Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Jun. 30, 2019	Jul. 31, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2019
Entity File Number	1-10596
Entity Registrant Name	ESCO TECHNOLOGIES INC.
Entity Incorporation, State or Country Code	MO
Entity Tax Identification Number	43-1554045
Entity Address, Address Line One	9900A Clayton Road
Entity Address, City or Town	St. Louis
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63124-1186
City Area Code	(314)
Local Phone Number	213-7200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Entity Common Stock, Shares Outstanding		25,981,313
Entity Central Index Key	0000866706
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Trading Symbol	ESE
Security Exchange Name	NYSE

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 199,766	$ 192,223	$ 576,312	$ 540,496
Costs and expenses:
Cost of sales	122,172	122,805	363,026	346,911
Selling, general and administrative expenses	43,400	39,910	126,066	122,813
Amortization of intangible assets	4,693	4,605	13,965	13,615
Interest expense, net	1,973	2,243	5,788	6,464
Other expenses (income), net	2,636	(656)	(2,037)	992
Total costs and expenses	174,874	168,907	506,808	490,795
Earnings before income tax	24,892	23,316	69,504	49,701
Income tax expense (benefit)	4,825	4,297	13,323	(13,983)
Net earnings	$ 20,067	$ 19,019	$ 56,181	$ 63,684
Earnings per share:
Basic - Net earnings	$ 0.77	$ 0.73	$ 2.17	$ 2.46
Diluted - Net earnings	$ 0.77	$ 0.73	$ 2.15	$ 2.45

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net earnings	$ 20,067	$ 19,019	$ 56,181	$ 63,684
Other comprehensive income net of tax:
Foreign currency translation adjustments	1,839	(6,865)	(2,013)	(2,740)
Net unrealized (loss) gain on derivative instruments	(7)	(62)	94	93
Total other comprehensive income (loss), net of tax	1,832	(6,927)	(1,919)	(2,647)
Comprehensive income	$ 21,899	$ 12,092	$ 54,262	$ 61,037

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Sep. 30, 2018
Current assets:
Cash and cash equivalents	$ 38,956	$ 30,477
Accounts receivable, net	168,675	163,740
Contract assets	99,499	53,034
Inventories, net	126,816	135,416
Other current assets	16,260	13,356
Total current assets	450,206	396,023
Property, plant and equipment, net of accumulated depreciation of $125,747 and $115,728, respectively	151,545	134,954
Intangible assets, net of accumulated amortization of $106,239 and $92,274, respectively	336,625	345,353
Goodwill	381,683	381,652
Other assets	6,036	7,140
Total assets	1,326,095	1,265,122
Current liabilities:
Short-term borrowings and current maturities of long-term debt	20,921	20,000
Accounts payable	59,329	63,033
Contract liabilities	53,758	49,035
Accrued salaries	29,914	29,379
Accrued other expenses	35,814	39,083
Total current liabilities	199,736	200,530
Pension obligations	14,610	16,286
Deferred tax liabilities	66,286	64,794
Other liabilities	36,656	24,102
Long-term debt	197,000	200,000
Total liabilities	514,288	505,712
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 30,596,940 and 30,534,786 shares, respectively	306	305
Additional paid-in capital	291,204	291,190
Retained earnings	661,003	606,837
Accumulated other comprehensive loss, net of tax	(33,447)	(31,528)
Total stockholders' equity before treasury stock	919,066	866,804
Less treasury stock, at cost: 4,615,627 and 4,623,958 common shares, respectively	(107,259)	(107,394)
Total shareholders' equity	811,807	759,410
Total Liabilities and Shareholders' Equity	$ 1,326,095	$ 1,265,122

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Sep. 30, 2018
CONSOLIDATED BALANCE SHEETS
Accumulated depreciation	$ 125,747	$ 115,728
Accumulated amortization	$ 106,239	$ 92,274
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	50,000,000	50,000,000
Common stock, shares issued	30,596,940	30,534,786
Treasury stock, shares	4,615,627	4,623,958

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net earnings	$ 56,181	$ 63,684
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	28,763	28,350
Stock compensation expense	3,878	3,864
Changes in assets and liabilities	(41,851)	(9,454)
Change in property, plant and equipment due to gain on sale of building	(8,922)
Effect of deferred taxes	1,492	(23,086)
Pension contributions	(2,500)	(9,414)
Net cash provided by operating activities	37,041	53,944
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	(937)	(11,445)
Additions to capitalized software	(6,207)	(7,118)
Capital expenditures	(26,457)	(15,539)
Proceeds from sale of building and land	17,201
Net cash used by investing activities	(16,400)	(34,102)
Cash flows from financing activities:
Proceeds from long-term debt	32,921	53,000
Principal payments on long-term debt	(35,000)	(66,000)
Dividends paid	(6,223)	(6,205)
Other	(3,234)	(2,886)
Net cash used by financing activities	(11,536)	(22,091)
Effect of exchange rate changes on cash and cash equivalents	(626)	(8)
Net increase (decrease) in cash and cash equivalents	8,479	(2,257)
Cash and cash equivalents, beginning of period	30,477	45,516
Cash and cash equivalents, end of period	38,956	43,259
Supplemental cash flow information:
Interest paid	5,556	6,333
Income taxes paid (including state and foreign)	$ 18,513	$ 4,343

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE

9 Months Ended

Jun. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE

Our significant accounting policies are included in Note 1 of our Annual Report on Form 10-K for the year ended September 30, 2018. On October 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606). Significant changes to our policies resulting from the adoption are provided below. We adopted ASC 606 using the modified retrospective transition method applied to contracts that were not substantially complete at the end of fiscal year 2018. We recorded a $4.2 million adjustment to increase retained earnings to reflect the cumulative impact of adopting this standard at the beginning of fiscal year 2019, primarily related to certain long-term contracts our Filtration and Technical Packaging segments have that converted to the cost-to-cost method for revenue recognition. The comparative information has not been restated and is reported under the accounting standards in effect for those periods. A reconciliation of the financial statement line items impacted for the three and nine months ended June 30, 2019 under ASC 606 to the prior accounting standards is provided in Note 14.

Revenue Recognition

Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred.

Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant.

Filtration: Within the Filtration segment, approximately 48% of revenues (approximately 18% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial and military customers and have a single performance obligation as there is only one good promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. The transaction price for these contracts reflects our estimate of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.

Approximately 52% of the segment’s revenues (approximately 19% of consolidated revenues) are accounted for over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract.

Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract.

Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Filtration segment contracts the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred based on an estimated profit margin.

The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us.

Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.

Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time.

For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable.

Test: Within the Test segment, approximately 25% of revenues (approximately 6% of consolidated revenues) are recognized at a point in time when products such as, antennas and probes are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.

Approximately 75% of the segment’s revenues (approximately 17% of consolidated revenues) are recorded over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, the Company estimates profit as the difference between total revenue and total estimated cost of a contract and recognizes these revenues and costs based primarily on contract milestones. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable.

Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.

Under the typical payment terms of our fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net.

USG: Within the USG segment, approximately 80% of revenues (approximately 24% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.

Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. The related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and the Company has a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets.

Included in this category, approximately 8% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represent our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets.

Technical Packaging: Within the Technical Packaging segment, 100% of the revenues (approximately 10% of consolidated revenues) are recognized over time as the product does not have an alternative use and the Company has an enforceable right to payment. Selecting the method to measure progress towards completion for the contracts requires judgment and is based on the nature of the products to be provided. We use the cost-to-cost method to measure progress for our Technical Packaging segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred. The transaction price for our contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant.

Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of weeks, minimizing the amount of judgment in developing the cost estimate. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.

Under the typical payment terms of our contracts, the customer is billed upon shipment of product. Amounts billed and due from our customers are classified in Accounts receivable, net. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets.

