Revenue Performance - Total revenues for the three months ended March 31, 2025, were $265.5 million, a 6.6% increase from $249.1 million in the same period of 2024[44] - For the six months ended March 31, 2025, total revenues reached $512.5 million, compared to $467.4 million for the same period in 2024, reflecting a growth of 9.6%[44] - The Company reported net earnings for common stockholders of $31.0 million for the three months ended March 31, 2025, compared to $23.2 million for the same period in 2024, representing a 33.5% increase[39] Tax and Equity - The effective income tax rate for the second quarter of 2025 was 23.4%, up from 20.5% in the second quarter of 2024[38] - The Company’s total equity as of March 31, 2025, was $1.277 billion, an increase from $1.166 billion as of March 31, 2024[39] Debt and Borrowings - As of March 31, 2025, total borrowings decreased to $88 million from $122 million as of September 30, 2024[34] - The Company had approximately $407 million available to borrow under the Credit Facility as of March 31, 2025, excluding the Incremental Facility[36] - The Company’s total long-term debt, less current portion, was $68 million as of March 31, 2025, down from $102 million as of September 30, 2024[34] - The weighted average interest rates for borrowings were 5.8% for the three months ending March 31, 2025, compared to 6.8% for the same period in 2024[37] Contracts and Performance Obligations - As of March 31, 2025, the company had $932.3 million in remaining performance obligations, with approximately 74% expected to be recognized as revenue in the next twelve months[49] - Contract assets, contract liabilities, and accounts receivable totaled $125.3 million, $138.5 million, and $218.1 million, respectively, as of March 31, 2025[50] - The company recognized approximately $56 million in revenues during the first six months of 2025 that were included in the contract liabilities balance at September 30, 2024[50] Lease Costs and Terms - The total lease costs for the three months ended March 31, 2025, amounted to $2,574,000, compared to $2,462,000 for the same period in 2024, reflecting an increase of 4.5%[55] - The weighted-average remaining lease term for operating leases was 10.2 years as of March 31, 2025, down from 10.8 years in 2024[55] - The present value of net minimum lease payments for operating leases was $40.6 million as of March 31, 2025[56] - The company’s finance lease costs for the six months ended March 31, 2025, totaled $1,152,000, compared to $1,204,000 for the same period in 2024[55] - The company’s operating cash flows from operating leases for the six months ended March 31, 2025, were $3,851,000, compared to $3,643,000 for the same period in 2024, indicating a growth of 5.7%[55] Acquisitions - The Company plans to acquire Ultra PMES Limited and other subsidiaries, with an incremental facility of up to $375 million to finance the acquisition[35] - The company completed the acquisition of the Signature Management & Power business for approximately $550 million in cash on April 25, 2025, enhancing its Aerospace & Defense segment[60] Risk Management - The company uses derivative financial instruments to manage market risks related to interest rates and foreign currency exchange rates, with no material changes since September 30, 2024[92]

Financial Data and Key Metrics Changes - Orders increased by nearly 22% in the quarter, resulting in a record backlog of $932 million [15] - Sales rose by 6.6% in the quarter, with all three segments contributing to the growth [15] - Adjusted EBIT margins were at 18%, with incremental margins on sales growth at 56%, leading to adjusted earnings per share of $1.35, a 24% increase year-over-year [15][21] Business Segment Data and Key Metrics Changes - **Aerospace and Defense**: Orders were up 5% with nearly 8% sales growth, driven by commercial aerospace and Navy orders. Adjusted EBIT margins increased by 400 basis points, with EBIT dollars up 28% due to favorable pricing and mix [16][17] - **Utility Solutions Group**: Orders grew nearly 17%, with sales growth of 4%. Adjusted EBIT margins improved to 23%, up 290 basis points year-over-year [18] - **Test Business**: Orders surged by 75%, with sales up 9%. Margins improved to 12.4%, benefiting from volume leverage and price increases [19] Market Data and Key Metrics Changes - The aerospace and defense market is expected to continue growing despite macro uncertainties, with strong demand for commercial and defense aircraft [8] - The utility market is experiencing a favorable business cycle, driven by increased electricity demand and aging infrastructure [11] - The renewable energy market is recalibrating, but order activity is improving compared to the previous year [12] Company Strategy and Development Direction - The company completed a major acquisition of SMMP, rebranding it as ESCO Maritime Solutions, which is expected to enhance margins and growth [10] - The strategic planning process assessed end markets and strategies to achieve above-market growth [7] - The company remains focused on navigating macroeconomic challenges while leveraging its diverse business mix [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic challenges and highlighted strong operational performance [5][25] - The outlook for the aerospace and defense markets remains positive, with expectations for continued growth despite recent order moderation [8] - Management acknowledged potential impacts from tariffs but emphasized proactive measures to mitigate risks [34] Other Important Information - The company updated its earnings guidance for 2025, projecting adjusted earnings per share in the range of $5.85 to $6.15 [23] - The acquisition of ESCO Maritime Solutions is expected to contribute adjusted earnings per share of $0.20 to $0.30 for the remainder of the fiscal year [23] Q&A Session Summary Question: Update on the sale of VACCO - Management indicated ongoing interest in the sale process, with a decision expected by May [28] Question: Performance of the underlying business - Management noted improvements in overall business performance, with stabilization observed compared to previous years [30] Question: Clarification on tariff impacts - The estimated tariff impact of $2 million to $4 million is a net figure, factoring in pricing adjustments and operational changes [34] Question: Cash generation from Maritime Solutions - Management expects strong cash flow benefits from the Maritime acquisition, with ongoing assessments as integration progresses [42] Question: Thoughts on shipbuilding budgets and orders - Management expressed confidence in the shipbuilding budget and order flow, particularly for Navy programs [45][76] Question: Insights on commercial aircraft orders - Management noted a moderation in commercial aircraft orders but remains optimistic about future demand normalization [72] Question: Pro forma capital structure and leverage profile - Management indicated a leverage ratio of just over 2.2 at closing, with expectations to reduce it below 2 as debt is paid down [81]

Financial Data and Key Metrics Changes - Orders increased by nearly 22% in the quarter, resulting in a record backlog of $932 million [16] - Sales grew by 6.6% in the quarter, with all three segments contributing to the increase [16] - Adjusted EBIT margins were at 18%, with incremental margins on sales growth at 56%, leading to adjusted earnings per share of $1.35, a 24% increase compared to the previous year [17] Business Segment Data and Key Metrics Changes - **Aerospace and Defense**: Orders were up 5% with nearly 8% sales growth, driven by commercial aerospace and Navy orders. Adjusted EBIT margins increased by 400 basis points, with EBIT dollars up 28% due to favorable pricing and mix [18][19] - **Utility Solutions Group**: Orders grew nearly 17%, with sales growth of 4%. Adjusted EBIT margins improved to 23%, up 290 basis points from the previous year [20] - **Test Business**: Orders surged by 75% compared to last year, with sales up 9%. Margins improved to 12.4%, benefiting from volume leverage and price increases [21] Market Data and Key Metrics Changes - The aerospace and defense market is expected to continue growing despite macro uncertainties, with strong demand for commercial and defense aircraft [9] - The utility market is experiencing a favorable business cycle, driven by increased electricity demand and aging infrastructure [12] - The renewable energy market is recalibrating, but order activity is improving compared to the previous year [13] Company Strategy and Development Direction - The company completed