St. Louis, March 10, 2025 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) announced today that Bryan Sayler, President & CEO, will make a Company presentation on Wednesday, March 19, at the Sidoti Small Cap Conference. The presentation webcast will begin at 3:15 Eastern Time and will be available through this registration link. Visuals presented will be available through the webcast link. ESCO is a global provider of highly engineered products and solutions serving diverse end-markets. It manufacture ...

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for ESCO Technologies Inc. and its subsidiaries for the three months ended December 31, 2024, and 2023 Condensed Consolidated Statements of Operations (Three Months Ended December 31): | Metric | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net sales | $247,026 | $218,314 | | Net earnings | $23,473 | $15,169 | | Basic EPS | $0.91 | $0.59 | | Diluted EPS | $0.91 | $0.59 | Condensed Consolidated Balance Sheets (As of December 31, 2024 vs. September 30, 2024): | Metric | Dec 31, 2024 (in thousands) | Sep 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total assets | $1,795,064 | $1,838,620 | | Total liabilities | $558,131 | $601,270 | | Total shareholders' equity | $1,236,933 | $1,237,350 | Condensed Consolidated Statements of Cash Flows (Three Months Ended December 31): | Metric | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $34,174 | $8,746 | | Net cash used by investing activities | $(7,795) | $(66,969) | | Net cash provided (used) by financing activities | $(18,095) | $66,504 | | Net increase in cash and cash equivalents | $5,321 | $9,530 | | Cash and cash equivalents, end of period | $71,284 | $51,396 | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=6&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides explanatory notes to the condensed consolidated financial statements, detailing the basis of presentation, specific accounting policies, and additional information on key financial line items [1. BASIS OF PRESENTATION](index=6&type=section&id=1.%20BASIS%20OF%20PRESENTATION) The financial statements are unaudited and include all necessary recurring accruals for a fair presentation, prepared in accordance with Form 10-Q and GAAP - The accompanying consolidated financial statements are unaudited and include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation[14](index=14&type=chunk) - The statements are presented in accordance with Form 10-Q and GAAP, requiring management to make estimates and assumptions[14](index=14&type=chunk)[15](index=15&type=chunk) [2. EARNINGS PER SHARE (EPS)](index=6&type=section&id=2.%20EARNINGS%20PER%20SHARE%20(EPS)) This note details the calculation of basic and diluted earnings per share, outlining the weighted average number of common shares outstanding used for each period Weighted Average Shares Outstanding for EPS Calculation (in thousands): | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Weighted Average Shares Outstanding — Basic | 25,781 | 25,797 | | Dilutive Restricted Shares | 53 | 49 | | Adjusted Shares — Diluted | 25,834 | 25,846 | [3. SHARE-BASED COMPENSATION](index=6&type=section&id=3.%20SHARE-BASED%20COMPENSATION) The company provides share-based compensation through PSU, RSU, and PARS awards to key employees and non-employee directors, with total expense increasing to $2.5 million in Q1 2025 Share-Based Compensation Expense (Three Months Ended December 31, in millions): | Category | 2024 | 2023 | | :--- | :--- | :--- | | RSU, PSU and PARS Awards | $2.2 | $1.9 | | Non-Employee Directors Plan | $0.3 | $0.3 | | **Total Share-Based Compensation Cost** | **$2.5** | **$2.2** | | Total Income Tax Benefit | $0.8 | $0.2 | - As of December 31, 2024, there was **$17.7 million** of total unrecognized compensation cost related to share-based compensation arrangements, expected to be recognized over a remaining weighted-average period of **2.0 years**[20](index=20&type=chunk) [4. INVENTORIES](index=7&type=section&id=4.%20INVENTORIES) This note provides a breakdown of the company's inventory components, including finished goods, work in process, and raw materials, as of December 31, 2024, and September 30, 2024 Inventories (in thousands): | Category | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | | Finished goods | $53,839 | $46,586 | | Work in process | $47,836 | $47,903 | | Raw materials | $117,708 | $114,675 | | **Total inventories** | **$219,383** | **$209,164** | [5. GOODWILL AND OTHER INTANGIBLE ASSETS](index=7&type=section&id=5.