ESCO Technologies(US:ESE)2026-02-09 17:33Revenue 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].