- Q2 Sales increase 7% to $266 Million - Q2 GAAP EPS increases 33% to $1.20 - Q2 Adjusted EPS increases 24% to $1.35 - Q2 Orders increase 22% to $291 Million / Book-to-Bill of 1.10x -

St. Louis, May 07, 2025 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the second quarter ended March 31, 2025 (Q2 2025).

Operating Highlights

Q2 2025 Sales increased $16.4 million (7 percent) to $265.5 million compared to $249.1 million in Q2 2024. Q2 2025 Entered Orders were $290.8 million for a book-to-bill ratio of 1.10x, resulting in record backlog of $932 million. Q2 2025 GAAP EPS increased 33 percent to $1.20 per share compared to $0.90 per share in Q2 2024. Q2 2025 Adjusted EPS increased 24 percent to $1.35 per share compared to $1.09 per share in Q2 2024. Net cash provided by operating activities was $58 million YTD, an increase of $39 million compared to the prior year period.

Bryan Sayler, Chief Executive Officer and President, commented, “Q2 was another strong quarter as we delivered 7 percent top line growth, 250 basis points of Adjusted EBITDA margin expansion, and a 24 percent increase in Adjusted EPS compared to the prior year. All three segments delivered solid revenue growth, highlighted by strength across our Navy, commercial aerospace, utility, and Test end-markets. It was very positive to see orders increase 22 percent over the prior year, with particular strength in both USG and Test.

“As previously announced, we closed the SM&P acquisition on April 25th. Going forward, SM&P will be known as ESCO Maritime Solutions (Maritime). We are happy to welcome the Maritime employees to the ESCO team. Maritime’s signature and power management solutions meaningfully expand our naval product offerings in both the US and UK. We are optimistic about the future of ESCO and are pleased to have Maritime join us as an integral part of that journey.”

Segment Performance

Aerospace & Defense (A&D)

Sales increased $8.7 million (8 percent) to $123.4 million in Q2 2025 from $114.7 million in Q2 2024. The Q2 increase was driven by strength in Navy and aerospace sales. EBIT increased $6.9 million in Q2 2025 to $30.3 million from $23.4 million in Q2 2024. Adjusted EBIT increased $6.7 million in Q2 2025 to $30.3 million (24.6 percent margin) from $23.6 million (20.6 percent margin) in Q2 2024. Margin improvement was driven by price increases and mix, partially offset by inflationary pressures. Entered Orders increased $6 million (5 percent) to $122 million in Q2 2025 compared to $116 million in Q2 2024. Q2 2025 included a $6M order for PTI’s cartridge actuated devices/propellant actuated devices (CAD/PAD) products. The segment book-to-bill was 0.99x in the quarter, resulting in ending backlog of $605 million.

Story Continues

Utility Solutions Group (USG)

Sales increased $3.5 million (4 percent) to $90.8 million in Q2 2025 from $87.3 million in Q2 2024. Doble’s sales increased by $3.5 million (5 percent) driven by a strong quarter for offline and protection testing products and services, partially offset by lower cybersecurity/compliance (DUCe) solutions. NRG sales were flat to the prior year due to moderation in renewable energy projects. EBIT increased $3.2 million in Q2 2025 to $20.8 million from $17.6 million in Q2 2024. Adjusted EBIT increased $3.3 million in Q2 2025 to $20.9 million (23.0 percent margin) from $17.6 million (20.1 percent margin) in Q2 2024. Margin was favorably impacted by leverage on higher volume, price increases and mix, partially offset by inflationary pressures. Entered Orders increased $13 million (17 percent) to $92 million in Q2 2025. Doble orders increased by $11 million (17 percent) on strong offline test equipment and services orders. NRG orders increased by $2 million (15 percent) driven by solar orders in North America and EMEA. The segment book-to-bill was 1.02x in the quarter, resulting in ending backlog of $124 million.

