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Esco Technologies Inc (ESE) SEC Filing 8-K Material Event for the period ending Tuesday, August 8, 2017

SEC Filings

Esco Technologies Inc

CIK: 866706 Ticker: ESE
EXHIBIT 99.1
 
 
 
NEWS FROM
For more information contact:
Kate Lowrey
Director, Investor Relations
ESCO Technologies Inc.
(314) 213-7277


ESCO ANNOUNCES THIRD QUARTER 2017 RESULTS

ST. LOUIS, August 8, 2017 – ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the third quarter (Q3 2017) and nine months year-to-date (YTD 2017) periods ended June 30, 2017.
On May 8, 2017 and May 25, 2017, the Company acquired NRG Systems Inc. (NRG) and the assets of Morgan Schaffer Inc. (Morgan Schaffer), respectively (see earlier announcements). Net sales, earnings, acquisition fees and costs, non-cash purchase accounting inventory step-up charges, and the amortization of intangible assets related to NRG and Morgan Schaffer are included in the Q3 2017 and YTD 2017 operating results from the date of acquisition.
The financial results presented include certain non-GAAP financial measures such as EBIT, EBITDA (defined as earnings before interest, taxes, depreciation and amortization), Adjusted EBITDA (defined as EBITDA excluding certain charges, such as non-cash purchase accounting inventory "step up" charges and costs incurred to complete the acquisitions), and Adjusted EPS. Any non-GAAP financial measures presented are reconciled to their respective GAAP equivalents.
Management believes these non-GAAP financial measures are useful in assessing the ongoing operational profitability of the Company's business segments, and therefore, allow shareholders better visibility into the Company's underlying operations. See "Non-GAAP Financial Measures" described below.
Earnings Summary / EPS Reconciliation
Q3 2017 GAAP EPS was $0.49 per share and Adjusted EPS was $0.51 per share, which excludes the ($0.02) per share net impact from the acquisitions of NRG and Morgan Schaffer. The ($0.02) per share net impact of the NRG and Morgan Schaffer acquisitions reflects the partial period EBIT contribution of $1.2 million, offset by ($1.3) million of costs and fees incurred to complete the acquisitions, and ($0.7) million of non-cash purchase accounting inventory step-up charges in Q3 2017;
Q3 2016 GAAP EPS was $0.44 per share, and Adjusted EPS was $0.49 per share (the adjustments related to the prior year restructuring charges were described in earlier releases);
GAAP net earnings were $12.6 million in Q3 2017 compared to $11.5 million in Q3 2016; and
Adjusted EBITDA increased 9.5 percent to $27.7 million in Q3 2017 from $25.3 million in Q3 2016. Adjusted EBITDA, a non-GAAP financial measure is reconciled to GAAP net earnings in the Condensed Business Segment Information table below for all periods presented.
Operating Highlights
Q3 2017 sales increased $31 million (22 percent) to $171 million compared to $140 million in Q3 2016;
YTD 2017 sales increased $67 million (16 percent) to $479 million compared to $412 million YTD 2016;
On a segment basis, Q3 2017 Filtration sales increased $17 million, or 31 percent compared to Q3 2016 driven by Westland and Mayday's Q3 2017 sales of $5 million and $11 million, respectively. Technical Packaging sales were $20 million in both Q3 periods presented and Test sales increased $1 million. USG sales increased $13 million as Doble sales increased $4 million, or 14 percent, driven by the additional sales contribution from new products and software solutions, and NRG / Morgan Schaffer contributed $9 million in sales since the date of acquisition;
SG&A expenses increased $7 million in Q3 2017 compared to Q3 2016 primarily due to the addition of Westland, Mayday, NRG and Morgan Schaffer in the current period, additional sales and marketing expenses at Doble to support future revenue growth, and higher professional fees and transaction costs associated with recent acquisition activities;
Entered orders were $182 million in Q3 2017 and $532 million YTD 2017 (book-to-bill of 1.06x and 1.11x, respectively) reflecting a $53 million (16 percent) increase in backlog for the first nine months of 2017, resulting in backlog of $386 million at June 30, 2017;
Filtration orders were $78 million in Q3 2017 and $207 million YTD 2017 (book-to-bill of 1.09x and 1.04x, respectively) comprised of recurring commercial aerospace orders and a large order for additional space products;
