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ESCO Announces Fiscal 2019 Results

- GAAP EPS $3.10 (Includes Doble Building Gain, net of Defined Charges) - Adjusted EPS $3.13 (Tops Guidance and Consensus / 13 Percent above 2018) -

St. Louis, Nov. 19, 2019 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (ESE) (ESCO, or the Company) today reported its operating results for the fourth quarter (Q4 2019) and fiscal year ended September 30, 2019 (2019).

On November 18, 2019, the Company announced the divestiture of its Technical Packaging segment under a separate release, where it expects to receive $187 million in gross cash proceeds and finalize the transaction as soon as customary regulatory items are completed.

The financial results presented include certain non-GAAP financial measures such as EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS, as defined within the “Non-GAAP Financial Measures” described below. 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 – Full Year

2019 GAAP EPS of $3.10 per share included $0.19 per share from a gain on the sale of Doble’s headquarters building in Watertown, Massachusetts, offset by $0.22 per share of charges related to cost reduction actions taken in Technical Packaging and at Doble, costs incurred to move the aircraft / aerospace business from VACCO to PTI, and one-time purchase accounting charges related to the July 2019 acquisition of Globe Composite Solutions, LLC (Globe). The $0.03 per share of net discrete items was excluded when determining 2019 Adjusted EPS of $3.13 per share. 2019 GAAP net earnings were $81 million.

2018 GAAP EPS of $3.54 per share reflected the favorable net impact of the December 2017 “Tax Cuts and Jobs Act” (U.S. Tax Reform) which resulted in a tax benefit of $0.94 per share, partially offset by $0.17 per share of cost reduction / restructuring and move costs. The net effect of excluding the $0.77 per share of discrete items resulted in 2018 Adjusted EPS of $2.77 per share. 2018 GAAP net earnings were $92 million.

2019 Adjusted EPS topped Management expectations and increased 13 percent over 2018 Adjusted EPS.

2019 Adjusted EBITDA was $151 million, an increase of 9 percent over 2018 Adjusted EBITDA of $139 million, led by Filtration and Test which increased 18 percent and 8 percent, respectively.

Earnings Summary – Q4

Q4 2019 GAAP EPS was $0.95 per share and Q4 2019 Adjusted EPS was $1.09 per share, excluding the $0.14 per share of one-time purchase accounting charges related to the Globe acquisition and the Q4 portion of the cost reduction actions described above.

Q4 2018 GAAP EPS was $1.09 per share and Q4 2018 Adjusted EPS was $1.22 per share, excluding $0.13 per share of charges related to the prior year’s cost reduction actions, and the true-up of income tax expense resulting from the implementation of U.S. Tax Reform.

Q4 2019 Adjusted EBITDA was $51 million compared to $52 million in Q4 2018.

Operating Highlights

  • Net sales increased $41 million (5.4 percent) to $813 million in 2019 compared to $772 million in 2018.
  • On a segment basis, 2019 Filtration sales increased 14 percent from 2018 (10.5 percent excluding Globe). Aerospace sales (PTI, Crissair, and Mayday) increased $32 million (19 percent) in 2019 driven by higher OEM build rates and strong after-market demand, partially offset by lower navy sales at VACCO due to revenue recognition timing on several large programs. Test sales increased $6 million (3 percent) in 2019 resulting from strong orders throughout 2019 and the completion of several large projects. USG sales from Doble increased $8 million (6 percent), while NRG’s sales to renewable energy customers decreased nearly $10 million, resulting in a net decrease in USG sales. Technical Packaging sales decreased nominally resulting from solid growth in domestic medical / pharm sales, offset by delayed new product introductions in Europe.
  • SG&A expenses increased in 2019 as a result of higher spending on R&D / new product development, additional sales commissions, normal cost of living adjustments, and the addition of Globe. Both periods’ SG&A spending represents approximately 21 percent of net sales.
  • Entered orders were $905 million in 2019 (book-to-bill of 1.11x) and were $279 million during Q4 2019 (book-to-bill of 1.18x) which resulted in an ending backlog of $475 million at September 30, 2019, an increase of $92 million, or 24 percent, from September 30, 2018.
  • The effective income tax rate (GAAP and Adjusted) was 21 percent in 2019 and was favorably impacted by certain tax strategies implemented during 2019.
  • 2019 net cash provided by operating activities was $105 million resulting in $224 million of net debt outstanding (total borrowings, less cash on hand) at September 30, 2019 with a 1.68x leverage ratio. Q4 2019 net cash provided by operating activities was $68 million resulting from strong earnings and favorable working capital management.