Contract Assets and Liabilities

Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. Liabilities for customer rebates and discounts are included in other current liabilities in the accompanying balance sheet.

EARNINGS PER SHARE (EPS)

9 Months Ended

Jun. 30, 2019

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)

3. EARNINGS PER SHARE (EPS)

Basic EPS is calculated using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive common share options and vesting of performance-accelerated restricted shares (restricted shares) by using the treasury stock method. The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands):


	Three Months		Nine Months
	Ended June 30,		Ended June 30,
	2019	2018	2019	2018

Weighted Average Shares Outstanding - Basic	25,971	25,900	25,935	25,862
Dilutive Options and Restricted Shares	138	150	155	180

Adjusted Shares - Diluted	26,109	26,050	26,090	26,042

INVENTORIES

9 Months Ended

Jun. 30, 2019

INVENTORIES

INVENTORIES

5. INVENTORIES

Inventories consist of the following:


	June 30,		September 30,
(In thousands)	2019		2018

Finished goods	$	18,583	26,678
Work in process		42,678	47,765
Raw materials		65,555	60,973
Total inventories	$	126,816	135,416

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Jun. 30, 2019

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Included on the Company’s Consolidated Balance Sheets at June 30, 2019 and September 30, 2018 are the following intangible assets gross carrying amounts and accumulated amortization:


	June 30,		September 30,
(Dollars in thousands)	2019		2018
Goodwill	$	381,683	381,652

Intangible assets with determinable lives:
Patents
Gross carrying amount	$	1,880	1,833
Less: accumulated amortization		873	791
Net	$	1,007	1,042

Capitalized software
Gross carrying amount	$	77,502	71,294
Less: accumulated amortization		47,206	41,624
Net	$	30,296	29,670

Customer relationships
Gross carrying amount	$	185,135	185,333
Less: accumulated amortization		55,641	47,802
Net	$	129,494	137,531

Other
Gross carrying amount	$	5,382	5,468
Less: accumulated amortization		2,518	2,056
Net	$	2,864	3,412
Intangible assets with indefinite lives:
Trade names	$	172,964	173,698

The changes in the carrying amount of goodwill attributable to each business segment for the nine months ended June 30, 2019 is as follows:


(Dollars in millions)	USG		Test	Filtration	Packaging	Total
Balance as of September 30, 2018		254.1	34.1	73.7	19.8	381.7
Foreign currency translation		0.2	—	—	(0.2)	—
Balance as of June 30, 2019	$	254.3	34.1	73.7	19.6	381.7

BUSINESS SEGMENT INFORMATION

9 Months Ended

Jun. 30, 2019

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

7. BUSINESS SEGMENT INFORMATION

The Company is organized based on the products and services that it offers, and classifies its business operations in four reportable segments for financial reporting purposes: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG) and Technical Packaging. The Filtration segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), and Mayday Manufacturing Co. and its affiliate Hi-Tech Metals, Inc. (collectively referred to as Mayday). The companies within this segment primarily design and manufacture specialty filtration products, including hydraulic filter elements used in commercial aerospace applications, unique filter mechanisms used in micro-propulsion devices for satellites and custom designed filters for manned and unmanned aircraft; manufacture elastomeric-based signature reduction solutions for the U.S. Navy; and manufacture landing gear components for the aerospace and defense industry. The Test segment’s operations consist primarily of ETS-Lindgren Inc.

(ETS-Lindgren). ETS-Lindgren is an industry leader in providing its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. The USG segment’s operations consist primarily of Doble Engineering Company (Doble), Morgan Schaffer Inc. (Morgan Schaffer), and NRG Systems, Inc. (NRG). Doble provides high-end, intelligent diagnostic test solutions for the electric power delivery industry and is a leading supplier of partial discharge testing instruments used to assess the integrity of high voltage power delivery equipment. Morgan Schaffer provides an integrated offering of dissolved gas analysis, oil testing, and data management solutions for the electric power industry. NRG designs and manufactures decision support tools for the renewable energy industry, primarily wind. The Technical Packaging segment’s operations consist of Thermoform Engineered Quality LLC (TEQ) and Plastique Limited and Plastique Sp. z o.o. (together, Plastique). The companies within this segment provide innovative solutions to the medical and commercial markets for thermoformed packages and specialty products using a wide variety of thin gauge plastics and pulp.

Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes.


	Three Months			Nine Months
	Ended June 30,			Ended June 30,
(In thousands)	2019		2018	2019	2018
NET SALES
Filtration	$	83,067	69,721	228,769	195,531
Test		42,298	45,034	126,459	123,368
USG		52,894	55,489	157,639	157,942
Technical Packaging		21,507	21,979	63,445	63,655
Consolidated totals	$	199,766	192,223	576,312	540,496

EBIT
Filtration	$	19,039	14,292	47,092	35,056
Test		5,927	5,902	14,791	13,797
USG		10,148	11,528	40,461	27,805
Technical Packaging		1,625	2,505	3,333	5,355
Corporate (loss)		(9,874)	(8,668)	(30,385)	(25,848)
Consolidated EBIT		26,865	25,559	75,292	56,165
Less: Interest expense		(1,973)	(2,243)	(5,788)	(6,464)
Earnings before income taxes	$	24,892	23,316	69,504	49,701

Non-GAAP Financial Measures

The financial measure “EBIT” is presented in the above table and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, 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. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT.

The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

DEBT

9 Months Ended

Jun. 30, 2019

DEBT

DEBT

8. DEBT

The Company’s debt is summarized as follows:


	June 30,		September 30,
(In thousands)	2019		2018
Total borrowings	$	217,921	220,000
Short-term borrowings and current portion of long-term debt		(20,921)	(20,000)
Total long-term debt, less current portion	$	197,000	200,000

The Company’s existing credit facility (“the Credit Facility”) matures December 21, 2020. The Credit Facility includes a $450 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of nine banks led by JPMorgan Chase Bank, N.A., as Administrative Agent.

At June 30, 2019, the Company had approximately $225 million available to borrow under the Credit Facility, and a $250 million increase option, in addition to $39.0 million cash on hand. At June 30, 2019, the Company had $217.0 million of outstanding borrowings under the Credit Facility, and $0.9 million of short-term borrowing in addition to outstanding letters of credit of $7.2 million. The Company classified $20.9 million as the current portion of long-term debt as of June 30, 2019, as the Company intends to repay this amount within the next twelve month period; however, the Company has no contractual obligation to repay such amount during the next twelve month period.

The Credit Facility requires, as determined by certain financial ratios, a facility fee ranging from 12.5 to 27.5 basis points per year on the unused portion. The terms of the facility provide that interest on borrowings may be calculated at a spread over the London Interbank Offered Rate (LIBOR) or based on the prime rate, at the Company’s election. The facility is secured by the unlimited guaranty of the Company’s material domestic subsidiaries and a 65% pledge of the material foreign subsidiaries’ share equity. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. The weighted average interest rates were 3.21% and 3.22% for the three and nine-month periods ending June 30, 2019, respectively, and 3.17% and 2.97% for the corresponding periods of 2018. At June 30, 2019, the Company was in compliance with all debt covenants.

INCOME TAX EXPENSE

9 Months Ended

Jun. 30, 2019

INCOME TAX EXPENSE

INCOME TAX EXPENSE

9. INCOME TAX EXPENSE

The third quarter 2019 effective income tax rate was 19.4% compared to 18.4% in the third quarter of 2018. The income tax expense for the first nine months of 2019 was $13.3 million compared to income tax benefit of $14.0 million for the first nine months of 2018. The effective income tax rate for the first nine months of 2019 was 19.2% compared to (28.1)% for the first nine months of 2018.

