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– Q2 GAAP EPS $0.64 and Adjusted EPS $0.65 – Q2 Sales increase 23.5% to $205 Million – $236 Million in Q2 Orders / Book-to-bill of 1.15x –

St. Louis, May 09, 2022 (GLOBE NEWSWIRE) — ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the second quarter ended March 31, 2022 (Q2 2022) compared to the second quarter ended March 31, 2021 (Q2 2021).

Operating Highlights

  • Q2 2022 GAAP EPS was $0.64 per share compared to $0.59 in Q2 2021. Q2 2022 Adjusted EPS increased $0.09 per share (16 percent) to $0.65 per share compared to $0.56 per share in Q2 2021.
  • Q2 2022 Sales of $204.9 million increased $39.0 million (23.5 percent) compared to Q2 2021. Organic sales increased $27.3 million (16.5 percent) and recent acquisitions contributed $11.7 million (7.0 percent) of revenue in the quarter.
  • Q2 2022 Entered Orders increased $60.2 million (34 percent) over the prior year period to $236.5 million (book-to-bill of 1.15x), resulting in record ending backlog of $671 million.
  • Net cash provided by operating activities was $23 million YTD 2022. Operating cash flow was negatively impacted by higher inventories to support record backlogs, supply chain challenges that reduced manufacturing output, and the timing of milestone payments.  
  • Net debt (total borrowings less cash on hand) was $142 million, resulting in a 1.27x leverage ratio and $546 million in liquidity at March 31, 2022.

Vic Richey, Chairman and Chief Executive Officer, commented, “Our global team delivered strong orders, sales, and earnings growth in Q2. I was particularly pleased to see increased activity from our North American utility customers drive revenue growth and margin improvement in our USG segment. In A&D, it was also encouraging to see our Q2 commercial aerospace revenue at the highest level since the beginning of the pandemic. Overall, the combination of meaningful organic growth and the contribution of recent acquisitions helped us deliver record Q2 revenue of $205 million and 16 percent growth in Adjusted EPS.

“The quarter was not without its challenges, as supply chain issues and wage and material cost inflation continue to present headwinds. Our teams continue to work diligently to navigate supply chain issues and implement price increases to offset the impacts of inflation.   These actions enabled us to exceed earnings expectations in the quarter. It is through the hard work and dedication of our employees that we were able overcome these economic disruptions to support our customers and deliver meaningfully improved operating results.

“We continue to see strong entered orders across our commercial aerospace, electric utility, renewables and Test end-markets. Our year-to-date orders of $461 million are up 38% over the prior year, resulting in record backlog which gives us confidence in our ability to deliver our stated revenue and earnings goals for 2022. Our end-market exposure is favorable and we are well-positioned to deliver profitable long-term growth and shareholder value as market demand continues to recover.”

Segment Performance

Aerospace & Defense (A&D)

  • Sales increased $2.3 million (3 percent) to $84.8 million in Q2 2022 from $82.5 million in Q2 2021. Commercial aerospace sales increased $7.2 million (30 percent) to $31 million, partially offset by lower Navy and industrial sales at VACCO compared to the prior year quarter.  
  • EBIT decreased $2.7 million in Q2 2022 to $14.3 million from $17.0 million in Q2 2021. Adjusted EBIT decreased $2.5 million in Q2 2022 to $14.5 million (17.1 percent margin) from $17.0 million (20.7 percent margin) in Q2 2021. The decrease in margin was driven by lower revenue at VACCO and unfavorable product mix in the aerospace business.   We expect A&D’s continuing order strength and record backlog to drive revenue growth and margin expansion in the second half of the year.
  • Entered Orders were $95 million in Q2 2022 (book-to-bill of 1.11x) compared to $88 million in Q2 2021. The order strength was driven by the continuing recovery of commercial aerospace, the 737 production ramp, increased MRO activity, and business jet orders. The 7 percent increase in orders over the prior year quarter resulted in ending backlog of $397 million.

