UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 12, 2009
ESCO TECHNOLOGIES INC.
(Exact Name of Registrant as Specified in Charter)
|
Missouri |
1-10596 |
43-1554045 |
|
(State or Other |
(Commission |
(I.R.S. Employer |
|
Jurisdiction of Incorporation) |
File Number) |
Identification No.) |
|
9900A Clayton Road, St. Louis, Missouri |
63124-1186 |
|
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number, including area code: 314-213-7200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b))
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.113d-4 (c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Today, November 12, 2009, the Registrant is issuing a press release (furnished herewith as Exhibit 99.1 to this report) announcing its fiscal year 2009 fourth quarter and full year financial and operating results. See Item 7.01, Regulation FD Disclosure below.
ITEM 7.01 REGULATION FD DISCLOSURE
Today, the Registrant is issuing a press release (Exhibit 99.1) announcing its fiscal year 2009 fourth quarter and full year financial and operating results. The Registrant will conduct a related Webcast conference call today at 4:00 p.m. central time. This press release will be posted on the Registrant’s
web site located at http://www.escotechnologies.com. It can be viewed through the “Investor Relations” page of the web site under the tab “Press Releases”, although the Registrant reserves the right to discontinue that availability at any time.
NON-GAAP FINANCIAL MEASURES
The press release furnished herewith as Exhibit 99.1 contains financial measures and financial terms not calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”) in order to provide investors and management with an alternative method for assessing the Registrant’s operating
results in a manner that is focused on the performance of the Registrant’s ongoing operations. The Registrant has provided definitions below for the non-GAAP financial measures utilized and not defined in the press release, together with an explanation of why management uses these measures, and why management believes that these non-GAAP financial measures are useful to investors. The press release uses the non-GAAP financial measures of EBIT, EBIT margin and fiscal 2008 revenue excluding the
Aclara deferred revenue from Pacific Gas & Electric recognized in fiscal 2008.
The Registrant defines EBIT as earnings before interest and taxes from continuing operations. The Registrant defines EBIT margin as EBIT as a percent of net sales. The Registrant’s management evaluates the performance of its operating segments based on EBIT and EBIT margin, and believes that EBIT and EBIT margin are useful to investors
to demonstrate the operational profitability of the Registrant’s business segments by excluding interest and taxes, which are generally accounted for across the entire Registrant on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Registrant and incentive compensation.
The Registrant believes that the presentation of these operational measures provides important supplemental information to management and investors regarding financial and business trends relating to the Registrant’s financial condition and results of operations. The Registrant’s management believes that these
measures provide an alternative method for assessing the Registrant’s expected future performance that is useful because they facilitate comparisons with other companies in the Utility Solutions Group segment industry, many of which use similar non-GAAP financial measures to supplement their GAAP results. The Registrant provides this information to investors to enable them to perform additional analyses of present and future operating performance, compare the Registrant to other companies, and
evaluate the Registrant’s ongoing financial operations.
The presentation of the information described above is intended to supplement investors’ understanding of the Registrant’s operating performance. The Registrant’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, these measures are not intended
to replace net earnings (loss), cash flows, financial position, comprehensive income (loss), or any other measure as determined in accordance with GAAP.
ITEM 8.01 OTHER EVENTS
In the press release issued today (Exhibit 99.1), the Registrant is also announcing that its Board of Directors has voted to initiate quarterly cash dividends payable at an annual rate of $0.32 per share on the Registrant’s common stock. The first quarterly dividend of $0.08 per share will be paid on January 19, 2010 to stockholders
of record as of January 4, 2010. Like quarterly dividends shall be paid until such time as the Board of Directors may terminate or amend the dividend declaration.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit No. Description of Exhibit
|
99.1 |
Press Release dated November 12, 2009 |
OTHER MATTERS
The information in this report furnished pursuant to Item 2.02 and Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (“Exchange Act”) or otherwise subject to the liabilities of that section, unless the Registrant incorporates
it by reference into a filing under the Securities Act of 1933 as amended or the Exchange Act.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
ESCO TECHNOLOGIES INC. | |
|
Dated: November 12, 2009 |
By: /s/ G.E. Muenster |
|
G.E. Muenster | |
|
Executive Vice President and | |
|
Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. Description
of Exhibit
|
99.1 |
Press Release dated November 12, 2009 |
NEWS FROM
|
For more information contact: |
For media inquiries: |
|
Patricia K. Moore |
David P. Garino |
|
Director, Investor Relations |
(314) 982-0551 |
|
ESCO Technologies Inc. |
|
|
(314) 213-7277 |
ESCO REPORTS FISCAL 2009 RESULTS AND
ANNOUNCES INITIATION OF QUARTERLY CASH DIVIDEND
ST. LOUIS, November 12, 2009 – ESCO Technologies Inc. (NYSE: ESE) today reported its operating results for the fourth quarter and fiscal year ended September 30, 2009, and announced that its Board of Directors has voted to initiate a quarterly cash dividend payable at an annual rate of $0.32 per share. The first quarterly dividend of
$0.08 per share will be paid on January 19, 2010 to stockholders of record as of January 4, 2010.
