ESCO Technologies Reports 13.2% Revenue Growth in Q1 Fiscal 2025

ESCO Technologies Inc. reported a significant increase in financial performance for the first quarter of fiscal 2025, ending December 31, 2024. The company achieved net sales of $247.0 million, a 13.2% increase from $218.3 million in the same period last year. Net earnings also rose to $23.5 million, or $0.91 per diluted share, compared to $15.2 million, or $0.59 per diluted share, in the prior year. This growth was primarily driven by increased sales across all three business segments: Aerospace & Defense (A&D), Utility Solutions Group (USG), and RF Test & Measurement (Test).

The A&D segment saw the most substantial growth, with net sales rising 20.7% to $114.3 million, attributed to higher aerospace shipments and increased navy sales. The USG segment reported a 4.5% increase in sales to $86.7 million, driven by higher sales of diagnostic testing products, although this was partially offset by a decline in renewable energy sales. The Test segment also experienced a 13.5% increase in sales, reaching $46.1 million, due to higher sales from both European and U.S. operations. Overall, the company’s consolidated EBIT improved to $32.2 million, up from $22.1 million in the previous year.

In terms of operational metrics, ESCO Technologies reported a backlog of $906.9 million as of December 31, 2024, an increase from $879.0 million at the end of the previous fiscal year. The company received new orders totaling $275.0 million during the quarter, with significant contributions from the A&D segment. The company’s selling, general, and administrative expenses increased to $58.8 million, reflecting higher sales-related costs and inflationary pressures. Additionally, the company’s effective income tax rate decreased slightly to 21.6% from 22.0% in the prior year.

On the balance sheet, total assets decreased to $1.8 billion from $1.8 billion at the end of the previous fiscal year, primarily due to a reduction in accounts receivable and goodwill. The company’s cash and cash equivalents increased to $71.3 million, while total liabilities decreased to $558.1 million. ESCO Technologies also announced plans for the acquisition of Ultra Electronics Holdings Limited’s Signature Management & Power business for approximately $550 million, which is expected to close in the second or early third quarter of fiscal 2025.

Looking ahead, ESCO Technologies remains optimistic about its growth trajectory, supported by a strong backlog and ongoing demand across its segments. The company anticipates that its financial position and liquidity will continue to be robust, with sufficient cash flow from operations and available credit to meet its capital requirements. The management's forward-looking statements indicate confidence in navigating market conditions and leveraging strategic acquisitions to enhance its operational capabilities.