax rate in the first half of the year, the total year effective tax rate is
estimated to be approximately 34 percent.
Revenues and EBIT Margins - 2007
- --------------------------------
Management continues to expect 2007 consolidated revenues to increase
approximately 22 percent compared to 2006 and be in the range of $555 to $560
million. Including the impact of the $2.6 million of pretax charges (sum of the
judgment and legal costs) in fiscal 2007 related to the Test segment arbitration
judgment, the consolidated EBIT margins should be in the range of 10.5 to 11.0
percent (also including the impact of the amortization of identifiable
intangible assets and the TNG amortization).
On a segment and operating unit basis for 2007, Management's expectations
remain consistent with the operating ranges noted in the May 8, 2007 earnings
release, with the exception of the Test segment's EBIT margin impact resulting
from the arbitration charges. Operationally, the 2007 Test segment expectations
remain unchanged.
Conference Call
- ---------------
The Company will host a conference call today, August 7, at 4:00 p.m.,
Central time, to discuss the Company's third quarter and year-to-date operating
results. A live audio webcast will be available on the Company's web site at
www.escotechnologies.com. Please access the web site at least 15 minutes prior
- ------------------------
to the call to register, download and install any necessary audio software. A
replay of the conference call will be available for seven days on the Company's
web site noted above or by phone (dial 1-888-203-1112 and enter the pass code
7074893).
Forward-Looking Statements
- --------------------------
Statements in this press release regarding the amounts and timing of fiscal
2007 future revenues, results, earnings, sales, EBIT, EPS, sales and EBIT
margins on a consolidated basis and on a segment and operating unit basis,
growth in the AMR IOU market, fiscal 2007 corporate operating expenses, fiscal
2007 effective tax rate, long-term success of the Company, stock option
expensing, successful development, delivery and customer acceptance of the TNG
software, and the timing and amount of future costs to be incurred in connection
with the TNG software, the timing of deferred revenue on products previously
delivered to PG&E, the ultimate number, value and timing of DCSI and Hexagram
products ordered and deployed by PG&E, the Company's ability to increase
shareholder value and any other written or oral statements which are not
strictly historical are "forward-looking" statements within the meaning of the
safe harbor provisions of the federal 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. 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: the
risk factors described in Item 1A of the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 2006; actions by the California Public
Utility Commission; PG&E's Board of Directors or PG&E's Management impacting
PG&E's AMI projects; the outcome of PG&E's evaluation of other technologies to
meet their requirements for the electric portion of its service territory; the
success of the Company's competitors; changes in or the effect of the Federal
Energy Bill; the timing and success of DCSI's software development efforts; the
timing and content of purchase order releases under the PG&E contracts; DCSI's
and Hexagram's successful performance of the PG&E contracts; site readiness
issues with Test segment customers; weakening of economic conditions in served
markets; changes in customer demands or customer insolvencies; competition;
intellectual property rights; technical difficulties; unforeseen charges
impacting corporate operating expenses; the performance of the Company's
international operations; successful execution of the planned sale of the
Company's Puerto Rico facility; material changes in the costs of certain raw
materials including steel, copper and petroleum-based resins; delivery delays or
defaults by customers; termination for convenience of customer contracts; timing
and magnitude of future contract awards; containment of engineering and
development costs; performance issues with key customers, suppliers and
subcontractors; labor disputes; changes in laws and regulations including but
not limited to changes in accounting standards and taxation requirements; costs
relating to environmental matters; uncertainty of disputes in litigation or
arbitration; and the Company's successful execution of internal operating plans.
ESCO, headquartered in St. Louis, is a proven supplier of special purpose
communications systems for electric, gas and water utilities, including hardware
and software to support advanced metering applications. In addition, the Company
provides engineered filtrations products to the transportation, health care and
process markets worldwide and is the industry leader in RF shielding and EMC
test products. Further information regarding ESCO and its subsidiaries is
available on the Company's website at www.escotechnologies.com.