The income tax expense in the third quarter and first nine months of 2019 was favorably impacted by tax planning strategies to increase foreign tax credits claimed retrospectively. The Company reduced the valuation allowance for excess foreign tax credits by $2.4 million ($2.3 million in the second quarter of 2019 and $0.1 million in third quarter of 2019) and recorded an amended return benefit of $0.3 million ($0.2 million in the second quarter of 2019 and $0.1 million in the third quarter of 2019) which favorably impacted the third quarter and year-to-date effective

tax rate by 1.0% and 4.1%, respectively. Income tax expense in the third quarter of 2019 and first nine months of 2019 was also favorably impacted by additional tax benefits on share-based compensation that vested during the quarter decreasing the effective tax rate by 1.8% and 0.7%, respectively. A non-automatic accounting method change filed with the 2018 tax return was approved by the Internal Revenue Service during the third quarter of 2019 and favorably impacted the third quarter and year-to-date effective tax rate by 1.0% and 0.4%, respectively.

H.R. 1, Tax Cuts and Jobs Act (“TCJA”), was signed into law on December 22, 2017. The total impact of the TCJA in the third quarter and first nine months of 2018 was a net expense of $0.1 million and a net benefit of $24.3 million, respectively. The impacts were as follows: First, the Company’s 2018 federal statutory rate dropped from 35.0% to 24.5% which required an adjustment to the value of its deferred tax assets and liabilities. This adjustment ($30.3 million provisional amount recorded in the first quarter of 2018 and $0.4 million provisional amount in the third quarter of 2018) favorably impacted the third quarter and year-to-date effective tax rate by 1.5% and 61.7%, respectively. Second, the TCJA subjected the Company’s cumulative foreign earnings to deferral income tax ($4.1 million provisional amount of which $2.9 million was recorded in the first quarter of 2018, $0.7 million was recorded in the third quarter of 2018 and $0.5 million in the third quarter of 2019) which unfavorably impacted the third quarter and year-to-date effective tax rate by 2.1% and 8.2%, respectively.

In the first quarter of 2018, the Company recorded a $2.3 million provisional estimate of the income tax effects of the future repatriation of the cumulative earnings of its foreign subsidiaries which unfavorably impacted the year-to-date effective tax rate by 4.7%. An additional $7.5 million pension contribution for the 2017 plan year was approved during the second quarter of 2018 increasing the value of the deferred tax liability by $1.0 million. This favorable adjustment, net of the $0.3 million unfavorable impact to the 2017 Domestic Production Deduction, favorably impacted the year-to-date effective tax rate by 1.6%. An accounting method change was filed with the 2017 tax return which resulted in an additional deferred tax liability to be adjusted as a result of the TCJA. A favorable adjustment, net of the $0.3 million unfavorable impact to the 2018 Domestic Production deduction, favorably impacted the third quarter and year-to-date effective tax rate by 2.9% and 1.4%, respectively. The income tax expense in the third quarter and first nine months of 2018 was favorably impacted by return to provision true-ups decreasing the third quarter and year-to-date effective tax rate by 1.4% and 0.7%, respectively. Income tax expense in the third quarter and first nine months of 2018 was also favorably impacted by additional tax benefits on share-based compensation that vested during the quarter decreasing the effective tax rate by 1.9% and 0.9%, respectively.

Provisions under the TCJA that became effective for the Company in the current fiscal year include a further reduction in the U.S. statutory rate to 21%, a new minimum tax on global intangible low-taxed income (“GILTI”), the benefit of the deduction for foreign-derived intangible income (“FDII”), and changes to IRC Section 162(m) related to the deductibility of executive compensation.

SHAREHOLDERS' EQUITY

9 Months Ended

Jun. 30, 2019

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

10. SHAREHOLDERS’ EQUITY

The change in shareholders’ equity for the first nine months of 2019 and 2018 is shown below (in thousands):


	Three Months Ended June 30,		Nine Months Ended June 30,
	2018	2019	2018	2019

Common stock
Beginning balance	305	305	305	305
Stock plans	—	1	—	1
Ending balance	305	306	305	306

Additional paid-in-capital
Beginning balance	292,404	293,612	289,785	291,190
Stock plans	(2,298)	(2,408)	321	14
Ending balance	290,106	291,204	290,106	291,204

Retained earnings
Beginning balance	557,249	643,018	516,718	606,836
Net earnings common stockholders	19,019	20,067	63,684	56,181
Dividends paid	(2,076)	(2,082)	(6,210)	(6,227)
Adoption of accounting standards updates	—	—	—	4,213
Ending balance	574,192	661,003	574,192	661,003

Accumulated other comprehensive income (loss)
Beginning balance	(23,028)	(35,280)	(27,308)	(31,528)
Foreign currency translation	(6,865)	1,840	(2,801)	(2,013)
Pension	—	—	61	—
Forward exchange contracts	(62)	(7)	93	94
Ending balance	(29,955)	(33,447)	(29,955)	(33,447)

Treasury stock
Beginning balance	(107,394)	(107,259)	(107,582)	(107,394)
Issued under stock plans	—	—	188	135
Ending balance	(107,394)	(107,259)	(107,394)	(107,259)

Total equity	727,254	811,807	727,254	811,807

RETIREMENT PLANS

9 Months Ended

Jun. 30, 2019

RETIREMENT PLANS

RETIREMENT PLANS

11. RETIREMENT PLANS

A summary of net periodic benefit expense for the Company’s defined benefit plans for the three and nine-month periods ended June 30, 2019 and 2018 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following:


	Three Months			Nine Months
	Ended June 30,			Ended June 30,
(In thousands)	2019		2018	2019	2018
Defined benefit plans
Interest cost	$	875	821	2,626	2,461
Expected return on assets		(1,086)	(975)	(3,259)	(2,924)
Amortization of:
Prior service cost		—	—	—	—
Actuarial loss		487	548	1,461	1,644
Net periodic benefit cost	$	276	394	828	1,181

DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Jun. 30, 2019

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

12. DERIVATIVE FINANCIAL INSTRUMENTS

Market risks relating to the Company’s operations result primarily from changes in interest rates and changes in foreign currency exchange rates. The Company is exposed to market risk related to changes in interest rates and selectively uses derivative financial instruments, including forward contracts and swaps, to manage these risks. In 2018, the Company entered into three interest rate swaps with a notional amount of $150 million to hedge some of its exposure to variability in future LIBOR-based interest payments on variable rate debt. In addition, the Company’s Canadian subsidiary Morgan Schaffer enters into foreign exchange contracts to manage foreign currency risk as a portion of their revenue is denominated in U.S. dollars. The Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. All derivative instruments are reported in either accrued expenses or other receivables on the balance sheet at fair value. For derivative instruments designated as cash flow hedges, the gain or loss on the derivative is deferred in accumulated other comprehensive income until recognized in earnings with the underlying hedged item. The interest rate swaps entered into during 2018 were not designated as cash flow hedges and, therefore, the gain or loss on the derivative is reflected in earnings each period.

The following is a summary of the notional transaction amounts and fair values for the Company’s outstanding derivative financial instruments by risk category and instrument type as of June 30, 2019:


		Fair
	Notional	Value		Float		Fix
(In thousands)	amount	(US$)		Rate		Rate
Forward contracts	6,000	USD	(4)
Interest rate swap	150,000	USD	6	2.38	%	2.09	%
Interest rate swap *	150,000	USD	(1,041)	N/A		2.24	%

*This swap represents a forward contract and will be effective in November 2019.

FAIR VALUE MEASUREMENTS

9 Months Ended

Jun. 30, 2019

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

13. FAIR VALUE MEASUREMENTS

The accounting guidance establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows:

●

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

●

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Financial Assets and Liabilities

The Company has estimated the fair value of its financial instruments as of June 30, 2019 and September 30, 2018 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, inventories, payables, debt and other current assets and liabilities approximate fair value because of the short maturity of those instruments.

