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Esco Technologies Inc (ESE) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, September 30, 2008

SEC Filings

Esco Technologies Inc

CIK: 866706 Ticker: ESE

EX-99.1
2
exhibit991.txt
ESCO EARNINGS RELEASE

Exhibit 99.1


ESCO TECHNOLOGIES

For more information contact:                              For media inquiries:
Patricia K. Moore                                            David P. Garino
Director, Investor Relations                                 (314) 982-0551
ESCO Technologies Inc.
(314) 213-7277

                     ESCO ANNOUNCES FISCAL YEAR 2008 RESULTS
                     ---------------------------------------

     ST. LOUIS,  November 12, 2008 - ESCO  Technologies  Inc. (NYSE:  ESE) today
announced its results for the fourth quarter and fiscal year ended September 30,
2008.

     Within this release,  references to "quarters" and "year-to-date" relate to
the fiscal  quarters  and fiscal  years ended  September  30 for the  respective
periods noted.

     Net  earnings  and EPS  are  presented  from  "Continuing  Operations"  and
"Discontinued  Operations."  Continuing  Operations represent the results of the
ongoing  businesses of the Company,  and Discontinued  Operations  represent the
results of the  filtration  portion of Filtertek  which was sold on November 25,
2007.

     The reconciliation  from "EPS - GAAP Basis" to "EPS - Adjusted Basis" noted
in the tables below excludes  intangible asset amortization  related to TWACS NG
software,  purchase accounting amortization related to recent acquisitions,  and
Doble's inventory step-up.

4th Quarter Summary ($ in millions):
------------------------------------
                                           4th Qtr         4th Qtr
    (Continuing Operations):                2008            2007         Delta
    ------------------------                ----            ----         -----
    Net Sales                        $     196.0          139.9           40.1%
    EBIT                             $      33.7           18.5           82.2%
    Net Earnings                     $      20.1           14.9           34.9%
                                            ====           ====
    EPS - GAAP Basis                 $      0.76           0.57           33.3%
                                            ====           ====
    EPS - Adjusted Basis             $      0.87           0.62           40.3%
                                            ====           ====
    (Discontinued Operations):
    --------------------------
    Net Earnings                     $       4.4            1.7            N.M.
                                             ===            ===
    EPS                              $      0.17           0.07            N.M
                                            ====           ====


Total Year Summary ($ in millions):
-----------------------------------
                                             FY            FY
    (Continuing Operations):                2008          2007            Delta
    ------------------------                ----          ----            -----
    Net Sales                        $     623.8          444.7           40.3%
    EBIT                             $      80.8           37.4          116.0%
    Net Earnings                     $      47.4           30.4           55.9%
                                            ====           ====
    EPS - GAAP Basis                 $      1.80           1.15           56.5%
                                            ====           ====
    EPS - Adjusted Basis             $      2.20           1.35           63.0%
                                            ====           ====
    (Discontinued Operations):
    --------------------------
    Net Earnings (Loss)              $     (0.7)            3.3            N.M.
                                           =====            ===
    EPS                              $    (0.02)           0.13            N.M
                                          ======           ====

     Management  believes using "EPS - Adjusted Basis" as a financial measure is
important for investors to understand  the Company's  operations and its ability
to service its debt.

Discontinued Operations
-----------------------

     Net earnings  and EPS from  discontinued  operations  were $4.4 million and
$0.17 per share,  respectively  for the 2008 fourth quarter.  For the full year,
discontinued  operations  resulted  in a net loss of $0.7  million  or $0.02 per
share.  The fourth quarter net earnings from  discontinued  operations  resulted
from  a tax  true-up  driven  by the  completion  of the  final  purchase  price
allocation as determined  by the buyer of Filtertek.  Also,  foreign tax credits
related to Filtertek prior to its  divestiture  were finalized and recognized in
the 2008 fourth quarter.

Sales
-----

     Fourth  quarter and total year sales  increased 40 percent in 2008 compared
to the same periods in 2007 with all three  operating  segments  contributing to
the sales growth.

