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ESCO Technologies Inc.$83.55$.14.17%

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 ESCO Announces Fiscal 2017 Results
   Tuesday, November 14, 2017 4:15:31 PM ET

- Net earnings of $54 million and Adjusted EBITDA of $123 million -

- GAAP EPS $2.07 and Adjusted EPS $2.22 -

ST. LOUIS, November 14, 2017 - ESCO Technologies Inc. (ESE ) (ESCO, or the Company) today reported its operating results for the fourth quarter (Q4 2017) and fiscal year ended September 30, 2017 (2017), compared to the fourth quarter (Q4 2016) and fiscal year ended September 30, 2016 (2016).

The Company previously announced it acquired Mayday Manufacturing Co. and its affiliate, Hi-Tech Metals, Inc. (collectively Mayday) on November 7, 2016, NRG Systems Inc. (NRG) on May 8, 2017, the assets of Morgan Schaffer Inc. (Morgan Schaffer) on May 25, 2017, and the assets of Vanguard Instruments Company (Vanguard) on August 30, 2017. Net sales, earnings, acquisition costs, non-cash purchase accounting inventory step-up charges, and amortization of intangible assets related to these entities are included in the 2017 operating results from the date of acquisition.

The financial results presented include certain non-GAAP financial measures such as EBIT, EBITDA (defined as earnings before interest, taxes, depreciation and amortization), Adjusted EBITDA (defined as EBITDA excluding certain charges, such as non-cash purchase accounting inventory step up charges, and acquisition costs incurred to complete the transactions), and Adjusted EPS. Any non-GAAP financial measures presented are reconciled to their respective GAAP equivalents.

Management believes these non-GAAP financial measures are useful in assessing the ongoing operational profitability of the Company’s business segments, and therefore, allows shareholders better visibility into the Company’s underlying operations. See "Non-GAAP Financial Measures" described below.

Earnings Summary - Full Year

- 2017 GAAP EPS was $2.07 per share and Adjusted EPS was $2.22 per share, which excludes the ($0.15) per share impact ($6.1 million pretax) of non-cash purchase accounting inventory step-up charges and costs incurred to complete the 2017 acquisitions;

- 2016 GAAP EPS was $1.77 per share and Adjusted EPS was $2.03 per share (the adjustments related to the prior year restructuring charges were described in earlier releases);

- 2017 GAAP net earnings were $54 million compared to $46 million in 2016; and,

- Adjusted EBITDA increased 22 percent to $123 million in 2017 from $101 million in 2016.

Earnings Summary - Q4

- Q4 2017 GAAP EPS was $0.74 per share and Adjusted EPS was $0.79 per share, which excludes ($0.05) per share impact ($1.8 million pretax) of non-cash purchase accounting inventory step-up charges and costs incurred to complete the 2017 acquisitions;

- Q4 2016 GAAP EPS was $0.65 per share and Adjusted EPS was $0.67 per share (the adjustments related to prior year Q4 restructuring charges were described in earlier releases);

- Q4 2017 GAAP net earnings were $19 million compared to $17 million in Q4 2016; and,

- Adjusted EBITDA increased 34 percent to $43 million in Q4 2017 from $32 million in Q4 2016.

Adjusted EBITDA is reconciled to GAAP net earnings in the Condensed Business Segment Information table below for all periods presented.

Operating Highlights - 2017

- 2017 sales increased $115 million (20 percent) to $686 million compared to $571 million in 2016;

- On a segment basis, 2017 Filtration sales increased $72 million, or 35 percent compared to 2016 primarily driven by the contribution of Westland and Mayday sales of $61 million. Technical Packaging sales increased $8 million, or 11 percent compared to 2016 driven by Plastique, and Test sales were $161 million in both periods presented. USG sales increased $35 million, or 27 percent, as Doble sales increased $11 million (9 percent) driven by the additional sales contribution from new products and software solutions, and NRG / Morgan Schaffer / Vanguard contributed $24 million in sales since the dates of acquisition;

- SG&A expenses increased $17 million in 2017 compared to 2016 primarily due to additional expenses related to Westland, Mayday, NRG, Morgan Schaffer and Vanguard in the current period, coupled with additional sales and marketing expenses at Doble to support future revenue growth. Acquisition costs are recorded at Corporate;

- Entered orders were $737 million in 2017 (book-to-bill of 1.07x) reflecting a $51 million (16 percent) increase in backlog during the year and an ending backlog of $377 million at September 30, 2017;