a major acquisition of SMMP, rebranding it as ESCO Maritime Solutions, which is expected to enhance margins and growth profile [11] - The strategic planning process assessed end markets and strategies to deliver above-market growth, focusing on long-term dynamics [8] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in navigating macroeconomic challenges and highlighted strong operational performance and strategic developments [5][6] - The company anticipates continued growth in key markets, with a favorable mix of businesses to mitigate risks [28] Other Important Information - The company updated its earnings guidance for 2025, projecting adjusted earnings per share in the range of $5.85 to $6.15, factoring in potential tariff impacts [25][26] Q&A Session Summary Question: Update on the sale of VACCO - The company is in an involved process to potentially sell VACCO, with active interest but no conclusion expected until May [31] Question: Performance of the underlying business - The overall business has stabilized with improved performance compared to last year, although margins remain lower than other segments [33][34] Question: Clarification on tariff impacts - The estimated tariff impact of $2 million to $4 million is a net number, with actions being taken to mitigate this [35][36] Question: Cash generation from Maritime Solutions - The strong cash profile is expected to continue, with ongoing details being worked through as the integration progresses [44] Question: Thoughts on shipbuilding budgets and orders - The company feels positive about the shipbuilding budget and order flow, particularly for submarines, which are high on the Department of Defense's priority list [75] Question: Insights on commercial aircraft orders - There has been a moderation in commercial aircraft orders, but the company remains confident in Boeing's recovery and backlog management [72][73] Question: Pro forma capital structure and leverage profile - The pro forma leverage ratio is expected to drop below 2 as the company continues to grow EBITDA and pay down debt [81]

Financial Data and Key Metrics Changes - Orders increased by nearly 22% in the quarter, resulting in a record backlog of $932 million [15] - Sales grew by 6.6% in the quarter, with all three segments contributing to the increase [15] - Adjusted EBIT margins were at 18%, with incremental margins on sales growth at 56%, leading to adjusted earnings per share of $1.35, a 24% increase year-over-year [15][21] Business Segment Data and Key Metrics Changes - **Aerospace and Defense**: Orders were up 5% with nearly 8% sales growth, driven by commercial aerospace and Navy orders. Adjusted EBIT margins increased by 400 basis points, with EBIT dollars up 28% due to favorable pricing and mix [16][18] - **Utility Solutions Group**: Orders grew nearly 17%, with sales up 4%. Doble experienced 5% sales growth, while NRG's sales were flat. Adjusted EBIT margins improved to 23%, up 290 basis points year-over-year [17][19] - **Test Business**: Orders surged by 75% compared to last year, with sales up 9%. Margins improved to 12.4%, benefiting from volume leverage and price increases [19][20] Market Data and Key Metrics Changes - The aerospace market shows fundamental demand for additional commercial and defense aircraft, with expectations for continued growth despite recent moderation in order rates [8][9] - The utility market is experiencing a favorable business cycle, driven by increased electricity demand and aging infrastructure [11][12] - The test business is recovering, with strong activity in EMC testing, healthcare, and industrial markets [13][14] Company Strategy and Development Direction - The company completed a major acquisition of SMMP, rebranding it as ESCO Maritime Solutions, which is expected to enhance margin and growth profiles [10][24] - The strategic planning process indicates a focus on delivering above-market growth by assessing end markets and strategies [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and geopolitical risks, highlighting strong underlying business conditions [4][5] - The long-term outlook for aerospace and defense remains positive, with expectations for continued growth despite short-term challenges [7][9] - The company anticipates growth in the utility sector due to