     Utility  Solutions  Group (USG) sales  increased $50.9 million (79 percent)
and $165.3  million (84  percent)  for the 2008 fourth  quarter and fiscal year,
respectively,  compared  to the  comparable  periods  of 2007 as a result of the
following:

o    Doble sales were $22.2 million in the 2008 fourth quarter and $74.3 million
     for the 10-month period since the date of acquisition;

o    Fixed  network RF AMI sales  increased  $21.5  million (114 percent) in the
     2008 fourth  quarter and $55.4 million (113 percent) for the year primarily
     due to higher gas  deliveries at PG&E and the sale of additional  water AMI
     products; and,


o    Fixed network  power-line system (PLS) AMI sales increased $6.9 million (18
     percent) in the 2008 fourth  quarter and $31.7 million (25 percent) for the
     year as TWACS deliveries increased across all customer end-markets and due
     to the completion of the PG&E contract as amended.

     Test sales in 2008 increased in the fourth quarter and total year due to an
increase in international chamber deliveries.

     Filtration  sales increased $3.7 million (12 percent) in the fourth quarter
of 2008,  and  $10.6 million  (10 percent) for the total year  reflecting  sales
increases across all product lines with particularly  strong results  recognized
in the aerospace end-markets.

Earnings Before Interest and Taxes (EBIT)
-----------------------------------------

     On a segment basis,  items that impacted EBIT dollars and EBIT as a percent
of sales ("EBIT margin") during the fourth quarter and fiscal year 2008 included
the following:

     In the USG  segment,  EBIT for the 2008 fourth  quarter  was $24.8  million
(21.5 percent  of sales),  compared to $10.1  million (15.7 percent of sales) in
the 2007 fourth  quarter.  The $14.7  million  increase in EBIT  dollars and the
increase in EBIT as a percent of sales was the result of the  significant  sales
increases  across the  segment as noted  above.  The 2008  fourth  quarter  also
included  higher  TWACS NG  software  amortization  compared  to the 2007 fourth
quarter ($2.9 million compared to $1.8 million).  Total year 2008 EBIT was $66.3
million  (18.3  percent of sales)  compared to $22.0  million  (11.1  percent of
sales) with the significant  increase in dollars and percentage  being driven by
the 84 percent increase in full-year sales within this segment.

     In the  Test  segment,  EBIT  margins  were  slightly  lower in 2008 due to
changes in sales mix involving  additional large chambers and fewer  high-margin
components sold versus 2007.

     In the Filtration  segment,  EBIT dollars and EBIT margin increased in 2008
due to the increase in sales noted above and as a result of favorable  sales mix
changes.

     Corporate  operating  costs were higher in 2008 due to lower royalty income
and higher  amortization  expenses related to recent  acquisitions that included
identifiable intangible assets.

Effective Tax Rate
------------------

     The effective tax rate from Continuing  Operations in the fourth quarter of
2008 was 35.2 percent  compared to 19.0  percent in the fourth  quarter of 2007,
and 33.3  percent  compared  to20.1  percent for the fiscal years 2008 and 2007,
respectively.  The 2008 and 2007 tax rates were  favorably  benefited in varying
degrees by specific tax credits  realized in the respective  fiscal years (i.e.,
export-related benefits, research credits, domestic production deduction).

New Orders
----------

     New orders  received in the fourth  quarters  were  $179.6  million in 2008
compared to $110.1 million in 2007,  representing a 63 percent increase. For the
fiscal years,  new orders  increased  approximately  35 percent in 2008 and were
$633.0 million in the current year compared to $470.2 million in 2007, resulting
in a backlog at September 30, 2008, of $266.8  million.  Doble's  orders for the
2008  fourth  quarter  and full  year were  $22.4  million  and  $78.6  million,
respectively.

     Orders from PG&E received in the 2008 fourth quarter were $34.0 million and
included an additional 100,000 units in September related to the RF electric AMI
product.  During fiscal 2008,  total PG&E orders  received were $111.8  million,
representing 1.9 million units. Total PG&E firm order quantities since inception
are 2.7 million  units (2.0 million gas and 0.7 million  electric)  worth $171.2
million.