Vic Richey, Chairman and Chief Executive Officer, commented, “The announcement today of the initiation of a cash dividend reflects the confidence that the Board of Directors and Management have in our long-term growth opportunities and financial strength. We are pleased to return a portion of our profits to our shareholders, while at
the same time, maintaining our emphasis on investing in new products that will support our growth, meeting our anticipated capital requirements, and paying down our remaining debt.”
2009 Highlights
|
· |
EPS from Continuing Operations was $0.82 in the fourth quarter and $1.86 for the year. |
|
· |
Favorable settlement of uncertain tax positions in the 2009 fourth quarter positively affected EPS for the quarter and the full year by $0.19. |
|
· |
Cash from operations was $40.5 million in the quarter, and $77.6 million for the year. |
|
· |
As a result of the strong cash flow, net debt outstanding decreased 34 percent to $130.6 million at September 30, 2009, reflecting a leverage ratio of 1.86x. |
|
· |
Entered orders of $180.2 million were recorded in the fourth quarter and $634.0 million for the year, which resulted in book-to-bill ratios greater than 1.0x, respectively. |
|
· |
Firm order backlog increased during the quarter and the fiscal year to an all-time high. |
Operating Results
The following table presents EPS for the fourth quarters and fiscal years ended September 30:
|
Fourth Quarter: |
2009 |
2008 | ||
|
EPS – Continuing Operations |
$ |
0.82 |
0.75 | |
|
EPS – Discontinued Operations |
$ |
0.00 |
0.18 | |
|
EPS |
$ |
0.82 |
0.93 | |
|
Total Year: |
||||
|
EPS – Continuing Operations |
$ |
1.86 |
1.81 | |
|
EPS – Discontinued Operations |
$ |
0.00 |
(0.03) | |
|
EPS |
$ |
1.86 |
1.78 |
EPS is presented from “Continuing Operations” and “Discontinued Operations.” Discontinued Operations represent the results of Comtrak which was sold in March 2009 and Filtertek which was sold in November
2007 (first quarter of fiscal 2008).
Effective Tax Rate
In September 2009, U.S. tax authorities completed their regular examination of certain previously filed tax returns. The completion of this examination substantiated the Company’s positions on previously uncertain tax areas and enabled Management to reassess its measurement of the related tax liabilities. The closure of this examination
resulted in a $5.0 million favorable adjustment to the 2009 fourth quarter tax provision, which significantly reduced the effective tax rate for the quarter and the year. Included in the examination results was the confirmation of the Company’s tax position for the deduction of losses realized on the disposition of a portion of the MicroSep business in 2004.
The effective tax rates were 8.5 percent and 35.1 percent in the fourth quarters of 2009 and 2008, respectively, and 22.0 percent and 33.3 percent for the fiscal years 2009 and 2008, respectively. The favorable tax rates in all of the comparable periods noted were the result of varying degrees of income tax benefits and credits realized in
the respective periods.
Cash Flow
Cash flow from operating activities generated $40.5 million during the 2009 fourth quarter and $77.6 million for the full year. As a result of this strong cash flow, net debt outstanding was reduced to $130.6 million at September 30, 2009 reflecting a favorable leverage ratio of 1.86x.
Entered Orders
Entered orders in the 2009 fourth quarter were $180.2 million, reflecting a book-to-bill ratio of 106 percent, and for the full year, entered orders were $634.0 million, or 102 percent of sales.