%20GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) This section details the company's goodwill and other intangible assets, with goodwill decreasing by $7.6 million due to foreign currency translation in Q1 2025 Goodwill and Intangible Assets (Net, in thousands): | Asset Type | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | | Goodwill | $532,312 | $539,899 | | Patents | $1,168 | $1,223 | | Capitalized software | $40,790 | $41,241 | | Customer relationships | $189,105 | $198,193 | | Other | $3,556 | $4,009 | | Trade names (indefinite lives) | $161,683 | $162,936 | Changes in Goodwill by Segment (Three Months Ended December 31, 2024, in millions): | Segment | Balance Sep 30, 2024 | Foreign Currency Translation | Balance Dec 31, 2024 | | :--- | :--- | :--- | :--- | | USG | $356.9 | $(5.5) | $351.4 | | Test | $67.4 | $(2.1) | $65.3 | | A&D | $115.6 | — | $115.6 | | **Total** | **$539.9** | **$(7.6)** | **$532.3** | [6. BUSINESS SEGMENT INFORMATION](index=7&type=section&id=6.%20BUSINESS%20SEGMENT%20INFORMATION) The company operates in three reportable segments: A&D, USG, and Test, all showing increased net sales and EBIT in Q1 2025 - The A&D segment designs and manufactures specialty filtration, fluid control, and naval products for aerospace and defense applications[23](index=23&type=chunk)[24](index=24&type=chunk) - The USG segment provides diagnostic testing and data management solutions for electric power grids and decision support tools for the renewable energy industry[25](index=25&type=chunk) - The Test segment designs and manufactures products and systems to measure and control RF and acoustic energy, serving various markets[26](index=26&type=chunk) Net Sales by Segment (Three Months Ended December 31, in thousands): | Segment | 2024 | 2023 | | :--- | :--- | :--- | | A&D | $114,301 | $94,733 | | USG | $86,660 | $82,984 | | Test | $46,065 | $40,597 | | **Consolidated totals** | **$247,026** | **$218,314** | EBIT by Segment (Three Months Ended December 31, in thousands): | Segment | 2024 | 2023 | | :--- | :--- | :--- | | A&D | $21,596 | $16,663 | | USG | $20,489 | $17,625 | | Test | $4,422 | $1,779 | | Corporate (loss) | $(14,309) | $(13,946) | | **Consolidated EBIT** | **$32,198** | **$22,121** | [7. DEBT](index=10&type=section&id=7.%20DEBT) The company's total borrowings decreased to $112 million at December 31, 2024, with $383 million available under its credit facility and compliance with all covenants Debt Summary (in thousands): | Metric | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | | Total borrowings | $112,000 | $122,000 | | Current portion of long-term debt | $(20,000) | $(20,000) | | Total long-term debt, less current portion | $92,000 | $102,000 | - The Credit Facility includes a **$500 million** revolving line of credit and an additional **$375 million** Incremental Facility for the SM&P Acquisition, maturing August 30, 2028[33](index=33&type=chunk)[34](index=34&type=chunk) - At December 31, 2024, the Company had approximately **$383 million** available to borrow under the Credit Facility (excluding the Incremental Facility) and **$71.3 million** cash on hand[35](index=35&type=chunk) - The weighted average interest rates were **6.1%** for Q1 2025, down from **6.8%** in Q1 2024, and the Company was in compliance with all covenants[36](index=36&type=chunk) [8. INCOME TAX EXPENSE](index=10&type=section&id=8.%20INCOME%20TAX%20EXPENSE) The effective income tax rate for Q1 2025 was 21.6%, a slight decrease from 22.0% in Q1 2024, due to share-based compensation tax benefits Effective Income Tax Rate (Three Months Ended December 31): | Period | Rate | | :--- | :--- | | Q1 2025 | 21.6% | | Q1 2024 | 22.0% | - Income tax expense in Q1 2025 was favorably impacted by additional tax benefits related to the vesting of share-based compensation awards[37](index=37&type=chunk) [9. SHAREHOLDERS' EQUITY](index=11&type=section&id=9.%20SHAREHOLDERS%27%20EQUITY) Total shareholders' equity increased to $1,236.9 million in Q1 2025, driven by net earnings, partially offset by foreign currency translation adjustments Changes in Shareholders' Equity (Three Months Ended December 31, in thousands): | Category | 2024 | 2023 | | :--- | :--- | :--- | | Common stock (ending balance) | $309 | $308 | | Additional paid-in-capital (ending balance) | $308,143 | $305,283 | | Retained earnings (ending balance) | $1,104,359 | $1,002,420 | | Accumulated other comprehensive loss (ending balance) | $(28,803) | $(14,555) | | Treasury stock (ending balance) | $(147,075) | $(139,362) | | **Total equity** | **$1,236,933** | **$1,154,094** | - Net earnings of **$23.5 million** contributed to retained earnings, while foreign currency translation adjustments resulted in an **$18.0 million** loss in accumulated other comprehensive income in Q1 2025[38](index=38&type=chunk) [10. FAIR VALUE MEASUREMENTS](index=11&type=section&id=10.