Utility Solutions Group (USG)

  • Sales increased $24.6 million (62 percent) to $64.2 million in Q2 2022 from $39.6 million in Q2 2021. Doble organic sales increased $12.4 million (39.0 percent) as demand from North American utility customers rebounded sharply.   In addition, Phenix and Altanova contributed $10.4 million in revenue and NRG sales increased $1.8 million (23 percent) as the strength in the renewables end-market continues.   
  • EBIT increased $4.6 million in Q2 2022 to $11.3 million from $6.7 million in Q2 2021. Adjusted EBIT increased $5.8 million in Q2 2022 to $11.3 million (17.7 percent margin) from $5.5 million (13.8 percent margin) in Q2 2021. The margin increase was primarily driven by leverage on higher revenue and price increases, partially offset by wage and material cost inflation and expenses related to the return of trade shows and customer events.
  • Entered Orders were $86 million in Q2 2022 (book-to-bill of 1.35x). Orders increased $43 million (98 percent) over the prior year quarter and resulted in ending backlog of $117 million. Doble core electric utility orders increased $27 million (76 percent) reflecting broad strength across the product portfolio, including a large long-term contract for upgraded Doble Universal Controller™ (DUC) hardware and service, protection testing orders, and service contract renewals. Phenix and Altanova added $13 million, and NRG renewables orders increased $3 million (40 percent) compared to the prior year.

Test

  • Sales increased $12.1 million (28 percent) to $55.9 million in Q2 2022 from $43.8 million in Q2 2021, due to increased volume related to medical shielding, power filters, and test and measurement projects in the U.S and China.
  • EBIT increased $2.8 million in Q2 2022 to $8.5 million (15.2 percent margin) from $5.7 million (13.0 percent margin) in Q2 2021.   The increase in profitability was driven by higher volume and price increases, which more than offset material cost and wage inflation.
  • Entered Orders were $55 million in Q2 2022 (book-to-bill of .99x) compared to $44 million in Q2 2021. The order growth was driven by domestic medical shielding and global demand for test and measurement projects.   The $11 million (25 percent) increase in Q2 2022 orders resulted in an ending backlog of $157 million.

Share Repurchase Program
As previously announced in our August 9, 2021 press release, the Company’s Board of Directors approved a new stock repurchase program. During Q2 2022, the Company repurchased approximately 113,000 shares for $8 million. As of March 31, 2022, the Company has repurchased approximately 229,000 shares for $18 million.

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on July 19, 2022 to stockholders of record on July 5, 2022.

Board of Directors
Effective May 4, 2022, the Company added an additional independent director, Janice L. Hess, to the Company’s Board of Directors. She was also named to the Nominating and Corporate Governance Committee of the Board of Directors.

Since 2014, Ms. Hess has been the President of the Engineered Systems Segment (ESS) and Teledyne Brown Engineering of Teledyne Technologies Incorporated (NYSE:TDY), a diversified multinational company which provides enabling technologies for industrial growth markets that require advanced technology and high reliability. She has full responsibility for ESS strategic positioning, growth, and profitability. Serving energy, space, maritime, and defense markets, ESS designs, develops and delivers a diverse array of advanced technology-driven solutions, systems, products, and services for complex and harsh environments.   She previously served in a number of positions of increasing financial, operational, and executive responsibility with Teledyne from 2000 to 2014, including as ESS’s Executive Vice President and Chief Financial Officer.

She was selected to serve on the Company’s Board on the basis of her four decades of operational, financial, and leadership experience, her commitment to continuous improvement, and her performance in growing traditional, adjacent, and emerging markets similar to those served by the Company, which will enable her to assist the Board in guiding Company strategy at the highest level.  

Ms. Hess has a BSBA in Accounting from Auburn University. She holds a Certificate in Management from the University of Virginia’s Darden Graduate School of Business, as well as a professional designation in Advanced Government Contracting. She is a Certified Public Accountant in Alabama (inactive) and a graduate of Leadership Alabama.