RF Test & Measurement (Test)

Sales increased $4.3 million (9 percent) to $51.4 million in Q2 2025 from $47.1 million in Q2 2024. Sales growth was primarily driven by higher Test and Measurement, industrial shielding, and medical services in the US, along with a strong quarter for MPE filters projects. EBIT increased $0.9 million in Q2 2025 to $6.4 million from $5.5 million in Q2 2024. Adjusted EBIT increased $0.7 million in Q2 2025 to $6.4 million (12.4 percent margin) from $5.7 million (12.2 percent margin) in Q2 2024. Margin was favorably impacted by leverage on higher volume, price increases, and cost reduction efforts, partially offset by unfavorable mix and inflationary pressures. Entered Orders increased $33 million (75 percent) to $77 million in Q2 2025. The increase was primarily driven by a strong quarter for US Test & Measurement, filters, and medical and industrial shielding orders. In addition, orders in China increased $9M in the quarter, primarily related to Test & Measurement projects. The segment book-to-bill was 1.50x in the quarter, resulting in ending backlog of $203 million.

Business Outlook – 2025 

Guidance for Q3 2025 and FY 2025 is being shown both with and without the impact of Maritime to provide insight into our expectations for Maritime’s impact on the remainder of Q3 2025 (approximately 2 months) and FY 2025 (approximately 5 months). The transaction costs and purchase accounting amortization associated with the Maritime acquisition have not yet been finalized and are not included in our current business outlook.

Consistent with our initial FY 2025 guidance, organic sales are expected to grow 6 to 8 percent in FY 2025. Maritime is expected to contribute sales in the range of $90 to $100 million in FY 2025.

Guidance Range ($ Millions) Sales Guidance excluding Maritime  $ 1,090  $ 1,110 Maritime Impact  $ 90  $ 100 Sales Guidance including Maritime  $ 1,180  $ 1,210

In our Q1 2025 earnings release (dated 2/6/2025), FY 2025 Adjusted EPS guidance was increased to $5.55-$5.75. Due to continued market strength and improvement in operational performance, we are raising our full-year guidance by another $0.10 to $5.65 to $5.85 (18 to 23 percent growth over the prior year). Maritime is expected to contribute Adjusted EPS in the range of $0.20 - $0.30 in FY 2025.

Guidance Range Previous FY 2025 Adjusted EPS Guidance  $ 5.55  $ 5.75 Guidance Increase  $ 0.10  $ 0.10 Updated FY'25 Adjusted EPS Guidance excluding Maritime  $ 5.65  $ 5.85 Maritime Impact  $ 0.20  $ 0.30 Updated FY'25 Adjusted EPS Guidance including Maritime  $ 5.85  $ 6.15

Management’s expectation is for Q3 Adjusted EPS without Maritime to be in the range of $1.50 to $1.60 (15 to 22 percent growth over the prior year quarter). Maritime is expected to add Adjusted EPS in the range of $0.08 to $0.12 in Q3 2025.

Guidance Range Q3 2025 Adjusted EPS Guidance excluding Maritime  $ 1.50  $ 1.60 Maritime Impact  $ 0.08  $ 0.12 Q3 2025 Adjusted EPS Guidance including Maritime  $ 1.58  $ 1.72

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on July 17, 2025 to stockholders of record on July 2, 2025.

Conference Call
The Company will host a conference call today, May 7, at 4:00 p.m. Central Time, to discuss the Company’s Q2 2025 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website.

Forward-Looking Statements
Statements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2025, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this presentation, 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, 2024 and the following: the timing and outcome, if any, of the Company’s strategic alternatives review of the VACCO business; the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components or supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses.

Non-GAAP Financial Measures
The financial measures EBIT, Adjusted 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 EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted 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, Adjusted 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.