- tables attached -
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended Three Months Ended
------------------ ------------------
June 30, 2007 June 30, 2006
------------- -------------
Net Sales $ 137,523 123,626
Cost and Expenses:
Cost of sales 88,582 77,152
SG&A 30,549 28,385
Amortization of intangible assets 2,853 2,554
Interest (income) expense (170) (195)
Other (income) expenses, net 2,443 (513)
----- ----
Total costs and expenses 124,257 107,383
------- -------
Earnings before income taxes 13,266 16,243
Income taxes 4,412 5,080
----- -----
Net earnings $ 8,854 11,163
====== ======
Earnings per share:
Basic
Net earnings $ 0.34 0.43
===== ====
Diluted
Net earnings $ 0.33 0.42
==== ====
Average common shares O/S:
Basic 25,941 25,790
====== ======
Diluted 26,493 26,441
====== ======
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
Nine Months Ended Nine Months Ended
----------------- -----------------
June 30, 2007 June 30, 2006
------------- ---------------
Net Sales $ 365,404 337,096
Cost and Expenses:
Cost of sales 242,965 221,654
SG&A 91,348 78,574
Amortization of intangible assets 7,900 4,603
Interest (income) expense (725) (1,012)
Other (income) expenses, net 1,835 (2,440)
----- ------
Total costs and expenses 343,323 301,379
------- -------
Earnings before income taxes 22,081 35,717
Income taxes 4,990 15,006
----- ------
Net earnings 17,091 20,711
====== ======
Earnings per share:
Basic
Net earnings $ 0.66 0.81
==== ====
Diluted
Net earnings $ 0.65 0.78
==== ====
Average common shares O/S:
Basic 25,904 25,678
====== ======
Diluted 26,482 26,418
====== ======
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information
(Unaudited)
(Dollars in millions)
Three Months Ended Nine Months Ended
June 30, June 30,
-------- --------
2007 2006 2007 2006
---- ---- ---- ----
Net Sales
- ---------
Communications $ 53.9 49.2 133.2 111.6
PTI 13.7 11.4 38.4 33.8
VACCO 9.3 6.6 24.5 22.9
Filtertek 26.0 24.6 72.6 72.3
---- ---- ---- ----
Filtration subtotal 49.0 42.6 135.5 129.0
Test 34.6 31.8 96.7 96.5
---- ---- ---- ----
Totals $137.5 123.6 365.4 337.1
====== ===== ===== =====
EBIT
- ----
Communications $ 8.6 11.4 11.9 20.1
PTI 2.7 1.5 6.5 4.3
VACCO 2.5 1.4 5.1 4.7
Filtertek 1.7 2.3 3.5 5.0
--- --- --- ---
Filtration subtotal 6.9 5.2 15.1 14.0
Test 2.0 (1) 4.0 8.2 (2) 11.3
Corporate (4.4)(3) (4.6)(4) (13.8)(5) (10.7)(6)
----- ----- ------ ------
Totals $ 13.1 16.0 21.4 34.7
==== ==== ==== ====
Note: Depreciation and amortization expense was $5.8 million and
$5.2 million for the quarters ended June 30, 2007 and 2006,
respectively, and $16.4 million and $12.4 million for the
nine-month periods ended June 30, 2007 and 2006, respectively.
(1) Includes a $2.3 million charge related to the adverse arbitration
award within the Test segment.
(2) Includes a $2.3 million charge related to the adverse arbitration
award and $0.3 million of legal costs associated with arbitrating
this dispute.
(3) Includes $0.5 million of amortization of acquired intangible
assets for Hexagram and Nexus.
(4) Includes $1.0 million of amortization of acquired intangible
assets for Hexagram and Nexus.
(5) Includes $1.7 million of amortization of acquired intangible
assets for Hexagram and Nexus.
(6) Includes a $1.8 million gain related to an indemnification
obligation with respect to a previously divested subsidiary and
$1.9 million of amortization of acquired intangible assets for
Hexagram and Nexus.