Business Outlook – 2022
Management’s expectations for 2022 remain consistent with the details outlined in our November 18, 2021 release.  Our 2022 guidance represents meaningful growth in sales, Adjusted EBIT, and Adjusted EBITDA across each of the Company’s business segments.

Our year-to-date results have generally matched our expectations as presented in November. Consistent with prior years and our November guidance, our revenue and earnings will be more second half weighted and reflect a significant ramp compared to the first half of the year. With solid backlog driving revenue growth and improving margins, we are on track to deliver our stated goal for the year of adjusted earnings per share in the range of $3.10 to $3.20. Our expectation is for Q3 Adjusted EPS in the range of $0.84 to $0.91 per share, representing growth of 25 to 35 percent over the prior year.

Conference Call
The Company will host a conference call today, May 9, at 4:00 p.m. Central Time, to discuss the Company’s Q2 2022 results. A live audio webcast and an accompanying slide presentation will be available on the Company’s website at https://investor.escotechnologies.com. A replay of the conference call will be available on the Company’s website noted above or by phone (dial 1-855-859-2056 and enter the pass code 9495619).

Forward-Looking Statements
Statements in this press release regarding the timing and magnitude of recovery in the Company’s end markets, the continuing impacts of COVID-19 on the Company’s results, sales, Adjusted SG&A, Adjusted EBIT, Adjusted EBITDA, Adjusted EPS, cash flow, results of cost reduction efforts, margins, growth, the financial success of the Company, the strength of its end markets, the outlook for the A&D, Test and USG segments, the ability to increase shareholder value, the timing and success of acquisition efforts, internal investments in new products and solutions, the impacts of inflation, the long-term success of the Company, and any other statements which are not strictly historical are “forward-looking” statements within the meaning of the safe harbor provisions of the federal securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future 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 those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021; the availability and acceptance of viable COVID-19 vaccines by enough of the U.S. and world’s population to curtail the pandemic; the continuing impact of the COVID-19 pandemic and the effects of known or unknown COVID-19 variants including labor shortages, facility closures, shelter in place policies or quarantines, material shortages, transportation delays, termination or delays of Company contracts, and the inability of our suppliers or customers to perform; the impacts of Executive Order 14042 and other vaccine mandates on our employees and businesses; the impacts of natural disasters on the Company’s operations and those of the Company’s customers and suppliers; the timing and content of future contract awards or customer orders; the appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties; the success of the Company’s acquisition efforts; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; changes in the costs and availability of certain raw materials; labor disputes; changes in U.S. tax laws and regulations; other changes in laws and regulations including but not limited to changes in accounting standards and foreign taxation; changes in interest rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration of recently acquired businesses.

Non-GAAP Financial Measures
The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financials Measures, and “Adjusted EPS” as GAAP earnings per share (EPS) excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures, which were ($0.01) per share in Q2 2022.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

ESCO, headquartered in St. Louis, Missouri: Manufactures highly-engineered filtration and fluid control products for the aviation, Navy, space and process markets worldwide, as well as composite-based products and solutions for Navy, defense and industrial customers; is the industry leader in RF shielding and EMC test products; and provides diagnostic instruments, software and services for the benefit of industrial power users and the electric utility and renewable energy industries. Further information regarding ESCO and its subsidiaries is available on the Company’s website at www.escotechnologies.com.

   

    ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
    
          Three Months
Ended
March 31,
2022
  Three Months
Ended
March 31,
2021
 
                 
Net Sales $ 204,928     165,894    
Cost and Expenses:          
  Cost of sales   128,375     103,553    
  Selling, general and administrative expenses   47,959     38,746    
  Amortization of intangible assets   6,510     4,917    
  Interest expense   1,020     432    
  Other (income) expenses, net   (604 )   (1,903 )  
    Total costs and expenses   183,260     145,745    
                 
Earnings before income taxes   21,668     20,149    
Income tax expense   5,085     4,745    
                 
    Net earnings $ 16,583     15,404    
                 
    Diluted EPS:          
    Diluted – GAAP          
      Net earnings $ 0.64     0.59    
                 
    Diluted – As Adjusted Basis          
      Net earnings $ 0.65   (1 ) 0.56   (2 )
                 
    Diluted average common shares O/S:   26,045     26,201    
                 
(1 ) Q2 2022 Adjusted EPS excludes $0.01 per share of after-tax charges associated with the NEco acquisition inventory step-up charge and Corporate acquisition related costs.
                 
