ESCO Reports Fourth Quarter and Fiscal 2024 Results

Core Viewpoint - ESCO Technologies Inc. reported strong financial results for Q4 2024 and FY 2024, with significant sales growth and improved earnings per share, despite a decrease in entered orders in Q4 2024. The company anticipates continued growth in 2025 across its business segments, driven by strong market demand in aerospace, Navy, and electric power sectors [1][2][10]. Operating Highlights - Q4 2024 sales increased by $26 million (9.5%) to $299 million compared to $273 million in Q4 2023, with organic sales up by $23 million (8.5%) and the MPE acquisition contributing $3 million (1.0%) [2]. - FY 2024 sales rose by $71 million (7.4%) to $1.03 billion from $956 million in FY 2023, with organic sales increasing by $61 million (6.4%) and the MPE acquisition adding $10 million (1.0%) [2]. - Q4 2024 GAAP EPS increased by 6.5% to $1.32 per share compared to $1.24 per share in Q4 2023, while adjusted EPS rose by 16.8% to $1.46 per share [2]. - FY 2024 GAAP EPS increased by 10.1% to $3.94 per share compared to $3.58 per share in FY 2023, with adjusted EPS up by 13.0% to $4.18 per share [2]. Segment Performance Aerospace & Defense (A&D) - Q4 2024 sales increased by $17 million (16.2%) to $124 million from $107 million in Q4 2023, driven by strength in Navy, commercial aerospace, and defense aerospace programs [5]. - FY 2024 sales increased by $56 million (14.2%) to $448 million from $392 million in FY 2023 [5]. - Q4 2024 EBIT increased by $4.7 million to $23.4 million, with adjusted EBIT margin improving to 19.4% [5][6]. Utility Solutions Group (USG) - Q4 2024 sales increased by $6 million (6.2%) to $108 million from $102 million in Q4 2023, with FY 2024 sales up by $27 million (7.8%) to $369 million from $342 million [7]. - Q4 2024 EBIT increased by $2.4 million to $28.6 million, with adjusted EBIT margin at 26.4% [7]. RF Test & Measurement (Test) - Q4 2024 sales increased by $2 million (3.6%) to $66 million from $64 million in Q4 2023, while FY 2024 sales decreased by $12 million (5.3%) to $210 million [8]. - Q4 2024 EBIT and adjusted EBIT both increased by $0.9 million to $12.0 million, with a margin of 18.3% [8]. Business Outlook - Management expects net sales to grow by 6% to 8% in FY 2025, reaching a range of $1.09 to $1.11 billion, with A&D growing by 7% to 9%, USG by 7% to 9%, and Test by 3% to 5% [10]. - Adjusted EBIT is anticipated to increase by approximately 12% to 15%, with margins rising to 15.3% to 15.7% of sales [10]. - FY 2025 adjusted EPS is expected to increase by 12% to 17% to a range of $4.70 to $4.90 per share [10]. Strategic Initiatives - The company is in the process of acquiring Signature Management & Power (SM&P) for $550 million, which is expected to enhance its Navy business [9]. - A strategic review of the Space business at VACCO is underway to optimize the company's portfolio and create shareholder value [11][12].