Test orders were $38 million in Q3 2017 and $138 million YTD 2017 (book-to-bill of 1.01x and 1.26x, respectively) which reflects continued momentum in the wireless, electric vehicle, and automotive markets. Test's significant YTD 2017 order volume and current backlog supports its projected sales and profit contribution over the remainder of the year;
USG orders were $46 million in Q3 2017 and $119 million YTD 2017 (book-to-bill of 1.10x and 1.08x, respectively) which reflects increased orders for new products such as the Doble Universal Controller (DUC), on-line monitoring solutions, dissolved gas analyzers (DGA's), additional software applications, and the continued expansion of service contracts;
Technical Packaging orders were $20 million in Q3 2017 and $68 million YTD 2017 (book-to-bill of 1.0x and 1.13x, respectively) driven by higher KAZ, medical, medical device, and pharmaceutical projects; and,
Net cash provided by operating activities was $33 million YTD 2017, which resulted in net debt (outstanding borrowings less cash on hand) of $216 million at June 30, 2017.
Chairman's Commentary – Q3 2017
Vic Richey, Chairman and Chief Executive Officer, commented, "Let me start out by saying that I'm extremely pleased with our recent acquisitions and their initial operating contributions, as well as what we anticipate in the future from each of our new partners. Not only did we add great companies to our portfolio, we also added very solid management teams who share our vision and our values.
"The integration of NRG, Morgan Schaffer and Doble is going very well and is ahead of plan. I'm excited about the outlook for USG as it is obvious from recent meetings that the group has come together with a unified focus on sales growth, market expansion, new product development, and enhanced operating margins.
"Because we acquired NRG and Morgan Schaffer during May, we did not get a full quarter's profit contribution, but we did incur all of the costs of the transactions in Q3 2017 as well as several significant non-cash purchase accounting charges required under GAAP. The transaction costs will not repeat in Q4, but non-cash purchase accounting charges will negatively impact our GAAP operating results in Q4 by approximately $1.5 million, or ($0.04) per share. As we enter 2018, the inventory step-up charges will be complete and we expect to present a much cleaner outlook.
"Moving on to a few Q3 operating highlights, Doble continued to outperform previous expectations  by delivering 14 percent sales growth as new product sales are exceeding expectations and our recent software introductions and solution offerings are being well received in the utility market. Within the Filtration and Technical Packaging segments, PTI and TEQ both exceeded profit expectations in Q3, and I'm pleased to see Test deliver a 13 percent EBIT contribution at its current sales level, which validates our profit expectations driven by its lower cost structure. Order activity has remained strong throughout the year with all four operating segments achieving YTD book-to-bill ratios greater 1.0x.
"Summarizing our Q3 performance, we supplemented our growth by adding NRG and Morgan Schaffer, hit our sales targets, performed at the top of our EPS range, generated more cash flow than previously anticipated, and booked orders across the company that once again exceeded our expectations and resulted in an all-time high backlog at June 30, 2017.
"On the acquisition front, we've been very active recently and are currently evaluating additional opportunities. We remain optimistic that we can further supplement our organic growth in both the near term and longer term, but we remain disciplined in our approach and will continue to maintain our focus on generating an attractive ROIC (return on invested capital).
"Moving on to our Q4 and full year outlook: Our plan and prior guidance anticipated a very large Q4 supported by the strength of our orders and backlog. While Q4 is still expected to be strong as well as significantly higher than Q4 2016, it will be short of our earlier expectations due to a few operational and non-operational items. While the acquisitions are solidly profitable, the above noted acquisition costs, non-cash inventory step-up charges, increased amortization charges, and associated interest costs are higher than the profit contributions during the short period since the date of acquisition.
"Additionally, from a timing perspective we had a few customer-driven orders and deliveries pushed out of the year which will negatively impact several of our operating units in Q4 2017 to the benefit of 2018. And lastly, VACCO experienced some engineering and development cost growth on several space-related new products which impact 2017's operating results.
