Q3 2024 ESCO Technologies Inc Earnings Call Transcript
Key Points
- ESCO Technologies Inc (ESE) reported substantial order growth in the third quarter, with a record backlog of nearly $890 million as of June 30.
- The Aerospace and Defense segment showed strong performance, with a 79% increase in orders, driven by significant growth in Navy orders.
- The Utility Solutions Group experienced a 17% increase in orders, with Doble delivering a 30% increase due to high demand for service work and testing.
- The Test business showed sequential improvements in both sales and margins, with adjusted EBIT margins reaching 16.6% in the quarter.
- ESCO Technologies Inc (ESE) has completed all required regulatory filings for the Signature Management & Power acquisition, expected to close in the first quarter of fiscal 2025.
- The VACCO space business is facing profitability challenges, with potential EBIT erosion estimated between $5 million to $7 million.
- The Test business experienced a decline in sales by 5% on an organic basis, although it showed sequential improvement.
- Adjusted EBIT margins in the Aerospace and Defense segment declined by 220 basis points due to additional margin declines in the VACCO space business.
- The Utility Solutions Group saw a reduction in orders for NRG compared to last year's record third quarter.
- ESCO Technologies Inc (ESE) has not yet secured larger Navy orders that were anticipated, indicating potential delays in expected revenue.
Good day and thank you for standing by. Welcome to the third quarter 2024 ESCO Technologies earnings call. (Operator Instructions) Please be advised that today's conference is recorded.
On the call today, we have Bryan Saler, President and CEO; Chris Tucker, Senior Vice President and CFO. And now I'd like to hand the conference over to our first speaker today, Kate Lowrey, Vice President of Investor Relations. Kate, you now have the floor.
Thank you. Statements made during this call, which are not strictly historical, are forward-looking statements within the meaning of the Safe Harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, and actual results may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the company's operations and business environment, including, but not limited to, the risk factors referenced in the company's press release issued
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