Order Highlights Include:
|
· |
Fourth quarter Aclara RF AMI gas products with PG&E were $6.5 million, bringing total PG&E gas project orders to 3.5 million units and $199 million to date. |
|
· |
Aclara RF AMI water products with New York City were $4.9 million in the fourth quarter, bringing the total project to 493,000 units and $39.1 million to date. |
|
· |
Aclara PLS AMI products in the fourth quarter were $35.2 million, bringing total year orders to $123.8 million, up from $121.6 million in 2008. |
|
· |
Aclara PLS orders from COOPs and Munis were $87.9 million in 2009 compared to $82.1 million in 2008. Fiscal 2009 includes $5.4 million of load control / demand response devices. |
|
· |
VACCO multi-year fluid flow product orders for the Navy’s Virginia Class submarine were $32.2 million during the fourth quarter. |
|
· |
TekPackaging orders for Thermoscan® ear thermometer probe covers were $11.7 million during the fourth quarter. |
Chairman’s Commentary
Mr. Richey further commented, “I am extremely pleased with our 2009 operating results. Given the state of today’s challenging global economy, being able to generate nearly $78 million of cash flow from operations, and to increase our firm order backlog to an all time high was very satisfying. This positive outcome was due to the
extraordinary efforts of our dedicated Management teams across the organization. As a result of these efforts and in spite of softness in several of our end markets, we were able to achieve the majority of our internal operating goals.
“Our Aclara group continues to gain momentum, and our ongoing investments in new products and advanced technologies continue to solidify our market position in the fast growing Smart Grid area. The recent announcement of our development of the Aclara Smart Communications Network solution,
which is a revolutionary, high-bandwidth, high-speed, wide area network for utility customers, is further evidence of our commitment to expand our position as a leading provider of next generation technologies for the Smart Grid.
“Like others in the AMI market, during 2009 we experienced delays of some expected orders and sales as a result of the uncertainty surrounding the government’s Stimulus Program. Several of our customers who participated in the Grant Program delayed placing orders and taking deliveries until the DOE announced the selection results.
The customers’ goal was to maximize the impact of the available grant money, and with this uncertainty now resolved, we fully expect to see a meaningful amount of progress. Based on the grant recipients identified, and with our participation in many of these projects being finalized, our confidence in the future remains high.
“Strategically, we are maintaining our focus on creating significant growth, and we will continue to focus our R&D and engineering spending toward new product development initiatives in the domestic AMI / Smart Grid area, as well as expanding our position in the international AMI market.
“We are making substantial progress with a number of large AMI projects and customers in our international pipeline, and we are enthused with our near-term order prospects in South America, Mexico and Asia. As these international projects begin to deploy Aclara products, we expect they will be a significant contributor to our multi-year
growth outlook.
“While I am very enthusiastic about the significant number of opportunities in front of us currently, the ongoing uncertainties of today’s economy, the delays associated with the Stimulus Program, and the timing of other customers finalizing their AMI deployment schedules have caused us to have a more conservative perspective
as we address fiscal 2010. As discussed in the Business Outlook section of this release, we are taking a cautious approach to our near-term outlook and expectations to reflect these uncertainties.
“I am confident that given our new products currently being introduced, the strength and size of our domestic and international business prospects, and acquisition opportunities that are currently under review, we are well positioned for the future.”
Sales
Fourth quarter sales were $169.4 million in 2009 compared to $192.5 million in 2008, and total year sales were $619.1 million in 2009 compared to $613.6 million in 2008. As noted in earlier releases, fiscal year 2008 sales included $31.3 million of revenue recognized that had been deferred from prior periods related to Aclara PLS deliveries
to PG&E. Excluding the PG&E deferred revenue recognized in 2008, fiscal 2009 sales increased $36.8 million, or 6.3 percent.
Utility Solutions Group (USG) fourth quarter sales decreased $11.3 million in 2009 compared to the 2008 fourth quarter, but increased $21.3 million for the full year. Absent the $31.3 million PG&E / PLS deferred revenue in 2008 noted above, fiscal 2009 sales increased $52.6 million, or 16.4 percent from the prior year. The USG sales
increase for the total year was primarily driven by significantly higher deliveries of fixed network RF AMI gas products to PG&E; continued increases in AMI water product deliveries; and higher sales at Aclara Software. Additionally, having Doble for 12 months in 2009 versus 10 months in 2008 contributed an additional $9.9 million of sales.