"While the shortfall is disappointing, I'm fully confident that this is merely a "stack up" of various items, both operational and non-operational, cash and non-cash, which hit us in a short period of time, and I'm fully confident these non-recurring issues will be resolved in Q4."
Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on October 17, 2017 to stockholders of record on October 3, 2017.
Business Outlook – Fiscal Year 2017
With the increased level of M&A activity, Management has placed more emphasis on Adjusted EBITDA and ROIC, as it believes these are the most relevant metrics to be considered for valuation. Adjusted EBITDA and ROIC are two of the key financial metrics used by Management when determining the appropriate price for acquisitions.
Given the 2017 financial contributions from the Westland, Mayday, NRG and Morgan Schaffer acquisitions, as well as the significant costs incurred in the execution of these acquisitions, and considering both operational and non-cash purchase accounting items, the current outlook for 2017 compared to the original guidance is described as follows:
2017 sales compared to 2016 are expected to increase approximately $120 million, or 21 percent (previous guidance was 18 percent to 20 percent). The increase is driven by the additional sales from acquisitions, increased space and navy business at VACCO, and higher sales of Doble's new products (DUC, etc.), software and services;
Gross profit dollars for the year are expected to increase approximately 13 percent compared to 2016 driven by the additional sales noted above and a meaningful incremental profit contribution from Doble. Gross profit dollars and margins in 2017 are negatively impacted by $4 million ($0.10 per share after-tax) of non-cash purchase accounting inventory step-up charges at Mayday, NRG and Morgan Schaffer. Compared to previous expectations, gross profit is also negatively impacted by certain space-related new product development cost overruns at VACCO, and revised customer-driven order and delivery schedules at Test, Plastique and Westland which moved previously expected 2017 sales into 2018;
EBIT dollars are expected to increase by more than 21 percent over 2016 due to the sales increase noted above, despite the impact of the purchase accounting charges discussed above;
2017 Adjusted EBITDA (defined above) is expected to increase approximately 21 percent over 2016, consistent with the original guidance, resulting in Adjusted EBITDA of approximately $122 million compared to 2016 Adjusted EBITDA of $101 million;
Interest expense on higher debt outstanding resulting from the 2017 acquisitions is expected to increase to $4.5 million (compared to $3.6 million expected in November's guidance), which reflects a $3.2 million increase from the $1.3 million of interest expense recorded in 2016;
Depreciation and amortization is expected to increase approximately $9 million, or ($0.22 per share after-tax) consistent with the amounts communicated in November's guidance;
2017 income tax expense (dollars) is expected to increase over 2016 based on higher pretax earnings. Management expects a 33 percent effective tax rate in 2017, consistent with the 33 percent effective tax rate in 2016;
In summary, Management projects 2017 GAAP EPS to be in the range of $2.05 to $2.10 per share, reflecting the profit contributions from the recent acquisitions, offset by the costs of the recent acquisitions, the impact of the purchase accounting inventory step-up charges noted above, the impact of additional depreciation and amortization, and customer-driven program pushouts described above.
Chairman's Commentary – Preliminary 2018 Perspective
Including the contributions from the Company's recent acquisitions, coupled with current expectations of organic growth from "legacy" operations, Management's preliminary 2018 outlook reflects solid sales and Adjusted EBITDA growth across each of the Company's business segments and anticipates growth rates in 2018 and beyond that exceed the broader industrial market.
Mr. Richey continued, "While our current focus is on completing 2017, as we look ahead to 2018 we are encouraged by our outlook. Our core businesses remain solid and the new acquisitions will be fully integrated and contributing at a significant level in 2018. The "noise" surrounding the acquisition costs, purchase accounting, and performance issues we encountered late in 2017 will be behind us. We will move forward into 2018 with numerous growth opportunities across all of our operating segments, and expect to continue supplementing our organic growth through additional complementary acquisitions.
