Espey Mfg. Reports 32.1% Revenue Growth and Increased Net Income in Latest Quarter

Espey Mfg. & Electronics Corp. reported significant financial performance improvements in its latest quarterly filing, with net sales for the three months ending December 31, 2024, reaching $13.6 million, a 32.1% increase from $10.3 million in the same period last year. For the six-month period, sales rose by 27.5% to $24.1 million compared to $18.9 million in the prior year. The company's gross profit for the quarter was approximately $3.2 million, yielding a gross margin of 23.2%, down from 30.5% in the previous year. Despite the increase in sales, the gross margin percentage decreased due to a shift in product mix and higher costs associated with restarting production lines.

The company’s net income for the three months ended December 31, 2024, was $1.9 million, or $0.74 per share, compared to $1.8 million, or $0.73 per share, in the same quarter of 2023. For the six-month period, net income increased to $3.5 million, or $1.37 per share, from $2.9 million, or $1.17 per share, in the prior year. The increase in net income was attributed to higher gross profits and increased interest income, despite rising selling, general, and administrative expenses.

Operationally, Espey reported a backlog of approximately $120.1 million as of December 31, 2024, down from $84.8 million a year earlier. This backlog includes significant contracts with three major customers, totaling $78.3 million. The company has also seen a notable increase in new orders, with approximately $46.9 million received in the first half of fiscal year 2025, compared to $20.1 million in the same period of the previous year. This includes a substantial $29.5 million contract for electric power distribution panels for the U.S. Navy's Columbia class submarines.

In terms of strategic developments, Espey has been awarded funding for facility and capital equipment upgrades, totaling $7.4 million, aimed at enhancing its capabilities for U.S. Navy contracts. The company also received an additional $3.4 million in December 2024 for similar upgrades, which are expected to be in effect through 2026. The company’s employee headcount remains stable, and it continues to monitor labor requirements closely to support its sales backlog.

Looking ahead, Espey anticipates that revenues for fiscal year 2025 will exceed those of fiscal year 2024, although net income per share is expected to be lower than in the previous fiscal year due to higher anticipated costs associated with the product mix. The company remains focused on converting its engineering program backlog into sales while navigating challenges such as inflationary pressures and potential supply chain disruptions.