Test sales in 2009 decreased in the fourth quarter and full year primarily due to the timing of large chamber deliveries to the international wireless and electronics end-markets.
Filtration sales in 2009 decreased in the fourth quarter and total year as sales increases in the defense aerospace and space product lines at VACCO were offset by lower commercial aerospace product deliveries at PTI.
Earnings Before Interest and Taxes (EBIT)
On a segment basis, items that impacted EBIT dollars and EBIT as a percent of sales (“EBIT margin”) during the fourth quarter and fiscal year 2009 included the following:
In the USG segment, EBIT for the 2009 fourth quarter was $22.6 million compared to 2008’s fourth quarter EBIT of $24.4 million (which includes $6.5 million of profit related to the fourth quarter PG&E / PLS sales deferral noted above). USG’s EBIT was impacted by the significant increases in sales of RF AMI products and Aclara
Software, offset by lower sales of PLS AMI products (PG&E related) and lower Doble hardware sales. The RF AMI business contributed the largest increase to EBIT during 2009 as a result of the significant sales increases noted above.
The 2009 USG EBIT was negatively impacted by approximately $2.3 million or $0.07 per share of exit and relocation costs at Aclara RF related to the relocation of its operations from three leased facilities
to a single, newer, more efficient leased facility. These costs primarily related to the noncash write-off of leasehold improvements, vacant facility charges, and moving costs.
Additionally, the 2009 USG EBIT comparison was significantly impacted by the 2008 EBIT contribution of $15 million ($8.5 million in the first quarter of 2008, and $6.5 million in the fourth quarter of 2008) associated with the PG&E / PLS deferred revenue recognized in 2008.
In the Test segment, EBIT dollars and EBIT margins were lower in the 2009 fourth quarter due to the lower sales volume, but higher for the year in 2009 due to favorable changes in sales mix and effective cost management throughout the organization.
In the Filtration segment, EBIT dollars decreased in 2009 due to lower sales of high-margin commercial aerospace products, an increase in research and development costs, and higher bid and proposal costs incurred in the pursuit of a significant number of Space related projects. For the fourth quarter of 2009, Filtration’s EBIT margins
were consistent with prior year on lower sales due to stringent cost management across the segment.
Corporate operating costs were higher in 2009 due to higher amortization expenses related to recent acquisitions that included identifiable intangible assets, higher stock compensation expenses and higher professional fees.
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.
TWACS NG Software Update
In October 2009, Management formally re-evaluated the expected remaining useful life of its TWACS NG software based on the significant amount of international AMI opportunities currently under evaluation. As a result, Management determined it has 10-plus years of projected AMI revenues and profits
expected to be generated using this advanced software platform. Therefore, beginning in 2010, the Company will amortize the remaining TWACS NG asset value of $44 million over its minimum expected remaining life of 10 years.
FY 2010 versus 2009
During 2010, Management anticipates gas AMI product deliveries to PG&E will be significantly lower than the quantities delivered in 2009 as the contract is entering the latter stages of its deployment. The current outlook for 2010 PG&E gas product sales is expected to be approximately
$40 million, coming off its peak of $98 million in 2009.
On the positive side, a number of domestic and international projects across the Company will show meaningful increases in sales and EBIT in 2010, which will contribute significantly toward offsetting the PG&E decrease. Additionally, a number of cost reduction initiatives and operating improvements
implemented across the Company will help to mitigate the PG&E-driven EBIT decrease.
As a result, Management expects 2010 consolidated revenues to decrease approximately three to five percent and EBIT to decline marginally compared to 2009. In addition, the 2010 effective tax rate is projected to be more normalized at 38 percent, as Management does not expect to realize the
same amount of tax benefits and credits during 2010 as were realized in 2009.
