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Revenue and Performance - The Company reported total revenues of $289.7 million for the three-month period ended December 31, 2025, compared to $214.6 million for the same period in 2024, representing a year-over-year increase of approximately 35%[43]. - The Company had $1,401.1 million in remaining performance obligations as of December 31, 2025, with an expectation to recognize approximately 58% of this amount as revenue in the next twelve months[47]. - The Company recognized approximately $37.7 million in revenues during the first quarter of 2026 that were included in the contract liabilities balance at September 30, 2025[48]. - The Company reported a total sales amount of approximately $1.3 million from transactions with two customers related to its Doble subsidiary during the first quarter of fiscal 2026[57]. Financial Position - The Company’s total equity increased to $1,560.9 million as of December 31, 2025, up from $1,236.9 million in the previous year[38]. - The Company’s cash on hand was $103.8 million as of December 31, 2025[34]. - The Company had approximately $469 million available to borrow under the Credit Facility as of December 31, 2025, excluding the Incremental Facility[34]. - The Company’s total borrowings decreased from $186 million as of September 30, 2025, to $145.5 million as of December 31, 2025, reflecting a reduction of approximately 22%[31]. Debt and Interest - The weighted average interest rate under the Credit Facility was 5.7% for the three-month period ending December 31, 2025, compared to 6.1% for the same period in 2024[35]. - The Company’s Incremental Facility allows for an additional principal amount of up to $375 million for acquisitions, including the Maritime Acquisition[33]. Lease Obligations - Total lease costs for the three months ended December 31, 2025, increased to $2,793,000 from $2,292,000 in the same period of 2024, representing a 21.9% increase[53]. - Operating cash flows from operating leases for the three months ended December 31, 2025, were $1,996,000, compared to $1,665,000 in 2024, indicating a 19.9% increase[53]. - The weighted-average remaining lease term for operating leases increased to 9.1 years in 2025 from 8.5 years in 2024[53]. - The total minimum lease payments for operating leases are projected to be $61,518,000, while finance leases are projected at $20,550,000[53]. - The present value of net minimum lease payments for operating leases is $49,420,000, and for finance leases, it is $16,171,000[53]. Taxation - The effective income tax rate from continuing operations for the first quarter of 2026 was 19.1%, down from 21.3% in the first quarter of 2025[36]. Market Risks - The Company selectively uses derivative financial instruments to manage market risks related to interest rates and foreign currency exchange rates[87]. - The Company’s Canadian subsidiary, Morgan Schaffer, enters into foreign exchange contracts to manage foreign currency risk, as part of their revenue is denominated in U.S. dollars[87]. - There has been no material change to the Company's market risks since September 30, 2025[87]. Regulatory Changes - The FASB issued ASU 2024-03, effective for fiscal years beginning after December 15, 2026, requiring disaggregated disclosure of income statement expenses[55].

Financial Performance - The company reported a 35% increase in top-line sales and a 380 basis point expansion in adjusted EBIT margin, resulting in a 73% year-over-year increase in adjusted earnings per share to a record $1.64 for Q1 [1][11] - Orders booked in the first quarter exceeded $550 million, marking a 143% increase compared to the previous year, with all segments experiencing double-digit growth [2][10] - Adjusted EBIT margins improved to 19.4%, with adjusted EBIT and adjusted EBITDA dollars more than doubling from the previous year's first quarter [11][12] Segment Highlights - The aerospace and defense segment saw orders over $380 million, a significant increase from $75 million in the prior year, driven by strong demand from commercial and military aircraft customers [11][12] - The utility solutions group experienced a 10% increase in orders, primarily from strong performance at Doble, although overall sales growth was modest at 1% due to declines in the renewables business [13][14] - The test business had a robust start with orders up over 17% and sales up nearly 27%, benefiting from strong market activity in various sectors [8][14] Guidance and Outlook - The company raised its full-year sales guidance by $20 million, now projecting sales between $1.29 billion and $1.33 billion, primarily driven by the test business [16][17] - Adjusted earnings per share for the full year are now expected to be in the range of $7.90 to $8.15, reflecting a growth of 31% to 35% compared to the previous year [17] - The company remains optimistic about long-term growth prospects in its markets, particularly in the aerospace and defense sectors, despite some near-term challenges in renewables [7][30]