- Filtration orders were $286 million (book-to-bill of 1.03x) in 2017 comprised of recurring commercial aerospace orders and additional space and navy products;

- Test orders were a record $199 million in 2017 (book-to-bill of 1.23x) which reflects increasing momentum in the wireless, electric vehicle, and automotive chamber markets;

- USG orders were $164 million in 2017 (book-to-bill of 1.01x) which reflects increased orders for new products such as the Doble Universal Controller (DUC), on-line monitoring solutions, dissolved gas analyzers (DGA’s) and additional software applications;

- Technical Packaging orders were $87 million in 2017 (book-to-bill of 1.05x) driven by higher KAZ, medical, medical device, and pharmaceutical projects; and,

- Net cash provided by operating activities was $67 million in 2017 which resulted in net debt of $229 million (outstanding borrowings less cash on hand) at September 30, 2017 and a 2.2x leverage ratio (gross debt outstanding / Adjusted EBITDA).

Chairman’s Commentary - 2017

Vic Richey, Chairman and Chief Executive Officer, commented, "I’m pleased with the way we wrapped up the year as we delivered EPS and Adjusted EBITDA within our previously expected ranges, and we successfully completed several acquisitions, which remains one of our key strategic goals. I’ve mentioned this before, but it is worth repeating: Not only did we add great companies to our portfolio, we also added very solid management teams who share our vision and our values.

"Regarding the recent acquisitions, I’m pleased to see the integration is going smoothly and is nearly complete, which supports my enthusiasm for USG’s outlook as the group has come together with a unified focus on sales growth, market expansion, new product development, and enhanced operating margins.

"Whenever you add new companies to an existing portfolio, it is never without risk. But I’m thrilled with the way our entire company, legacy entities and new partners, came together and collectively delivered $123 million of Adjusted EBITDA in 2017. This reflects a 22 percent increase over prior year and represents the best year in ESCO’s history.

"Touching on a few Q4 operating highlights, Filtration delivered a 22 percent EBIT margin driven by outstanding performance at Crissair and VACCO. Test reported a 16 percent EBIT margin in Q4 and during the past six months of 2017, delivered $89 million in sales at a 15 percent EBIT margin. Doble continued to outperform in Q4 by delivering an EBIT margin above 28 percent as its new products, software and solution offerings continue to gain traction in the utility market.

"Wrapping up the year, a clear highlight for the Company is the strength of our order activity as all four operating segments achieved book-to-bill ratios greater 1.0x, led by Test’s nearly $200 million in new business.

"As we enter 2018, we plan to build on the successes we achieved in 2017 and benefit from having aggressively addressed the challenges we faced during the past year, which gives me a favorable view of the future with our goal remaining unchanged - to increase long-term shareholder value."

Dividend Payment

The next quarterly cash dividend of $0.08 per share will be paid on January 19, 2018 to stockholders of record on January 4, 2018.

Board of Directors

Effective November 8, 2017, the Company added an additional independent director, Patrick M. (Pat) Dewar to the Company’s Board of Directors.

Mr. Dewar currently serves as Chief Executive of The Trenton Group LLC. Previously, Mr. Dewar spent 34 years in the Aerospace Sector with GE Aerospace and Lockheed Martin, where he created and led Lockheed Martin International as an Executive Vice President managing over $10 billion in annual revenue. He holds a Master of Science degree in Electrical Engineering from Drexel University as well as a Bachelor of Science degree in Engineering from Swarthmore College. Mr. Dewar is a member of the Council of Foreign Relations and serves as a senior advisor to numerous investment firms on Aerospace & Defense matters.

Mr. Dewar was selected to serve the Company as his extensive strategic and operational experience in the aerospace and defense markets will allow him to assist the board in guiding strategy from the highest level.

Adding a new director further enhances Corporate Governance, facilitates board refreshment, and adds new and relevant experience supplementing existing independent director oversight. The Board of Directors performed extensive diligence in its search, including utilizing a globally recognized executive search firm.

Business Outlook - 2018

With the increased level of M&A activity, Management has placed more emphasis on Adjusted EBITDA as a supplement to EPS as it believes this is a relevant metric to be considered for measuring ongoing operating performance as well as the Company’s enterprise valuation. Adjusted EBITDA is also a key financial metric used by Management when determining the appropriate price for acquisitions.