%20FAIR%20VALUE%20MEASUREMENTS) The company uses a three-level hierarchy for fair value measurements, with derivative instruments classified within Level 2, and no impairments recorded for nonfinancial assets - The company classifies fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[39](index=39&type=chunk) - Forward contracts and interest rate swaps are classified within **Level 2** of the valuation hierarchy[40](index=40&type=chunk) - No impairments were recorded for nonfinancial assets (e.g., property, plant and equipment, other intangible assets) during the three-month period ended December 31, 2024[41](index=41&type=chunk) [11. REVENUES](index=12&type=section&id=11.%20REVENUES) This note disaggregates revenues by customer type, geographic location, and recognition method, with remaining performance obligations totaling $906.9 million at December 31, 2024 Disaggregation of Revenues (Three Months Ended December 31, 2024, in thousands): | Category | A&D | USG | Test | Total | | :--- | :--- | :--- | :--- | :--- | | **Customer type:** | | | | | | Commercial | $47,500 | $84,279 | $36,349 | $168,128 | | Government | $66,801 | $2,381 | $9,716 | $78,898 | | **Geographic location:** | | | | | | United States | $96,703 | $59,917 | $28,630 | $185,250 | | International | $17,598 | $26,743 | $17,435 | $61,776 | | **Revenue recognition method:** | | | | | | Point in time | $50,126 | $69,278 | $9,791 | $129,195 | | Over time | $64,175 | $17,382 | $36,274 | $117,831 | Disaggregation of Revenues (Three Months Ended December 31, 2023, in thousands): | Category | A&D | USG | Test | Total | | :--- | :--- | :--- | :--- | :--- | | **Customer type:** | | | | | | Commercial | $37,209 | $81,469 | $35,087 | $153,765 | | Government | $57,524 | $1,515 | $5,510 | $64,549 | | **Geographic location:** | | | | | | United States | $79,901 | $55,961 | $22,252 | $158,114 | | International | $14,832 | $27,023 | $18,345 | $60,200 | | **Revenue recognition method:** | | | | | | Point in time | $39,465 | $66,703 | $7,980 | $114,148 | | Over time | $55,268 | $16,281 | $32,617 | $104,166 | - At December 31, 2024, remaining performance obligations (backlog) totaled **$906.9 million**, with approximately **72%** expected to be recognized as revenue in the next twelve months[46](index=46&type=chunk) - Contract assets, contract liabilities, and accounts receivable totaled **$131.4 million**, **$138.4 million**, and **$202.7 million**, respectively, at December 31, 2024[47](index=47&type=chunk) [12. LEASES](index=14&type=section&id=12.%20LEASES) The company recognizes ROU assets and lease liabilities for leases, with total lease costs for Q1 2025 at $2.6 million and operating lease ROU assets at $38.7 million Total Lease Costs (Three Months Ended December 31, in thousands): | Lease Type | 2024 | 2023 | | :--- | :--- | :--- | | Finance lease cost | $578 | $616 | | Operating lease cost | $1,983 | $1,864 | | **Total lease costs** | **$2,561** | **$2,480** | Lease Metrics (As of December 31, 2024): | Metric | Operating Leases | Finance Leases | | :--- | :--- | :--- | | Weighted-average remaining lease term | 8.5 years | 10.2 years | | Weighted-average discount rate | 4.4 % | 4.7 % | | Present value of net minimum lease payments (in thousands) | $40,882 | $17,632 | | ROU assets (in thousands) | $38,710 | $13,311 | [13. RECENT ACCOUNTING PRONOUNCEMENTS](index=15&type=section&id=13.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note outlines recent FASB ASUs impacting future disclosures, effective for fiscal years beginning after December 15, 2023, 2024, and 2026, without changing consolidated financial statements - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for fiscal years beginning after December 15, 2026, requiring disaggregated expense disclosures[55](index=55&type=chunk) - ASU 2023-09 (Improvements to Income Tax Disclosures) is effective for fiscal years beginning after December 15, 2024, updating rate reconciliation and income taxes paid disclosures[56](index=56&type=chunk) - ASU 2023-07 (Improvements to Reportable Segment Disclosures) is effective for fiscal years beginning after December 15, 2023, expanding annual and interim segment disclosures[57](index=57&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=16&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance and condition for the three months ended December 31, 2024, covering sales, segment performance, expenses, EBIT, and liquidity [RESULTS OF OPERATIONS](index=16&type=section&id=RESULTS%20OF%20OPERATIONS) The company reported strong financial results for Q1 2025, with significant increases in net sales, net earnings, and diluted EPS, driven by growth across all segments and improved EBIT margins [OVERVIEW](index=16&type=section&id=OVERVIEW) Key Financial Highlights (Three Months Ended December 31): | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales | $247.0 million | $218.3 million | | Net earnings | $23.5 million | $15.2 million | | Diluted earnings per share | $0.91 | $0.59 | [NET SALES](index=16&type=section&id=NET%20SALES) Net sales increased by $28.7 million, or 13.2%, to $247.0 