 "Our current backlog and expectations for additional orders have us well positioned for 2018. Our management teams' focus on profitable growth and ROIC will remain steadfast as we believe these are the key drivers of continued and sustainable share price appreciation."
Conference Call
The Company will host a conference call today, August 8, at 4:00 p.m. Central Time, to discuss the Company's Q3 2017 results. A live audio webcast will be available on the Company's website at www.escotechnologies.com. Please access the website at least 15 minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available for seven days on the Company's website noted above or by phone (dial 1-855-859-2056 and enter the pass code 46597032).
Forward-Looking Statements
Statements in this press release regarding the Company's expected quarterly, 2017 full year and beyond results, revenue and sales growth, EPS, EPS growth, EBIT, EBITDA, Adjusted EBITDA, gross profit, interest expense, non-cash depreciation and amortization of intangibles, corporate costs, effective tax rates, the Company's ability to increase operating margins, realize financial goals and increase shareholder value, the success of acquisition efforts, the size, number and timing of future sales and growth opportunities, the long-term success of the Company, and any other statements which are not strictly historical are "forward-looking" statements within the meaning of the safe harbor provisions of the federal securities laws.
Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company's actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company's operations and business environment including, but not limited to those described in Item 1A, "Risk Factors", of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2016, and the following: the success of the Company's competitors; weakening of economic conditions in served markets; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties; delivery delays or defaults by customers; material changes in the costs and availability of certain raw materials; the appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts; the timing and content of future contract awards or customer orders; performance issues with key customers, suppliers and subcontractors; labor disputes; the impacts of natural disasters on the Company's operations and those of the Company's customers and suppliers; changes in laws and regulations, including but not limited to changes in accounting standards and taxation requirements; changes in interest rates; costs relating to environmental matters arising from current or former facilities; financial exposure in connection with Company guarantees of certain Aclara contracts; the availability of select acquisitions; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the success and integration of recently acquired businesses.
Non-GAAP Financial Measures
The financial measures EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are presented in this press release. The Company defines "EBIT" as earnings before interest and taxes, "EBITDA" as earnings before interest, taxes, depreciation and amortization, "Adjusted EBITDA" as EBITDA excluding certain defined non-recurring charges, and "Adjusted EPS" as GAAP earnings per share (EPS) excluding the non-recurring charges described above which were $0.02 per share for Q3 2017 and $0.05 per share for Q3 2016.
EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes that EBIT, EBITDA and Adjusted EBDITDA are useful in assessing the operational profitability of the Company's business segments because they exclude interest, taxes, depreciation and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The Company believes that the presentation of EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.
ESCO, headquartered in St. Louis: Manufactures highly-engineered filtration and fluid control products for the aviation, space and process markets worldwide; is the industry leader in RF shielding and EMC test products; provides diagnostic instruments, software and services for the benefit of industrial power users and the electric utility and renewable energy industries; and, produces custom thermoformed packaging, pulp-based packaging, and specialty products for medical and commercial markets. Further information regarding ESCO and its subsidiaries is available on the Company's website at www.escotechnologies.com.