Chairman’s Commentary – 2019

Vic Richey, Chairman and Chief Executive Officer, commented, “I’m pleased with how we ended the year as our results once again came in above expectations and we delivered 13 percent Adjusted EPS growth over prior year. We had solid operational performance across the Company as we exceeded our sales, Adjusted EBIT, and Adjusted EPS commitments set at the beginning of the year. Our Filtration business was the clear winner in 2019 as the segment, when excluding Globe, exceeded profit expectations by 9 percent, with Test and Doble also beating profit expectations and delivering strong results.

“We improved our 2019 Adjusted EBITDA by 9 percent and increased our margins from 2018, while generating record cash flow from operations. Our entered orders were another bright spot as we booked over $900 million of new business during the year and grew our backlog by 24 percent, which sets us up nicely for growth in 2020.

“The Globe acquisition announced in early July is off to a great start as they performed better than we projected. I’m very happy with the early stages of the integration, and I’m looking forward to Globe’s continuing growth as part of ESCO. The strong leadership team, dedicated employees, and great products are an excellent addition to our portfolio and enable us to create additional avenues for meaningful sales growth across our shared customer base.

“On the M&A front we continue to evaluate a robust pipeline of opportunities and continue to work these aggressively, and I remain hopeful that we will be able to add to our portfolio. Consistent with our history, we will remain prudent and committed to our disciplined approach of balancing ROIC and protecting our balance sheet.

“The Doble headquarters relocation from Watertown to Marlborough is nearly complete and we expect to be moved in and fully operational in the next few weeks. The Doble team is looking forward to having all of its Boston area staff co-located in a single, customer-friendly facility as this will further enhance our operational efficiency and effectiveness, while lowering our facility operating costs.

“I’m pleased with the way we wrapped up 2019, and we plan to build on the successes we achieved this year and expect to continue benefitting from our disciplined operating culture heading into 2020. Our solid market positions and tangible growth opportunities across the Company provide us with a favorable view of the future with our goal remaining unchanged – to increase long-term shareholder value.”

Dividend Payment

The next quarterly cash dividend of $0.08 per share will be paid on January 17, 2020 to stockholders of record on January 2, 2020.

Board of Directors

Effective November 13, 2019, the Company added an additional independent director, Gloria L. Valdez to the Company’s Board of Directors.

Ms. Valdez retired in 2018 after 32 years of civilian service with the Department of the Navy and the Department of Homeland Security. Prior to her retirement she served as Deputy Assistant Secretary of the Navy for Ships within the Office of the Assistant Secretary of the Navy for Research, Development and Acquisition. In this capacity, Ms. Valdez was responsible for executive oversight of all naval shipbuilding programs, major ship conversions, and the maintenance, modernization and disposal of in-service ships.

Ms. Valdez holds a Master of Science degree in Management from Florida Institute of Technology as well as a Bachelor of Science in Mechanical Engineering from the University of New Mexico, and was selected to serve on the Company’s Board due to her extensive management experience in the navy and defense markets, which will allow her to assist the board in guiding strategy from the highest level.

Adding a new director further enhances Corporate Governance, facilitates board refreshment, and adds new and relevant experience supplementing existing independent director oversight.

Business Outlook – 2020 Adjusted Basis

Given the pending sale of the Technical Packaging business, beginning with the Q1 2020 results of operations, the segment’s operating results, balance sheet and cash flows will be reported as Discontinued Operations, and therefore, will be excluded from the Business Outlook comparisons to 2019 described below.