Management continues to see meaningful sales and Adjusted EBITDA growth across each of the Company’s business segments and anticipates growth rates in 2018 and beyond that exceed the Company’s defined peer group and the broader industrial market.

The details of Management’s growth expectations for 2018 compared to 2017 are as follows:

- Sales are expected to increase approximately 13 percent driven by: incremental sales from acquisitions being included for a full year; increased commercial aerospace deliveries at PTI, Crissair and Mayday; higher organic sales at USG; significantly higher sales at Test including the catch-up of 2017 deliveries as well as significant new product wins currently in backlog; partially offset by a reduction in lower margin industrial/automotive market product deliveries at PTI as it exits that market; and flat sales in Technical Packaging;

- Adjusted EBITDA is expected to increase between 15 and 17 percent, resulting in Adjusted EBITDA in the range of $141 million to $143 million, compared to 2017 Adjusted EBITDA of $123 million;

- Interest expense on higher debt (acquisition funding) is expected to be approximately $9.5 million, reflecting an increase of $4.9 million (or $0.12 per share) over the $4.6 million of interest expense in 2017;

- Non-cash depreciation and amortization of intangibles is expected to increase approximately $7.1 million (or $0.18 per share after-tax) as a result of the recent acquisitions. Purchase accounting intangible asset amortization charges are recorded at Corporate;

- Income tax expense is expected to increase in 2018 as Management is projecting a 35 percent effective tax rate calculated on higher pretax earnings. Management’s expected rate excludes any impact resulting from potential tax reform. When compared to the 33 percent tax rate in 2017, the 2 percent higher rate on the additional pretax earnings negatively impacts 2018 EPS ($0.07 per share); and,

- In summary, Management projects 2018 GAAP EPS to be in the range of $2.30 to $2.40 per share, including the profit contributions from the recent acquisitions, the additional depreciation and amortization charges, higher interest, and incremental tax expense as described above.

On a quarterly basis, Management expects 2018 operating results to reflect a profile similar to 2017 and previous years, with revenues and EPS being more second-half weighted. As with past years, projected second half 2018 sales and EPS are expected to be significantly stronger than the first half.

Management expects Q1 2018 GAAP EPS to be in the range of $0.28 to $0.33 per share. The timing of quarterly sales and earnings throughout the year, coupled with higher non-cash charges within the respective quarters impacts comparability in Q1.

Chairman’s Commentary - 2018

Mr. Richey continued, "Given the expected contribution from our recent acquisitions, coupled with current expectations of organic growth from "legacy" operations, I believe 2018 reflects solid sales, EBIT, EBITDA and EPS growth and positions us well to meet or exceed our shareholder value-creation goals.

"We ended 2017 in a favorable position given our strong backlog and balance sheet, and as we enter the new year, I am very comfortable with our outlook. Our core businesses remain solid and the acquisitions are nearly fully integrated and are contributing at a meaningful level. We enter 2018 with numerous growth opportunities throughout our operating segments as described above.

"I’m especially excited by our growth outlook in Test, where we’ve worked diligently for the past few years on right-sizing the cost structure and enhancing operating efficiency to allow it to be more competitive and significantly more profitable. Test’s current backlog firmly supports our outlook, and I’m happy to report that we were recently notified of two new large chamber wins totaling $30 million from globally recognized customers in the government / defense and automotive markets.

"Additionally, at Westland, we were recently awarded a large, multi-year contract to supply next-generation technology protecting naval vessels in support of our long-term outlook for this growing platform.

"Our market leadership positions and the breadth and diversity of our new product offerings will allow us to continue to grow at levels above our peer averages. Our management teams’ focus on profitable growth and ROIC will remain steadfast as we believe these are the key drivers of continued and sustainable share price appreciation."

Conference Call

The Company will host a conference call today, November 14, at 4:00 p.m. Central Time, to discuss the Company’s 2017 results. A live audio webcast will be available on the Company’s website at www.escotechnologies.com. Please access the website 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 website noted above or by phone (dial 1-855-859-2056 and enter the pass code 96067789).