increasing electricity demand and the importance of renewable technologies [12] Other Important Information - The company expects sales growth of 6% to 8% for the year, with adjusted earnings per share guidance increased to a range of $5.65 to $5.85 [23][24] - The acquisition is projected to contribute adjusted earnings per share in the range of $0.20 to $0.30 [23] Q&A Session Summary Question: Update on the sale of VACCO - Management indicated ongoing interest in the sale process, with a decision expected by May [28] Question: Performance of the underlying business - The business has stabilized with improved performance compared to last year, although margins remain lower than other segments [30] Question: Clarification on tariff impacts - The estimated tariff impact of $2 million to $4 million is a net number, factoring in mitigation efforts [32][34] Question: Cash generation from Maritime Solutions - Management expects strong cash flow benefits from the Maritime acquisition, with ongoing assessments as integration progresses [40] Question: Thoughts on the 2025 and 2026 budget for shipbuilding - Management is optimistic about the shipbuilding budget, noting strong visibility and progress in programs [42][43] Question: Commercial aircraft orders moderation - Management noted a slight moderation in orders due to inventory management but remains confident in future growth [68] Question: Status of Department of Defense programs - Programs related to submarines and Navy initiatives are prioritized, with a positive order flow expected [70]

Financial Performance - Q2 FY25 - Sales increased by 6.6% to $265.5 million, all organic[9, 12] - Entered orders increased by 21.6% to $290.8 million[9, 14] - Adjusted EPS increased by 24% to $1.35[11, 13] - Adjusted EBIT increased by 23.7% to $47.9 million with an adjusted EBIT margin of 18.0%[10, 14] - Record ending backlog of $932 million, a 6% increase from September 30, 2024[15] Financial Performance - YTD Q2 FY25 - Sales increased by 9.6% to $512.5 million[32, 36] - Entered orders increased by 6.2% to $565.8 million[32, 36] - Adjusted EPS increased by 30.8% to $2.42[34, 36] - Adjusted EBIT increased by 28.6% to $85.6 million with an adjusted EBIT margin of 16.7%[33, 36] - YTD Book-to-Bill of 1.1, with ending backlog up $53 million YTD, a 6% increase[37] - Operating cash flow increased significantly to $58.3 million compared to $19.2 million in the same period last year[39, 46] Segment Performance - Q2 FY25 - A&D sales increased by 7.6% to $123.4 million with adjusted EBIT increasing by 28.2% to $30.3 million[17, 19] - USG sales increased by 4.0% to $90.8 million with adjusted EBIT increasing by 18.7% to $20.9 million[22, 24] - Test sales increased by 9.0% to $51.4 million with adjusted EBIT increasing by 10.9% to $6.4 million[27, 29] FY25 Guidance - Full year revenue (excluding Maritime) is expected to increase by 6% - 8%, reaching $1.09 billion - $1.11 billion[49] - Adjusted EPS (excluding Maritime) is expected to increase by $0.10 to $5.65 - $5.85, representing an 18% - 23% growth over FY24[49] - Including Maritime, FY25 Adjusted EPS is expected to be in the range of $5.85 - $6.15, a 23% - 29% growth over FY24[49]

Financial Performance - Q2 2025 sales increased by 7% to $266 million compared to $249.1 million in Q2 2024[3] - Q2 2025 GAAP EPS rose by 33% to $1.20 per share, up from $0.90 per share in Q2 2024[3] - Q2 2025 adjusted EPS increased by 24% to $1.35 per share, compared to $1.09 per share in Q2 2024[3] - Net sales for the six months ended March 31, 2025, increased to $512,545 thousand from $467,443 thousand, representing an increase of 9% year-over-year[25] - Net earnings for the six months ended March 31, 2025, rose to $54,506 thousand compared to $38,388 thousand for the same period in 2024, reflecting a growth of 42%[25] - Diluted earnings per share (EPS) on a GAAP basis increased to $2.11 for the six months ended March 31, 2025, up from $1.49 in the prior year[25] - Adjusted net earnings for the six months ended March 31, 2025, were $62,727 thousand, excluding $8.2 million of after-tax charges, compared to $47,622 thousand in the prior year[31] Segment Performance - The Aerospace & Defense segment saw sales increase by 8% to $123.4 million, with EBIT rising to $30.3 million[7] - Utility Solutions Group