About ESCO
ESCO Technologies is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products, advanced composites, as well as signature and power management solutions for aviation, Navy, space, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit ESCO’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
March 31,
2025  Three Months
Ended
March 31,
2024   Net Sales   $ 265,519  249,129  Cost and Expenses:  Cost of sales  156,298  152,347  Selling, general and administrative expenses  58,163  55,097  Amortization of intangible assets  7,989  8,572  Interest expense  2,195  3,226  Other expenses (income), net  375  666  Total costs and expenses  225,020  219,908   Earnings before income taxes  40,499  29,221  Income tax expense  9,466  6,002   Net earnings $ 31,033  23,219   Earnings Per Share (EPS)   Diluted - GAAP $ 1.20  0.90   Diluted - As Adjusted Basis $ 1.35 (1 ) 1.09 (2 )  Diluted average common shares O/S:  25,877  25,847   (1 ) Q2 2025 Adjusted EPS excludes $0.15 per share of after-tax charges consisting primarily of acquisition related amortization.  (2 ) Q2 2024 Adjusted EPS excludes $0.19 per share of after-tax charges consisting of: $0.02 of MPE acquisition backlog charges, $0.02 of restructuring charges (primarily severance) within the Test and A&D segments, and $0.15 of acquisition related amortization.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Operations (Unaudited)  (Dollars in thousands, except per share amounts)   Six Months
Ended
March 31, 2025  Six Months
Ended
March 31, 2024   Net Sales  $ 512,545   467,443  Cost and Expenses:  Cost of sales  304,940   286,498  Selling, general and administrative expenses  116,947   109,065  Amortization of intangible assets  15,982   16,440  Interest expense  4,452   5,893  Other expenses (income), net  (216 )  872  Total costs and expenses  442,105   418,768   Earnings before income taxes  70,440   48,675  Income tax expense  15,934   10,287   Net earnings $ 54,506   38,388   Earnings Per Share (EPS)   Diluted - GAAP $ 2.11   1.49   Diluted - As Adjusted Basis $ 2.42  (1 ) 1.85 (2 )  Diluted average common shares O/S:  25,854   25,846   (1 ) YTD Q2 2025 Adjusted EPS excludes $0.31 per share of after-tax charges consisting primarily of $0.01 of restructuring charges within the Test segment and $0.30 of acquisition related amortization.  (2 ) YTD Q2 2024 Adjusted EPS excludes $0.36 per share of after-tax charges consisting of: $0.05 of MPE acquisition backlog and inventory step-up charges and acquisition costs, $0.02 of restructuring charges (primarily severance) within the Test and A&D segments, and $0.29 of acquisition related amortization.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES Condensed Business Segment Information (Unaudited) (Dollars in thousands)  GAAP  As Adjusted  Q2 2025  Q2 2024  Q2 2025  Q2 2024  Net Sales  Aerospace & Defense $ 123,369   114,701   123,369   114,701  USG  90,767   87,309   90,767   87,309  Test  51,383   47,119   51,383   47,119  Totals $ 265,519   249,129   265,519   249,129   EBIT  Aerospace & Defense $ 30,296   23,377   30,298   23,640  USG  20,779   17,575   20,862   17,575  Test  6,369   5,542   6,369   5,745  Corporate  (14,750 )  (14,047 )  (9,648 )  (8,260 )  Consolidated EBIT  42,694   32,447   47,881   38,700  Less: Interest expense  (2,195 )  (3,226 )  (2,195 )  (3,226 )  Less: Income tax expense  (9,466 )  (6,002 )  (10,659 )  (7,440 )  Net earnings $ 31,033   23,219   35,027   28,034   Note 1: Adjusted net earnings of $35.0 million in Q2 2025 exclude $4.0 million (or $0.15 per share) of after-tax charges consisting primarily of acquisition related amortization.  Note 2: Adjusted net earnings of $28.0 million in Q2 2024 exclude $4.8 million (or $0.19 per share) of after-tax charges consisting of: $0.02 of MPE acquisition backlog charges, $0.02 of restructuring charges (primarily severance) within the Test and A&D segments, and $0.15 of acquisition related amortization.  EBITDA Reconciliation to Net earnings:      Q2 2025 -  Q2 2024 -  Q2 2025  Q2 2024  As Adjusted  As Adjusted  Consolidated EBITDA $ 56,668   46,550   56,895   47,174  Less: Depr & Amort  (13,974 )  (14,103 )  (9,014 )  (8,474 )  Consolidated EBIT  42,694   32,447   47,881   38,700  Less: Interest expense  (2,195 )  (3,226 )  (2,195 )  (3,226 )  Less: Income tax expense  (9,466 )  (6,002 )  (10,659 )  (7,440 )  Net earnings $ 31,033   23,219   35,027   28,034

