ST. LOUIS, Feb. 4 /PRNewswire-FirstCall/ -- ESCO Technologies Inc.
(NYSE: ESE) today reported its operating results for the first
fiscal quarter ended December 31, 2009. EPS is presented from
"Continuing Operations" and "Discontinued Operations". Fiscal 2009
discontinued operations include the results of Comtrak which was
sold in March 2009. First Quarter 2010 Highlights -- Net sales were
$112.7 million; -- EPS was $0.02 per share; -- Gross margin
percentage (sales, less cost of sales, divided into sales) was 40.2
percent; -- Cash flow from operating activities was $5.2 million;
-- Net debt outstanding was $129.6 million at December 31, 2009
(2.0x leverage ratio); -- Entered orders were $138.4 million,
(book-to-bill ratio of 1.23x); and -- Backlog increased $25.7
million (9 percent) to an all-time high of $325.1 million.
Chairman's Commentary Vic Richey, Chairman and Chief Executive
Officer, commented, "I am pleased with our first quarter results,
as we beat our original profit, cash flow and order expectations.
We anticipated net earnings and EPS at break-even, but as a result
of solid execution on several fronts, particularly within the
Utility Solutions Group and Filtration segments, we exceeded our
EBIT goals by nearly $2 million, with Doble being the biggest
contributor. "The most important highlight of the quarter was the
strength of entered orders and the resulting record high backlog.
Strong order activity was realized across all three operating
segments, which reinforces that we are taking the appropriate
actions when it comes to investing in new products, enhancing
existing products and servicing our customers with innovative
solutions. "We made meaningful progress toward meeting our annual
operating goals by capturing several large water AMI projects, as
well as booking $26 million of initial AMI deployment orders with
two significant international customers in Latin America. We
continue to be enthused with our business prospects in Central and
South America, and, as these international projects begin to deploy
Aclara products, we expect they will be significant contributors to
our multi-year growth outlook. "While the government's Stimulus
Program continues to cause delays of some expected orders and
sales, we remain confident that once the money is distributed to
the utilities we will benefit from this program over the balance of
the year and well into the future. "I am confident that given our
new products, the strength and size of our domestic and
international business prospects and acquisition opportunities, we
are well-positioned for the future." Entered Orders Entered orders
in the 2010 first quarter were $138.4 million, resulting in a
book-to-bill ratio of 123 percent of sales. First Quarter Order /
Contract Highlights: -- Aclara RF AMI gas product orders with
PG&E were $7.4 million during the first quarter, bringing total
PG&E gas project orders to 3.7 million units and $207 million.
-- Aclara PLS AMI orders were $38.4 million, including
approximately $26 million of international business in Mexico and
Colombia. -- Test segment orders were $37.1 million, including
several large chamber orders. Significant Contracts / Orders
Received Subsequent to December 31: -- Aclara RF AMI water contract
signed with San Francisco Public Utilities Commission in November
2009, with a $13 million purchase order received in January 2010.
-- Aclara RF AMI water contract with Toho Water Authority in
Florida with orders under the contract expected to total $9
million. -- Aclara RF AMI water contract with City of Toronto with
orders under the contract expected to total $34 million. -- Aclara
RF AMI water orders for the New York City Water project worth $17.3
million. -- Test segment order for two large shielded enclosures
worth over $14 million. Business Outlook 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. Dividend Payment The next quarterly cash dividend of
$0.08 per share will be paid on April 20 to stockholders of record
on April 5. FY 2010 Management's expectations for fiscal year 2010
remain consistent with the Business Outlook discussions noted in
the Company's Earnings Release dated November 12, 2009. As noted
earlier, Management decided to defer providing specific 2010
guidance due to the significant size and uncertain timing of the
numerous projects in which the Company is currently engaged.
Combined with the impact of the global economic recovery,
Management believes the specific financial impact and timing of
these large projects will be more quantifiable in the future, and
therefore believes it is prudent to defer providing specific EPS
guidance at this time. Chairman's Commentary - Wrap-Up Mr. Richey
concluded, "We continue to have a sizeable amount of specific,
identifiable growth opportunities that should develop into orders
and sales in varying degrees throughout fiscal 2010. I expect 2010
to be a year of significant activity as many of these projects
materialize and firmly set us up for meaningful growth in sales and
earnings over the next few years. I remain very optimistic about
our current business prospects, both domestically and
internationally. Our commitment remains the same, to achieve our
long-term goal of increasing shareholder value." Conference Call
The Company will host a conference call today, February 4, at 4
p.m. Central Time, to discuss the Company's first quarter fiscal
2010 operating results. A live audio webcast will be available on
the Company's web site at http://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 8614240). Forward-Looking Statements
Statements in this press release regarding the likelihood, timing
and size of potential international and domestic opportunities,
projects and contracts which the Company may receive or participate
in, expected total orders to be received under significant Company
contracts and orders described herein, the likelihood and timing of
benefits resulting from the government's Stimulus Program, amounts