Forward-Looking Statements

Statements in this press release regarding the Company’s expected quarterly, 2018 full year and beyond results, revenue and sales growth, EPS, EPS growth, EBIT, EBITDA, Adjusted EBITDA, gross profit, interest expense, non-cash depreciation and amortization of intangibles, corporate costs, effective tax rates, the Company’s ability to increase operating margins, realize financial goals and increase shareholder value, the success of acquisition efforts, the size, number and timing of future sales and growth opportunities, 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 them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including, but not limited to those described in Item 1A, "Risk Factors", of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016, and the following: the success of the Company’s competitors; weakening of economic conditions in served markets; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties; delivery delays or defaults by customers; material changes in the costs and availability of certain raw materials; the appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts; the timing and content of future contract awards or customer orders; performance issues with key customers, suppliers and subcontractors; labor disputes; the impacts of natural disasters on the Company’s operations and those of the Company’s customers and suppliers; changes in laws and regulations, including but not limited to changes in accounting standards and taxation requirements; changes in interest rates; costs relating to environmental matters arising from current or former facilities; financial exposure in connection with Company guarantees of certain Aclara contracts; the availability of select acquisitions; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the success and integration of recently acquired businesses.

Non-GAAP Financial Measures

The financial measures EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are presented in this press release. The Company defines "EBIT" as earnings before interest and taxes, "EBITDA" as earnings before interest, taxes, depreciation and amortization, "Adjusted EBITDA" as EBITDA excluding certain defined non-recurring charges, and "Adjusted EPS" as GAAP earnings per share (EPS) excluding the non-recurring charges described above which were $0.05 per share for Q4 2017 and $0.02 per share for Q4 2016.

EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes that EBIT, EBITDA and Adjusted EBDITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The Company believes that the presentation of EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

ESCO, headquartered in St. Louis: Manufactures highly-engineered filtration and fluid control products for the aviation, space and process markets worldwide; is the industry leader in RF shielding and EMC test products; provides diagnostic instruments, software and services for the benefit of industrial power users and the electric utility and renewable energy industries; and, produces custom thermoformed packaging, pulp-based packaging, and specialty products for medical and commercial markets. Further information regarding ESCO and its subsidiaries is available on the Company’s website at www.escotechnologies.com.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES                                                                                                                                                            
Condensed Consolidated Statements of Operations (Unaudited)                                                                                                                                        
 (Dollars in thousands, except per share amounts)                                                                                                                               
                                                                                                                                                                                
          Three Months                  Three Months          
                                                                                                          Ended                                           Ended
                                                                                                         September 30,                                                       September 30,
                                                                                                         2017                                                                2016
                        
Net Sales                                                                           $                    207,005                       159,505               
Cost and Expenses:                                                                                  
  Cost of sales                                                    129,769                       96,038                
  Selling, general and administrative expenses                     41,329                        34,304                
  Amortization of intangible assets                                4,790                         3,090                 
  Interest expense                                                 1,826                         391                   
  Other (income) expenses, net                                     (496)                         1,365                 
    Total costs and expenses                    177,218                       135,188               
                        
Earnings before income taxes                                                          29,787                        24,317                
Income taxes                                                                          10,613                        7,402                 
                        
    Net earnings                              $                    19,174                        16,915                
                        
                        
                        
    Diluted EPS - GAAP                        $                    0.74                          0.65                  
                        
    Diluted EPS - As Adjusted                 $                    0.79                      (1)                    0.67                 (2)
                        
    Diluted average common shares O/S:          26,057                        25,935                
                        
                        
(1)                  Q4 2017 As Adjusted EPS excluded $1.8 million, pretax (or $0.05 per share) of purchase accounting inventory step up charges and acquisition costs during the fourth quarter of 2017.
                        
(2)                  Q4 2016 As Adjusted EPS excluded $0.8 million, pretax (or $0.02 per share) of restructuring charges incurred at ETS and Doble during the fourth quarter of 2016.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES                                                                                                                                                       
Condensed Consolidated Statements of Operations (Unaudited)                                                                                                                                   
 (Dollars in thousands, except per share amounts)                                                                                                                          
                                                                                                                                                                           
          Year Ended               Year Ended            
                                                                                                         September 30,                                                  September 30,
                                                                                                         2017                                                           2016
                   
Net Sales                                                                           $                    685,740                  571,459               
Cost and Expenses:                                                                             
  Cost of sales                                                    436,918                  350,807               
  Selling, general and administrative expenses                     148,433                  131,493               
  Amortization of intangible assets                                16,338                   11,630                
  Interest expense                                                 4,578                    1,308                 
  Other (income) expenses, net                                     (680)                    7,801                 
    Total costs and expenses                    605,587                  503,039               
                   
Earnings before income taxes                                                          80,153                   68,420                
Income taxes                                                                          26,450                   22,538                
                   
    Net earnings                              $                    53,703                   45,882                
                   
                   
                   
    Diluted EPS - GAAP                        $                    2.07                     1.77                  
                   
    Diluted EPS - As Adjusted                 $                    2.22                 (1)                    2.03                 (2)
                   
    Diluted average common shares O/S:          25,995                   25,968                
                   
                   
(1)                  2017 As Adjusted EPS excluded $6.1 million, pretax (or $0.15 per share) of purchase accounting inventory step up charges and acquisition costs during fiscal 2017.
                   