(2 ) Q2 2021 Adjusted EPS excludes $0.03 per share of after-tax income associated with the final settlement from the sale of the Doble Watertown facility partially offset by charges related to the Doble Manta facility consolidation.

   

   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
    
          Six Months
Ended
March 31,
2022
  Six Months
Ended
March 31,
2021
 
                 
Net Sales $ 381,938     328,568    
Cost and Expenses:          
  Cost of sales   236,680     203,175    
  Selling, general and administrative expenses   94,594     79,746    
  Amortization of intangible assets   12,977     9,865    
  Interest expense   1,753     973    
  Other (income) expenses, net   (571 )   (1,880 )  
    Total costs and expenses   345,433     291,879    
                 
Earnings before income taxes   36,505     36,689    
Income tax expense   8,398     8,467    
                 
    Net earnings $ 28,107     28,222    
                 
    Diluted EPS:          
    Diluted – GAAP          
      Net earnings $ 1.08     1.08    
                 
    Diluted – As Adjusted Basis          
      Net earnings $ 1.11   (1 ) 1.08   (2 )
                 
    Diluted average common shares O/S:   26,098     26,192    
                 
(1 ) YTD Q2 2022 Adjusted EPS excludes $0.03 per share of after-tax charges associated with the Altanova & NEco acquisition inventory step-up charges and Corporate acquisition related costs.
                 
(2 ) YTD Q2 2021 Adjusted EPS excludes after-tax income associated with the final settlement from the sale of the Doble Watertown facility offset by charges related to the Doble Manta facility consolidation and ATM acquisition inventory step-up.

   

   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
   
        GAAP   As Adjusted  
        Q2 2022   Q2 2021   Q2 2022   Q2 2021  
Net Sales                  
  Aerospace & Defense $ 84,821     82,528     84,821     82,528    
  USG   64,191     39,555     64,191     39,555    
  Test   55,916     43,811     55,916     43,811    
    Totals $ 204,928     165,894     204,928     165,894    
                       
EBIT                    
  Aerospace & Defense $ 14,349     17,006     14,489     17,046    
  USG   11,314     6,725     11,331     5,461    
  Test   8,494     5,688     8,494     5,688    
  Corporate   (11,469 )   (8,838 )   (11,344 )   (8,548 )  
    Consolidated EBIT   22,688     20,581     22,970     19,647    
    Less: Interest expense   (1,020 )   (432 )   (1,020 )   (432 )  
    Less: Income tax expense   (5,085 )   (4,745 )   (5,150 )   (4,530 )  
    Net earnings $ 16,583     15,404     16,800     14,685    
                          
Note 1: Adjusted net earnings were $16.8 million in Q2 2022 which excludes $0.01 per share of after-tax charges associated with the NEco acquisition inventory step-up charge and Corporate acquisition related costs.
                          
Note 2: Adjusted net earnings were $14.7 million in Q2 2021 which excludes $0.03 per share of after-tax income associated with the final settlement from the sale of the Doble Watertown facility partially offset by charges related to the Doble Manta facility consolidation.
                       