Financial Data and Key Metrics Changes - The company booked over $550 million in orders in Q1 2026, an increase of 143% year-over-year [4] - Top line sales growth was 35%, with adjusted EBIT margin expanding by 380 basis points, leading to a 73% increase in adjusted earnings per share to a record $1.64 [5][12] - Operating cash flow more than doubled to $68.9 million on a continuing operations basis [16] Business Segment Data and Key Metrics Changes - Aerospace and Defense segment saw orders over $380 million, compared to $75 million in the prior year, with sales up 76% driven by strong demand [12][6] - Utility Solutions Group orders increased by 10%, but sales were up only 1% due to declines in the renewables business [14] - The Test business had orders up over 17% and sales up nearly 27%, with adjusted EBIT margins improving to 13.8% [16] Market Data and Key Metrics Changes - The company noted strong order flow for services and condition monitoring in the Utility Solutions Group, but faced headwinds in the renewables market [7][8] - The aerospace market is experiencing increasing build rates for commercial aerospace OEMs, contributing to the positive outlook [6] Company Strategy and Development Direction - The company is raising its full-year sales and earnings guidance due to strong Q1 results and record backlog [10] - Focus remains on strategic acquisitions in utility, aircraft components, and Navy segments to drive long-term growth [49] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term demand across markets, particularly in Navy programs, despite short-term lumpiness in orders [25] - The renewables market is expected to stabilize in the second half of 2026 as developers complete current projects [40] Other Important Information - The company is actively rebuilding a pipeline of M&A opportunities and is focused on strategic acquisitions [48] - Full-year adjusted earnings per share guidance has been increased to a range of $7.90-$8.15, representing growth of 31%-35% compared to 2025 [18][19] Q&A Session Summary Question: Update on A&D orders and ship set content - Management indicated long-term demand is strong, but specifics on platforms are not available due to the nature of contracts [25][26] Question: Revenue guidance appears conservative - Management expects Q1 to be the strongest growth quarter, with solid growth tapering down through the year [34] Question: Strength in the test business - The test business saw a return to strong orders, particularly in electromagnetic compatibility and medical shielding [38] Question: Military business outside Navy - Management highlighted broad-based strength in military aircraft, including significant orders for F-15EX fighters and ongoing programs for F-35 [52] Question: Capital allocation and M&A opportunities - The company is focused on strategic acquisitions in utility and Navy segments, with a healthy pipeline of opportunities [49]

ESCO Technologies (NYSE:ESE) Q1 2026 Earnings call February 05, 2026 05:00 PM ET Company ParticipantsBryan Sayler - President and CEOChris Tucker - SVP and CFOKate Lowrey - VP of Investor RelationsConference Call ParticipantsJon Tanwanteng - Managing Director and Senior Equity Research AnalystTommy Moll - Managing Director and Senior Equity Research AnalystOperatorDay, and thank you for standing by. Welcome to Q1 2026 ESCO Technologies Earnings Call. At this time, all participants are in a listen-only mode. ...

Financial Data and Key Metrics Changes - The company booked over $550 million in orders in Q1 2026, a 143% increase year-over-year [4] - Top line sales growth was 35%, with adjusted earnings per share increasing by 73% to a record $1.64 per share [5][12] - Adjusted EBIT margin expanded by 380 basis points to 19.4% [12] Business Segment Data and Key Metrics Changes - Aerospace and Defense segment saw orders over $380 million, compared to $75 million in the prior year, with sales up 76% [6][12] - Utility Solutions Group orders increased by 10%, driven by strong performance at Doble, while sales were up modestly by 1% [14] - Test business had orders up over 17% and sales up nearly 27%, with adjusted EBIT margins improving to 13.8% [15] Market Data and Key Metrics Changes - The company experienced strong order strength from both U.S. and U.K. Navy programs, indicating robust demand in the defense sector [5][6] - The renewables market is currently recalibrating, affecting near-term investments but expected to play a vital role in the long term [8][41] Company Strategy and Development Direction - The company is raising its full-year sales and earnings guidance due to strong Q1 results and record backlog [10][18] - Focus remains on strategic acquisitions in utility, aircraft components, and Navy segments, with a healthy M&A pipeline being rebuilt [50] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term demand across markets, particularly in Navy and aerospace sectors, despite short-term fluctuations [25][26] - The company anticipates a tapering of growth after a strong Q1, with expectations for solid growth throughout the year [34] Other Important Information - Operating cash flow more than doubled to $68.9 million, driven by increased contract liability in the Navy business [16] - Full-year adjusted earnings per share guidance increased to a range of $7.90-$8.15, reflecting a growth of 31%-35% compared to 2025 [19] Q&A Session Summary Question: Updates on A&D orders and ship set content - Management noted long-term demand is strong, but specifics on platforms cannot be disclosed due to MOD policies [25][26] Question: Revenue guidance appears conservative - Management indicated that Q1 is expected to be the strongest growth quarter, with tapering growth anticipated later in the year [34] Question: Strength in the test business - The recovery in traditional core markets, particularly electromagnetic compatibility and medical shielding, has driven recent strength [38] Question: Outlook for the energy business - Current focus is on completing existing projects to qualify for tax credits, with expectations for a return to normal growth in late 2026 [41] Question: Maritime business large orders impact - Management expects some revenue from maritime contracts starting in Q4, with more significant impacts in 2027 and 2028 [43] Question: Capital allocation and M&A opportunities - The company is actively rebuilding its M&A pipeline, focusing on strategic acquisitions in its core segments [50] Question: Military business strength outside Navy - Management highlighted broad-based strength in military aircraft, including significant orders for F-15EX fighters and sixth-generation platforms [54]

Bryan Sayler President & CEO Chris Tucker Sr. Vice President & CFO February 5, 2026 1 Forward Looking Statement ESCO Technologies First Quarter FY 2026 Earnings Call Statements in this presentation regarding Management's intentions, expectations and guidance for fiscal 2026, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are "forward-looking statements" ...

