Espey(US:ESP)2026-02-10 21:02Financial Performance - Net sales for the three months ended December 31, 2025, were $12,136,903, a decrease of 10.8% compared to $13,608,740 in the same period of 2024[12] - Gross profit for the six months ended December 31, 2025, increased to $7,429,583, up 24.5% from $5,964,594 in 2024[12] - Operating income for the three months ended December 31, 2025, was $3,071,141, representing a 51.8% increase from $2,024,437 in the prior year[12] - Net income for the six months ended December 31, 2025, was $4,974,945, a 41.9% increase compared to $3,506,816 in 2024[12] - Total revenue for the three months ended December 31, 2025, was $11,281,937, representing an increase of 22.1% compared to $9,237,688 for the same period in 2024[48] - Total revenue for the six months ended December 31, 2025, was $18,621,160, compared to $17,500,184 for the same period in 2024, reflecting a growth of 6.4%[48] - Net income for the three-month period ended December 31, 2025, was $2,805,109, compared to $1,908,499 for the same period in 2024, representing a year-over-year increase of approximately 47%[31] - For the six-month period ended December 31, 2025, net income was $4,974,945, up from $3,506,816 in 2024, indicating a growth of about 42%[32] Assets and Equity - Total assets as of December 31, 2025, were $85,166,300, an increase of 7.0% from $79,116,564 as of June 30, 2025[10] - Total stockholders' equity increased to $53,206,972 as of December 31, 2025, up from $50,849,000 as of June 30, 2025[10] - Total current liabilities increased to $31,959,328 as of December 31, 2025, compared to $28,267,564 as of June 30, 2025[10] Cash Flow and Dividends - Cash and cash equivalents decreased to $17,757,632 as of December 31, 2025, down from $18,862,645 as of June 30, 2025[10] - The company declared dividends of $0.25 per share for the three months ended December 31, 2025, consistent with the previous year[12] - The company paid dividends of $0.50 per share, totaling $1,279,061 for the six months ended December 31, 2024, and increased dividends to $3,429,487 for the same period in 2025[23] Stock-Based Compensation - Stock-based compensation for the six months ended December 31, 2025, was $126,078, compared to $193,033 for the same period in 2024[23] - Total stock-based compensation expense for the three-month period ended December 31, 2025, was $51,638, down from $91,541 in 2024, reflecting a decrease of approximately 44%[34] - The total stock-based compensation expense for the six-month periods ended December 31, 2025, was $126,078, compared to $193,033 in 2024, reflecting a decrease of approximately 35%[34] - As of December 31, 2025, there was $107,016 of unrecognized compensation cost related to stock option awards expected to be recognized over the next four quarters[35] Contract Liabilities and Backlog - The company experienced an increase in contract liabilities of $3,372,490 during the six months ended December 31, 2025[23] - Contract liabilities increased to $26,258,894 as of December 31, 2025, from $22,886,404 as of June 30, 2025, primarily due to advance cash collections[51] - The Company's backlog as of December 31, 2025, totaled $134.7 million, with 19.9% expected to be recognized in 2026 and 33.0% in 2027[52] Revenue Recognition - The Company recognized revenue based on the transfer of control of products or services to customers, following FASB ASC 606 standards[46] - Revenue recognized based on milestones achieved for the three months ended December 31, 2025, was $854,966, a decrease of 80.5% from $4,371,052 in the prior year[48] - The Company recognized $2,217,027 in revenue from contract liabilities that were previously recorded as of June 30, 2025[51] ESOP and Employee Compensation - ESOP compensation expense for the three-month period ended December 31, 2025, was $211,601, compared to $163,067 for the same period in 2024, representing a 29.7% increase[57] - Total share distributions from the ESOP during the six months ended December 31, 2025, totaled 57,954, compared to 65,491 in the same period of 2024, indicating a decrease of 11.5%[59] - The fair value of unearned shares held by the ESOP as of December 31, 2025, was $8,446,969, compared to $6,049,658 as of December 31, 2024[58] Funding and Investments - The company received $3.4 million in funding from the U.S. Navy for facility and capital equipment upgrades, with an expected investment of approximately $508,000 from the company to qualify for full reimbursement[45] - As of December 31, 2025, the company had received $2,029,608 in milestone reimbursements related to the Navy funding, with $1,605,192 included in property, plant, and equipment[45] - Total investment securities as of December 31, 2025, amounted to $25,410,727, with certificates of deposit valued at $24,216,000 and municipal bonds at $1,194,727[27]