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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1.
|
The voting for directors was as follows:
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Nominee
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For
|
Withheld
|
Broker Non-Votes
|
|||||
Gary E. Muenster
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19,349,314
|
3,788,241
|
1,066,090
|
|||||
Donald C. Trauscht
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22,552,019
|
585,535
|
1,066,090
|
|
2.
|
The voting to ratify the Registrant’s appointment of KPMG LLP as the Registrant’s independent registered public accounting firm for the fiscal year ending September 30, 2015 was as follows:
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For
|
Against
|
Abstain
|
||||
23,854,643
|
339,002
|
9,999
|
|
3.
|
The advisory vote on the resolution to approve the compensation of the Registrant’s executive officers was as follows:
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For
|
Against
|
Abstain
|
Broker Non-Votes
|
|||||
22,054,460
|
1,064,636
|
18,458
|
1,066,090
|
|
4.
|
The vote on the shareholder proposal relating to sustainability reporting was as follows:
|
For
|
Against
|
Abstain
|
Broker Non-Votes
|
|||||
5,655,412
|
14,525,299
|
2,956,844
|
1,066,090
|
|
Gary E. Muenster
|
|
Executive Vice President
|
|
and Chief Financial Officer
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·
|
Q1 2015 sales decreased $4 million, or 3 percent to $120 million compared to $124 million in Q1 2014. Utility Solutions Group (USG, or Doble) sales increased $4 million (14 percent), Filtration sales decreased $8 million (14 percent), and Test sales were consistent in both periods;
|
·
|
Q1 2015 gross margin increased to 41.6 percent compared to 40.3 percent in Q1 2014, driven by the significant increase in Doble sales which included new international customers, new hardware and software applications including DobleARMS®, and additional services;
|
·
|
The effective tax rate in Q1 2015 was 26.7 percent compared to 35.7 percent in Q1 2014. The Q1 2015 rate was favorably impacted by the December 2014 extension of the research credit which provided a $0.9 million cumulative tax benefit reducing the tax rate by 6.4 percentage points;
|
·
|
The Q1 2015 projected tax rate was 35 percent compared to the 26.7 percent reported. The better than expected tax rate generated approximately $0.05 of EPS in Q1 2015;
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·
|
Q1 2015 Orders were $152 million (book-to-bill of 1.26x) resulting in an order backlog of $335 million at December 31, 2014, reflecting a $32 million, or 10 percent increase during the quarter;
|
·
|
Test orders were a record $60 million (book-to-bill of 1.53x) and included a $10 million automotive chamber in China. Filtration orders were $64 million (book-to-bill of 1.35x) and included additional orders from KAZ, and significant aerospace and Space orders. Doble’s orders were $28 million (book-to-bill of 0.83x) consistent with its historical quarterly profile;
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·
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Net debt at December 31, 2014 was $21 million ($39 million of cash and $60 million of borrowings);
|
·
|
During Q1 2015, the Company returned $8.5 million to shareholders through dividends ($2.1 million) and share repurchases ($6.4 million, and 183,000 shares).
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·
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Increased EBIT contributions from Filtration and Test;
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·
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Lower EBIT from Doble as its Q1 performance was exceptional, which is expected to normalize its 6 month YTD EBIT margin;
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·
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Higher Corporate costs reflecting additional professional fees incurred in support of specific acquisition activities, including the ENOSERV transaction; and,
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·
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A higher effective tax rate that is more comparable to the expected annual tax rate of 34 percent.
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ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||
Condensed Consolidated Statements of Operations (Unaudited)
|
||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||
|
||||||||||
Three Months
Ended
December 31,
2014
|
Three Months
Ended
December 31,
2013
|
|||||||||
Net Sales
|
$ | 120,547 | 124,450 |
Cost and Expenses:
|
||||||||||
Cost of sales
|
70,420 | 74,281 | ||||||||
Selling, general and administrative expenses
|
33,504 | 33,872 | ||||||||
Amortization of intangible assets
|
1,873 | 1,686 | ||||||||
Interest expense
|
195 | 692 | ||||||||
Other (income) expenses, net
|
(221 | ) | 179 | |||||||
Total costs and expenses
|
105,771 | 110,710 | ||||||||
Earnings before income taxes
|
14,776 | 13,740 | ||||||||
Income taxes
|
3,948 | 4,908 | ||||||||
Net earnings from continuing operations
|
10,828 | 8,832 | ||||||||
Earnings from discontinued operations, net of tax
|
||||||||||
expense of $1,306
|
0 | 2,357 | ||||||||
Net earnings
|
$ | 10,828 | 11,189 | |||||||
Earnings per share:
|
||||||||||
Diluted - GAAP
|
||||||||||
Continuing operations
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0.41 | 0.33 | ||||||||
Discontinued operations
|
0.00 | 0.09 | ||||||||
Net earnings
|
$ | 0.41 | 0.42 | |||||||
Diluted - As Adjusted Basis
|
||||||||||
Continuing operations
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$ | 0.41 | 0.34 |
(1)
|
||||||
Average common shares O/S:
|
||||||||||
Diluted
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26,386 | 26,738 | ||||||||
(1)
|
Adjusted basis includes $0.2 million (or $0.01 per share) of add back adjustments
|
|||||||||
for restructuring charges incurred at Crissair during the first quarter of fiscal 2014.