(2)                  2016 As Adjusted EPS excluded $7.8 million, pretax (or $0.26 per share) of restructuring charges incurred at ETS and Doble during fiscal 2016.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
 
          GAAP                                                                    
          Q4 2017                Q4 2016                       
Net  Sales                                                     
  Filtration                                  $                    80,640                 61,994                        
  Test                                          51,115                 41,903                        
  USG                                           52,183                 34,129                        
  Technical Packaging                           23,067                 21,479                        
    Totals                 $                    207,005                159,505                       
                         
EBIT                                                                              
  Filtration                                  $                    17,905                 15,716                        
  Test                                          8,404                  5,276                         
  USG                                           11,010                 9,502                         
  Technical Packaging                           2,836                  2,590                         
  Corporate                                     (8,542)                (8,376)                       
    Consolidated EBIT        31,613                 24,708                        
    Less: Interest expense   (1,826)                (391)                         
    Less: Income tax expense                    (10,613)               (7,402)                       
    Net earnings           $                    19,174                 16,915                        
                         
Note 1: Adjusted net earnings were $20.4 million in Q4 17 which excluded $1.8 million, pretax (or $0.05 per share) net impact from the acquisitions of NRG, Morgan Schaffer & Vanguard during the fourth quarter of 2017.
                         
Note 2: Adjusted net earnings were $17.5 million in Q4 16 which excluded $0.8 million, pretax (or $0.02 per share) of net restructuring charges at ETS and Doble during the fourth quarter of 2016.
                         
EBITDA Reconciliation to Net earnings:                                                                                  
          Q4 2017                Q4 2017                  Q4 2016                Q4 2016
                                                                                                                                - As Adj                                                                                                 - As Adj
Consolidated EBITDA                                              $                    40,819                 42,636                   31,067                 31,905
Less: Depr & Amort                                                 (9,206)                (9,206)                  (6,359)                (6,359)
Consolidated EBIT                                                  31,613                 33,430                   24,708                 25,546
Less: Interest expense                                             (1,826)                (1,826)                  (391)                  (391)
Less: Income tax expense                                           (10,613)               (11,249)                 (7,402)                (7,617)
Net earnings                                                     $                    19,174                 20,355                   16,915                 17,538
                         

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES                                                                                                                                                                                                                          
Condensed Business Segment Information (Unaudited)                                                                                                                                                                                                               
(Dollars in thousands)                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                              
            GAAP                                                                      
            FY 2017                FY 2016                         
Net  Sales                                                         
  Filtration                                    $                    279,510                207,752                         
  Test                                            160,853                161,512                         
  USG                                             162,469                127,785                         
  Technical Packaging                             82,908                 74,410                          
    Totals                   $                    685,740                571,459                         
                             
EBIT                                                               
  Filtration                                    $                    52,201                 45,227                          
  Test                                            19,481                 13,863                          
  USG                                             36,596                 31,083                          
  Technical Packaging                             8,495                  9,625                           
  Corporate                                       (32,042)               (30,070)                        
    Consolidated EBIT          84,731                 69,728                          
    Less: Interest expense     (4,578)                (1,308)                         
    Less: Income tax expense   (26,450)               (22,538)                        
    Net earnings             $                    53,703                 45,882                          
                             
Note 1: Adjusted net earnings were $57.7 million in FY 17 which excluded $6.1 million, pretax (or $0.15 per share) net impact from the acquisitions of Mayday, NRG, Morgan Schaffer & Vanguard during fiscal 2017.
                             
Note 2: Adjusted net earnings were $52.8 million in FY 16 which excluded $7.8 million, pretax (or $0.26 per share) of restructuring charges at ETS and Doble during fiscal 2016.
                             