sales increased by 4% to $90.8 million, with EBIT growing to $20.8 million[7] - RF Test & Measurement segment sales rose by 9% to $51.4 million, with entered orders increasing by 75% to $77 million[7] - Aerospace & Defense segment net sales for Q2 2025 were $123,369 thousand, an increase from $114,701 thousand in Q2 2024, representing an 8% growth[27] - The Test segment reported net sales of $51,383 thousand in Q2 2025, up from $47,119 thousand in Q2 2024, reflecting a 5% increase[27] Orders and Backlog - Q2 2025 entered orders were $290.8 million, resulting in a book-to-bill ratio of 1.10x and a record backlog of $932 million[3] - The ending backlog as of March 31, 2025, was $932,269 thousand, up from $878,969 thousand at the beginning of the fiscal year, indicating strong order growth[38] Guidance and Projections - For FY 2025, organic sales are expected to grow by 6% to 8%, with Maritime contributing sales of $90 to $100 million[9] - Adjusted EPS guidance for FY 2025 has been raised to a range of $5.65 to $5.85, reflecting 18% to 23% growth over the prior year[10] - Q3 2025 adjusted EPS guidance without Maritime is projected to be between $1.50 and $1.60, with Maritime expected to add $0.08 to $0.12[12] Cash and Assets - Total current assets decreased slightly to $660,753 thousand as of March 31, 2025, from $668,649 thousand as of September 30, 2024[34] - Cash and cash equivalents at the end of the period were $57,397 thousand, down from $65,963 thousand at the beginning of the period[36] EPS Adjustments - Q2 2024 GAAP EPS is $0.90, with adjustments leading to an adjusted EPS of $1.09, reflecting a $0.19 adjustment primarily due to acquisition-related charges[41] - The $0.19 EPS adjustment includes $6.2 million in pre-tax charges, resulting in a net impact of $4.8 million after tax benefits[42] - YTD Q2 2025 GAAP EPS is $2.11, with adjustments resulting in an adjusted EPS of $2.42, reflecting a $0.31 adjustment mainly from acquisition-related amortization[43] - The $0.31 EPS adjustment consists of $10.7 million in pre-tax charges, leading to a net impact of $8.2 million after tax benefits[44] - YTD Q2 2024 GAAP EPS is $1.49, with adjustments leading to an adjusted EPS of $1.85, reflecting a $0.36 adjustment primarily due to acquisition costs and restructuring charges[45] - The $0.36 EPS adjustment includes $12 million in pre-tax charges, resulting in a net impact of $9.2 million after tax benefits[46]

Core Insights - ESCO Technologies Inc. reported a 7% increase in Q2 sales to $266 million, with GAAP EPS rising 33% to $1.20 and adjusted EPS increasing 24% to $1.35 [1][6][29] - The company experienced a 22% increase in orders, resulting in a book-to-bill ratio of 1.10x and a record backlog of $932 million [1][6][44] - The acquisition of SM&P, now known as ESCO Maritime Solutions, is expected to enhance the company's naval product offerings [4][10] Financial Performance - Q2 2025 sales increased by $16.4 million (7%) compared to Q2 2024, with net earnings rising to $31.0 million from $23.2 million [6][25] - Adjusted EBITDA margin expanded by 250 basis points, reflecting strong revenue growth across all segments [3][6] - Year-to-date net cash provided by operating activities was $58 million, an increase of $39 million compared to the prior year [6] Segment Performance - Aerospace & Defense segment sales increased by $8.7 million (8%) to $123.4 million, driven by Navy and aerospace sales [7][29] - Utility Solutions Group (USG) sales rose by $3.5 million (4%) to $90.8 million, with a strong performance in offline testing products [8][29] - Test segment sales increased by $4.3 million (9%) to $51.4 million, primarily due to higher Test and Measurement orders [15][29] Business Outlook - The company expects organic sales growth of 6% to 8% for FY 2025, with Maritime contributing sales of $90 to $100 million [11][12] - Adjusted EPS guidance for FY 2025 has been raised to a range of $5.65 to $5.85, reflecting continued market strength [12][13] - Q3 2025 adjusted EPS guidance without Maritime is projected to be between $1.50 and $1.60 [14] Dividend Information - The next quarterly cash dividend of $0.08 per share is scheduled for payment on July 17, 2025 [16]