-  tables attached -






 
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
       
Condensed Consolidated Statements of Operations (Unaudited)
       
(Dollars in thousands, except per share amounts)
       
         
   
Three Months
Ended
June 30,
2017
         
Three Months
Ended
June 30,
2016
       
                         
Net Sales
 
$
171,189
           
140,191
       
Cost and Expenses:
                           
Cost of sales
   
108,856
           
86,602
       
Selling, general and administrative expenses
   
38,453
           
31,369
       
Amortization of intangible assets
   
4,085
           
2,951
       
Interest expense
   
1,213
           
320
       
Other expenses, net
   
1,160
           
1,429
       
Total costs and expenses
   
153,767
           
122,671
       
                             
Earnings before income taxes
   
17,422
           
17,520
       
Income taxes
   
4,777
           
5,992
       
                             
Net earnings
 
$
12,645
           
11,528
       
                             
                             
                             
Diluted EPS - GAAP
 
$
0.49
           
0.44
       
                             
Adjusted EPS
 
$
0.51
 (1)    
 
 
   
0.49
 (2)    
 
 
                                 
Diluted average common shares O/S:
   
26,025
             
25,910
         
                                 
 
                                 
(1)
Q3 FY 17 - Adjusted EPS was $0.51 which excluded $0.5 million (or $0.02 per share) net impact from the acquisitions of NRG and Morgan Schaffer during the third quarter of 2017.
 
                                 
(2)
Q3 FY 16 - Adjusted EPS was $0.49 which excluded $1.1 million (or $0.05 per share) of restructuring charges incurred at ETS and Doble during the third quarter of 2016.
 









ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
       
Condensed Consolidated Statements of Operations (Unaudited)
       
(Dollars in thousands, except per share amounts)
       
         
   
Nine Months
Ended
June 30,
2017
         
Nine Months
Ended
June 30,
2016
       
                         
Net Sales
 
$
478,735
           
411,954
       
Cost and Expenses:
                           
Cost of sales
   
307,149
           
254,769
       
Selling, general and administrative expenses
   
107,104
           
97,189
       
Amortization of intangible assets
   
11,548
           
8,540
       
Interest expense
   
2,752
           
917
       
Other (income) expenses, net
   
(184
)
         
6,436
       
Total costs and expenses
   
428,369
           
367,851
       
                             
Earnings before income taxes
   
50,366
           
44,103
       
Income taxes
   
15,837
           
15,136
       
                             
Net earnings
 
$
34,529
           
28,967
       
                             
                             
                             
Diluted EPS - GAAP
 
$
1.33
           
1.12
       
                             
Adjusted EPS
 
$
1.41
 (1)    
 
 
   
1.36
 (2)    
 
 
                                 
Diluted average common shares O/S:
   
25,975
             
25,962
         
                                 
 
                                 
(1)
YTD Q3 FY 17 - Adjusted EPS was $1.41 which excluded $2.0 million (or $0.08 per share) net impact from the acquisitions of Mayday, NRG and Morgan Schaffer during the first nine months of 2017.
 
                                 
(2)
YTD Q3 FY 16 - Adjusted EPS was $1.36 which excluded $6.3 million (or $0.24 per share) of restructuring charges incurred at ETS and Doble during the first nine months of 2016.
 









ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
 
   
GAAP
          
     
Q3 2017
     
Q3 2016
          
Net  Sales
                           
Filtration
 
$
71,179
     
54,396
          
Test
   
37,544
     
36,234
          
USG
   
42,059
     
29,121
          
Technical Packaging
   
20,407
     
20,440
          
Totals
 
$
171,189
     
140,191
          
                              
EBIT
                           
Filtration
 
$
11,945
     
12,163
          
Test
   
4,885
     
3,744
          
USG
   
8,477
     
6,124
          
Technical Packaging
   
2,433
     
2,474
          
Corporate
   
(9,105
)
   
(6,665
)
        
Consolidated EBIT
   
18,635
     
17,840
          
Less: Interest expense
   
(1,213
)
   
(320
)
        
Less: Income tax expense
   
(4,777
)
   
(5,992
)
        
Net earnings
 
$
12,645
     
11,528
          
                              
 
Note 1: Adjusted net earnings were $13.1 million in Q3 17 which excluded $0.5 million (or $0.02 per share) net impact from the acquisitions of NRG and Morgan Schaffer during the third quarter of 2017.
                              
Note 2: Adjusted net earnings were $12.6 million in Q3 16 which excluded $1.1 million (or $0.05 per share) of restructuring charges at ETS and Doble during the third quarter of 2016.
 