EBITDA Reconciliation to Net earnings:       Adjusted   Adjusted  
        Q2 2022   Q2 2021   Q2 2022   Q2 2021  
Consolidated EBITDA $ 34,808     30,684     35,090     29,750    
Less: Depr & Amort   (12,120 )   (10,103 )   (12,120 )   (10,103 )  
Consolidated EBIT   22,688     20,581     22,970     19,647    
Less: Interest expense   (1,020 )   (432 )   (1,020 )   (432 )  
Less: Income tax expense   (5,085 )   (4,745 )   (5,150 )   (4,530 )  
Net earnings $ 16,583     15,404     16,800     14,685    
                       

       ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
   
        GAAP   As Adjusted  
        YTD Q2   YTD Q2   YTD Q2   YTD Q2  
        2022     2021     2022     2021    
Net Sales                  
  Aerospace & Defense $ 155,065     149,144     155,065     149,144    
  USG   127,676     94,095     127,676     94,095    
  Test   99,197     85,329     99,197     85,329    
    Totals $ 381,938     328,568     381,938     328,568    
                       
EBIT                    
  Aerospace & Defense $ 24,304     25,266     24,639     25,626    
  USG   24,705     19,456     25,172     18,842    
  Test   12,459     11,030     12,459     11,030    
  Corporate   (23,210 )   (18,090 )   (22,905 )   (17,740 )  
    Consolidated EBIT   38,258     37,662     39,365     37,758    
    Less: Interest expense   (1,753 )   (973 )   (1,753 )   (973 )  
    Less: Income tax   (8,398 )   (8,467 )   (8,653 )   (8,489 )  
    Net earnings $ 28,107     28,222     28,959     28,296    
                          
Note 1: Adjusted net earnings were $29.0 million in YTD Q2 2022 which excludes $0.03 per share of after-tax charges associated with the Altanova & NEco acquisition inventory step-up charges and Corporate acquisition related costs.
                          
Note 2: Adjusted net earnings were $28.3 million in YTD Q2 2021 which excludes income from the final settlement on the sale of the Doble Watertown facility offset by charges related to the Doble Manta facility consolidation and ATM acquisition inventory step-up.
                       
EBITDA Reconciliation to Net earnings:       Adjusted   Adjusted  
        YTD Q2   YTD Q2   YTD Q2   YTD Q2  
        2022     2021     2022     2021    
Consolidated EBITDA $ 62,550     57,777     63,657     57,873    
Less: Depr & Amort   (24,292 )   (20,115 )   (24,292 )   (20,115 )  
Consolidated EBIT   38,258     37,662     39,365     37,758    
Less: Interest expense   (1,753 )   (973 )   (1,753 )   (973 )  
Less: Income tax expense   (8,398 )   (8,467 )   (8,653 )   (8,489 )  
Net earnings $ 28,107     28,222     28,959     28,296    
                       

      

   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
   
        March 31,
2022
  September 30,
2021
             
Assets        
  Cash and cash equivalents $ 54,324   56,232
  Accounts receivable, net   140,497   146,341
  Contract assets   111,453   93,771
  Inventories   175,152   147,148
  Other current assets   31,972   22,662
    Total current assets   513,398   466,154
  Property, plant and equipment, net   156,963   154,265
  Intangible assets, net   407,203   409,250
  Goodwill   508,406   504,853
  Operating lease assets   30,139   31,846
  Other assets   9,677   10,977
      $ 1,625,786   1,577,345
             
Liabilities and Shareholders’ Equity        
  Current maturities of long-term debt $ 20,000   20,000
  Accounts payable   71,811   56,669
  Contract liabilities   108,629   106,045
  Other current liabilities   77,355   92,281
    Total current liabilities   277,795   274,995
  Deferred tax liabilities   82,187   73,560
  Non-current operating lease liabilities   26,302   28,032
  Other liabilities   42,329   47,062
  Long-term debt   176,000   134,000
  Shareholders’ equity   1,021,173   1,019,696
      $ 1,625,786   1,577,345

   

   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
       
    Six Months
Ended
March 31,
2022
  Six Months
Ended
March 31,
2021
Cash flows from operating activities:        
Net earnings $ 28,107     28,222  
Adjustments to reconcile net earnings to net cash        
provided by operating activities:        
Depreciation and amortization   24,292     20,115  
Stock compensation expense   3,428     2,745  
Changes in assets and liabilities   (41,451 )   9,179  
Gain on sale of building and land   0     (1,950 )
Effect of deferred taxes   8,627     (989 )
Net cash provided by operating activities   23,003     57,322  
         