Core Insights - Ascendis Pharma A/S will present new data on its hypoparathyroidism, achondroplasia, and growth hormone deficiency programs at the ESPE & ESE 2025 congress in Copenhagen from May 10-13, 2025 [1][2] Hypoparathyroidism - The company will showcase 4-year efficacy and safety data from the Phase 2 PaTH Forward Trial of TransCon PTH (palopegteriparatide) in adults with chronic hypoparathyroidism [2][4] - Presentations will include a retrospective matched cohort study using real-world data from England to estimate the risk of chronic kidney disease progression in chronic hypoparathyroidism [4][6] Achondroplasia - Ascendis will present Week 52 growth and bone morphometry data from the pivotal ApproaCH Trial of TransCon CNP (navepegritide) in children with achondroplasia [2][4] - The congress will feature discussions on assessing health-related quality of life (HRQoL) in achondroplasia across the life course [4][6] Growth Hormone Deficiency - The company will present results from the Phase 3 foresiGHt Trial supporting the efficacy and safety of once-weekly lonapegsomatropin in adults with growth hormone deficiency [2][6] - The presentations will highlight the importance of growth hormone in maintaining normal body composition and cardiometabolic health throughout adulthood [9] Company Overview - Ascendis Pharma is a global biopharmaceutical company focused on innovative therapies using its TransCon technology platform to address unmet medical needs [10] - The company is headquartered in Copenhagen, Denmark, with additional facilities in Europe and the United States [10]

Group 1 - Ardagh Metal Packaging S.A. (AMBP) has outperformed the Industrial Products sector with a year-to-date return of approximately 25.6%, while the sector has returned an average of -8.9% [4] - The Zacks Rank for AMBP is currently 2 (Buy), indicating a positive earnings outlook with a 1.7% increase in the consensus estimate for full-year earnings over the past quarter [3] - AMBP belongs to the Metal Products - Procurement and Fabrication industry, which is ranked 42 in the Zacks Industry Rank, and has performed better than this group, which has lost about 5.2% year-to-date [6] Group 2 - The Industrial Products group includes 191 companies and is currently ranked 9 in the Zacks Sector Rank, which evaluates the average Zacks Rank of individual stocks within the sector [2] - Another stock in the Industrial Products sector, Esco Technologies (ESE), has a year-to-date return of 18.3% and a Zacks Rank of 1 (Strong Buy), with a consensus EPS estimate increase of 18.8% over the past three months [4][5] - The Manufacturing - Electronics industry, to which Esco Technologies belongs, is ranked 66 and has declined by -14.4% year-to-date [7]

Core Viewpoint - ESCO Technologies Inc. has acquired the Signature Management & Power (SM&P) business from Ultra Maritime for $550 million, enhancing its capabilities in the naval defense market [1][3]. Group 1: Acquisition Details - The acquisition price for SM&P is $550 million in cash [1]. - SM&P specializes in mission-critical signature and power management solutions for the US and UK naval defense markets [1][2]. - The integration of SM&P will significantly scale ESCO's Navy businesses, particularly in US Navy submarine and surface ship programs, and expand into UK and AUKUS navy platforms [1][2]. Group 2: Product Offerings - SM&P's Signature Management solutions provide countermeasures for surface ships and submarines to prevent detection by underwater mines and sensors [2]. - The Power Management product line includes highly-engineered motors designed for critical ship propulsion systems, featuring ultra-quiet designs to enhance stealth capabilities [2]. Group 3: Strategic Implications - This acquisition aligns with ESCO's long-term goal of strengthening its leadership in high-growth end-markets, particularly as global naval defense spending increases [3]. - The impact of the SM&P acquisition will be reflected in ESCO's updated FY 2025 guidance, which will be announced on May 7, 2025 [3]. Group 4: Company Overview - ESCO is a global provider of engineered products and solutions across various end-markets, including aviation, Navy, space, and industrial sectors [4]. - The company is recognized for its RF test and measurement products, diagnostic instruments, and solutions for the electric utility and renewable energy industries [4].