     While only a nominal quantity is included in the order amounts noted above,
the Company  previously  announced  that its AMI technology has been selected by
Idaho  Power  (estimated  at  500,000  power-line  system  electric  units,  $25
million),  New York City  Water  (estimated  at 875,000  RF water  units,  $68.3
million),  and  Baltimore  Gas &  Electric  (selected  for RF pilot  for gas and
electric trial).

     Also in the 2008 fourth  quarter,  the Test  segment was awarded one of the
largest  contracts  in its  history  when  ETS-Lindgren  signed a $16.7  million
contract with the National  Automotive  Testing and R&D  Infrastructure  Project
(NATRIP) in India to provide two  automotive  test  chambers to support  India's
most significant automotive initiative undertaken to date.

Cash Flow / Debt Position
-------------------------

Net cash provided by operating  activities from Continuing  Operations was $76.3
million during fiscal 2008. At September 30, 2008, the Company had $28.7 million
in cash,  $7 million of restricted  cash  included in other  assets,  and $233.7
million of total  debt  outstanding  resulting  in a net debt  position  of $198
million.  This net debt position  includes the cash used to acquire LDIC GmbH on
August 4, 2008, as previously announced.


Doble Purchase Accounting Items
-------------------------------

     The  2008  pretax  amortization  charge  related  to  Doble's  identifiable
intangible  assets  was  $2.8 million.   Additionally,  Doble's  finished  goods
inventory  was  required to be "stepped  up" under  purchase  accounting,  which
caused  finished  goods  inventory  to be sold with no profit  recognized.  This
resulted  in positive  cash flow,  but "lost"  profit of $1.5  million in fiscal
2008.

Chairman's Commentary - 2008
----------------------------

     Vic Richey,  Chairman and Chief Executive  Officer,  commented,  "I am very
pleased with our operating performance in 2008 as our growth in sales, earnings,
and entered orders continued to demonstrate ESCO's  significant  resiliency in a
challenging  economic  environment.  We finished  the year at a level well above
last year's sales, EBIT, EPS, cash flow, and entered orders. Our success in 2008
was clearly evident when looking at the double-digit  growth  percentages  noted
throughout our financials, especially within the Utility Solutions Group."

Business Outlook - 2009
-----------------------

     Statements contained in the preceding and following paragraphs are based on
current expectations. Statements that are not strictly historical are considered
forward-looking, and actual results may differ materially.

     The  Business  Outlook  described  below  excludes the impact of any future
acquisitions or  divestitures,  and reflects:  the impact of the amortization of
identifiable  intangible  purchase accounting assets related to Aclara Software,
Aclara RF, Doble and LDIC; the impact of the Doble inventory  step-up  resulting
in "lost" profit; and the amortization of TWACS NG software.

Aclara RF Facility Relocation
-----------------------------

     Due to its  significant  sales  growth,  Aclara RF Systems  Inc.  (formerly
Hexagram,  Inc.) will be relocating to a newer,  more efficient  facility in the
greater  Cleveland,  Ohio,  area during fiscal 2009. As a result,  approximately
$2.0 million in pretax nonrecurring exit and relocation costs are expected to be
incurred  in the  Utility  Solutions  Group,  primarily  related to the  noncash
write-off of leasehold improvements,  vacant facility charges, and physical move
costs.


Revenues and Earnings Per Share - 2009
--------------------------------------

         In fiscal 2009, Management expects the following:

o    Revenues between $680 million and $690 million;

o    EPS - GAAP Basis of between $2.00 and $2.15 (which  includes  approximately
     $0.05 per share related to the Aclara RF facility  relocation  charge noted
     above);

o    EPS - Adjusted Basis of between $2.42 and $2.57 per share; and,

o    EBITDA of greater than $120 million.

     EPS -  Adjusted  Basis  excludes  approximately  $0.42  per  share of costs
related to TWACS NG software amortization,  purchase accounting intangible asset
amortization related to the Company's recent acquisitions,  and Doble's purchase
accounting inventory step-up.

     Additionally,  interest  expense for 2009 included in the EPS amounts noted
above is  expected  to be in the range of $0.22 to $0.24 per  share,  and fiscal
2009 stock compensation expense is expected to be in the range of $0.07 to $0.09
per share for the year.

     The  full-year  2009  tax rate is  expected  to be 35 to 37  percent,  with
quarterly variations depending on the timing and amount of discrete tax benefits
and charges.