million in Q1 2025, driven by growth across the A&D, Test, and USG segments - Net sales increased by **$28.7 million**, or **13.2%**, to **$247.0 million** in Q1 2025[60](index=60&type=chunk) Net Sales Increase by Segment (Q1 2025 vs. Q1 2024): | Segment | Increase (in millions) | | :--- | :--- | | A&D | $19.5 | | Test | $5.5 | | USG | $3.7 | - A&D sales increased **20.7%** due to higher aerospace shipments at Crissair and PTI, and increased navy sales at VACCO and Globe[61](index=61&type=chunk) - USG sales increased **4.5%** mainly from Doble's higher sales of offline and protection testing products and services, partially offset by moderation in the renewables end-market for NRG[62](index=62&type=chunk) - Test sales increased **13.5%** driven by higher sales from European, Asian, and U.S. operations[63](index=63&type=chunk) [ORDERS AND BACKLOG](index=16&type=section&id=ORDERS%20AND%20BACKLOG) Orders and Backlog (in millions): | Metric | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | | Backlog | $906.9 | $879.0 | New Orders Received (Three Months Ended December 31): | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total New Orders | $275.0 | $293.7 | | A&D products | $120.6 | $171.5 | | USG products | $89.6 | $77.0 | | Test products | $64.8 | $45.2 | [SELLING, GENERAL AND ADMINISTRATIVE EXPENSES](index=16&type=section&id=SELLING%2C%20GENERAL%20AND%20ADMINISTRATIVE%20EXPENSES) Selling, General and Administrative (SG&A) Expenses (Three Months Ended December 31): | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | SG&A Expenses | $58.8 million | $54.0 million | | % of Net Sales | 23.8% | 24.7% | - The increase in SG&A was mainly due to higher sales, inflationary impacts, R&D expenses, and commission expenses across all three business segments[65](index=65&type=chunk) [AMORTIZATION OF INTANGIBLE ASSETS](index=16&type=section&id=AMORTIZATION%20OF%20INTANGIBLE%20ASSETS) Amortization of Intangible Assets (Three Months Ended December 31, in millions): | Period | Amount | | :--- | :--- | | Q1 2025 | $8.0 | | Q1 2024 | $7.9 | - The increase was mainly due to higher amortization of capitalized software and intangible assets related to the MPE acquisition[66](index=66&type=chunk) [OTHER (INCOME) EXPENSES, NET](index=18&type=section&id=OTHER%20(INCOME)%20EXPENSES%2C%20NET) Other (Income) Expenses, Net (Three Months Ended December 31, in millions): | Period | Amount | | :--- | :--- | | Q1 2025 | $(0.6) (income) | | Q1 2024 | $0.2 (expense) | [EBIT](index=18&type=section&id=EBIT) Consolidated EBIT significantly increased to $32.2 million (13.0% of net sales) in Q1 2025, driven by higher sales volumes, price increases, and cost reduction efforts across all segments Consolidated EBIT (Three Months Ended December 31, in millions): | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Consolidated EBIT | $32.2 | $22.1 | | % of Net Sales | 13.0% | 10.1% | EBIT Reconciliation to Net Earnings (Three Months Ended December 31, in thousands): | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net earnings | $23,473 | $15,169 | | Plus: Interest expense, net | $2,257 | $2,667 | | Plus: Income tax expense | $6,468 | $4,285 | | **Consolidated EBIT** | **$32,198** | **$22,121** | - A&D EBIT increased due to higher sales volumes and price increases, partially offset by inflationary pressures and mix[71](index=71&type=chunk) - USG EBIT increased due to higher sales volumes at Doble, price increases, and mix, partially offset by inflationary pressures[72](index=72&type=chunk) - Test EBIT increased primarily from higher sales volumes in European and Asian operations, price increases, and cost reduction efforts, partially offset by inflationary pressures and **$0.4 million** in restructuring charges[73](index=73&type=chunk) - Corporate costs increased mainly due to higher share-based compensation and acquisition costs[74](index=74&type=chunk) [INTEREST EXPENSE, NET](index=18&type=section&id=INTEREST%20EXPENSE%2C%20NET) Interest Expense, Net (Three Months Ended December 31, in millions): | Period | Amount | | :--- | :--- | | Q1 2025 | $2.3 | | Q1 2024 | $2.7 | - The decrease was mainly due to lower average outstanding borrowings and lower average interest rates (**6.1%** in Q1 2025 vs. **6.8%** in Q1 2024)[75](index=75&type=chunk) [INCOME TAX EXPENSE](index=19&type=section&id=INCOME%20TAX%20EXPENSE) Effective Income Tax Rate (Three Months Ended December 31): | Period | Rate | | :--- | :--- | | Q1 2025 | 21.6% | | Q1 2024 | 22.0% | - The Q1 2025 rate was favorably impacted by additional tax benefits related to the vesting of share-based compensation awards[76](index=76&type=chunk) [CAPITAL RESOURCES AND LIQUIDITY](index=19&type=section&id=CAPITAL%20RESOURCES%20AND%20LIQUIDITY) The company maintains a strong financial position and liquidity, with working capital increasing to $329.4 million and