The Discontinued Operations impact, as well as the expected after-tax gain on the sale of Technical Packaging will be excluded from the calculation of Adjusted EBIT, Adjusted EBITDA and Adjusted EPS in the reporting of the 2020 and 2019 results.

The net proceeds from the sale will be used to pay down debt, thereby significantly increasing liquidity and enhancing the Company’s ability to complete future acquisitions.

Additionally, later in 2020, Management plans to use a portion of the net proceeds to fully fund, terminate, and annuitize the defined benefit pension plan currently maintained by the Company. Annuitizing this non-strategic liability through an insurance company will eliminate both equity market risk and interest rate volatility, thereby reducing our costs and eliminating future cash payments. The defined benefit plan was frozen in 2003 and no additional benefits have been accrued since that date. The accounting impact of terminating and annuitizing the pension will also be excluded from the calculation of Adjusted EBITDA and Adjusted EPS.

Management continues to see meaningful net sales, Adjusted EBIT, and Adjusted EBITDA growth across each of the Company’s business segments and anticipates growth rates in 2020 and beyond that will generally exceed the broader industrial market. The growth described below is expected to be enhanced by additional M&A contributions throughout the year.

Management’s expectations for growth in 2020 compared to 2019, excluding the results of Technical Packaging in both periods, are as follows:

  • Net sales from continuing operations are expected to increase 9 to 10 percent on a consolidated basis, with Filtration growing 13.5 to 14.5 percent, USG growing 7 to 8 percent and Test growing 4 to 5 percent;
  • Adjusted EBIT is expected to increase approximately 11 to 12 percent with Adjusted EBIT margins at 14 to 15 percent of sales;
  • Adjusted EBITDA is expected to increase approximately 12 to 13 percent with Adjusted EBITDA margins increasing nearly a full point;
  • Interest expense is expected to be lower than 2019, and will be impacted by the timing (date) of closing and the amount of the final after-tax cash proceeds received on the sale of Technical Packaging;
  • Non-cash depreciation and amortization of intangible assets is expected to increase approximately $5 million, or $0.15 per share after-tax, related to previous acquisitions and capital spending;
  • Income tax expense is expected to increase in 2020 as Management is projecting a 23 to 24 percent effective tax rate calculated on higher pretax earnings, compared to the 20.3 percent effective tax rate used in calculating 2019 Adjusted EPS (excluding Technical Packaging). The higher effective tax rate negatively impacts 2020 Adjusted EPS by approximately ($0.10) per share;
  • In summary, and excluding Technical Packaging, Management projects 2020 Adjusted EPS to be in the range of $3.20 to $3.30 per share (compared to 2019 Adjusted EPS of $2.95 per share, excluding the 2019 results of Technical Packaging). This increase reflects meaningful sales, Adjusted EBITDA and Adjusted EPS growth, partially offset by the additional depreciation and amortization charges and incremental tax expense as noted above.

On a quarterly basis and consistent with prior years, Management expects 2020 revenues and Adjusted EPS to be more back half weighted resulting in the second half of the year being stronger than the first half.

Management expects Q1 2020 Adjusted EPS to be in the range of $0.35 to $0.40 per share. The timing of quarterly sales and earnings throughout the year, coupled with the discrete charges incurred within the respective quarters will impact quarterly comparability.

Conference Call

The Company will host a conference call today, November 19, at 4:00 p.m. Central Time, to discuss the Company’s 2019 results and the packaging segment divestiture. 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 on the Company’s website noted above or by phone (dial 1-855-859-2056 and enter the pass code 2935058).