     The 2009 quarterly earnings profile is projected to be back-end loaded, but
not as severely as fiscal 2008.  GAAP  earnings in the first half of fiscal 2009
are  expected  to  be  approximately   $0.70  to  $0.75  per  share,   which  is
significantly  higher than the $0.53 per share  recognized  in the first half of
fiscal 2008.

Chairman's Commentary - 2009
----------------------------

     Mr. Richey further  commented,  "I am optimistic  about our future based on
how well positioned we are heading into 2009. Having Doble for the full year and
beginning our AMI  deployments  with Idaho Power,  New York City water,  and our
near-term international  opportunities will give us positive momentum throughout
2009."

     Mr. Richey concluded,  "I remain committed to our strategy to drive organic
growth  across all  operating  segments  through  new  product  development  and
attention to costs, supplemented by acquisition activity, to allow us to further
enhance  our  market   presence   world-wide.   These  actions  will  contribute
significantly to our stated goal of increasing long-term shareholder value."


Conference Call
---------------

     The Company  will host a  conference  call today,  November  12, at 4 p.m.,
Central Time, to discuss the Company's  fourth  quarter and full-year  operating
results.  A live audio  webcast will be available on the  Company's  web site at
www.escotechnologies.com.  Please  access the web site 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
web site noted  above or by phone (dial  1-888-203-1112  and enter the pass code
1439544).

Forward-Looking Statements
--------------------------

     Statements in this press release regarding the amounts and timing of fiscal
2009 future revenues,  results, earnings, EBIT, EPS - Adjusted Basis, EPS - GAAP
Basis, EBITDA, interest expense, stock compensation expense, costs incurred with
the Aclara RF relocation  and new building,  the success of product  development
and cost reduction  efforts,  the  amortization  of Doble's  intangible  assets,
future  acquisitions,  the fiscal 2009 effective annual tax rate, the success of
international  AMR / AMI pilots and the success of international  opportunities,
the long-term  success of the Company,  and any other written or oral 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.  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: the risk factors described in Item 1A of the Company's Annual Report
on Form 10-K for the fiscal year ended  September 30, 2007, and in Part II, Item
1A of the  Company's  Quarterly  Report on Form 10-Q for the three  months ended
June 30,  2008;  the  success of the  Company's  competitors;  changes in or the
effect of the Federal  Energy  Bill;  the timing and  content of purchase  order
releases under the Company's AMI contracts; the Company's successful performance
of its AMI  contracts;  site  readiness  issues  with  Test  segment  customers;
weakening of economic conditions in served markets;  changes in customer demands
or customer insolvencies;  competition;  intellectual property rights; technical
difficulties;  unforeseen charges impacting corporate  operating  expenses;  the
performance of the Company's international  operations;  material changes in the
costs of certain raw materials  including  steel and copper;  delivery delays or
defaults by customers;  termination for convenience ofcustomer contracts; timing
and  magnitude  of  future  contract  awards;  containment  of  engineering  and
development  costs;  performance  issues  with  key  customers,   suppliers  and
subcontractors;  labor disputes;  changes in laws and regulations  including but
not limited to changes in accounting standards and taxation requirements;  costs
relating to  environmental  matters;  uncertainty  of disputes in  litigation or
arbitration; the Company's successful execution of internal operating plans; and
the integration of newly acquired businesses.

     ESCO,  headquartered  in St. Louis, is a proven supplier of special purpose
utility solutions for electric, gas, and water utilities, including hardware and
software  to  support  advanced   metering   applications  and  fully  automated
intelligent  instrumentation.  In  addition,  the  Company  provides  engineered
filtration products to the aviation, space, and process markets worldwide and is
the industry leader in RF shielding and EMC test products.  Further  information
regarding  ESCO and its  subsidiaries  is available on the Company's web site 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    Three Months
                                                 Ended           Ended
                                              September 30,  September 30,
                                                  2008           2007
                                                  ----           ----