Fair Value of Financial Instruments

The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, as presented below as of June 30, 2019:


(In thousands)	Level 1		Level 2	Level 3		Total
Assets (Liabilities):
Forward contracts	$	—	(1,039)	$	—	(1,039)

Valuation was based on third party evidence of similarly priced derivative instruments.

Nonfinancial Assets and Liabilities

The Company’s nonfinancial assets such as property, plant and equipment, and other intangible assets are not measured at fair value on a recurring basis; however they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. No impairments were recorded during the three and nine-month periods ended June 30, 2019.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

REVENUES

9 Months Ended

Jun. 30, 2019

REVENUES

REVENUES

14. REVENUES

Disaggregation of Revenues

Our revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2019 are presented in the table below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The table below also includes a reconciliation of the disaggregated revenue within our reportable segments.


Three Months Ended June 30, 2019							Technical
(In thousands)	Filtration		Test		USG		Packaging		Total
Customer type:
Commercial	$	47,482	$	37,980	$	52,065	$	21,507	$	159,034
Government		35,585		4,318		829		—		40,732
Total revenues	$	83,067	$	42,298	$	52,894	$	21,507	$	199,766

Geographic location:
United States	$	69,872	$	26,923	$	38,414	$	11,559	$	146,268
International		13,195		15,375		14,480		9,948		53,498
Total revenues	$	83,067	$	42,298	$	52,894	$	21,507	$	199,766

Revenue recognition method:
Point in time	$	41,633	$	6,485	$	40,968	$	—	$	89,092
Over time		41,434		35,813		11,926		21,507		110,674
Total revenues	$	83,067	$	42,298	$	52,894	$	21,507	$	199,766


Nine Months Ended June 30, 2019							Technical
(In thousands)	Filtration		Test		USG		Packaging		Total
Customer type:
Commercial	$	131,112	$	111,577	$	154,240	$	63,251	$	460,180
Government		97,657		14,882		3,399		194		116,132
Total revenues	$	228,769	$	126,459	$	157,639	$	63,445	$	576,312

Geographic location:
United States	$	190,701	$	82,072	$	112,289	$	32,865	$	417,927
International		38,068		44,387		45,350		30,580		158,385

Total revenues	$	228,769	$	126,459	$	157,639	$	63,445	$	576,312

Revenue recognition method:
Point in time	$	115,852	$	29,092	$	122,075	$	-	$	267,021
Over time		112,917		97,367		35,564		63,445		309,291
Total revenues	$	228,769	$	126,459	$	157,639	$	63,445	$	576,312

Remaining Performance Obligations

Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenue in future periods when we perform under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At June 30, 2019, we had $432.5 million in remaining performance obligations of which we expect to recognize revenues of 83% in the next twelve months.

Contract assets and liabilities

Assets and liabilities related to our contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At June 30, 2019, contract assets and liabilities totaled $99.5 million and $53.8 million, respectively. Upon adoption of ASC 606 on October 1, 2018, contract assets and liabilities related to our contracts with customers were $87 million and $51 million, respectively. During the first nine months of 2019, we recognized approximately $35 million in revenues that were included in the contract liabilities balance at the adoption date.

Reconciliation of ASC 606 to Prior Accounting Standards

The amount by which each financial statement line item is affected in 2019 as a result of applying the new accounting standard as discussed in Note 2 is presented below:


	June 30, 2019
			Effect of the
			adoption of		Under Prior
(In thousands)	As Reported		ASC 606		Accounting
Consolidated Balance Sheets
Contract assets (1)	$	99,499	$	(43,576)	$	55,923
Inventories		126,816		36,089		162,905
Total current assets		450,206		(7,487)		442,719
Total assets		1,326,095		(7,487)		1,318,608
Contract liabilities (2)		53,758		4,549		58,307
Total current liabilities		199,736		4,549		204,285
Deferred tax liabilities		66,286		(1,678)		64,608
Total liabilities		514,288		2,871		517,159
Retained earnings		661,003		(10,358)		650,645
Total shareholders’ equity		811,807		(10,358)		801,449
Total liabilities and shareholders’ equity	$	1,326,095		(7,487)		1,318,608

(1)

Previously “cost and estimated earnings on long-term contracts”

(2)

Previously “advance payments on long-term contracts” and “current portion of deferred revenue”


	Three Months Ended
	June 30, 2019
			Effect of the
			adoption of		Under Prior
(In thousands, except per share amounts)	As Reported		ASC 606		Accounting
Consolidated Statements of Operations
Net sales	$	199,766	$	(4,008)	$	195,758
Cost of sales		122,172		(1,380)		120,792
Total costs and expenses		174,874		(1,380)		173,494
Earnings before income tax		24,892		(2,628)		22,264
Income tax expense (benefit)		4,825		(399)		4,426
Net earnings		20,067		(2,229)		17,838
Earnings per share:
Basic:
Net earnings	$	0.77	$	(0.08)	$	0.69
Diluted:
Net earnings	$	0.77	$	(0.08)	$	0.69
Consolidated Statements of Comprehensive Income
Net earnings	$	20,067	$	(2,229)	$	17,838
Comprehensive income		21,899		(2,229)		19,670


	Nine Months Ended
	June 30, 2019
			Effect of the
			adoption of		Under Prior
(In thousands, except per share amounts)	As Reported		ASC 606		Accounting
Consolidated Statements of Operations
Net sales	$	576,312	$	(9,787)	$	566,525
Cost of sales		363,026		(8,360)		354,666
Total costs and expenses		506,808		(8,360)		498,448
Earnings before income tax		69,504		(1,427)		68,077
Income tax expense (benefit)		13,323		(171)		13,152
Net earnings		56,181		(1,256)		54,925
Earnings per share:
Basic:
Net earnings	$	2.17	$	(0.05)	$	2.12
Diluted:
Net earnings	$	2.15	$	(0.04)	$	2.11
Consolidated Statements of Comprehensive Income
Net earnings	$	56,181	$	(1,256)	$	54,925
Comprehensive income		54,262		(1,256)		53,006
Consolidated Statements of Cash flows
Net earnings	$	56,181	$	(1,256)	$	54,925
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in assets and liabilities	$	(41,851)		1,256	$	(40,595)
Net cash provided by operating activities		37,041		—		37,041

NEW ACCOUNTING STANDARDS

9 Months Ended

Jun. 30, 2019

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS

15. NEW ACCOUNTING STANDARDS

In February 2016, the FASB issued ASU No. 2016-062, “Leases” (ASU 2016-02) which supersedes ASC 840, “Leases” and creates a new topic, ASC 842 “Leases.” Subsequent to the issuance of ASU 2016-02, ASC 842 was amended by various updates that amend and clarify the impact and implementation of the aforementioned update. These updates require lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. Upon initial application, the provisions of these updates are required to be applied using the modified retrospective method which requires retrospective adoption to each prior

reporting period presented with the cumulative effect of adoption recorded to the earliest reporting period presented. An optional transition method can be utilized which requires retrospective adoption beginning on the date of adoption with the cumulative effect of initially applying these updates recognized at the date of initial adoption. These updates also expand the required quantitative and qualitative disclosures surrounding leases. These updates are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier application permitted. We expect to adopt these updates on October 1, 2019 using the optional transition method. We continue to evaluate the impact these updates will have on our consolidated financial statements. Based upon the analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of assets and liabilities of less than $30 million to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. We believe the updates will also have an impact on our accounting policies, internal controls and disclosures related to leases.