Cash flows from investing activities:        
Acquisition of business, net of cash acquired   (15,592 )   (6,684 )
Capital expenditures   (20,715 )   (13,153 )
Additions to capitalized software   (4,727 )   (3,973 )
Proceeds from sale of building and land   0     1,950  
Net cash used by investing activities   (41,034 )   (21,860 )
         
Cash flows from financing activities:        
Proceeds from long-term debt   88,000     34,000  
Principal payments on long-term debt and short-term borrowings   (46,000 )   (74,368 )
Dividends paid   (4,150 )   (4,167 )
Purchases of common stock into treasury   (17,878 )   0  
Other   (2,719 )   0  
Net cash provided (used) by financing activities   17,253     (44,535 )
         
Effect of exchange rate changes on cash and cash equivalents   (1,130 )   2,166  
         
Net (decrease) increase in cash and cash equivalents   (1,908 )   (6,907 )
Cash and cash equivalents, beginning of period   56,232     52,560  
Cash and cash equivalents, end of period $ 54,324     45,653  

   

   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
   
Backlog And Entered Orders – Q2 2022   Aerospace & Defense   USG   Test   Total
  Beginning Backlog – 1/1/22 $ 387,173     94,382     157,844     639,399  
  Entered Orders   94,550     86,485     55,443     236,478  
  Sales     (84,821 )   (64,191 )   (55,916 )   (204,928 )
  Ending Backlog – 3/31/22 $ 396,902     116,676     157,371     670,949  
                     
                     
                     
Backlog And Entered Orders – YTD Q2 2022   Aerospace & Defense   USG   Test   Total
  Beginning Backlog – 10/1/21 $ 367,216     91,631     133,176     592,023  
  Entered Orders   184,751     152,721     123,392     460,864  
  Sales     (155,065 )   (127,676 )   (99,197 )   (381,938 )
  Ending Backlog – 3/31/22 $ 396,902     116,676     157,371     670,949  

      

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
   
         
EPS – Adjusted Basis Reconciliation – Q2 2022      
  EPS – GAAP Basis – Q2 2022 $ 0.64    
  Adjustments (defined below)   0.01    
  EPS – As Adjusted Basis – Q2 2022 $ 0.65    
         
  Adjustments exclude $0.01 per share consisting of NEco acquisition inventory
  step-up charges and Corporate related acquisition costs in the second quarter of 2022.
  The $0.01 of EPS adjustments per share consists of $282K of pre-tax charges
  offset by $65K of tax benefit for net impact of $217K.      
         
EPS – Adjusted Basis Reconciliation – Q2 2021      
  EPS GAAP Basis – Q2 2021 $ 0.59    
  Adjustments (defined below)   (0.03 )  
  EPS – As Adjusted Basis – Q2 2021 $ 0.56    
         
  Adjustments exclude $0.03 per share consisting of income associated with the final
  settlement from the sale of the Doble Watertown facility partially offset by charges
  related to the Doble Manta facility consolidation in the second quarter of 2021.
  The $0.03 of EPS adjustments per share consists of $934K of pre-tax income
  offset by $215K of tax expense for net impact of $719K.      
         
EPS – Adjusted Basis Reconciliation – YTD Q2 2022      
  EPS – GAAP Basis – YTD Q2 2022 $ 1.08    
  Adjustments (defined below)   0.03    
  EPS – As Adjusted Basis – YTD Q2 2022 $ 1.11    
         
  Adjustments exclude $0.03 per share consisting of Altanova & NEco acquisition inventory
  step-up charges and Corporate related acquisition costs in the first six months of 2022.
  The $0.03 of EPS adjustments per share consists of $1,107K of pre-tax charges
  offset by $255K of tax benefit for net impact of $852K.      
         

    
SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277

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