Net Sales                                      $196,032          139,892
Cost and Expenses:
  Cost of sales                                 118,260           89,265
  SG&A                                           39,288           28,571
  Amortization of intangible assets               4,800            2,691
  Interest expense                                2,677               27
  Other (income) expenses, net                       (8)             903
                                                     --              ---
      Total costs and expenses                  165,017          121,457
                                                -------          -------

Earnings before income taxes                     31,015           18,435
Income taxes                                     10,908            3,510
                                                 ------            -----

      Net earnings from continuing operations    20,107           14,925

Earnings from discontinued operations,
 net of tax expense of $515                           -            1,697
Gain on sale from discontinued
 operations, net of tax benefit of $4,652         4,398                -
                                                 ------             -----
      Net earnings from discontinued
        operations                                4,398            1,697

      Net earnings                             $ 24,505           16,622
                                               ========           ======


Earnings per share:
      Basic
          Continuing operations                    0.77             0.58
          Discontinued operations                  0.17             0.07
                                                   ----             ----
          Net earnings                         $   0.94             0.65
                                               ========             ====

      Diluted
          Continuing operations                    0.76             0.57
          Discontinued operations                  0.17             0.07
                                                   ----             ----
          Net earnings                         $   0.93             0.64
                                               ========             ====

Average common shares O/S:
      Basic                                      26,052           25,760
                                                 ======           ======
      Diluted                                    26,452           26,160
                                                 ======           ======


                                    - more -



                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

                                              Year Ended       Year Ended
                                             September 30,   September 30,
                                                 2008             2007
                                                 ----             ----

Net Sales                                      $623,817           444,704
Cost and Expenses:
   Cost of sales                                374,098           282,596
   SG&A                                         151,173           111,610
   Amortization of intangible assets             17,570            10,243
   Interest expense (income)                      9,812              (599)
   Other expenses, net                              149             2,815
                                                    ---             -----
     Total costs and expenses                   552,802           406,665
                                                -------           -------

Earnings before income taxes                     71,015            38,039
Income taxes                                     23,613             7,633
                                                 ------             -----

     Net earnings from continuing operations     47,402            30,406

(Loss) earnings from discontinued
 operations, net of tax expense of $325 and
 $1,382, respectively                              (115)            3,307
Loss on sale of discontinued
 operations, net of tax of $157                    (576)                -
                                                   -----              ----
     Net (loss) earnings from discontinued
      operations                                   (691)            3,307

     Net earnings                              $ 46,711            33,713
                                               ========            ======


Earnings per share:
     Basic
        Continuing operations                      1.83              1.17
        Discontinued operations                   (0.03)             0.13
                                                  -----              ----
        Net earnings                           $   1.80              1.30
                                               ========              ====

     Diluted
        Continuing operations                      1.80              1.15
        Discontinued operations                   (0.02)             0.13
                                                  -----              ----
        Net earnings                           $   1.78              1.28
                                               ========              ====

Average common shares O/S:
     Basic                                       25,909            25,865
                                                 ======            ======
     Diluted                                     26,315            26,387
                                                 ======            ======


                                    - more -



                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                     Condensed Business Segment Information
                                   (Unaudited)
                             (Dollars in thousands)

                             Three Months Ended           Year Ended
                                September 30,             September 30,
                             2008           2007        2008         2007
                             ----           ----        ----         ----
Net Sales
---------
  Utility Solutions        $115,372        64,428     362,905      197,631

  Test                       46,171        44,697     144,770      141,492

  Filtration                 34,489        30,767     116,142      105,581
                             ------        ------     -------      -------
  Totals                   $196,032       139,892     623,817      444,704
                           ========       =======     =======      =======


EBIT
----
  Utility Solutions        $ 24,761        10,109      66,301       22,000

  Test                        6,351         6,160      13,877       14,406(5)

  Filtration                  7,417         6,055      21,195       18,413

  Corporate                  (4,837)(1)    (3,862)(2) (20,546)(3)  (17,379)(4)
                             ------        ------     -------      -------
    Consolidated EBIT        33,692        18,462      80,827       37,440
    Interest (expense)/
      income                 (2,677)          (27)     (9,812)         599
                             ------           ---      ------          ---
    Earnings before
      income taxes         $ 31,015        18,435      71,015       38,039
                           ========        ======      ======       ======

Note: Depreciation and amortization expense was $7.7 million and
      $4.3 million for the quarters ended September 30, 2008 and 2007,
      respectively, and $27.6 million and $16.4 million for the years
      ended September 30, 2008 and 2007, respectively.