In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which eliminates the exception for all intra-entity sale of assets other than inventory. This standard is effective for annual periods beginning after December 15, 2017. There was no significant impact to the Company’s consolidated financial statements as a result of adopting this new standard.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE (Policies)	9 Months Ended
	Jun. 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE
Revenue Recognition	Revenue Recognition Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Filtration: Within the Filtration segment, approximately 48% of revenues (approximately 18% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial and military customers and have a single performance obligation as there is only one good promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. The transaction price for these contracts reflects our estimate of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 52% of the segment’s revenues (approximately 19% of consolidated revenues) are accounted for over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract. Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Filtration segment contracts the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Test: Within the Test segment, approximately 25% of revenues (approximately 6% of consolidated revenues) are recognized at a point in time when products such as, antennas and probes are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 75% of the segment’s revenues (approximately 17% of consolidated revenues) are recorded over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, the Company estimates profit as the difference between total revenue and total estimated cost of a contract and recognizes these revenues and costs based primarily on contract milestones. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. USG: Within the USG segment, approximately 80% of revenues (approximately 24% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. The related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and the Company has a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 8% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represent our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Technical Packaging: Within the Technical Packaging segment, 100% of the revenues (approximately 10% of consolidated revenues) are recognized over time as the product does not have an alternative use and the Company has an enforceable right to payment. Selecting the method to measure progress towards completion for the contracts requires judgment and is based on the nature of the products to be provided. We use the cost-to-cost method to measure progress for our Technical Packaging segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred. The transaction price for our contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of weeks, minimizing the amount of judgment in developing the cost estimate. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our contracts, the customer is billed upon shipment of product. Amounts billed and due from our customers are classified in Accounts receivable, net. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable.
Contract Assets and Liabilities	Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. Liabilities for customer rebates and discounts are included in other current liabilities in the accompanying balance sheet.

EARNINGS PER SHARE (EPS) (Tables)

9 Months Ended

Jun. 30, 2019

EARNINGS PER SHARE (EPS)

Schedule of weighted average number of shares used in the calculation of earnings per share


	Three Months		Nine Months
	Ended June 30,		Ended June 30,
	2019	2018	2019	2018

Weighted Average Shares Outstanding - Basic	25,971	25,900	25,935	25,862
Dilutive Options and Restricted Shares	138	150	155	180

Adjusted Shares - Diluted	26,109	26,050	26,090	26,042

INVENTORIES (Tables)

9 Months Ended

Jun. 30, 2019

INVENTORIES

Schedule of inventories

Inventories consist of the following:


	June 30,		September 30,
(In thousands)	2019		2018

Finished goods	$	18,583	26,678
Work in process		42,678	47,765
Raw materials		65,555	60,973
Total inventories	$	126,816	135,416

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Jun. 30, 2019

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of goodwill and intangible assets


	June 30,		September 30,
(Dollars in thousands)	2019		2018
Goodwill	$	381,683	381,652

Intangible assets with determinable lives:
Patents
Gross carrying amount	$	1,880	1,833
Less: accumulated amortization		873	791
Net	$	1,007	1,042

Capitalized software
Gross carrying amount	$	77,502	71,294
Less: accumulated amortization		47,206	41,624
Net	$	30,296	29,670

Customer relationships
Gross carrying amount	$	185,135	185,333
Less: accumulated amortization		55,641	47,802
Net	$	129,494	137,531

Other
Gross carrying amount	$	5,382	5,468
Less: accumulated amortization		2,518	2,056
Net	$	2,864	3,412
Intangible assets with indefinite lives:
Trade names	$	172,964	173,698

Schedule of carrying amount of goodwill attributable to each business segment


(Dollars in millions)	USG		Test	Filtration	Packaging	Total
Balance as of September 30, 2018		254.1	34.1	73.7	19.8	381.7
Foreign currency translation		0.2	—	—	(0.2)	—
Balance as of June 30, 2019	$	254.3	34.1	73.7	19.6	381.7

BUSINESS SEGMENT INFORMATION (Tables)

9 Months Ended

Jun. 30, 2019

BUSINESS SEGMENT INFORMATION

Schedule of Net Sales and Earnings Before Income Tax


	Three Months			Nine Months
	Ended June 30,			Ended June 30,
(In thousands)	2019		2018	2019	2018
NET SALES
Filtration	$	83,067	69,721	228,769	195,531
Test		42,298	45,034	126,459	123,368
USG		52,894	55,489	157,639	157,942
Technical Packaging		21,507	21,979	63,445	63,655
Consolidated totals	$	199,766	192,223	576,312	540,496

EBIT
Filtration	$	19,039	14,292	47,092	35,056
Test		5,927	5,902	14,791	13,797
USG		10,148	11,528	40,461	27,805
Technical Packaging		1,625	2,505	3,333	5,355
Corporate (loss)		(9,874)	(8,668)	(30,385)	(25,848)
Consolidated EBIT		26,865	25,559	75,292	56,165
Less: Interest expense		(1,973)	(2,243)	(5,788)	(6,464)
Earnings before income taxes	$	24,892	23,316	69,504	49,701

SHAREHOLDERS' EQUITY (Tables)

9 Months Ended

Jun. 30, 2019

SHAREHOLDERS' EQUITY

Schedule of change in shareholders' equity

The change in shareholders’ equity for the first nine months of 2019 and 2018 is shown below (in thousands):


	Three Months Ended June 30,		Nine Months Ended June 30,
	2018	2019	2018	2019

Common stock
Beginning balance	305	305	305	305
Stock plans	—	1	—	1
Ending balance	305	306	305	306

Additional paid-in-capital
Beginning balance	292,404	293,612	289,785	291,190
Stock plans	(2,298)	(2,408)	321	14
Ending balance	290,106	291,204	290,106	291,204

Retained earnings
Beginning balance	557,249	643,018	516,718	606,836
Net earnings common stockholders	19,019	20,067	63,684	56,181
Dividends paid	(2,076)	(2,082)	(6,210)	(6,227)
Adoption of accounting standards updates	—	—	—	4,213
Ending balance	574,192	661,003	574,192	661,003

Accumulated other comprehensive income (loss)
Beginning balance	(23,028)	(35,280)	(27,308)	(31,528)
Foreign currency translation	(6,865)	1,840	(2,801)	(2,013)
Pension	—	—	61	—
Forward exchange contracts	(62)	(7)	93	94
Ending balance	(29,955)	(33,447)	(29,955)	(33,447)

Treasury stock
Beginning balance	(107,394)	(107,259)	(107,582)	(107,394)
Issued under stock plans	—	—	188	135
Ending balance	(107,394)	(107,259)	(107,394)	(107,259)

Total equity	727,254	811,807	727,254	811,807

RETIREMENT PLANS (Tables)

9 Months Ended

Jun. 30, 2019

RETIREMENT PLANS

Schedule of components of net periodic benefit cost


	Three Months			Nine Months
	Ended June 30,			Ended June 30,
(In thousands)	2019		2018	2019	2018
Defined benefit plans
Interest cost	$	875	821	2,626	2,461
Expected return on assets		(1,086)	(975)	(3,259)	(2,924)
Amortization of:
Prior service cost		—	—	—	—
Actuarial loss		487	548	1,461	1,644
Net periodic benefit cost	$	276	394	828	1,181

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Jun. 30, 2019

DERIVATIVE FINANCIAL INSTRUMENTS

Schedule of outstanding derivative financial instruments


		Fair
	Notional	Value		Float		Fix
(In thousands)	amount	(US$)		Rate		Rate
Forward contracts	6,000	USD	(4)
Interest rate swap	150,000	USD	6	2.38	%	2.09	%
Interest rate swap *	150,000	USD	(1,041)	N/A		2.24	%

*This swap represents a forward contract and will be effective in November 2019.

