ESCO Technologies Inc. reported significant financial growth in its first quarter of fiscal 2026, with net sales reaching $289.7 million, a 35% increase from $214.6 million in the same period last year. The company’s net earnings also rose to $28.7 million, or $1.11 per diluted share, compared to $20.3 million, or $0.79 per diluted share, in the first quarter of fiscal 2025. This growth was primarily driven by a substantial increase in the Aerospace & Defense (A&D) segment, which saw sales rise by $61.9 million, largely attributed to increased navy and aerospace revenues, including contributions from the Maritime acquisition.
In terms of operational metrics, ESCO's backlog increased to $1.4 billion as of December 31, 2025, up from $1.1 billion at the end of the previous fiscal year. The company secured new orders totaling $557.2 million during the quarter, significantly higher than the $229.2 million in new orders received in the first quarter of fiscal 2025. The A&D segment accounted for the majority of these new orders, totaling $382.3 million, while the Utility Solutions Group (USG) and Test segments contributed $98.8 million and $76.1 million, respectively.
The company also made strategic moves during the quarter, including the finalization of a $5 million working capital settlement related to the Maritime acquisition. This acquisition is expected to enhance ESCO's capabilities in the defense sector. Additionally, the company reported an increase in selling, general, and administrative (SG&A) expenses to $61.2 million, primarily due to costs associated with the Maritime acquisition. However, SG&A as a percentage of net sales decreased, indicating improved operational efficiency.
Financially, ESCO's total assets decreased slightly to $2.4 billion from $2.41 billion at the end of the previous fiscal year, while total liabilities also fell to $838.1 million from $869.5 million. The company maintained a strong liquidity position, with approximately $469 million available under its credit facility and $103.8 million in cash. The effective income tax rate from continuing operations improved to 19.1% from 21.3% in the prior year, benefiting from additional tax deductions related to share-based compensation.
Looking ahead, ESCO Technologies remains optimistic about its growth trajectory, bolstered by a strong backlog and strategic acquisitions. The company anticipates continued revenue growth driven by demand in the A&D sector and expects to leverage its enhanced capabilities from recent acquisitions to capture additional market share. The management's outlook reflects confidence in navigating market conditions and capitalizing on opportunities in the coming quarters.
About ESCO TECHNOLOGIES INC
ESCO Technologies Inc. is a diversified provider of engineered filtration, fluid control, RF shielding, and diagnostic products serving aerospace, defense, utility, and industrial markets worldwide. Its core segments include Aerospace & Defense, Utility Solutions, and RF Test & Measurement, offering specialized systems, components, and services. The company focuses on innovation, intellectual property, and strategic acquisitions to deliver high-margin, high-growth solutions to government and commercial customers globally.
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