(1) Includes $1.2 million of amortization of acquired intangible assets.

(2) Includes $0.4 million of amortization of acquired intangible assets.

(3) Includes $4.2 million of amortization of acquired intangible assets.

(4) Includes $2.1 million of amortization of acquired intangible assets.

(5) Includes a $2.3 million charge related to the litigation award within
    the Test segment and $0.3 million of legal costs associated with
    arbitrating this dispute.


                                    - more -



                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                  Reconciliation of Non-GAAP Financial Measures
                                   (Unaudited)

EPS - Adjusted Basis Reconciliation (Continuing Operations)
-----------------------------------------------------------

                                 Q4 08      Q4 07      FY 08      FY 07
                                 -----      -----      -----      -----
EPS - GAAP Basis                 $0.76       0.57       1.80       1.15
Adjustments (defined below)       0.11       0.05       0.40       0.20
                                  ----       ----       ----       ----
EPS - Adjusted Basis             $0.87       0.62       2.20       1.35
                                 =====       ====       ====       ====

Adjustments  exclude pretax  intangible  asset  amortization  expense related to
TWACS NG software,  purchase accounting  intangible  amortization related to the
Company's  acquisitions  within the last three years and the expense  related to
the purchase accounting step-up of Doble Engineering Company inventory.  For the
year ended September 30, 2008, these  adjustments  consisted of $11.0 million of
pretax intangible asset amortization expense related to TWACS NG software,  $4.2
million of  amortization  of  acquired  intangible  assets,  and a $1.5  million
inventory step-up.


EBITDA - FY 2009
----------------

EBITDA of greater than $120  million  under  "Revenues  and Earnings Per Share -
2009"  cannot  be  reconciled   with  a  GAAP  measure  as  this   represents  a
forward-looking measure with no comparable GAAP measurement quantifiable at this
time.


EPS - Adjusted Basis Reconciliation - FY 2009
---------------------------------------------

EPS - GAAP Basis - FY 2009 Range        $2.00    2.15
Adjustments (defined below)              0.45    0.45
                                         ----    ----
EPS - Adjusted Basis - FY 2009 Range    $2.45    2.60
                                        =====    ====

Adjustments  exclude pretax  intangible  asset  amortization  expense related to
TWACS NG software,  purchase accounting  intangible  amortization related to the
Company's  acquisitions  within the last three years, the expense related to the
purchase  accounting  step-up of Doble  Engineering  Company  inventory  and the
nonrecurring Aclara RF facility relocation costs.


                                    - more -




                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                Condensed Consolidated Balance Sheets (Unaudited)
                             (Dollars in thousands)

                                              September 30,  September 30,
                                                  2008           2007
                                                  ----           ----

Assets
  Cash and cash equivalents                    $ 28,667         18,638
  Accounts receivable, net                      135,436         85,319
  Costs and estimated earnings on long-term
   contracts                                      9,095         11,520
  Inventories                                    66,962         55,885
  Current portion of deferred tax assets         15,368         25,264
  Other current assets                           15,108         28,054
  Current assets from discontinued operations         -         35,670
                                                -------         ------
      Total current assets                      270,636        260,350

  Property, plant and equipment, net             72,591         50,193
  Goodwill                                      329,478        124,757
  Intangible assets, net                        238,223         74,624
  Other assets                                   17,745         10,338
  Other assets from discontinued operations           -         55,845
                                                -------         ------
                                               $928,673        576,107
                                               ========        =======

Liabilities and Shareholders' Equity

  Short-term borrowings and current maturities
   of long-term debt                            $50,000              -
  Accounts payable                               49,329         45,726
  Current portion of deferred revenue            18,920         24,621
  Other current liabilities                      50,434         31,859
  Current liabilities from discontinued
   operations                                         -         16,994
                                                -------         ------
      Total current liabilities                 168,683        119,200
  Long-term portion of deferred revenue           2,228          4,514
  Deferred tax liabilities                       83,515         18,522
  Other liabilities                              21,760         15,854
  Long-term debt                                183,650              -
  Other liabilities from discontinued
   operations                                         -          2,534
  Shareholders' equity                          468,837        415,483
                                                -------        -------
                                               $928,673        576,107
                                               ========        =======


