INVESTOR NEWS

ESCO Announces Third Quarter Results

ST. LOUIS, Aug. 3 /PRNewswire-FirstCall/ -- ESCO Technologies Inc. (NYSE:ESE - News) today reported its operating results for the third quarter ended June 30, 2010.

EPS is presented from “Continuing Operations” and “Discontinued Operations.” Fiscal 2009 discontinued operations include the results of Comtrak which was sold in March 2009.

Third Quarter 2010 Summary:

• Net sales were $157.6 million, an increase of $9.5 million, or 6.4 percent, over Q3 2009 sales of $148.1 million;
• Sequentially, Q3 2010 net sales increased $28.3 million, or 21.9 percent, over Q2 2010 sales of $129.3 million;
• EPS was $0.55 per share, an increase of $0.12 per share, or 27.9 percent, over Q3 2009 EPS of $0.43 per share;
• Sequentially, Q3 2010 EPS increased $0.33 per share, or 150 percent, over Q2 2010 EPS of $0.22 per share;
• Entered orders were $150.0 million resulting in book-to-bill ratio of .95x;
• Aclara RF AMI gas orders with PG&E were $20.8 million, bringing total PG&E gas orders to 4.4 million units and $247 million, exceeding the 4.1 million units originally expected under the contract; and
• Aclara RF AMI water orders with New York City Water were $9.4 million, bringing total NYC orders to 866,000 units and $66.8 million.

Chairman’s Commentary

Vic Richey, Chairman and Chief Executive Officer, commented, “I am very pleased with our third quarter results compared to both the prior year third quarter and our fiscal 2010 second quarter. We continue to focus on sales growth and execution, and again demonstrated our success in the third quarter.

“Compared to the prior year third quarter, we increased sales by $9.5 million in spite of a $9.7 million decrease at Aclara RF related to the wind-down of PG&E’s gas deployment. We increased our EBIT contribution $8.0 million, or 84 percent of the sales increase, resulting from exceptional operating performance at Doble and Aclara PLS.

“Filtration delivered a 19.4 percent EBIT margin on strong performance from all three operating units. Test reported an EBIT margin of nearly 10 percent as changes in sales mix impacted its EBIT margins compared to the prior year. The Utility Solutions Group was clearly the brightest spot in the quarter with an EBIT margin of 22.3 percent compared to 14.4 percent in the prior year.

“Coming off our significant second quarter orders, I’m very pleased with the $150 million in orders we received in Q3. This brings our year-to-date orders to a record $507 million resulting in a book-to-bill ratio of 1.27x for the nine months of fiscal 2010.

“Nearly halfway through the fourth quarter, I’m very comfortable with where we are in relation to meeting our full-year operating goals. My confidence in the remainder of the fiscal year is supported by the level and mix of our shippable backlog.

“Looking forward, we remain confident in our ongoing prospects across all segments of our business, both domestically and internationally. Our Aclara products, in particular, are well positioned on several international projects in Central America and South America as well as Asia. We expect these geographic areas to be significant contributors to our multi-year growth outlook.”

Business Outlook

Statements contained in the preceding and following paragraphs are based on current expectations. Statements that are not strictly historical are considered forward-looking, and actual results may differ materially.

Dividend Payment

The next quarterly cash dividend of $0.08 per share will be paid on October 20 to stockholders of record on October 6.

FY 2010

Management’s expectations for fiscal year 2010 remain consistent with the Business Outlook discussions noted in the Company’s Earnings Release dated November 12, 2009.

Chairman’s Commentary – Wrap-Up

Mr. Richey concluded, “I am very pleased with our selection to begin negotiations of a definitive agreement for SoCalGas’ Advanced Metering Infrastructure (AMI) project. I remain very optimistic about our current business prospects, both domestically and internationally, as well as our new product roadmap. Our commitment remains the same − to achieve our long-term goal of increasing shareholder value.”

Conference Call

The Company will host a conference call today, August 3, at 4 p.m. Central Time, to discuss the Company’s third quarter fiscal 2010 operating results. A live audio webcast will be available on the Company’s web site at http://us.lrd.yahoo.com/_ylt=AgVmXCHigW9lLM9LRgSS6Myxcq9_;_ylu=X3oDMTE2Nm40Y203BHBvcwMxBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3ZXNjb3RlY2hu/SIG=115kqp9ar/**http%3A//www.escotechnologies.com/. Please access the web site at least 15 minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available for seven days on the Company’s web site noted above or by phone (dial 1-888-203-1112 and enter the pass code 4585825).

Forward-Looking Statements

Statements in this press release regarding the Company’s success in capturing international and domestic AMI opportunities, achievement of fiscal 2010 operating goals, negotiation of a contract with SoCalGas, success of new products and technologies, the long-term success of the Company, and any other statements which are not strictly historical are “forward-looking” statements within the meaning of the safe harbor provisions of the federal securities laws. Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including, but not limited to: the risk factors described in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2009; the success of negotiations between SoCalGas and the Company; changes in requirements of SoCalGas; SoCalGas’ ability to successfully negotiate appropriate terms and conditions with other subcontractors and project participants; financial constraints impacting SoCalGas; the receipt of necessary regulatory approvals pertaining to the SoCalGas project; the effect of the American Recovery and Reinvestment Act of 2009; the success of the Company’s competitors; changes in Federal or State energy laws; the Company’s successful performance of its AMI contracts; site readiness issues with Test segment customers; weakening of economic conditions in served markets; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties; unforeseen charges impacting corporate operating expenses; the performance of the Company’s international operations; material changes in the costs and availability of certain raw materials including steel and copper; worldwide availability of electronic components; delivery delays or defaults by customers; termination for convenience of customer contracts; timing and magnitude of future contract awards; containment of engineering and development costs; performance issues with key customers, suppliers and subcontractors; labor disputes; changes in laws and regulations including but not limited to changes in accounting standards and taxation requirements; costs relating to environmental matters; uncertainty of disputes in litigation or arbitration; and the Company’s successful execution of internal operating plans.

ESCO, headquartered in St. Louis, is a proven supplier of special purpose utility solutions for electric, gas, and water utilities, including hardware and software to support advanced metering applications and fully automated intelligent instrumentation. In addition, the Company provides engineered filtration products to the aviation, space, and process markets worldwide and is the industry leader in RF shielding and EMC test products. Further information regarding ESCO and its subsidiaries is available on the Company’s web site at http://us.lrd.yahoo.com/_ylt=AuEp9oPMeaJKjFyrMxPwZcqxcq9_;_ylu=X3oDMTE2azRydHY2BHBvcwMyBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3ZXNjb3RlY2hu/SIG=115kqp9ar/**http%3A//www.escotechnologies.com/.