Forward-Looking Statements

Statements in this press release regarding the timing and amounts of the Company’s expected quarterly, 2020 full year and beyond results, revenue and sales growth, sales, EPS, Adjusted EPS, EPS growth, cash,  EBIT, Adjusted EBIT, Adjusted EBIT margins, Adjusted EBITDA margins, Adjusted EBITDA, interest expense, income tax expense, effective tax rate, non-cash depreciation and amortization of intangible assets, liquidity, actions in regard to the Company’s frozen defined benefit plan, the realization of operational efficiencies, the Company’s competitiveness, the Company’s ability to increase operating margins, realize financial goals and increase shareholder value, the success of acquisition efforts, the sale of and expected proceeds from the pending divestiture and use of those proceeds, 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, 2018, and the following: to the failure to obtain regulatory approval of the Company’s sale of the Technical Packaging business, contractual disputes with the buyer of the Company’s Technical Packaging business; 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, taxation requirements, and new or modified tariffs; 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; and the uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration.

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 charges, and “Adjusted EPS” as GAAP earnings per share (EPS) excluding the net impact of the items described above which were $0.03 per share in 2019.

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 EBITDA 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 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, Missouri: Manufactures highly-engineered filtration and fluid control products for the aviation, navy, space and process markets worldwide, as well as composite-based products and solutions for navy, defense and industrial customers; 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.
  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Operations (Unaudited)  
 (Dollars in thousands, except per share amounts)  
   
          Three Months
Ended
September 30,
2019
    Three Months
Ended
September 30,
2018
 
                   
Net Sales     $ 236,658     231,086  
Cost and Expenses:            
  Cost of sales   145,495     143,486  
  Selling, general and administrative expenses 46,043     39,618  
  Amortization of intangible assets   5,523     4,713  
  Interest expense   2,608     2,284  
  Other expenses (income), net   4,277     2,663  
    Total costs and expenses   203,946     192,764  
                   
Earnings before income taxes   32,712     38,322  
Income taxes   7,854     9,870  
                   
    Net earnings $ 24,858     28,452  
                   
                   
    Diluted EPS - GAAP $ 0.95     1.09  
                   
    Diluted EPS - As Adjusted $ 1.09 (1 )   1.22 (2 )
                   
    Diluted average common shares O/S:   26,146     26,103  
                   
                   
(1 ) Q4 2019 Adjusted EPS excluded $0.14 per share net impact of purchase accounting charges related to the Globe acquisition and restructuring charges incurred primarily at Plastique, Doble and PTI/VACCO during the fourth quarter of 2019.
                   
(2 ) Q4 2018 Adjusted EPS excluded $0.13 per share of after-tax charges incurred related to the Q4 2018 restructuring actions and the true-up of tax expense recorded resulting from the implementation of U.S. Tax Reform.

  

  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Operations (Unaudited)  
 (Dollars in thousands, except per share amounts)  
   
          Year Ended
September 30,
2019
    Year Ended
September 30,
2018
 
                   
Net Sales   $ 812,970     771,582    
Cost and Expenses:            
  Cost of sales   508,521     490,397    
  Selling, general and administrative expenses 172,109     162,431    
  Amortization of intangible assets   19,488     18,328    
  Interest expense   8,396     8,748    
  Other expenses (income), net   2,240     3,655    
    Total costs and expenses   710,754     683,559    
                   
Earnings before income taxes   102,216     88,023    
Income taxes     21,177     (4,113 )  
                   
    Net earnings $ 81,039     92,136    
                   
                   
    Diluted EPS - GAAP $ 3.10     3.54    
                   
    Diluted EPS - As Adjusted $ 3.13 (1 )   2.77   (2 )
                   
    Diluted average common shares O/S:   26,097     26,058    
                   
                   
(1 ) 2019 Adjusted EPS excluded $0.03 per share net impact mainly from the purchase accounting charges related to the Globe acquisition and restructuring charges primarily at Plastique, PTI/VACCO & Doble partially offset by the gain on the sale of the Doble Watertown property.
                   
(2 ) 2018 Adjusted EPS excluded $0.17 per share of after-tax charges incurred related to the 2018 restructuring actions, and excluded a $0.94 net tax benefit recorded resulting from the implementation of U.S. Tax Reform.