net cash from operations significantly rising to $34.2 million in Q1 2025 - Working capital increased to **$329.4 million** at December 31, 2024, from **$318.8 million** at September 30, 2024[77](index=77&type=chunk) Net Cash Provided by Operating Activities (Three Months Ended December 31, in millions): | Period | Amount | | :--- | :--- | | Q1 2025 | $34.2 | | Q1 2024 | $8.7 | - Capital expenditures decreased to **$5.2 million** in Q1 2025 from **$7.8 million** in Q1 2024, mainly due to reduced building improvements and machinery & equipment in the A&D segment[79](index=79&type=chunk) - At December 31, 2024, the company had approximately **$383 million** available to borrow under its bank credit facility (excluding the Incremental Facility) and **$71.3 million** cash on hand[80](index=80&type=chunk) - The SM&P Acquisition, with a purchase price of approximately **$550 million**, is expected to close in Q2 or early Q3 fiscal year, subject to regulatory clearance[81](index=81&type=chunk) - Quarterly dividends of **$0.08 per share**, totaling **$2.1 million**, were paid in October 2024 and January 2025[82](index=82&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=19&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Management affirms the reasonableness of accounting policies, which require significant judgment and estimates, with further details available in the company's Annual Report on Form 10-K - Management believes the accounting policies are reasonable and appropriate, requiring significant judgment and estimates based on historical experience, industry trends, and external information[83](index=83&type=chunk)[85](index=85&type=chunk) - The most significant areas involving management judgments and estimates are detailed in the Critical Accounting Policies section of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024[85](index=85&type=chunk) [OTHER MATTERS](index=21&type=section&id=OTHER%20MATTERS) This section addresses contingencies, which management believes are adequately reserved, and provides a comprehensive disclosure of forward-looking statements, cautioning about inherent risks - Management believes that the aggregate costs involved in the resolution of contingencies (claims, litigation, environmental matters) are adequately reserved, covered by insurance, or would not have a material adverse effect on the company's results[86](index=86&type=chunk) - The report contains forward-looking statements, and investors are cautioned that actual future results may differ materially due to various risks and uncertainties, including economic conditions, supply chain disruptions, contract awards, and regulatory changes[87](index=87&type=chunk)[88](index=88&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=22&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's market risks primarily stem from changes in interest rates and foreign currency exchange rates, managed using derivative financial instruments, with no material change since September 30, 2024 - Market risks primarily result from changes in interest rates and foreign currency exchange rates[89](index=89&type=chunk) - The company uses derivative financial instruments (forward contracts and swaps) to manage these risks, with all derivatives reported at fair value on the balance sheet[89](index=89&type=chunk) - There has been no material change to the company's market risks since September 30, 2024[89](index=89&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=22&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[90](index=90&type=chunk) - No material change in the company's internal control over financial reporting occurred during the period covered by this report[90](index=90&type=chunk) [PART II. OTHER INFORMATION](index=23&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=23&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported that it did not repurchase any shares during the first quarter of fiscal 2025 - The Company did not repurchase any shares during the first quarter of 2025[92](index=92&type=chunk) [ITEM 5. OTHER INFORMATION](index=23&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the first quarter of fiscal 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the first quarter of fiscal 2025[93](index=93&type=chunk) [ITEM 6. EXHIBITS](index=24&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, credit agreements, and certifications from the CEO and CFO - Exhibit 3.1(a) to 3.1(d) and 3.2 detail the Restated Articles of Incorporation, Amended Certificate of Designation, Articles of Merger, Amendment of Articles of Incorporation, and Bylaws[94](index=94&type=chunk) - Exhibit 4.1(a) and 4.1(b) relate to the Amended and Restated Credit Agreement and Amendment No. 1 to the Credit Agreement[94](index=94&type=chunk) - Exhibits 31.1, 31.2, and 32 are Certifications of the