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||||
Condensed Business Segment Information (Unaudited)
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||
|
||||||||||||||
Three Months
Ended
December 31,
GAAP
|
Adjustments
|
Three Months
Ended
December 31,
As Adjusted
|
||||||||||||
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
|||||||||
Net Sales
|
Filtration
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$
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47,511
|
55,478
|
47,511
|
55,478
|
|||||||||
Test
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39,421
|
39,477
|
39,421
|
39,477
|
||||||||||
Utility Solutions Group
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33,615
|
29,495
|
33,615
|
29,495
|
||||||||||
Totals
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$
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120,547
|
124,450
|
0
|
0
|
120,547
|
124,450
|
|||||||
EBIT
|
||||||||||||||
Filtration
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$
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7,076
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9,484
|
201
|
(1)
|
7,076
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9,685
|
|||||||
Test
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3,795
|
3,575
|
3,795
|
3,575
|
||||||||||
Utility Solutions Group
|
9,977
|
7,647
|
9,977
|
7,647
|
||||||||||
Corporate
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(5,877)
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(6,274)
|
(5,877)
|
(6,274)
|
||||||||||
Consolidated EBIT
|
14,971
|
14,432
|
0
|
201
|
14,971
|
14,633
|
||||||||
Less: Interest expense
|
(195)
|
(692)
|
(195)
|
(692)
|
||||||||||
Less: Income tax expense
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(3,948)
|
(4,908)
|
(3,948)
|
(4,908)
|
||||||||||
Net earnings from
|
||||||||||||||
Continuing Operations
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$
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10,828
|
8,832
|
0
|
201
|
10,828
|
9,033
|
|||||||
Note:
|
The above table is presented on a continuing operations basis.
|
|||||||||||||
Note:
|
Depreciation and amortization expense was $4.3 million and $4.0 million for the quarters ended December 31, 2014 and 2013, respectively.
|
|||||||||||||
(1)
|
Includes $0.2 million (or $0.01 per share) of restructuring charges at Crissair during the first quarter of fiscal 2014.
|
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||
Condensed Consolidated Balance Sheets (Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
|
||||||||
December 31,
2014
|
September 30,
2014
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 38,609 | 35,131 | |||||
Accounts receivable, net
|
87,478 | 105,449 | ||||||
Costs and estimated earnings on
|
||||||||
long-term contracts
|
24,983 | 27,798 | ||||||
Inventories
|
101,015 | 94,292 | ||||||
Current portion of deferred tax assets
|
19,217 | 19,946 | ||||||
Other current assets
|
12,209 | 13,337 | ||||||
Total current assets
|
283,511 | 295,953 | ||||||
Property, plant and equipment, net
|
76,235 | 76,465 | ||||||
Intangible assets, net
|
182,994 | 182,063 | ||||||
Goodwill
|
281,778 | 282,337 | ||||||
Other assets
|
9,195 | 9,088 | ||||||
$ | 833,713 | 845,906 | ||||||
Liabilities and Shareholders' Equity
|
||||||||
Current maturities of long-term debt
|
$ | 20,000 | 20,000 | |||||
Accounts payable
|
23,765 | 40,328 | ||||||
Current portion of deferred revenue
|
17,703 | 19,895 | ||||||
Other current liabilities
|
52,484 | 66,877 | ||||||
Total current liabilities
|
113,952 | 147,100 | ||||||
Deferred tax liabilities
|
77,335 | 77,440 | ||||||
Other liabilities
|
20,704 | 21,195 | ||||||
Long-term debt
|
40,000 | 20,000 | ||||||
Shareholders' equity
|
581,722 | 580,171 | ||||||
$ | 833,713 | 845,906 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||
Consolidated Statements of Cash Flows (Unaudited)
|
||||
(Dollars in thousands)
|
||||
|
||||
Three Months
Ended
December 31,
2014
|
||||
Cash flows from operating activities:
|
||||
Net earnings
|
$ | 10,828 | ||
Adjustments to reconcile net earnings
|
||||
to net cash used by operating activities:
|
||||
Depreciation and amortization
|
4,282 | |||
Stock compensation expense
|
1,255 | |||
Changes in current assets and liabilities
|
(15,154 | ) | ||
Change in deferred revenue and costs, net
|
(2,803 | ) | ||
Other
|
1,194 | |||
Net cash used by operating activities
|
(398 | ) | ||
Cash flows from investing activities:
|
||||
Capital expenditures
|
(3,532 | ) | ||
Additions to capitalized software
|
(1,615 | ) | ||
Net cash used by investing activities
|
(5,147 | ) | ||
Cash flows from financing activities:
|
||||
Proceeds from long-term debt
|
45,000 | |||
Principal payments on long-term debt
|
(25,000 | ) | ||
Dividends paid
|
(2,105 | ) | ||
Purchases of common stock into treasury
|
(6,363 | ) | ||
Other
|
(46 | ) | ||
Net cash provided by financing activities
|
11,486 | |||
Effect of exchange rate changes on cash and cash equivalents
|
(2,463 | ) | ||
Net increase in cash and cash equivalents
|
3,478 | |||
Cash and cash equivalents, beginning of period
|
35,131 | |||
Cash and cash equivalents, end of period
|
$ | 38,609 |
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||||||
Other Selected Financial Data (Unaudited)
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
|
||||||||||||||||
Backlog And Entered Orders - Q1 FY 2015
|
USG
|
Test
|
Filtration
|
Total
|
||||||||||||
Beginning Backlog - 10/1/14
|
$ | 33,093 | 90,739 | 179,063 | 302,895 | |||||||||||
Entered Orders
|
27,790 | 60,372 | 64,069 | 152,231 | ||||||||||||
Sales
|
(33,615 | ) | (39,421 | ) | (47,511 | ) | (120,547 | ) | ||||||||
Ending Backlog - 12/31/14
|
$ | 27,268 | 111,690 | 195,621 | 334,579 |
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