and timing of fiscal 2010 future revenues, earnings, sales growth,
orders, growth, the success in capturing international AMI
opportunities, the global economic recovery, the Company's ability
to complete acquisitions, success of new products and technologies,
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, 2009; the effect of the
American Recovery and Reinvestment Act of 2009; the success of the
Company's competitors; changes in Federal or State energy laws; the
timing and content of purchase order releases under the Company's
Gas AMI contract with PG&E; the Company's successful
performance of its AMI contracts; site readiness issues with Test
segment customers; weakening of economic conditions in served
markets; the availability and pricing of acquisition targets,
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 of
customer 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; and the Company's successful execution
of internal operating plans. 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
http://www.escotechnologies.com/. ESCO TECHNOLOGIES INC. AND
SUBSIDIARIES Condensed Consolidated Statements of Operations
(Unaudited) (Dollars in thousands, except per share amounts) Three
Months Three Months Ended Ended December 31, December 31, 2009 2008
---- ---- Net Sales $112,705 147,357 Cost and Expenses: Cost of
sales 67,436 92,616 SG&A 39,208 39,280 Amortization of
intangible assets 2,884 4,603 Interest expense 1,482 2,618 Other
expenses (income), net 1,023 (112) ----- ---- Total costs and
expenses 112,033 139,005 ------- ------- Earnings before income
taxes 672 8,352 Income taxes 236 2,512 --- ----- Net earnings from
continuing operations 436 5,840 Loss from discontinued operations,
net of tax benefit of $11 - (20) --- --- Net earnings $436 5,820
==== ===== Earnings per share: Basic Continuing operations 0.02
0.22 Discontinued operations - - --- --- Net earnings $0.02 0.22
===== ==== Diluted Continuing operations 0.02 0.22 Discontinued
operations - - --- --- Net earnings $0.02 0.22 ===== ==== Average
common shares O/S: Basic 26,423 26,108 ====== ====== Diluted 26,709
26,422 ====== ====== ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited) (Dollars in
thousands) Three Months Ended December 31,
---------------------------- 2009 2008 ---- ---- Net Sales
---------- Utility Solutions Group $61,224 88,201 Test 26,986
35,489 Filtration 24,495 23,667 ------ ------ Totals $112,705
147,357 ======== ======= EBIT ---- Utility Solutions Group $4,570
10,555 Test 700 3,234 Filtration 2,358 2,863 Corporate (5,474) (1)
(5,682) (1) ------ ------ Consolidated EBIT 2,154 10,970 Less:
Interest expense (1,482) (2,618) ------ ------ Earnings before
income taxes $672 8,352 ==== ===== Note: Depreciation and
amortization expense was $5.6 million and $7.4 million for the
quarters ended December 31, 2009 and 2008, respectively. (1)
Includes $1.2 million of amortization of acquired intangible
assets. ESCO TECHNOLOGIES INC. AND SUBSIDIARIES Condensed
Consolidated Balance Sheets (Unaudited) (Dollars in thousands)
December September 31, 30, 2009 2009 ---- ---- Assets ------ Cash
and cash equivalents $35,353 44,630 Accounts receivable, net 83,963
108,620 Costs and estimated earnings on long-term contracts 7,980
10,758 Inventories 88,477 82,020 Current portion of deferred tax
assets 22,021 20,417 Other current assets 13,294 13,750 ------
------ Total current assets 251,088 280,195 Property, plant and
equipment, net 70,535 69,543 Goodwill 330,670 330,719 Intangible
assets, net 219,953 221,600 Other assets 22,011 21,630 ------
------ $894,257 923,687 ======== ======= Liabilities and
Shareholders' Equity ----------------------------- Current
maturities of long-term debt $50,000 50,000 Accounts payable 30,318
47,218 Current portion of deferred revenue 21,548 20,215 Other
current liabilities 40,293 46,552 ------ ------ Total current
liabilities 142,159 163,985 Deferred tax liabilities 78,857 78,471
Other liabilities 33,490 33,424 Long-term debt 120,423 130,467
Shareholders' equity 519,328 517,340 ------- ------- $894,257
923,687 ======== ======= ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands) Three Months Ended December 31, 2009 ---------------
Cash flows from operating activities: Net earnings $436 Adjustments
to reconcile net earnings to net cash provided by operating
activities: Depreciation and amortization 5,564 Stock compensation
expense 1,031 Changes in current assets and liabilities (958)
Effect of deferred taxes (1,218) Change in deferred revenue and
costs, net 598 Other (251) ---- Net cash provided by operating
activities 5,202 Cash flows from investing activities: Additions to
capitalized software (1,381) Capital expenditures (3,715) ------
Net cash used by investing activities (5,096) Cash flows from
financing activities: Principal payments on long-term debt (10,044)
Proceeds from exercise of stock options 279 Other 601 --- Net cash
used by financing activities (9,164) ------ Effect of exchange rate
changes on cash and cash equivalents (219) ---- Net decrease in
cash and cash equivalents (9,277) Cash and cash equivalents,
beginning of period 44,630 ------ Cash and cash equivalents, end of
period $35,353 ======= ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited) (Dollars in thousands)
Backlog And Entered Orders -Q1 Utility FY 2010 Solutions Test
Filtration Total ----------- ---------- ---- ---------- -----
Beginning Backlog - 9/30/09 $132,376 54,240 112,755 299,371 Entered
Orders 74,312 37,071 27,035 138,418 Sales (61,224) (26,986)
(24,495) (112,705) ------- ------- ------- -------- Ending Backlog
- 12/31/09 $145,464 64,325 115,295 325,084 ======== ====== =======
======= DATASOURCE: ESCO Technologies Inc. CONTACT: Patricia K.
Moore, Director, Investor Relations, +1-314-213-7277, or media,
David P. Garino, +1-314-982-0551, both of ESCO Technologies Inc.
Web Site: http://www.escotechnologies.com/
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