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES Condensed Business Segment Information (Unaudited) (Dollars in thousands)  GAAP  As Adjusted  YTD Q2 2025  YTD Q2 2024  YTD Q2 2025  YTD Q2 2024  Net Sales  Aerospace & Defense $ 237,670   209,434   237,670   209,434  USG  177,427   170,293   177,427   170,293  Test  97,448   87,716   97,448   87,716  Totals $ 512,545   467,443   512,545   467,443   EBIT  Aerospace & Defense $ 51,892   40,040   51,920   40,303  USG  41,269   35,200   41,352   35,320  Test  10,791   7,321   11,256   7,797  Corporate  (29,060 )  (27,993 )  (18,959 )  (16,860 )  Consolidated EBIT  74,892   54,568   85,569   66,560  Less: Interest expense  (4,452 )  (5,893 )  (4,452 )  (5,893 )  Less: Income tax  (15,934 )  (10,287 )  (18,390 )  (13,045 )  Net earnings $ 54,506   38,388   62,727   47,622   Note 1: Adjusted net earnings of $62.7 million in YTD 2025 exclude $8.2 million (or $0.31 per share) of after-tax charges consisting of: $0.01 of restructuring charges within the Test segment and acquisition related costs at Corporate, and $0.30 of acquisition related amortization.  Note 2: Adjusted net earnings of $47.6 million in YTD 2024 exclude $9.2 million (or $0.36 per share) of after-tax charges consisting of: $0.05 of MPE acquisition backlog and inventory step-up charges and acquisition costs, $0.02 of restructuring costs (primarily severance) within the Test and A&D segments, and $0.29 of acquisition related amortization.  EBITDA Reconciliation to Net earnings:      YTD  YTD  YTD  YTD  Q2 2025 -  Q2 2024 -  Q2 2025  Q2 2024  As Adjusted  As Adjusted  Consolidated EBITDA $ 102,673   82,123   103,393   83,582  Less: Depr & Amort  (27,781 )  (27,555 )  (17,824 )  (17,022 )  Consolidated EBIT  74,892   54,568   85,569   66,560  Less: Interest expense  (4,452 )  (5,893 )  (4,452 )  (5,893 )  Less: Income tax expense  (15,934 )  (10,287 )  (18,390 )  (13,045 )  Net earnings $ 54,506   38,388   62,727   47,622

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)  March 31,
2025  September 30,
2024  Assets  Cash and cash equivalents $ 57,397  65,963 Accounts receivable, net  218,123  240,680 Contract assets  125,281  130,534 Inventories  231,200  209,164 Other current assets  28,752  22,308 Total current assets  660,753  668,649 Property, plant and equipment, net  172,081  170,596 Intangible assets, net  394,594  407,602 Goodwill  536,222  539,899 Operating lease assets  38,322  37,744 Other assets  13,690  14,130 $ 1,815,662  1,838,620  Liabilities and Shareholders' Equity  Current maturities of long-term debt $ 20,000  20,000 Accounts payable  81,244  98,371 Contract liabilities  128,114  124,845 Other current liabilities  92,661  106,638 Total current liabilities  322,019  349,854 Deferred tax liabilities  72,580  75,333 Non-current operating lease liabilities  35,948  34,810 Other liabilities  39,787  39,273 Long-term debt  68,000  102,000 Shareholders' equity  1,277,328  1,237,350 $ 1,815,662  1,838,620