EBITDA Reconciliation to Net earnings:                                                                                      
            FY 2017                FY 2017                  FY 2016                FY 2016               
                                                                                                                                  - As Adjusted                                                                                            - As Adjusted
Consolidated EBITDA                                                $                    116,960                123,044                  93,296                 101,097               
Less: Depr & Amort                                                   (32,229)               (32,229)                 (23,568)               (23,568)              
Consolidated EBIT                                                    84,731                 90,815                   69,728                 77,529                
Less: Interest expense                                               (4,578)                (4,578)                  (1,308)                (1,308)               
Less: Income tax expense                                             (26,450)               (28,579)                 (22,538)               (23,387)              
Net earnings                                                       $                    53,703                 57,658                   45,882                 52,834                
                             

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
 
                September 30,          September 30,
                                                                                            2017                                      2016
                     
Assets                                                     
  Cash and cash equivalents                         $                    45,516                 53,825
  Accounts receivable, net                            160,580                121,486
  Costs and estimated earnings on                          
    long-term contracts            47,286                 28,746
  Inventories                                         124,515                105,542
  Other current assets                                14,895                 13,884
    Total current assets           392,792                323,483
  Property, plant and equipment, net                  132,748                92,405
  Intangible assets, net                              351,134                231,759
  Goodwill                                            377,879                323,616
  Other assets                                        5,891                  7,108
              $                    1,260,444              978,371
                     
Liabilities and Shareholders’ Equity                                          
  Short-term borrowings and current                 $                    20,000                 20,000
    maturities of long-term debt        
  Accounts payable                                    54,789                 42,074
  Current portion of deferred revenue                 28,583                 27,212
  Other current liabilities                           91,597                 68,790
    Total current liabilities      194,969                158,076
  Deferred tax liabilities                            86,378                 69,562
  Other liabilities                                   52,179                 45,624
  Long-term debt                                      255,000                90,000
  Shareholders’ equity                                671,918                615,109
              $                    1,260,444              978,371

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
 
                                                     Year Ended
                                                                                          September 30,
                                                                                          2017
Cash flows from operating activities:                                   
  Net earnings                                    $                    53,703
  Adjustments to reconcile net earnings              
  to net cash provided by operating activities:      
  Depreciation and amortization                     32,229
  Stock compensation expense                        5,444
  Changes in assets and liabilities                 (19,539)
  Change in deferred revenue and costs, net         1,650
  Effect of deferred taxes                          1,360
  Pension contributions                             (2,677)
  Other                                             (4,830)
  Net cash provided by operating activities         67,340
                                                     
Cash flows from investing activities:                                   
  Acquisition of businesses, net of cash acquired   (198,628)
  Capital expenditures                              (29,728)
  Additions to capitalized software                 (9,002)
  Proceeds from sale of land                        1,184
  Proceeds from life insurance                      2,307
  Net cash used by investing activities             (233,867)
                                                     
Cash flows from financing activities:                                   
  Proceeds from long-term debt                      257,000
  Principal payments on long-term debt              (92,000)
  Dividends paid                                    (8,257)
  Other                                             20
  Net cash provided by financing activities         156,763
                                                     
Effect of exchange rate changes on cash and cash equivalents           1,455
                                                     
Net decrease in cash and cash equivalents                              (8,309)
Cash and cash equivalents, beginning of period                         53,825
Cash and cash equivalents, end of period                             $                    45,516

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
 
Backlog And Entered Orders - Q4 FY 2017                          Filtration             Test                   USG                    Technical Packaging    Total
  Beginning Backlog - 7/1/17                $                    204,054                105,568                42,369                 27,506                 379,497
  Entered Orders                              79,706                 60,339                 45,395                 19,175                 204,615
  Sales                    (80,640)               (51,115)               (52,183)               (23,067)               (207,005)
  Ending Backlog - 9/30/17                  $                    203,120                114,792                35,581                 23,614                 377,107
                         
                         
                         
Backlog And Entered Orders - FY 2017                             Filtration             Test                   USG                    Technical Packaging    Total
  Beginning Backlog - 10/1/16               $                    195,801                77,032                 33,744                 19,654                 326,231
  Entered Orders                              286,829                198,613                164,306                86,868                 736,616
  Sales                    (279,510)              (160,853)              (162,469)              (82,908)               (685,740)
  Ending Backlog - 9/30/17                  $                    203,120                114,792                35,581                 23,614                 377,107

SOURCE ESCO Technologies Inc.

Kate Lowrey, Director of Investor Relations, (314) 213-7277

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: ESCO Technologies Inc via Globenewswire



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