Financial Performance - Q1 2026 sales increased by $75 million (35.0%) to $290 million compared to $215 million in Q1 2025[4] - Q1 2026 GAAP EPS from continuing operations increased by 40.5% to $1.11 per share compared to $0.79 per share in Q1 2025[4] - Q1 2026 adjusted EPS from continuing operations increased by 72.6% to $1.64 per share compared to $0.95 per share in Q1 2025[4] - Total net sales for Q1 2026 reached $289.7 million, a 35% increase from $214.6 million in Q1 2025[21] - Adjusted net earnings for Q1 2026 were $42.4 million, compared to $24.5 million in Q1 2025, reflecting a 73% year-over-year growth[21][22] - Consolidated EBITDA for Q1 2026 was $64.9 million, up from $41.0 million in Q1 2025, representing a 58% increase[23] - The company reported a consolidated EBIT of $38.4 million for Q1 2026, compared to $28.1 million in Q1 2025, marking a 37% increase[23] Orders and Backlog - Q1 2026 entered orders increased by $328 million (143.0%) to $557 million, resulting in a record backlog of $1.4 billion[4] - Organic orders increased by 39% across all three business segments, reflecting favorable end-market conditions[3] - The ending backlog as of December 31, 2025, was $1.4 billion, an increase from $1.1 billion at the beginning of the quarter[29] Segment Performance - Aerospace & Defense segment sales increased by $62 million (75.7%) to $144 million, driven by strong performance in Navy and aerospace[7] - Utility Solutions Group sales increased by $1 million (1.0%) to $87 million, with Doble sales increasing by $4 million (5.8%) and NRG sales decreasing by $3 million (22.4%) compared to Q1 2025[7] - Test & Measurement segment sales increased by $12 million (26.7%) to $58 million, primarily driven by higher U.S. and European demand[10] Guidance - FY 2026 revenue guidance increased by $20 million, now expected to be in the range of $1.29 to $1.33 billion, reflecting 18% to 21% growth over the prior year[10] - Full year adjusted EPS guidance raised to a range of $7.90 - $8.15 per share, reflecting a 31% to 35% growth[10] Cash and Debt - Cash and cash equivalents at the end of Q1 2026 were $103.8 million, up from $101.4 million at the end of Q4 2025[27] - The total current assets as of December 31, 2025, were $689.7 million, slightly up from $688.5 million as of September 30, 2025[25] - The company’s long-term debt decreased to $125.0 million from $166.0 million in the previous quarter[25] - The company incurred $2.9 million in interest expenses for Q1 2026, compared to $2.3 million in Q1 2025[23]

Core Insights - ESCO Technologies Inc. reported a strong start to fiscal year 2026 with significant increases in sales, orders, and earnings per share, reflecting favorable market conditions and effective execution by the team [1][3][4]. Financial Performance - Q1 2026 sales increased by 35% to $290 million compared to $215 million in Q1 2025 [6]. - Entered orders surged by 143% to $557 million, resulting in a record backlog of $1.4 billion [6][32]. - GAAP EPS from continuing operations rose by 40.5% to $1.11 per share, while adjusted EPS increased by 72.6% to $1.64 per share [6][34]. Segment Performance - Aerospace & Defense (A&D) segment sales increased by 75.7% to $144 million, driven by strong Navy and aerospace performance [7]. - Utility Solutions Group (USG) sales remained stable at $87 million, with a slight increase from the previous year [8]. - Test & Measurement segment sales grew by 26.7% to $58 million, supported by higher demand in U.S. and European markets [12]. Operational Highlights - The company achieved a 320 basis points expansion in adjusted EBITDA margin, reflecting operational efficiency [3]. - Net cash provided by operating activities from continuing operations was $69 million, an increase of $40 million compared to the prior year [6]. Business Outlook - Full year revenue guidance for FY 2026 has been increased by $20 million, now expected to be in the range of $1.29 to $1.33 billion, indicating 18 to 21% growth over the prior year [10]. - Adjusted EPS guidance for the full year is raised to a range of $7.90 to $8.15 per share, reflecting a midpoint increase of $0.38 from previous guidance [10].

Core Viewpoint - ESCO Technologies Inc. is set to report its first quarter financial results on February 5, 2026, followed by a conference call to discuss the results and related commentary [1]. Group 1: Financial Reporting - The first quarter 2026 financial results will be announced after market close on February 5, 2026 [1]. - A conference call will take place at 4:00 p.m. Central Time to discuss the financial results [1]. - A webcast and accompanying slide presentation will be available in the Investor Center of ESCO's website [1]. Group 2: Company Overview - ESCO Technologies is a global provider of highly engineered products and solutions for diverse end-markets [3]. - The company manufactures filtration and fluid control products, advanced composites, and power management solutions for aviation, Navy, and industrial customers [3]. - ESCO is an industry leader in RF test and measurement products and systems, providing diagnostic instruments, software, and services to industrial power users and the electric utility and renewable energy sectors [3]. - The company is headquartered in St. Louis, Missouri, with offices and manufacturing facilities worldwide [3].