Missouri
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1-10596
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43-1554045
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(State or Other
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(Commission
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(I.R.S. Employer
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Jurisdiction of Incorporation)
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File Number)
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Identification No.)
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9900A Clayton Road, St. Louis, Missouri
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63124-1186
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(Address of Principal Executive Offices)
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(Zip Code)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.113d-4 (c))
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G.E. Muenster
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Executive Vice President
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and Chief Financial Officer
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For more information contact: | For media inquiries: | |
Kate Lowrey | David P. Garino | |
Director, Investor Relations | (314) 982-0551 | |
ESCO Technologies Inc. | ||
(314) 213-7277 |
·
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Q2 2013 EPS “As Adjusted” was $0.28 per share, with GAAP EPS of $0.06 per share compared to $0.38 in Q2 2012;
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·
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During Q2 2013, the Company recorded an additional $12 million in orders from Southern California Gas Company (SoCalGas), resulting in program-to-date orders of $151 million through March 31, 2013;
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·
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Consolidated orders were $175 million in Q2 2013, resulting in a book-to-bill ratio of 1.05x, and firm backlog of $465 million at March 31, 2013. Backlog increased $58 million, or 14 percent, since September 30, 2012;
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·
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Segment book-to-bill ratios for Q2 and YTD 2013 were: Utility Solutions Group (USG) 1.10x and 1.29x, Filtration 0.97x and 1.09x, and Test 1.08x and 1.13x;
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·
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Consolidated Q2 2013 sales were $166 million compared to $174 million in Q2 2012, with Filtration increasing $5 million (10 percent), while USG decreased $2 million due to a lower volume of power-line sales partially offset by higher RF product sales, and Test was $11 million lower due to the timing of major projects within the comparable periods;
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·
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Q2 2013 cost of sales includes the $5.0 million inventory write-off noted above;
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·
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SG&A decreased to $46 million in Q2 2013 from $48 million in Q2 2012 primarily due to lower costs in all three operating segments as several cost savings initiatives were realized; and,
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·
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The 56 percent effective tax rate in Q2 2013 is the result of the previously announced write-off of the Doble-Lemke deferred tax asset ($1.8 million) resulting from the closure of its German facility.
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ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
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||||||||
Condensed Consolidated Statements of Operations (Unaudited)
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||||||||
(Dollars in thousands, except per share amounts)
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||||||||
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||||||||
Three Months
Ended
March 31, 2013
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Three Months
Ended
March 31, 2012
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|||||||
Net Sales
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$ | 166,178 | 173,863 | |||||
Cost and Expenses:
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||||||||
Cost of sales
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110,681 | 105,967 | ||||||
Selling, general and administrative expenses
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45,751 | 47,944 | ||||||
Amortization of intangible assets
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4,203 | 3,254 | ||||||
Interest expense
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668 | 470 | ||||||
Other (income) expenses, net
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1,330 | (376 | ) | |||||
Total costs and expenses
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162,633 | 157,259 | ||||||
Earnings before income taxes
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3,545 | 16,604 | ||||||
Income taxes
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1,986 | 6,402 | ||||||
Net earnings
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$ | 1,559 | 10,202 | |||||
Earnings per share:
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||||||||
Basic
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||||||||
Net earnings
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$ | 0.06 | 0.38 | |||||
Diluted
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||||||||
Net earnings
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$ | 0.06 | 0.38 | |||||
Average common shares O/S:
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||||||||
Basic
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26,417 | 26,706 | ||||||
Diluted
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26,745 | 26,985 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
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||||||||
Condensed Consolidated Statements of Operations (Unaudited)
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(Dollars in thousands, except per share amounts)
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||||||||
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||||||||
Six Months
Ended
March 31, 2013
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Six Months
Ended
March 31, 2012
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|||||||
Net Sales
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$ | 311,443 | 326,788 | |||||
Cost and Expenses:
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||||||||
Cost of sales
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204,719 | 198,688 | ||||||
Selling, general and administrative expenses
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92,690 | 96,634 | ||||||
Amortization of intangible assets
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7,703 | 6,407 | ||||||
Interest expense
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1,231 | 961 | ||||||
Other (income) expenses, net
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1,258 | (848 | ) | |||||
Total costs and expenses
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307,601 | 301,842 | ||||||
Earnings before income taxes
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3,842 | 24,946 | ||||||
Income taxes
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2,037 | 9,537 | ||||||
Net earnings
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$ | 1,805 | 15,409 | |||||
Earnings per share:
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||||||||
Basic
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||||||||
Net earnings
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$ | 0.07 | 0.58 | |||||
Diluted
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||||||||
Net earnings
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$ | 0.07 | 0.57 | |||||
Average common shares O/S:
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||||||||
Basic
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26,460 | 26,689 | ||||||
Diluted
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26,763 | 26,940 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
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|||||||||||||||||||||||||||||||||
Condensed Business Segment Information (Unaudited)
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(Dollars in thousands)
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|||||||||||||||||||||||||||||||||
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Three Months Ended
March 31,
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Six Months Ended
March 31,
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||||||||||||||||||||||||||||||||
2013
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2012
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2013
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2012
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||||||||||||||||||||||||||||||
Net Sales
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Utility Solutions Group
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$ | 72,731 | 74,475 | 135,349 | 144,824 | ||||||||||||||||||||||||||||
Test
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39,821 | 50,483 | 76,116 | 89,837 | |||||||||||||||||||||||||||||
Filtration
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53,626 | 48,905 | 99,978 | 92,127 | |||||||||||||||||||||||||||||
Totals
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$ | 166,178 | 173,863 | 311,443 | 326,788 | ||||||||||||||||||||||||||||
EBIT
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Utility Solutions Group
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$ | (2,423 | ) | 9,101 | (4,631 | ) | 14,067 | ||||||||||||||||||||||||||
Test
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2,559 | 4,775 | 3,078 | 6,722 | |||||||||||||||||||||||||||||
Filtration
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10,894 | 9,468 | 19,695 | 17,704 | |||||||||||||||||||||||||||||
Corporate
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(6,817 | ) | (1) | (6,270 | ) | (1) | (13,069 | ) | (2) | (12,586 | ) | (3) | |||||||||||||||||||||
Consolidated EBIT
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4,213 | 17,074 | 5,073 | 25,907 | |||||||||||||||||||||||||||||
Less: Interest expense
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(668 | ) | (470 | ) | (1,231 | ) | (961 | ) | |||||||||||||||||||||||||
Earnings before income taxes
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$ | 3,545 | 16,604 | 3,842 | 24,946 |
Note:
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Depreciation and amortization expense was $7.3 million and $6.3 million for the quarters
ended March 31, 2013 and 2012, respectively, and $13.8 million and $12.3 million for the
six-month periods ended March 31, 2013 and 2012, respectively.
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||||||||||||||||||||||||||||||||
(1)
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Includes $1.1 million of amortization of acquired intangible assets.
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(2)
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Includes $2.0 million of amortization of acquired intangible assets.
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(3)
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Includes $2.3 million of amortization of acquired intangible assets.