                                    - more -

                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)

                                                    Year Ended
                                                 September 30, 2008
                                                 ------------------
Cash flows from operating activities:
   Net earnings                                     $ 46,711
   Adjustments to reconcile net earnings
    to net cash provided by operating activities:
          Net loss from discontinued operations          691
          Depreciation and amortization               27,634
          Stock compensation expense                   3,990
          Changes in operating working capital        (8,770)
          Effect of deferred taxes                     7,561
          Change in deferred revenues and costs, net  (2,780)
          Other                                        1,213
                                                       -----
            Net cash provided by operating
             activities - continuing operations       76,250
            Net loss from discontinued operations,
             net of tax                                 (691)
            Net cash provided by discontinued
             operations                                1,581
                                                       -----
            Net cash provided by operating
             activities - discontinued operations        890
                                                         ---
            Net cash provided by
             operating activities                     77,140
                                                      ------

Cash flows from investing activities:
   Acquisition of businesses, net of cash
    acquired                                        (345,395)
   Proceeds from sale of marketable securities         4,966
   Change in restricted cash                          (6,841)
   Additions to capitalized software                 (11,012)
   Capital expenditures - continuing operations      (16,683)
                                                     -------
       Net cash used by investing activities -
        continuing operations                       (374,965)
   Capital expenditures - discontinued operations     (1,126)
   Proceeds from divestiture of business, net -
    discontinued operations                           74,370
                                                      ------
       Net cash provided by investing
        activities - discontinued operations          73,244
                                                      ------
       Net cash used by investing activities        (301,721)
                                                    --------

Cash flows from financing activities:
   Proceeds from long-term debt                      304,157
   Principal payments on long-term debt              (71,197)
   Debt issuance costs                                (2,965)
   Net decrease in short-term borrowings -
    discontinued operations                           (2,844)
   Excess tax benefit from stock options exercised       737
   Proceeds from exercise of stock options             6,384
   Other                                                 338
                                                         ---
     Net cash provided by financing activities       234,610
                                                     -------
Net increase in cash and cash equivalents             10,029
Cash and cash equivalents, beginning of period        18,638
                                                      ------
Cash and cash equivalents, end of period            $ 28,667
                                                    ========


                                    - more -


                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                          Other Selected Financial Data
                                   (Unaudited)
                             (Dollars in thousands)

Backlog And Entered Orders -        Utility
----------------------------
 Q4 FY 2008                        Solutions    Test   Filtration  Total
 ----------                        ---------    ----   ----------  -----
  Beginning Backlog - 6/30/08
   continuing opers                $138,928    61,402    82,962   283,292
  Entered Orders                    101,987    54,592    22,990   179,569
  Sales                            (115,372)  (46,171)  (34,489) (196,032)
                                   --------   -------   -------  --------
  Ending Backlog - 9/30/08         $125,543    69,823    71,463   266,829
                                   ========    ======    ======   =======


Backlog And Entered Orders -        Utility
----------------------------
 FY 2008                           Solutions    Test   Filtration  Total
 -------                           ---------    ----   ----------  -----
  Beginning Backlog - 9/30/07
   continuing opers                $123,176    60,038    74,394   257,608
  Entered Orders                    365,272   154,555   113,211   633,038
  Sales                            (362,905) (144,770) (116,142) (623,817)
                                   --------  --------  --------  --------
  Ending Backlog - 9/30/08         $125,543    69,823    71,463   266,829
                                   ========    ======    ======   =======


                                      # # #




The following information was filed by Esco Technologies Inc (ESE) on Wednesday, November 12, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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SEC Filing Tools
Ticker: ESE
CIK: 866706
Form Type: 10-K Annual Report
Accession Number: 0000950137-08-014173
Submitted to the SEC: Mon Dec 01 2008 5:25:57 PM EST
Accepted by the SEC: Mon Dec 01 2008
Period: Tuesday, September 30, 2008
Industry: Communications Equipment

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