Given the PG&E project wind-down and higher effective tax rate, Management expects EPS to be lower in 2010 compared to 2009. On a quarterly basis, Management expects 2010 revenues and EPS to be heavily “second half” weighted as they were in 2009 and 2008. Regarding the 2010 first quarter, because of the delays caused by the
Stimulus Program funding that is impacting the timing of customer orders and delivery schedules, and continued investments in engineering and new product development, Management expects 2010 first quarter EPS to be generally breakeven.
The Company continues to be actively engaged in several large domestic and international projects across all three operating segments that have the ability to favorably impact EPS in 2010 and beyond.
Management has decided to defer providing specific 2010 guidance due to the significant size and uncertain timing of the numerous projects in which the Company is currently engaged. Combined with the impact of the global economic recovery, Management believes the specific financial impact and timing of these large projects will be more quantifiable
in the future, and therefore believes it is prudent to defer providing specific EPS guidance at this time.
Chairman’s Commentary – Wrap-Up
Mr. Richey concluded, “We have a sizeable amount of specific, identifiable growth opportunities that should manifest themselves into orders and sales in varying degrees throughout fiscal 2010. Some of these opportunities are on projects where we have already been selected, and others are opportunities where we view ourselves as the
front-runner in the selection process. I expect 2010 to be a year of significant activity as many of these projects materialize and firmly set us up for meaningful growth in sales and earnings over the next few years and beyond. I remain very optimistic about our current business prospects both domestically and internationally. Through our disciplined planning process and management oversight, I am confident that we have sufficient opportunities and the appropriate contingencies in place to allow us to execute
our strategic plan. 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, November 12, at 4 p.m. Central Time, to discuss the Company’s fourth quarter and fiscal year 2009 operating results. A live audio webcast will be available on the Company’s web site at www.escotechnologies.com. Please
access the web site at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the conference call will be available for seven days on the Company’s web site noted above or by phone (dial 1-888-203-1112 and enter the pass code 4610995).
Forward-Looking Statements
Statements in this press release regarding the likelihood, timing and size of potential projects and contracts which the Company may receive or participate in, amounts and timing of fiscal 2010 future revenues, results, earnings, EPS, AMI customers’ responses to the availability of Grant Program funds, sales growth, orders, growth,
the success in capturing international AMI opportunities, increased market share in the Smart Grid area, success of new products and technologies, the timing and certainty of utility customer spending, the long-term success of the Company, and any other written or oral statements which are not strictly historical are “forward-looking” statements within the meaning of the safe harbor provisions of the federal securities laws. Investors are cautioned that such statements are only predictions
and speak only as of the date of this release, and the Company undertakes no duty to update. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including, but not limited to: the risk factors described in Item 1A of the Company’s Annual Report on Form
10-K for the fiscal year ended September 30, 2008; 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 timing and content of purchase order releases under the Company’s AMI contracts with PG&E; 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 of certain raw materials including steel and copper; 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 www.escotechnologies.com.
- tables attached -
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts) | |||