                                 
EBITDA Reconciliation to Net earnings:
                   
     
Q3 2017
   
Q3 2017
- As Adj
     
Q3 2016
  Q3 2016
- As Adj
 
Consolidated EBITDA
 
$
26,970
     
27,724
     
23,811
   
25,264
 
Less: Depr & Amort
   
(8,335
)
   
(8,335
)
   
(5,971
)
 
(5,971
 )
Consolidated EBIT
   
18,635
     
19,389
     
17,840
   
19,293
 
Less: Interest expense
   
(1,213
)
   
(1,213
)
   
(320
)
 
(320
 )
Less: Income tax expense
   
(4,777
)
   
(5,041
)
   
(5,992
)
 
(6,332
 )
Net earnings
 
$
12,645
     
13,135
     
11,528
   
12,641
 
 
                         
      
 





ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
 
   
GAAP
      
   
YTD Q3
2017
   
YTD Q3
2016
      
Net  Sales
                   
Filtration
 
$
198,869
     
145,758
      
Test
   
109,738
     
119,608
      
USG
   
110,287
     
93,657
      
Technical Packaging
   
59,841
     
52,931
      
Totals
 
$
478,735
     
411,954
      
                           
EBIT
                        
Filtration
 
$
34,296
     
29,511
      
Test
   
11,076
     
8,587
      
USG
   
25,585
     
21,581
      
Technical Packaging
   
5,660
     
7,035
      
Corporate
   
(23,499
)
   
(21,694
)
    
Consolidated EBIT
   
53,118
     
45,020
      
Less: Interest expense
   
(2,752
)
   
(917
)
    
Less: Income tax expense
   
(15,837
)
   
(15,136
)
    
Net earnings
 
$
34,529
     
28,967
      
 
                           
Note 1: Adjusted net earnings were $36.5 million YTD Q3 17 which excluded $2.0 million (or $0.08 per share) net impact from the acquisitions of Mayday, NRG and Morgan Schaffer during the first nine months of 2017.
                           
Note 2: Adjusted net earnings were $35.3 million YTD Q3 16 which excluded $6.3 million (or $0.24 per share) of restructuring charges at ETS and Doble during the first nine months of 2016.
 
                                       
EBITDA Reconciliation to Net earnings:
             
 
     
   
 
   
YTD Q3
2017
   
YTD Q3
2017 - As
Adjusted
     
YTD Q3
2016
    YTD Q3
2016 - As
Adjusted
 
Consolidated EBITDA
 
$
76,141
     
79,181
     
62,229
     
69,192
 
Less: Depr & Amort
   
(23,023
)
   
(23,023
)
   
(17,209
 )    
(17,209
 )
Consolidated EBIT
   
53,118
     
56,158
     
45,020
     
51,983
 
Less: Interest expense
   
(2,752
)
   
(2,752
)
   
(917
 )    
(917
 )
Less: Income tax expense
   
(15,837
)
   
(16,901
)
   
(15,136
 )    
(15,770
 )
Net earnings
 
$
34,529
     
36,505
     
28,967
     
35,296
 
 
                   
 
     
       
 


 

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
 
Condensed Consolidated Balance Sheets (Unaudited)
 
(Dollars in thousands)
 
   
   