  

  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
 
        GAAP   As Adjusted  
        Q4 2019   Q4 2018   Q4 2019   Q4 2018  
Net  Sales                  
  Filtration $ 96,966     91,274     96,966     91,274    
  USG   54,276     56,013     54,276     56,013    
  Test   61,935     59,523     61,935     59,523    
  Technical Packaging   23,481     24,276     23,481     24,276    
    Totals $ 236,658     231,086     236,658     231,086    
                       
EBIT                  
  Filtration $ 23,050     23,615     23,459     23,961    
  USG   11,708     15,364     12,715     16,399    
  Test   10,849     10,029     10,849     10,029    
  Technical Packaging   2,532     2,721     2,635     2,721    
  Corporate   (12,819 )   (11,123 )   (9,659 )   (10,252 )  
    Consolidated EBIT   35,320     40,606     39,999     42,858    
    Less: Interest expense   (2,608 )   (2,284 )   (2,608 )   (2,284 )  
    Less: Income tax expense   (7,854 )   (9,870 )   (8,941 )   (8,582 )  
    Net earnings $ 24,858     28,452     28,450     31,992    
                       
Note 1: Adjusted net earnings were $28.5 million in Q4 2019 which excluded the $0.14 per share net impact of the purchase accounting charges related to the Globe acquisition and the restructuring charges incurred at Doble, Plastique, PTI and VACCO during Q4 2019.
                       
Note 2: Adjusted net earnings were $32.0 million in Q4 2018 which excluded the $0.13 per share of after-tax charges incurred related to the Q4 2018 restructuring actions, and the true-up of tax expense recorded resulting from the implementation of U.S. Tax Reform.
                       
EBITDA Reconciliation to Net earnings:              
                Adjusted   Adjusted  
        Q4 2019   Q4 2018   Q4 2019   Q4 2018  
Consolidated EBITDA $ 46,607     50,011     51,286     52,263    
Less: Depr & Amort   (11,287 )   (9,405 )   (11,287 )   (9,405 )  
Consolidated EBIT   35,320     40,606     39,999     42,858    
Less: Interest expense   (2,608 )   (2,284 )   (2,608 )   (2,284 )  
Less: Income tax expense   (7,854 )   (9,870 )   (8,941 )   (8,582 )  
Net earnings $ 24,858     28,452     28,450     31,992    
                       

  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
 
        GAAP   As Adjusted  
        FY 2019   FY 2018   FY 2019   FY 2018  
Net  Sales                  
  Filtration $ 325,735     286,805     325,735     286,805    
  USG   211,915     213,953     211,915     213,953    
  Test   188,394     182,892     188,394     182,892    
  Technical Packaging   86,926     87,932     86,926     87,932    
    Totals $ 812,970     771,582     812,970     771,582    
                       
EBIT                    
  Filtration $ 70,142     58,670     71,316     59,464    
  USG   52,169     43,169     46,282     46,121    
  Test   25,640     23,826     25,640     23,826    
  Technical Packaging   5,865     8,075     7,299     8,075    
  Corporate   (43,204 )   (36,969 )   (39,375 )   (35,875 )  
    Consolidated EBIT   110,612     96,771     111,162     101,611    
    Less: Interest expense   (8,396 )   (8,748 )   (8,396 )   (8,748 )  
    Less: Income tax   (21,177 )   4,113     (20,965 )   (20,665 )  
    Net earnings $ 81,039     92,136     81,801     72,198    
                       
Note 1: Adjusted net earnings were $81.8 million in 2019 which excluded the $0.03 per share net impact of the purchase accounting charges related to the Globe acquisition and the restructuring charges incurred at Doble, Plastique, PTI and VACCO during 2019, partially offset by the gain on the sale of the Doble Watertown property.
                       
Note 2: Adjusted net earnings were $72.2 million in 2018 which excluded $0.17 per share of after-tax charges incurred related to the 2018 restructuring actions, and excluded a $0.94 net tax benefit recorded resulting from the implementation of U.S. Tax Reform.
                       