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jun. 30, 2019

FAIR VALUE MEASUREMENTS

Schedule of fair value of financial instruments

The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, as presented below as of June 30, 2019:


(In thousands)	Level 1		Level 2	Level 3		Total
Assets (Liabilities):
Forward contracts	$	—	(1,039)	$	—	(1,039)

REVENUES (Tables)

9 Months Ended

Jun. 30, 2019

REVENUES

Schedule of disaggregation of revenue by reportable segment


Three Months Ended June 30, 2019							Technical
(In thousands)	Filtration		Test		USG		Packaging		Total
Customer type:
Commercial	$	47,482	$	37,980	$	52,065	$	21,507	$	159,034
Government		35,585		4,318		829		—		40,732
Total revenues	$	83,067	$	42,298	$	52,894	$	21,507	$	199,766

Geographic location:
United States	$	69,872	$	26,923	$	38,414	$	11,559	$	146,268
International		13,195		15,375		14,480		9,948		53,498
Total revenues	$	83,067	$	42,298	$	52,894	$	21,507	$	199,766

Revenue recognition method:
Point in time	$	41,633	$	6,485	$	40,968	$	—	$	89,092
Over time		41,434		35,813		11,926		21,507		110,674
Total revenues	$	83,067	$	42,298	$	52,894	$	21,507	$	199,766


Nine Months Ended June 30, 2019							Technical
(In thousands)	Filtration		Test		USG		Packaging		Total
Customer type:
Commercial	$	131,112	$	111,577	$	154,240	$	63,251	$	460,180
Government		97,657		14,882		3,399		194		116,132
Total revenues	$	228,769	$	126,459	$	157,639	$	63,445	$	576,312

Geographic location:
United States	$	190,701	$	82,072	$	112,289	$	32,865	$	417,927
International		38,068		44,387		45,350		30,580		158,385

Total revenues	$	228,769	$	126,459	$	157,639	$	63,445	$	576,312

Revenue recognition method:
Point in time	$	115,852	$	29,092	$	122,075	$	-	$	267,021
Over time		112,917		97,367		35,564		63,445		309,291
Total revenues	$	228,769	$	126,459	$	157,639	$	63,445	$	576,312

Schedule of reconciliation of ASC 606 to prior accounting standards

The amount by which each financial statement line item is affected in 2019 as a result of applying the new accounting standard as discussed in Note 2 is presented below:


	June 30, 2019
			Effect of the
			adoption of		Under Prior
(In thousands)	As Reported		ASC 606		Accounting
Consolidated Balance Sheets
Contract assets (1)	$	99,499	$	(43,576)	$	55,923
Inventories		126,816		36,089		162,905
Total current assets		450,206		(7,487)		442,719
Total assets		1,326,095		(7,487)		1,318,608
Contract liabilities (2)		53,758		4,549		58,307
Total current liabilities		199,736		4,549		204,285
Deferred tax liabilities		66,286		(1,678)		64,608
Total liabilities		514,288		2,871		517,159
Retained earnings		661,003		(10,358)		650,645
Total shareholders’ equity		811,807		(10,358)		801,449
Total liabilities and shareholders’ equity	$	1,326,095		(7,487)		1,318,608

(1)

Previously “cost and estimated earnings on long-term contracts”

(2)

Previously “advance payments on long-term contracts” and “current portion of deferred revenue”


	Three Months Ended
	June 30, 2019
			Effect of the
			adoption of		Under Prior
(In thousands, except per share amounts)	As Reported		ASC 606		Accounting
Consolidated Statements of Operations
Net sales	$	199,766	$	(4,008)	$	195,758
Cost of sales		122,172		(1,380)		120,792
Total costs and expenses		174,874		(1,380)		173,494
Earnings before income tax		24,892		(2,628)		22,264
Income tax expense (benefit)		4,825		(399)		4,426
Net earnings		20,067		(2,229)		17,838
Earnings per share:
Basic:
Net earnings	$	0.77	$	(0.08)	$	0.69
Diluted:
Net earnings	$	0.77	$	(0.08)	$	0.69
Consolidated Statements of Comprehensive Income
Net earnings	$	20,067	$	(2,229)	$	17,838
Comprehensive income		21,899		(2,229)		19,670


	Nine Months Ended
	June 30, 2019
			Effect of the
			adoption of		Under Prior
(In thousands, except per share amounts)	As Reported		ASC 606		Accounting
Consolidated Statements of Operations
Net sales	$	576,312	$	(9,787)	$	566,525
Cost of sales		363,026		(8,360)		354,666
Total costs and expenses		506,808		(8,360)		498,448
Earnings before income tax		69,504		(1,427)		68,077
Income tax expense (benefit)		13,323		(171)		13,152
Net earnings		56,181		(1,256)		54,925
Earnings per share:
Basic:
Net earnings	$	2.17	$	(0.05)	$	2.12
Diluted:
Net earnings	$	2.15	$	(0.04)	$	2.11
Consolidated Statements of Comprehensive Income
Net earnings	$	56,181	$	(1,256)	$	54,925
Comprehensive income		54,262		(1,256)		53,006
Consolidated Statements of Cash flows
Net earnings	$	56,181	$	(1,256)	$	54,925
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in assets and liabilities	$	(41,851)		1,256	$	(40,595)
Net cash provided by operating activities		37,041		—		37,041

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE- Revenue Recognition (Details)	9 Months Ended
	Jun. 30, 2019
Filtration
Percentage of segment revenues recognized when services are performed or when products are delivered	48.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	18.00%
Percentage of segment revenues recorded over time	52.00%
Percentage of consolidate revenues recorded over time	19.00%
Test
Percentage of segment revenues recognized when services are performed or when products are delivered	25.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	6.00%
Percentage of segment revenues recorded over time	75.00%
Percentage of consolidate revenues recorded over time	17.00%
USG
Percentage of segment revenues recognized when services are performed or when products are delivered	80.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	24.00%
Percentage of segment revenues recorded over time	20.00%
Percentage of consolidate revenues recorded over time	6.00%
Percentage of segment revenues based on software contracts	8.00%
Percentage of consolidate revenues based on software contracts	2.00%
Technical Packaging
Percentage of segment revenues recorded over time	100.00%
Percentage of consolidate revenues recorded over time	10.00%

EARNINGS PER SHARE (EPS) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
EARNINGS PER SHARE (EPS)
Weighted Average Shares Outstanding - Basic	25,971	25,900	25,935	25,862
Dilutive Options and Restricted Shares	138	150	155	180
Adjusted Shares - Diluted	26,109	26,050	26,090	26,042

SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Selling, general and administrative expenses
SHARE-BASED COMPENSATION
Total share-based compensation cost	$ 1.3	$ 1.2	$ 3.9	$ 3.9
Performance-Accelerated Restricted Share Awards
SHARE-BASED COMPENSATION
Pretax compensation expense	$ 1.0	0.9	$ 3.1	3.1
Non-vested shares	280,504		280,504
Non-Employee Directors Plan
SHARE-BASED COMPENSATION
Pretax compensation expense	$ 0.3	0.3	$ 0.8	0.8
Total income tax benefit recognized	0.2	$ 0.2	0.8	$ 0.9
Total unrecognized compensation cost related to share-based compensation arrangements	$ 10.7		$ 10.7
Remaining weighted-average period for recognition of total unrecognized compensation cost			2 years 1 month 6 days

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Sep. 30, 2018
INVENTORIES
Finished goods	$ 18,583	$ 26,678
Work in process	42,678	47,765
Raw materials	65,555	60,973
Total inventories	$ 126,816	$ 135,416

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Sep. 30, 2018
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill	$ 381,683	$ 381,652
Less: accumulated amortization	106,239	92,274
Patents
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	1,880	1,833
Less: accumulated amortization	873	791
Net	1,007	1,042
Capitalized software
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	77,502	71,294
Less: accumulated amortization	47,206	41,624
Net	30,296	29,670
Customer relationships
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	185,135	185,333
Less: accumulated amortization	55,641	47,802
Net	129,494	137,531
Other
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	5,382	5,468
Less: accumulated amortization	2,518	2,056
Net	2,864	3,412
Trade names
GOODWILL AND OTHER INTANGIBLE ASSETS
Trade names	$ 172,964	$ 173,698

GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2019 USD ($)
Changes in goodwill
Goodwill, Beginning Balance	$ 381,652
Goodwill, Ending Balance	381,683
USG
Changes in goodwill
Goodwill, Beginning Balance	254,100
Foreign currency translation	200
Goodwill, Ending Balance	254,300
Test
Changes in goodwill
Goodwill, Beginning Balance	34,100
Goodwill, Ending Balance	34,100
Filtration
Changes in goodwill
Goodwill, Beginning Balance	73,700
Goodwill, Ending Balance	73,700
Technical Packaging
Changes in goodwill
Goodwill, Beginning Balance	19,800
Foreign currency translation	(200)
Goodwill, Ending Balance	$ 19,600

BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
BUSINESS SEGMENT INFORMATION
NET SALES	$ 199,766	$ 192,223	$ 576,312	$ 540,496
Consolidated EBIT	26,865	25,559	75,292	56,165
Less: interest expense	(1,973)	(2,243)	(5,788)	(6,464)
Earnings before income taxes	24,892	23,316	69,504	49,701
Filtration
BUSINESS SEGMENT INFORMATION
NET SALES	83,067	69,721	228,769	195,531
Consolidated EBIT	19,039	14,292	47,092	35,056
Test
BUSINESS SEGMENT INFORMATION
NET SALES	42,298	45,034	126,459	123,368
Consolidated EBIT	5,927	5,902	14,791	13,797
USG
BUSINESS SEGMENT INFORMATION
NET SALES	52,894	55,489	157,639	157,942
Consolidated EBIT	10,148	11,528	40,461	27,805
Technical Packaging
BUSINESS SEGMENT INFORMATION
NET SALES	21,507	21,979	63,445	63,655
Consolidated EBIT	1,625	2,505	3,333	5,355
Corporate (loss)
BUSINESS SEGMENT INFORMATION
Consolidated EBIT	$ (9,874)	$ (8,668)	$ (30,385)	$ (25,848)

DEBT (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Sep. 30, 2018
DEBT
Total borrowings	$ 217,921	$ 220,000
Short-term borrowings and current portion of long-term debt	(20,921)	(20,000)
Total long-term debt, less current portion	$ 197,000	$ 200,000

DEBT - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
DEBT
Available to borrow under the credit facility	$ 225,000		$ 225,000
Cash on hand	38,956		38,956		$ 30,477
Outstanding borrowings	217,921		217,921		$ 220,000
Short term borrowings	900		900
Letters of Credit Outstanding, Amount	$ 7,200		$ 7,200
Facility Secured By Pledge Of Material Foreign Subsidiaries Share Equity			65.00%
Weighted average interest rates	3.21%	3.17%	3.22%	2.97%
Long-term Debt, Current Maturities	$ 20,900		$ 20,900
Revolving Credit Facility
DEBT
Outstanding borrowings	217,000		217,000
Line of Credit Facility, Amount Outstanding	450,000		$ 450,000
Line of Credit Facility, Commitment Fee Amount	250,000
Minimum
DEBT
Credit facility fees			12.50%
Maximum
DEBT
Incremental term loan	$ 250,000		$ 250,000
Credit facility fees			27.50%

INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands		3 Months Ended					9 Months Ended
INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands	Dec. 22, 2017	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2019	Sep. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
INCOME TAX EXPENSE
Effective Income Tax Rate Reconciliation, Percent		18.40%		19.40%			19.20%		(28.10%)
Income Tax Expense (Benefit)		$ 4,825		$ 4,297			$ 13,323		$ (13,983)
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount		100	$ 2,300				2,400
Amended return benefit		$ 100	$ 200				$ 300
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Percent		1.00%					4.10%
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Percent		1.80%		1.90%			0.70%		0.90%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent						35.00%	21.00%	24.50%
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount				$ 400	$ 1,000	$ (30,300)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent				1.50%					61.70%
Effective Income Tax Rate Reconciliation, Tax Settlement, Domestic, Amount	$ 4,100	$ 500		$ 700		2,900
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount						$ 2,300
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Percent		2.10%					8.20%		4.70%
Effective Income Tax Rate Reconciliation, Deduction, Amount		$ 300							$ 300
Effective Income Tax Rate Reconciliation, Deduction, Percent		1.00%		2.90%			0.40%		1.40%	1.60%
Additional Pension Contribution to be Made					$ 7,500
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent				1.40%					0.70%
Tax Cuts And Jobs Act [Member]
INCOME TAX EXPENSE
Income Tax Expense (Benefit)				$ 100					$ 24,300

SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Changes in shareholder's equity
Beginning Balance			$ 759,410
Net earnings	$ 20,067	$ 19,019	56,181	$ 63,684
Other comprehensive income (loss)	1,832	(6,927)	(1,919)	(2,647)
Ending Balance	811,807	727,254	811,807	727,254
Common Stock [Member]
Changes in shareholder's equity
Beginning Balance	305	305	305	305
Stock plans	1		1
Ending Balance	306	305	306	305
Common Stock Including Additional Paid in Capital [Member]
Changes in shareholder's equity
Beginning Balance	293,612	292,404	291,190	289,785
Stock compensation plans	(2,408)	(2,298)	14	321
Ending Balance	291,204	290,106	291,204	290,106
Retained Earnings [Member]
Changes in shareholder's equity
Beginning Balance	643,018	557,249	606,836	516,718
Net earnings	20,067	19,019	56,181	63,684
Cash dividends	(2,082)	(2,076)	(6,227)	(6,210)
Adoption of accounting standards updates			4,213
Ending Balance	661,003	574,192	661,003	574,192
AOCI Attributable to Parent [Member]
Changes in shareholder's equity
Beginning Balance	(35,280)	(23,028)	(31,528)	(27,308)
Foreign currency translation	1,840	(6,865)	(2,013)	(2,801)
Pension				61
Forward exchange contracts	(7)	(62)	94	93
Ending Balance	(33,447)	(29,955)	(33,447)	(29,955)
Treasury Stock [Member]
Changes in shareholder's equity
Beginning Balance	(107,259)	(107,394)	(107,394)	(107,582)
Issued under stock plans			135	188
Ending Balance	$ (107,259)	$ (107,394)	$ (107,259)	$ (107,394)

RETIREMENT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
RETIREMENT PLANS (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
RETIREMENT PLANS
Interest cost	$ 875	$ 821	$ 2,626	$ 2,461
Expected return on plan assets	(1,086)	(975)	(3,259)	(2,924)
Actuarial loss	(487)	(548)	(1,461)	(1,644)
Net periodic benefit cost	$ 276	$ 394	$ 828	$ 1,181

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Notional amount	$ 150,000	$ 150,000
Fair Value	$ 6
Float Rate	2.38%
Fix Rate	2.09%
Interest rate swap one
DERIVATIVE FINANCIAL INSTRUMENTS
Notional amount	$ 150,000
Fair Value	$ (1,041)
Fix Rate	2.24%
Forward contracts
DERIVATIVE FINANCIAL INSTRUMENTS
Notional amount	$ 6,000
Fair Value	$ (4)