June 30,
2017
   
September 30,
2016
 
             
Assets
           
Cash and cash equivalents
 
$
48,521
     
53,825
 
Accounts receivable, net
   
135,545
     
121,486
 
Costs and estimated earnings on
               
long-term contracts
   
44,753
     
28,746
 
Inventories
   
130,828
     
105,542
 
Other current assets
   
20,980
     
13,884
 
Total current assets
   
380,627
     
323,483
 
Property, plant and equipment, net
   
130,419
     
92,405
 
Intangible assets, net
   
328,545
     
231,759
 
Goodwill
   
365,965
     
323,616
 
Other assets
   
5,901
     
7,108
 
   
$
1,211,457
     
978,371
 
                 
Liabilities and Shareholders' Equity
               
Short-term borrowings and current
 
$
20,000
     
20,000
 
maturities of long-term debt
               
Accounts payable
   
48,555
     
42,074
 
Current portion of deferred revenue
   
31,881
     
27,212
 
Other current liabilities
   
75,143
     
68,790
 
Total current liabilities
   
175,579
     
158,076
 
Deferred tax liabilities
   
84,184
     
69,562
 
Other liabilities
   
62,105
     
45,624
 
Long-term debt
   
245,000
     
90,000
 
Shareholders' equity
   
644,589
     
615,109
 
   
$
1,211,457
     
978,371
 









ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
 
Consolidated Statements of Cash Flows (Unaudited)
 
(Dollars in thousands)
 
   
   
Nine Months
Ended
June 30,
2017
 
Cash flows from operating activities:
     
   Net earnings
 
$
34,529
 
   Adjustments to reconcile net earnings
       
     to net cash provided by operating activities:
       
         Depreciation and amortization
   
23,023
 
         Stock compensation expense
   
4,130
 
         Changes in assets and liabilities
   
(24,977
)
         Change in deferred revenue and costs, net
   
4,863
 
         Effect of deferred taxes
   
(577
)
         Pension contributions
   
(2,317
)
         Other
   
(5,202
)
           Net cash provided by operating activities
   
33,472
 
         
Cash flows from investing activities:
       
   Acquisition of businesses, net of cash acquired
   
(162,268
)
   Capital expenditures
   
(23,055
)
   Additions to capitalized software
   
(6,213
)
   Proceeds from sale of land
   
1,184
 
   Proceeds from life insurance
   
2,307
 
       Net cash used by investing activities
   
(188,045
)
         
Cash flows from financing activities:
       
   Proceeds from long-term debt
   
213,000
 
   Principal payments on long-term debt
   
(58,000
)
   Dividends paid
   
(6,190
)
   Other
   
(21
)
     Net cash provided by financing activities
   
148,789
 
         
Effect of exchange rate changes on cash and cash equivalents
   
480
 
         
Net decrease in cash and cash equivalents
   
(5,304
)
Cash and cash equivalents, beginning of period
   
53,825
 
Cash and cash equivalents, end of period
 
$
48,521
 






ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
 
Other Selected Financial Data (Unaudited)
 
(Dollars in thousands)
 
   
Backlog And Entered Orders - Q3 FY 2017
 
Filtration
   
Test
   
USG
   
Technical Packaging
   
Total
 
Beginning Backlog - 4/1/17
 
$
197,651
     
111,219
     
38,073
     
27,645
     
374,588
 
Entered Orders
   
77,582
     
38,031
     
46,355
     
20,268
     
182,236
 
Sales
   
(71,179
)
   
(37,544
)
   
(42,059
)
   
(20,407
)
   
(171,189
)
Ending Backlog - 6/30/17
 
$
204,054
     
111,706
     
42,369
     
27,506
     
385,635
 
                                         
                                         
                                         
Backlog And Entered Orders - YTD Q3 FY 2017
 
Filtration
   
Test
   
USG
   
Technical Packaging
   
Total
 
Beginning Backlog - 10/1/16
 
$
195,801
     
83,170
     
33,744
     
19,654
     
332,369
 
Entered Orders
   
207,122
     
138,274
     
118,912
     
67,693
     
532,001
 
Sales
   
(198,869
)
   
(109,738
)
   
(110,287
)
   
(59,841
)
   
(478,735
)
Ending Backlog - 6/30/17
 
$
204,054
     
111,706
     
42,369
     
27,506
     
385,635
 






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Esco Technologies Inc provided additional information to their SEC Filing as exhibits

Ticker: ESE
CIK: 866706
Form Type: 8-K Corporate News
Accession Number: 0000866706-17-000010
Submitted to the SEC: Tue Aug 08 2017 4:17:58 PM EST
Accepted by the SEC: Tue Aug 08 2017
Period: Tuesday, August 8, 2017
Industry: Communications Equipment
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Regulated Disclosure

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