Fri, May 9, 4:11 PM (40 days ago)
**ESCO Technologies Inc. (ESE) - Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Q1 2025 revenue was $265.5 million, a 6.6% increase from Q1 2024 ($249.1 million). For the first six months, revenue was $512.5 million, up 9.6% from $467.4 million in the same period last year. - **Profit Margins:** Gross margin improved to 41.2% in Q1 2025 from 39.8% in Q1 2024. Operating margin was 16.1% in Q1 2025, up from 13.0% in Q1 2024. - **Net Earnings:** Net earnings for Q1 2025 were $31.0 million, a 33.6% increase from $23.2 million in Q1 2024. For the first six months, net earnings were $54.5 million, up 41.8% from $38.4 million in the same period last year. - **Earnings per Share (EPS):** Diluted EPS for Q1 2025 was $1.20, up from $0.90 in Q1 2024. For the first six months, diluted EPS was $2.11, up from $1.49 in the same period last year. - **Cash Flow:** Operating cash flow for the first six months of 2025 was $58.3 million, a significant increase from $19.2 million in the same period last year. **Segment Performance:** - **Aerospace & Defense (A&D):** Revenue increased by 7.6% in Q1 2025 and 13.5% in the first six months, driven by higher commercial aerospace shipments and navy revenues. - **Utility Solutions Group (USG):** Revenue increased by 4.0% in Q1 2025 and 4.2% in the first six months, driven by higher sales of offline and protection testing products and services. - **RF Test and Measurement (Test):** Revenue increased by 9.1% in Q1 2025 and 11.1% in the first six months, driven by higher sales volumes in U.S. and European operations. **Trends and Uncertainties:** - **Backlog:** Backlog increased to $932.3 million at the end of Q1 2025, up from $879.0 million at the end of Q4 2024. - **Acquisitions:** The company completed the acquisition of the Signature Management & Power (SM&P) business of Ultra Maritime for approximately $550 million in cash, which is expected to complement ESCO’s current naval programs. - **Market Risks:** The company is exposed to market risks related to changes in interest rates and foreign currency exchange rates. The company uses derivative financial instruments to manage these risks. **Future Operations Impact:** - **Capital Expenditures:** Capital expenditures for the first six months of 2025 were $15.4 million, down from $16.3 million in the same period last year. - **Debt:** The company had $88 million of outstanding borrowings under the credit facility at the end of Q1 2025, with approximately $407 million available to borrow. The company's ability to access the additional $250 million increase option of the credit facility is subject to acceptance by participating or other outside banks. - **Dividends:** The company paid a quarterly dividend of $0.08 per share, totaling $2.1 million, on April 17, 2025. **Conclusion:** ESCO Technologies Inc. demonstrated strong financial health and performance in Q1 2025, with significant increases in revenue, profit margins, net earnings, and EPS. The company's strategic acquisitions and effective risk management strategies position it well for future growth. However, market risks and uncertainties related to economic conditions, regulatory changes, and geopolitical events may impact the company's future operations.