REVENUES - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of revenues
Total revenues	$ 199,766	$ 192,223	$ 576,312	$ 540,496
Point in time
Disaggregation of revenues
Total revenues	89,092		267,021
Over time
Disaggregation of revenues
Total revenues	110,674		309,291
United States
Disaggregation of revenues
Total revenues	146,268		417,927
International
Disaggregation of revenues
Total revenues	53,498		158,385
Commercial
Disaggregation of revenues
Total revenues	159,034		460,180
Government
Disaggregation of revenues
Total revenues	40,732		116,132
Filtration
Disaggregation of revenues
Total revenues	83,067	69,721	228,769	195,531
Filtration \| Point in time
Disaggregation of revenues
Total revenues	41,633		115,852
Filtration \| Over time
Disaggregation of revenues
Total revenues	41,434		112,917
Filtration \| United States
Disaggregation of revenues
Total revenues	69,872		190,701
Filtration \| International
Disaggregation of revenues
Total revenues	13,195		38,068
Filtration \| Commercial
Disaggregation of revenues
Total revenues	47,482		131,112
Filtration \| Government
Disaggregation of revenues
Total revenues	35,585		97,657
Test
Disaggregation of revenues
Total revenues	42,298	45,034	126,459	123,368
Test \| Point in time
Disaggregation of revenues
Total revenues	6,485		29,092
Test \| Over time
Disaggregation of revenues
Total revenues	35,813		97,367
Test \| United States
Disaggregation of revenues
Total revenues	26,923		82,072
Test \| International
Disaggregation of revenues
Total revenues	15,375		44,387
Test \| Commercial
Disaggregation of revenues
Total revenues	37,980		111,577
Test \| Government
Disaggregation of revenues
Total revenues	4,318		14,882
USG
Disaggregation of revenues
Total revenues	52,894	55,489	157,639	157,942
USG \| Point in time
Disaggregation of revenues
Total revenues	40,968		122,075
USG \| Over time
Disaggregation of revenues
Total revenues	11,926		35,564
USG \| United States
Disaggregation of revenues
Total revenues	38,414		112,289
USG \| International
Disaggregation of revenues
Total revenues	14,480		45,350
USG \| Commercial
Disaggregation of revenues
Total revenues	52,065		154,240
USG \| Government
Disaggregation of revenues
Total revenues	829		3,399
Technical Packaging
Disaggregation of revenues
Total revenues	21,507	$ 21,979	63,445	$ 63,655
Technical Packaging \| Over time
Disaggregation of revenues
Total revenues	21,507		63,445
Technical Packaging \| United States
Disaggregation of revenues
Total revenues	11,559		32,865
Technical Packaging \| International
Disaggregation of revenues
Total revenues	9,948		30,580
Technical Packaging \| Commercial
Disaggregation of revenues
Total revenues	$ 21,507		63,251
Technical Packaging \| Government
Disaggregation of revenues
Total revenues			$ 194

REVENUES - Remaining Performance Obligations (Details) $ in Millions	Jun. 30, 2019 USD ($)
Remaining Performance Obligations
Revenue, Remaining Performance Obligation, Amount	$ 432.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized as of June 30, 2019	83.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months

REVENUES - Contract assets and liabilities (Details) - USD ($) $ in Millions	9 Months Ended
	Jun. 30, 2019	Oct. 01, 2018
REVENUES
Contract with Customer, Asset, Net	$ 99.5	$ 87.0
Contract with Customer, Liability	53.8	$ 51.0
Contract with Customer, Liability, Revenue Recognized	$ 35.0

REVENUES - Reconciliation of ASC 606 to Prior Standards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Consolidated Balance Sheets
Contract assets	$ 99,499		$ 99,499		$ 53,034
Inventories	126,816		126,816		135,416
Total current assets	450,206		450,206		396,023
Total assets	1,326,095		1,326,095		1,265,122
Contract liabilities	53,758		53,758		49,035
Total current liabilities	199,736		199,736		200,530
Deferred tax liabilities	66,286		66,286
Total liabilities	514,288		514,288		505,712
Retained earnings	661,003		661,003		606,837
Total shareholders' equity	811,807	$ 727,254	811,807	$ 727,254	759,410
Total liabilities and shareholders' equity	1,326,095		1,326,095		$ 1,265,122
Consolidated Statements of Operations
Net sales	199,766	192,223	576,312	540,496
Cost of sales	122,172	122,805	363,026	346,911
Total costs and expenses	174,874	168,907	506,808	490,795
Earnings before income tax	24,892	23,316	69,504	49,701
Income tax expense (benefit)	4,825	4,297	13,323	(13,983)
Net earnings	$ 20,067	$ 19,019	$ 56,181	$ 63,684
Basic:
Net earnings	$ 0.77	$ 0.73	$ 2.17	$ 2.46
Diluted:
Net earnings	$ 0.77	$ 0.73	$ 2.15	$ 2.45
Consolidated Statements of Comprehensive Income
Net earnings	$ 20,067	$ 19,019	$ 56,181	$ 63,684
Comprehensive income	21,899	12,092	54,262	61,037
Consolidated Statements of Cash flows
Net earnings	20,067	$ 19,019	56,181	63,684
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in assets and liabilities			(41,851)	(9,454)
Net cash provided by operating activities			37,041	$ 53,944
Effect of the Effect of ASU 606
Consolidated Balance Sheets
Contract assets	(43,576)		(43,576)
Inventories	36,089		36,089
Total current assets	(7,487)		(7,487)
Total assets	(7,487)		(7,487)
Contract liabilities	4,549		4,549
Total current liabilities	4,549		4,549
Deferred tax liabilities	(1,678)		(1,678)
Total liabilities	2,871		2,871
Retained earnings	(10,358)		(10,358)
Total shareholders' equity	(10,358)		(10,358)
Total liabilities and shareholders' equity	(7,487)		(7,487)
Consolidated Statements of Operations
Net sales	(4,008)		(9,787)
Cost of sales	(1,380)		(8,360)
Total costs and expenses	(1,380)		(8,360)
Earnings before income tax	(2,628)		(1,427)
Income tax expense (benefit)	(399)		(171)
Net earnings	$ (2,229)		$ (1,256)
Basic:
Net earnings	$ (0.08)		$ (0.05)
Diluted:
Net earnings	$ (0.08)		$ (0.04)
Consolidated Statements of Comprehensive Income
Net earnings	$ (2,229)		$ (1,256)
Comprehensive income	(2,229)		(1,256)
Consolidated Statements of Cash flows
Net earnings	(2,229)		(1,256)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in assets and liabilities			1,256
Under Prior Accounting
Consolidated Balance Sheets
Contract assets	55,923		55,923
Inventories	162,905		162,905
Total current assets	442,719		442,719
Total assets	1,318,608		1,318,608
Contract liabilities	58,307		58,307
Total current liabilities	204,285		204,285
Deferred tax liabilities	64,608		64,608
Total liabilities	517,159		517,159
Retained earnings	650,645		650,645
Total shareholders' equity	801,449		801,449
Total liabilities and shareholders' equity	1,318,608		1,318,608
Consolidated Statements of Operations
Net sales	195,758		566,525
Cost of sales	120,792		354,666
Total costs and expenses	173,494		498,448
Earnings before income tax	22,264		68,077
Income tax expense (benefit)	4,426		13,152
Net earnings	$ 17,838		$ 54,925
Basic:
Net earnings	$ 0.69		$ 2.12
Diluted:
Net earnings	$ 0.69		$ 2.11
Consolidated Statements of Comprehensive Income
Net earnings	$ 17,838		$ 54,925
Comprehensive income	19,670		53,006
Consolidated Statements of Cash flows
Net earnings	$ 17,838		54,925
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in assets and liabilities			(40,595)
Net cash provided by operating activities			$ 37,041

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE - ASC 606 Adoption (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Oct. 01, 2018	Sep. 30, 2018
Impact due to new accounting pronouncements
Retained earnings	$ 661,003		$ 606,837
Effect of the Effect of ASU 606 \| ASU 2014-09
Impact due to new accounting pronouncements
Retained earnings		$ 4,200

NEW ACCOUNTING STANDARDS (Details) - ASU 2016-02 - Restatement adjustment - Maximum $ in Millions	Oct. 01, 2019 USD ($)
Leases
Right-of-use assets	$ 30
Operating lease liabilities	$ 30

FAIR VALUE MEASUREMENTS (Details) - Forward contracts $ in Thousands	Jun. 30, 2019 USD ($)
DERIVATIVE FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments	$ (1,039)
Level 2
DERIVATIVE FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments	$ (1,039)