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands)  Six Months
Ended
March 31, 2025  Six Months
Ended
March 31, 2024 Cash flows from operating activities:  Net earnings $ 54,506   38,388  Adjustments to reconcile net earnings to net cash  provided by operating activities:  Depreciation and amortization  27,781   27,555  Stock compensation expense  5,323   4,144  Changes in assets and liabilities  (27,207 )  (47,869 ) Effect of deferred taxes  (2,128 )  (2,981 ) Net cash provided by operating activities  58,275   19,237   Cash flows from investing activities:  Acquisition of business, net of cash acquired    (56,179 ) Capital expenditures  (15,350 )  (16,301 ) Additions to capitalized software  (5,465 )  (5,912 ) Net cash used by investing activities  (20,815 )  (78,392 )  Cash flows from financing activities:  Proceeds from long-term debt  66,000   154,000  Principal payments on long-term debt and short-term borrowings  (100,000 )  (65,000 ) Dividends paid  (4,130 )  (4,125 ) Purchases of common stock into treasury    (7,189 ) Other  (6,146 )  (1,432 ) Net cash (used) provided by financing activities  (44,276 )  76,254   Effect of exchange rate changes on cash and cash equivalents  (1,750 )  471   Net (decrease) increase in cash and cash equivalents  (8,566 )  17,570  Cash and cash equivalents, beginning of period  65,963   41,866  Cash and cash equivalents, end of period $ 57,397   59,436

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES Other Selected Financial Data (Unaudited) (Dollars in thousands)  Backlog And Entered Orders - Q2 2025  A&D  USG  Test  Total Beginning Backlog - 1/1/25 $ 606,687   122,857   177,404   906,948  Entered Orders  121,706   92,184   76,950   290,840  Sales   (123,369 )  (90,767 )  (51,383 )  (265,519 ) Ending Backlog - 3/31/25 $ 605,024   124,274   202,971   932,269   Backlog And Entered Orders - YTD Q2 2025  A&D  USG  Test  Total Beginning Backlog - 10/1/24 $ 600,382   119,943   158,644   878,969  Entered Orders  242,312   181,758   141,775   565,845  Sales   (237,670 )  (177,427 )  (97,448 )  (512,545 ) Ending Backlog - 3/31/25 $ 605,024   124,274   202,971   932,269

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES  Reconciliation of Non-GAAP Financial Measures (Unaudited)   EPS – Adjusted Basis Reconciliation – Q2 2025  EPS – GAAP Basis – Q2 2025 $ 1.20  Adjustments (defined below)  0.15  EPS – As Adjusted Basis – Q2 2025 $ 1.35   Adjustments exclude $0.15 per share consisting primarily of acquisition  related amortization.  The $0.15 of EPS adjustments per share consists of $5.2 million of pre-tax  charges offset by $1.2 million of tax benefit for net impact of $4 million.   EPS – Adjusted Basis Reconciliation – Q2 2024  EPS – GAAP Basis – Q2 2024 $ 0.90  Adjustments (defined below)  0.19  EPS – As Adjusted Basis – Q2 2024 $ 1.09   Adjustments exclude $0.19 per share consisting primarily of $0.02 of MPE  acquisition backlog charges, $0.02 of restructuring charges within the Test  and A&D segments, and $0.15 of acquisition related amortization.  The $0.19 of EPS adjustments per share consists of $6.2 million of pre-tax charges  offset by $1.4 million of tax benefit for net impact of $4.8 million.   EPS – Adjusted Basis Reconciliation – YTD Q2 2025  EPS – GAAP Basis – YTD Q2 2025 $ 2.11  Adjustments (defined below)  0.31  EPS – As Adjusted Basis – YTD Q2 2025 $ 2.42   Adjustments exclude $0.31 per share consisting primarily of $0.01 of restructuring  charges within the Test segment and $0.30 of acquisition related amortization.  The $0.31 of EPS adjustments per share consists of $10.7 million of pre-tax charges  offset by $2.5 million of tax benefit for net impact of $8.2 million.   EPS – Adjusted Basis Reconciliation – YTD Q2 2024  EPS – GAAP Basis – YTD Q2 2024 $ 1.49  Adjustments (defined below)  0.36  EPS – As Adjusted Basis – YTD Q2 2024 $ 1.85   Adjustments exclude $0.36 per share consisting primarily of $0.05 of MPE acquisition  backlog charges, inventory step-up charges and acquisition costs, $0.02 of  restructuring charges, and $0.29 of acquisition related amortization.  The $0.36 of EPS adjustments per share consists of $12 million of pre-tax charges  offset by $2.8 million of tax benefit for net impact of $9.2 million.

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

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