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
EBIT Margin Outlook - FY 2007
- -----------------------------
Consolidated EBIT margin in the range of 10.5 percent to 11.0 percent
under "Revenues and EBIT Margins-2007" cannot be reconciled with a GAAP
measure as this represents a forward-looking measure with no comparable
GAAP measurement quantifiable at this time.
Test Segment EBIT Margin (Dollars in millions):
- -----------------------------------------------
Q307 YTD Q3 07
---- ---------
Test segment EBIT - GAAP $2.0 8.2
Arbitration award 2.3 2.3
Legal costs - 0.3
--- ---
Test segment EBIT - Operational $4.3 10.8
=== ====
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
June 30, September 30,
2007 2006
---- ----
Assets
- ------
Cash and cash equivalents $ 21,884 36,819
Accounts receivable, net 101,579 83,816
Costs and estimated earnings
on long-term contracts 5,039 1,345
Inventories 67,994 50,984
Current portion of deferred
tax assets 36,169 24,251
Other current assets 19,967 10,042
------ ------
Total current assets 252,632 207,257
Property, plant and equipment, net 74,611 68,754
Goodwill 144,435 143,450
Deferred tax assets - -
Other assets 82,110 69,233
------ ------
$553,788 488,694
======== =======
Liabilities and Shareholders' Equity
- ------------------------------------
Accounts payable $ 53,448 39,496
Other current liabilities 52,660 36,399
------ ------
Total current liabilities 106,108 75,895
Deferred income 3,477 7,458
Other liabilities 47,001 28,907
Long-term debt - -
Shareholders' equity 397,202 376,434
------- -------
$553,788 488,694
======== =======
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
June 30, 2007
-------------
Cash flows from operating activities:
Net earnings $ 17,091
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 16,361
Stock compensation expense 4,113
Changes in operating working capital (28,514)
Effect of deferred taxes 6,959
Change in deferred revenues and costs, net 6,427
Other (2,283)
------
Net cash provided by operating activities 20,154
Cash flows from investing activities:
Acquisition of business (1,250)
Capital expenditures (13,201)
Capitalized software expenditures (22,676)
-------
Net cash used by investing activities (37,127)
-------
Cash flows from financing activities:
Proceeds from / payments of long-term debt -
Net increase in short-term borrowings 676
Other, including exercise of stock options 1,362
-----
Net cash provided by financing activities 2,038
-----
Net decrease in cash and cash equivalents (14,935)
Cash and cash equivalents, beginning of period 36,819
------
Cash and cash equivalents, end of period $ 21,884
========
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data
(Unaudited)
(Dollars in thousands)
Backlog And Entered
- -------------------
Orders-Q3 FY 2007 Comm. Filtration Test Total
- ----------------- ----- ---------- ---- -----
Beginning Backlog-
3/31/07 $ 145,946 92,057 69,652 307,655
Entered Orders 61,656 * 54,470 30,262 146,388
Sales (53,943)* (49,035) (34,545) (137,523)
------- ------- ------- --------
Ending Backlog-6/30/07 $ 153,659 97,492 65,369 316,520
======= ====== ====== =======
Backlog And Entered
- -------------------
Orders-YTD FY 2007 Comm. Filtration Test Total
- ------------------ ----- ---------- ---- -----
Beginning Backlog-
9/30/06 $ 118,986 78,569 55,857 253,412
Entered Orders 167,876 * 154,461 106,175 428,512
Sales (133,203)* (135,538) (96,663) (365,404)
-------- -------- ------- --------
Ending Backlog-6/30/07 $ 153,659 97,492 65,369 316,520
======= ====== ====== =======
Q3 FY YTD FY
2007 Q3 FY 2007 YTD FY
Entered 2007 Entered 2007
*Communications Recap: Orders Sales Orders Sales
- ---------------------- ------ ----- ------ -----
DCSI $ 32,759 39,158 95,479 88,756
Comtrak 489 496 3,458 3,452
Nexus Energy 3,966 3,528 12,531 10,674
Hexagram 24,442 10,761 56,408 30,321
------ ------ ------ ------
Total $ 61,656 53,943 167,876 133,203
====== ====== ======= =======
# # #