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ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
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||||||||
Condensed Consolidated Balance Sheets (Unaudited)
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||||||||
(Dollars in thousands)
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||||||||
|
||||||||
March 31,
2013
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September 30,
2012
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|||||||
Assets
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||||||||
Cash and cash equivalents
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$ | 35,880 | 30,215 | |||||
Accounts receivable, net
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141,154 | 151,051 | ||||||
Costs and estimated earnings on
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||||||||
long-term contracts
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15,523 | 14,567 | ||||||
Inventories
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117,497 | 108,061 | ||||||
Current portion of deferred tax assets
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22,706 | 22,313 | ||||||
Other current assets
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38,699 | 17,237 | ||||||
Total current assets
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371,459 | 343,444 | ||||||
Property, plant and equipment, net
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80,699 | 75,876 | ||||||
Intangible assets, net
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244,392 | 231,473 | ||||||
Goodwill
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387,630 | 361,280 | ||||||
Other assets
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21,327 | 21,680 | ||||||
$ | 1,105,507 | 1,033,753 | ||||||
Liabilities and Shareholders' Equity
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||||||||
Short-term borrowings and current maturities
|
||||||||
of long-term debt
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$ | 51,698 | 50,000 | |||||
Accounts payable
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50,237 | 54,049 | ||||||
Current portion of deferred revenue
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40,149 | 24,920 | ||||||
Other current liabilities
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67,254 | 75,236 | ||||||
Total current liabilities
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209,338 | 204,205 | ||||||
Deferred tax liabilities
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92,790 | 88,675 | ||||||
Other liabilities
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56,021 | 44,560 | ||||||
Long-term debt
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126,000 | 65,000 | ||||||
Shareholders' equity
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621,358 | 631,313 | ||||||
$ | 1,105,507 | 1,033,753 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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||||
(Dollars in thousands)
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||||
|
||||
Six Months
Ended
March 31, 2013
|
||||
Cash flows from operating activities:
|
||||
Net earnings
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$ | 1,805 | ||
Adjustments to reconcile net earnings
|
||||
to net cash provided by operating activities:
|
||||
Depreciation and amortization
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13,796 | |||
Stock compensation expense
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2,434 | |||
Changes in current assets and liabilities
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(27,470 | ) | ||
Inventory write down
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5,045 | |||
Effect of deferred taxes
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3,722 | |||
Change in deferred revenue and costs, net
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3,811 | |||
Pension contributions
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(1,755 | ) | ||
Other
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676 | |||
Net cash provided by operating activities
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2,064 | |||
Cash flows from investing activities:
|
||||
Acquisition of businesses, net of cash acquired
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(28,247 | ) | ||
Capital expenditures
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(10,117 | ) | ||
Additions to capitalized software
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(7,665 | ) | ||
Net cash used by investing activities
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(46,029 | ) | ||
Cash flows from financing activities:
|
||||
Proceeds from long-term debt
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77,698 | |||
Principal payments on long-term debt
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(15,000 | ) | ||
Dividends paid
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(4,244 | ) | ||
Purchases of common stock into treasury
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(9,703 | ) | ||
Proceeds from exercise of stock options
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1,739 | |||
Other
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(49 | ) | ||
Net cash provided by financing activities
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50,441 | |||
Effect of exchange rate changes on cash and cash equivalents
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(811 | ) | ||
Net increase in cash and cash equivalents
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5,665 | |||
Cash and cash equivalents, beginning of period
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30,215 | |||
Cash and cash equivalents, end of period
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$ | 35,880 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||||||
Other Selected Financial Data (Unaudited)
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(Dollars in thousands)
|
||||||||||||||||
|
||||||||||||||||
Backlog And Entered Orders - Q2 FY 2013
|
Utility
Solutions
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Test
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Filtration
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Total
|
||||||||||||
Beginning Backlog - 1/1/13
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$ | 220,259 | 85,960 | 150,488 | 456,707 | |||||||||||
Entered Orders
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79,736 | 43,084 | 51,826 | 174,646 | ||||||||||||
Sales
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(72,731 | ) | (39,821 | ) | (53,626 | ) | (166,178 | ) | ||||||||
Ending Backlog - 3/31/13
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$ | 227,264 | 89,223 | 148,688 | 465,175 | |||||||||||
Backlog And Entered Orders - YTD Q2 FY 2013
|
Utility
Solutions
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Test
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Filtration
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Total
|
||||||||||||
Beginning Backlog - 10/1/12
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$ | 187,795 | 79,418 | 139,689 | 406,902 | |||||||||||
Entered Orders
|
174,818 | 85,921 | 108,977 | 369,716 | ||||||||||||
Sales
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(135,349 | ) | (76,116 | ) | (99,978 | ) | (311,443 | ) | ||||||||
Ending Backlog - 3/31/13
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$ | 227,264 | 89,223 | 148,688 | 465,175 |