|
Three Months
Ended
September 30, 2009 |
Three Months
Ended
September 30, 2008 | ||
|
Net Sales |
$169,449 |
192,543 | |
|
Cost and Expenses: |
|||
|
Cost of sales |
99,471 |
116,093 | |
|
SG&A |
38,239 |
38,442 | |
|
Amortization of intangible assets |
4,835 |
4,667 | |
|
Interest expense |
1,489 |
2,707 | |
|
Other expenses, net |
1,620 |
(3) | |
|
Total costs and expenses |
145,654 |
161,906 | |
|
Earnings before income taxes |
23,795 |
30,637 | |
|
Income taxes |
2,028 |
10,764 | |
|
Net earnings from continuing operations |
21,767 |
19,873 | |
|
Earnings from discontinued operations, net of
tax benefit of $4,508 |
- |
4,632 | |
|
Net earnings |
$21,767 |
24,505 | |
|
Earnings per share: |
|||
|
Basic |
|||
|
Continuing operations |
0.83 |
0.76 | |
|
Discontinued operations |
- |
0.18 | |
|
Net earnings |
$0.83 |
0.94 | |
|
Diluted |
|||
|
Continuing operations |
0.82 |
0.75 | |
|
Discontinued operations |
- |
0.18 | |
|
Net earnings |
$0.82 |
0.93 | |
|
Average common shares O/S: |
|||
|
Basic |
26,332 |
26,052 | |
|
Diluted |
26,652 |
26,452 | |
- more -
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ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts) | |||
|
Year Ended
September 30, 2009 |
Year Ended
September 30, 2008 | ||
|
Net Sales |
$619,064 |
613,566 | |
|
Cost and Expenses: |
|||
|
Cost of sales |
372,351 |
367,951 | |
|
SG&A |
152,397 |
147,324 | |
|
Amortization of intangible assets |
19,214 |
17,044 | |
|
Interest expense |
7,450 |
9,808 | |
|
Other expenses, net |
4,480 |
161 | |
|
Total costs and expenses |
555,892 |
542,288 | |
|
Earnings before income taxes |
63,172 |
71,278 | |
|
Income taxes |
13,867 |
23,709 | |
|
Net earnings from continuing operations |
49,305 |
47,569 | |
|
Earnings (loss) from discontinued operations,
net of tax of $568 and $229, respectively |
135 |
(282) | |
|
Loss on sale from discontinued operations, net
of tax of $905 and $157, respectively |
(32) |
(576) | |
|
Net earnings (loss) from discontinued
operations |
103 |
(858) | |
|
Net earnings |
$49,408 |
46,711 | |
|
Earnings per share: |
|||
|
Basic |
|||
|
Continuing operations |
1.88 |
1.84 | |
|
Discontinued operations |
- |
(0.04) | |
|
Net earnings |
$1.88 |
1.80 | |
|
Diluted |
|||
|
Continuing operations |
1.86 |
1.81 | |
|
Discontinued operations |
- |
(0.03) | |
|
Net earnings |
$1.86 |
1.78 | |
|
Average common shares O/S: |
|||
|
Basic |
26,216 |
25,909 | |
|
Diluted |
26,560 |
26,315 | |
- more -
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ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information
(Unaudited)
(Dollars in thousands) | ||||||||
|
Three Months Ended
September 30, |
Year Ended
September 30, |
|||||||
|
2009 |
2008 |
2009 |
2008 |
|||||
|
Net Sales |
||||||||
|
Utility Solutions Group |
$100,621 |
111,883 |
374,001 |
352,654 |
||||
|
Test |
40,035 |
46,171 |
138,345 |
144,770 |
||||
|
Filtration |
28,793 |
34,489 |
106,718 |
116,142 |
||||
|
Totals |
$169,449 |
192,543 |
619,064 |
613,566 |
||||
|
EBIT |
||||||||
|
Utility Solutions Group |
$22,617 |
24,412 |
62,468 |
66,559 |
||||
|
Test |
3,752 |
6,351 |
14,134 |
13,877 |
||||
|
Filtration |
6,129 |
7,417 |
18,056 |
21,195 |
||||
|
Corporate |
(7,214) |
(1) |
(4,836) |
(2) |
(24,036) |
(3) |
(20,545) |
(4) |
|
Consolidated EBIT |
25,284 |
33,344 |
70,622 |
81,086 |
||||
|
Less: Interest expense |
(1,489) |
(2,707) |
(7,450) |
(9,808) |
||||
|
Earnings before income
taxes |
$23,795 |
30,637 |
63,172 |
71,278 |
||||
|
Note:Depreciation and amortization expense was $7.6 million and $7.6 million for the quarters ended September 30, 2009 and 2008, respectively, and $30.3 million and $27.1 million for the years ended September 30, 2009 and 2008, respectively. | ||||||||
|
(1) Includes $1.2 million of amortization of acquired intangible assets. | ||||||||
|
(2) Includes $1.2 million of amortization of acquired intangible assets. | ||||||||
|
(3) Includes $4.7 million of amortization of acquired intangible assets. | ||||||||
|
(4) Includes $4.2 million of amortization of acquired intangible assets. | ||||||||
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|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands) | |||