Chief Executive Officer and Chief Financial Officer[94](index=94&type=chunk) [SIGNATURE](index=25&type=section&id=SIGNATURE) This section formally attests that the report has been duly signed on behalf of ESCO Technologies Inc. by Christopher L. Tucker, Senior Vice President and Chief Financial Officer - The report is signed by Christopher L. Tucker, Senior Vice President and Chief Financial Officer, as a duly authorized officer and principal accounting and financial officer of the registrant[97](index=97&type=chunk)[98](index=98&type=chunk) - The signing date for the report is February 10, 2025[98](index=98&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $1.07, which is nearly 41% higher than the previous year's first quarter [22] - Sales increased by 13% year-over-year, all of which was organic growth [23] - Adjusted EBIT margins improved by 250 basis points during the quarter [23] Business Segment Data and Key Metrics Changes - Aerospace and Defense (A&D) segment saw a revenue growth of 20% with a margin improvement, driven by a 56% increase in navy sales, amounting to an additional $13 million [11][25] - The Utility Solutions Group experienced strong order growth of over 16%, with Doble achieving 12% sales growth, while NRG's revenue was lower due to moderation in renewable projects [26][16] - The Test business had orders up over 40% and double-digit organic sales growth, with significant contributions from various sectors including EMC test and measurement [28] Market Data and Key Metrics Changes - The backlog reached a record amount of $907 million, with a book-to-bill ratio of 111% [23] - The company noted strong investments from utilities, driven by increasing electricity demand from various sectors [40] Company Strategy and Development Direction - The company is optimistic about the long-term outlook for the aerospace and defense markets, with production rates ramping up to meet customer demand [10] - The strategic review of the VACCO business is ongoing, with the potential for either retaining or selling the entire business [14] - The company is prioritizing the closure of the SMNP acquisition while remaining open to other opportunities in the M&A environment [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to increase full-year guidance based on strong first-quarter performance [34] - The outlook for 2025 and beyond remains positive, with expectations of continued growth across all business segments [19] Other Important Information - The company experienced no catastrophic losses from recent wildfires affecting Southern California employees, emphasizing support for its workforce [9] - The company recognized the retirement of long-term director Lee Olivier, highlighting his contributions to the business [36] Q&A Session Summary Question: Context on Doble's revenue growth and book-to-bill ratio - Management indicated that the full-year guidance increase suggests durable growth driven by capital investments in utilities [40] Question: Guidance on revenue and margin expectations - Management noted good margin upside in A&D and strong mix in Doble, while acknowledging potential softness in renewable revenue [46] Question: Demand improvement at VACCO - Management confirmed stronger demand in navy compared to space, with improved business performance [53] Question: Update on SMNP acquisition - Management stated that 2024 performance of SMNP was in line with expectations, maintaining optimism about future revenue opportunities [72] Question: Impact of Boeing strike resolution - Management expressed satisfaction with the resolution and noted a modest outlook for build rates from Boeing, expecting growth in the second half of the year [78] Question: General supply chain conditions for defense contracts - Management reported steady progress in submarine and surface ship builds, despite some delays in contracting [84]

NEWS FROM Exhibit 99.1 Aerospace & Defense (A&D) Utility Solutions Group (USG) For more information contact: Kate Lowrey - VP of Investor Relations (314) 213-7277 / klowrey@escotechnologies.com ESCO REPORTS FIRST QUARTER FISCAL 2025 RESULTS - Q1 Sales increase 13% to $247 Million - - Q1 GAAP EPS increases 54% to $0.91 - - Q1 Adjusted EPS as defined in prior guidance increases 48% to $0.92 - - Q1 Adjusted EPS excluding Acquisition Related Amortization increases 41% to $1.07 - ST. LOUIS, February 6, 2025 – ES ...

- Q1 Sales increase 13% to $247 Million - Q1 GAAP EPS increases 54% to $0.91 - Q1 Adjusted EPS as defined in prior guidance increases 48% to $0.92 - Q1 Adjusted EPS excluding Acquisition Related Amortization increases 41% to $1.07 -St. Louis, Feb. 06, 2025 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the first quarter ended December 31, 2024 (Q1 2025). Operating Highlights Q1 2025 Sales increased $28.7 million (13.2 percent) to $247.0 ...