EBITDA Reconciliation to Net earnings:              
                Adjusted   Adjusted  
        FY 2019   FY 2018   FY 2019   FY 2018  
Consolidated EBITDA $ 150,662     134,526     151,212     139,366    
Less: Depr & Amort   (40,050 )   (37,755 )   (40,050 )   (37,755 )  
Consolidated EBIT   110,612     96,771     111,162     101,611    
Less: Interest expense   (8,396 )   (8,748 )   (8,396 )   (8,748 )  
(Less) Plus: Income tax   (21,177 )   4,113     (20,965 )   (20,665 )  
Net earnings $ 81,039     92,136     81,801     72,198    
                       

  

  ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
 
        September 30,
2019
  September 30,
2018
             
Assets          
  Cash and cash equivalents $ 61,808   30,477
  Accounts receivable, net   174,427   163,740
  Contract assets   115,310   53,034
  Inventories   128,825   135,416
  Other current assets   14,824   13,356
    Total current assets   495,194   396,023
  Property, plant and equipment, net   161,470   134,954
  Intangible assets, net   393,047   345,353
  Goodwill   409,215   381,652
  Other assets   7,794   7,140
      $ 1,466,720   1,265,122
             
Liabilities and Shareholders' Equity        
  Short-term borrowings and current $ 21,261   20,000
    maturities of long-term debt        
  Accounts payable   71,370   63,033
  Contract liabilities   81,177   49,035
  Other current liabilities   77,827   68,462
    Total current liabilities   251,635   200,530
  Deferred tax liabilities   64,855   64,794
  Other liabilities   59,008   40,388
  Long-term debt   265,000   200,000
  Shareholders' equity   826,222   759,410
      $ 1,466,720   1,265,122

  

  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
 
     Year Ended
September 30, 2019
Cash flows from operating activities:    
  Net earnings $ 81,039  
  Adjustments to reconcile net earnings    
  to net cash provided by operating activities:    
  Depreciation and amortization   40,050  
  Stock compensation expense   5,353  
  Changes in assets and liabilities   (9,944 )
  Change in PP&E from gain on building sale   (8,922 )
  Pension contributions   (2,500 )
  Effect of deferred taxes   61  
  Net cash provided by operating activities   105,137  
     
Cash flows from investing activities:    
  Acquisition of businesses, net of cash acquired   (96,777 )
  Capital expenditures   (37,183 )
  Additions to capitalized software   (8,386 )
  Proceeds from sale of building and land   17,201  
  Net cash used by investing activities   (125,145 )
     
Cash flows from financing activities:    
  Proceeds from long-term debt and short-term borrowings   131,261  
  Principal payments on long-term debt   (65,000 )
  Dividends paid   (8,302 )
  Debt issuance costs   (1,071 )
  Other   (3,371 )
  Net cash provided by financing activities   53,517  
     
Effect of exchange rate changes on cash and cash equivalents   (2,178 )
     
Net increase in cash and cash equivalents   31,331  
Cash and cash equivalents, beginning of period   30,477  
Cash and cash equivalents, end of period $ 61,808  

  

  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
 
Backlog And Entered Orders - Q4 FY 2019   Filtration   USG   Test   Technical Packaging   Total
  Beginning Backlog - 7/1/19 $ 231,150     41,529     143,035     16,737     432,451  
  Entered Orders   154,256     54,461     52,477     18,146     279,340  
  Sales     (96,966 )   (54,276 )   (61,935 )   (23,481 )   (236,658 )
  Ending Backlog - 9/30/19 $ 288,440     41,714     133,577     11,402     475,133  
                         
                         
                         
Backlog And Entered Orders - YTD Q4 FY 2019   Filtration   USG   Test   Technical Packaging   Total
  Beginning Backlog - 10/1/18 $ 204,227     40,727     122,350     15,467     382,771  
  Entered Orders   409,948     212,902     199,621     82,861     905,332  
  Sales     (325,735 )   (211,915 )   (188,394 )   (86,926 )   (812,970 )
  Ending Backlog - 9/30/19 $ 288,440     41,714     133,577     11,402     475,133  

  
SOURCE ESCO Technologies Inc.
Kate Lowrey, Director of Investor Relations, (314) 213-7277