|
September 30, 2009 |
September 30, 2008 | ||
|
Assets |
|||
|
Cash and cash equivalents |
$44,630 |
28,667 | |
|
Accounts receivable, net |
108,620 |
134,710 | |
|
Costs and estimated earnings on long-term
contracts |
10,758 |
9,095 | |
|
Inventories |
82,020 |
65,019 | |
|
Current portion of deferred tax assets |
20,417 |
15,368 | |
|
Other current assets |
13,750 |
14,888 | |
|
Current assets from discontinued operations |
- |
2,889 | |
|
Total current assets |
280,195 |
270,636 | |
|
Property, plant and equipment, net |
69,543 |
72,353 | |
|
Goodwill |
330,719 |
328,878 | |
|
Intangible assets, net |
221,600 |
236,192 | |
|
Other assets |
21,630 |
17,665 | |
|
Other assets from discontinued operations |
- |
2,349 | |
|
$923,687 |
928,073 | ||
|
Liabilities and Shareholders’ Equity |
|||
|
Short-term borrowings and current maturities
of long-term debt |
$50,000 |
50,000 | |
|
Accounts payable |
47,218 |
48,982 | |
|
Current portion of deferred revenue |
20,215 |
18,226 | |
|
Other current liabilities |
46,552 |
49,934 | |
|
Current liabilities from discontinued operations |
- |
1,541 | |
|
Total current liabilities |
163,985 |
168,683 | |
|
Deferred tax liabilities |
78,471 |
83,515 | |
|
Other liabilities |
33,424 |
23,988 | |
|
Long-term debt |
130,467 |
183,650 | |
|
Shareholders’ equity |
517,340 |
468,237 | |
|
$923,687 |
928,073 | ||
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|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Dollars in thousands) | |
|
Year Ended
September 30, 2009 | |
|
Cash flows from operating activities: |
|
|
Net earnings |
$49,408 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities |
|
|
Net earnings from discontinued operations |
(103) |
|
Depreciation and amortization |
30,267 |
|
Stock compensation expense |
4,866 |
|
Changes in current assets and liabilities |
1,566 |
|
Effect of deferred taxes |
(2,543) |
|
Change in deferred revenue and costs, net |
1,781 |
|
Pension contributions |
(1,997) |
|
Change in other long-term tax liabilities |
(5,700) |
|
Other |
(71) |
|
Net cash provided by operating activities – continuing operations |
77,474 |
|
Net cash provided by operating activities – discontinued operations |
142 |
|
Net cash provided by operating activities |
77,616 |
|
Cash flows from investing activities: |
|
|
Acquisition of businesses |
(6,442) |
|
Additions to capitalized software |
(5,004) |
|
Change in acquisition escrow |
2,189 |
|
Capital expenditures |
(9,255) |
|
Net cash used by investing activities – continuing operations |
(18,512) |
|
Proceeds from divestiture of business, net – discontinued operations |
3,100 |
|
Net cash used by investing activities |
(15,412) |
|
Cash flows from financing activities: |
|
|
Proceeds from long-term debt |
32,000 |
|
Principal payments on long-term debt |
(85,183) |
|
Proceeds from exercise of stock options |
6,621 |
|
Other |
1,029 |
|
Net cash used by financing activities |
(45,533) |
|
Effect of exchange rate changes on cash and cash equivalents |
(708) |
|
Net increase in cash and cash equivalents |
15,963 |
|
Cash and cash equivalents, beginning of period |
28,667 |
|
Cash and cash equivalents, end of period |
$44,630 |
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|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data
(Unaudited)
(Dollars in thousands) | |||||||
|
Backlog And Entered Orders – Q4 FY 2009 |
Utility
Solutions |
Test |
Filtration |
Total | |||
|
Beginning Backlog – 6/30/09 continuing opers |
$155,532 |
60,249 |
72,832 |
288,613 | |||
|
Entered Orders |
77,465 |
34,026 |
68,716 |
180,207 | |||
|
Sales |
(100,621) |
(40,035) |
(28,793) |
(169,449) | |||
|
Ending Backlog – 9/30/09 |
$132,376 |
54,240 |
112,755 |
299,371 | |||
|
Backlog And Entered Orders – FY 2009 |
Utility Solutions |
Test |
Filtration |
Total | |||
|
Beginning Backlog – 9/30/08 continuing opers |
$143,170 |
69,823 |
71,463 |
284,456 | |||
|
Entered Orders |
363,207 |
122,762 |
148,010 |
633,979 | |||
|
Sales |
(374,001) |
(138,345) |
(106,718) |
(619,064) | |||
|
Ending Backlog – 9/30/09 |
$132,376 |
54,240 |
112,755 |
299,371 | |||
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