Group 1 - ESE Entertainment Inc. has granted 250,000 stock options to director Ryan Vaupshas, allowing the purchase of common shares at $0.07 each for three years [1] - The Options Grant is subject to approval from the TSX Venture Exchange [1] - The transaction is classified as a related party transaction under Multilateral Instrument 61-101, with exemptions from valuation and minority shareholder approval requirements being utilized [2] Group 2 - ESE Entertainment Inc. is a global technology company focused on the gaming industry, providing services to video game developers, publishers, and brands [3] - The company operates its own ecommerce channels, esports teams, and gaming leagues [3]

St. Louis, Jan. 14, 2025 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE:ESE) will report its first quarter financial results after the market close on Thursday, February 6, 2025, followed by a conference call where the financial results and related commentary will be discussed. Event: First Quarter 2025 Conference Call Date: Thursday, February 6Time: 4:00 p.m. Central Time The conference call webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. The sl ...

Revenue Segments - The Aerospace & Defense (A&D) segment accounted for approximately 44% of total revenue in 2024, up from 41% in both 2023 and 2022[20]. - The Utility Solutions Group (USG) segment represented about 36% of total revenue in 2024, consistent with 2023, and an increase from 32% in 2022[23]. - The Test segment contributed approximately 20% of total revenue in 2024, down from 23% in 2023 and 27% in 2022[25]. - International sales accounted for about 28% of total revenue in 2024, a slight decrease from 30% in both 2023 and 2022[29]. - Direct and indirect sales to the U.S. Government accounted for approximately 27%, 23%, and 25% of total revenue in 2024, 2023, and 2022, respectively[30]. Acquisitions and Strategic Initiatives - The company completed the acquisition of MPE Limited in November 2023, enhancing its product offerings for military and critical infrastructure applications[17]. - The company also acquired CMT Materials, LLC in February 2023, which specializes in syntactic materials for various applications[17]. - A Sale and Purchase Agreement for the acquisition of Ultra Electronics' Signature Management & Power business is set for approximately $550 million, with closing expected in the second quarter of fiscal 2025[18]. - The company is conducting a strategic review of its Space business at VACCO, which may lead to a sale or other alternatives to optimize its portfolio[18]. - The company has consolidated Westland Technologies and Globe Composites into a single business to streamline operations and reduce costs[16]. - The company has secured adequate financing for the SM&P Acquisition, with the waiting period under the Hart-Scott-Rodino Act expired in August 2024[18]. Growth and Backlog - Total Company backlog of firm orders at September 30, 2024, was $879.0 million, representing an increase of $106.6 million (13.8%) from $772.4 million at September 30, 2023[40]. - Approximately 70% of the total backlog at September 30, 2024, is expected to be completed in the fiscal year ending September 30, 2025[40]. - The A&D segment's backlog increased from $484.1 million in 2023 to $600.4 million in 2024[40]. Workforce and Engagement - As of September 30, 2024, the company employed 3,281 persons, including 3,242 full-time employees, with 20% located in 19 foreign countries[50]. - The company achieved an overall engagement favorability of 81% in its first global engagement survey, exceeding comparable benchmarks[52]. - The company has a diverse workforce, with over half of employees coming from demographically diverse backgrounds[53]. - As of September 30, 2024, the workforce composition is 69% male and 24% female, with 7% classified as unknown[60]. - Among the workforce, 41% are identified as minorities, with 37% being White[59]. - The generational breakdown shows 40% Millennials, 27% Gen X, 20% Boomers, and 13% Gen Z[59]. Intellectual Property and Risk Management - The company emphasizes developing intellectual property and protecting its rights, with significant value attributed to its patents across all segments[39]. - The company has sought patent protection for significant inventions in its Test segment, including novel designs for window and door assemblies and improved acoustic techniques[38]. - The company is subject to supply chain risks, particularly for aerospace-grade titanium and gaseous helium, which may be in short supply[42]. - The company has a structured approach to risk factors, which is referenced in its reports[63]. Leadership - The current President and CEO, Bryan H. Sayler, has been in position since January 1, 2023, and previously led the Utility Solutions Group[67]. - Christopher L. Tucker has been the CFO since April 2021, focusing on enhancing finance and IT capabilities[67]. - David M. Schatz has served as Senior Vice President and General Counsel since April 2021, with extensive knowledge of the company's operations and M&A[67]. Transparency and Reporting - The company provides free access to its financial reports and other documents on its website[65].

Financial Performance - Q4 FY24 - Sales increased by 9.5% to $298.5 million, with organic growth contributing 8.5% and the MPE acquisition adding 1%[6,7] - Adjusted EBIT increased by 17.7% to $51.8 million, resulting in an adjusted EBIT margin of 17.4%, a 1.3 percentage point increase[6,7] - Adjusted EPS increased by 16.8% to $1.46, despite profit erosion on Space development programs at VACCO[6,7] - Entered orders decreased by 14.9% to $288.8 million, leading to a book-to-bill ratio of 0.97, but the ending backlog increased by $107 million (14%) from September 30, 2023[6,7] Segment Performance - Q4 FY24 - A&D sales increased by 16.2% to $124.3 million, with adjusted EBIT increasing by 26.7% to $24.2 million and a record ending backlog of +$116 million (+24%) from 9/30/23[9,10,11] - USG sales increased by 6.2% to $108.5 million, with adjusted EBIT increasing by 9.0% to $28.6 million[12,13] - Test sales increased by 3.6% to $65.8 million, with adjusted EBIT increasing by 8.1% to $12.0 million[17,20] Full Year FY24 Performance - Sales increased by 7.4% to $1,026.8 million[21,23] - Adjusted EBIT increased by 13.8% to $150.1 million, with an adjusted EBIT margin of 14.6%, an increase of 0.8 percentage points[21,23] - Adjusted EPS increased by 13.0% to $4.18[21,23] - Entered orders increased by 9.7% to $1,133.4 million, resulting in a book-to-bill ratio of 1.10 and an ending backlog increase of $107 million (14%)[21,22,23] FY25 Guidance - Sales are expected to increase by 6% to 8%, reaching a range of $1.09 billion to $1.11 billion[28,29] - Adjusted EBIT is expected to increase by approximately 12% to 15%, with margins increasing to 15.3% - 15.7%[28] - Adjusted EPS is expected to be in the range of $4.70 to $4.90 per share, representing a growth of 12% to 17%[28,30]

Financial Data and Key Metrics Changes - The company achieved a significant milestone with orders and sales both exceeding $1 billion for the first time in its history [6][24] - Sales in Q4 increased by 9.5%, driven by 8.5% organic growth and 1% from the MPE acquisition [16] - Adjusted EBIT margins improved by 130 basis points to 17.4%, with adjusted EPS rising 17% to $1.46 per share [17][24] Business Line Data and Key Metrics Changes - **Aerospace & Defense**: Orders saw a decline of 15% in Q4 due to tough comparisons from the previous year, but backlog increased by 24% to over $600 million [15][18] - **Utility Solutions Group**: Orders increased by 2% and sales grew by 6%, with adjusted EBIT up 70 basis points to 26.4% of sales [20] - **Test Business**: Orders decreased by 8.5%, but sales grew by 4%, with margins increasing by 80 basis points to 18.3% [21][22] Market Data and Key Metrics Changes - The regulated utility market is experiencing increased capital spending forecasts, which is beneficial for the company's global business [11] - The renewable energy segment showed strong orders and sales growth in Q4, indicating a positive outlook for future demand [12] Company Strategy and Development Direction - The company is focused on maintaining momentum in its business segments, particularly in Aerospace & Defense and Utility Solutions, while also addressing challenges in the Test business [7][10] - The company is optimistic about the future, with guidance for 2025 indicating sales growth of 6% to 8% and adjusted EPS growth of 12% to 17% [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges, including the resolution of the Boeing strike, which is not expected to impact financials in 2025 [9][30] - The company is closely monitoring the regulatory environment and potential impacts on the renewable energy sector, but remains optimistic about underlying market demand [44][48] Other Important Information - The company completed regulatory filings for the Signature Management & Power acquisition and is awaiting UK approvals [31][32] - Operating cash flow for the year was over $127 million, a substantial increase from the previous year [25] Q&A Session Summary Question: A&D outlook and Boeing impact - Management indicated a conservative approach to forecasting, with expectations of offsetting any potential impacts from Boeing contracts with work from other customers [34][36] Question: SM&P acquisition guidance - Management confirmed that updated guidance will break down components related to the acquisition, including amortization impacts [38][39] Question: Test business growth expectations - Management noted that no significant improvement in China is embedded in the forecast, maintaining a steady outlook [43] Question: Renewable energy policy risks - Management emphasized that underlying market demand for electrification is increasing, regardless of policy changes [44][48] Question: VACCO Space business review - Management is considering options for the VACCO business and expects to provide updates in February [53][54] Question: SM&P acquisition status - Management provided an update on the acquisition process, indicating a normal bureaucratic pace in the UK review [62]