0001410578-24-002064 | 10-K | XBRL Viewer

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Business Segment Information - Additional Information (Details) $ in Millions	12 Months Ended
	Sep. 30, 2024 USD ($) customer	Sep. 30, 2023 USD ($) customer	Sep. 30, 2022 USD ($) customer
Percentage Of Sale Of Customer Maximum	10.00%	10.00%	10.00%
Capitalized Computer Software, Period Increase (Decrease)	$ 12.1	$ 12.4	$ 12.9
Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Number of customers who exceeded 10% of sales \| customer	0	0	0
Property, Plant and Equipment
Depreciation	$ 22.6	$ 21.6	$ 22.4

Debt (Tables)

12 Months Ended

Sep. 30, 2024

Debt

Schedule of debt


(Dollars in thousands)	2024		2023
Total borrowings	$	122,000	102,000
Current portion of long-term debt and short-term borrowings		(20,000)	(20,000)
Total long-term debt, less current portion	$	102,000	82,000

Leases - Components of lease costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Leases
Option to extend	true
Finance lease cost
Amortization of right-of-use assets	$ 1,510	$ 1,572
Interest on lease liabilities	861	925
Operating lease cost	7,634	7,224
Total lease costs	$ 10,005	$ 9,721
Maximum
Leases
Lease term	20 years

Share-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2024

Share-Based Compensation

Summary of outstanding share-based compensation awards


	FY 2024			FY 2023			FY 2022
		Estimated			Estimated			Estimated
		Weighted			Weighted			Weighted
	Shares	Avg. Price		Shares	Avg. Price		Shares	Avg. Price
Nonvested at October 1,	189,725	$	94.91	265,367	$	84.29	226,705	$	76.15
Granted	78,016		108.16	84,880		93.64	117,045		82.54
Vested	(34,753)		96.52	(119,811)		82.28	(75,327)		56.87
Cancelled	(12,230)		94.91	(40,711)		85.00	(3,056)		89.51
Nonvested at September 30,	220,758	$	102.40	189,725	$	94.91	265,367	$	84.29

Share-Based Compensation - Schedule Of Outstanding Restricted Share Awards (Details) - $ / shares	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation
Outstanding restricted share awards, Nonvested at October 1,	189,725	265,367	226,705
Outstanding restricted share awards, Granted, Shares	78,016	84,880	117,045
Outstanding restricted share awards, Vested, Shares	(34,753)	(119,811)	(75,327)
Outstanding restricted share awards, Cancelled, Shares	(12,230)	(40,711)	(3,056)
Outstanding restricted share awards, Nonvested at September 30,	220,758	189,725	265,367
Outstanding restricted share awards, Nonvested at October 1, Weighted Avg. Price	$ 94.91	$ 84.29	$ 76.15
Outstanding restricted share awards, Granted, Weighted Avg. Price	108.16	93.64	82.54
Outstanding restricted share awards, Vested, Weighted Avg. Price	96.52	82.28	56.87
Outstanding restricted share awards, Cancelled, Weighted Avg. Price	94.91	85.00	89.51
Outstanding restricted share awards, Nonvested at September 30, Weighted Avg. Price	$ 102.40	$ 94.91	$ 84.29

Summary of Significant Accounting Policies - Number Of Shares Used In Calculation Of Earnings Per Share (Details) - shares shares in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Summary of Significant Accounting Policies
Average common shares outstanding - Basic	25,774	25,802	25,933
Dilutive Restricted Shares	98	77	134
Shares - Diluted	25,872	25,879	26,067

Revenues

12 Months Ended

Sep. 30, 2024

Revenues

Revenues

12. Revenues

(a)	Disaggregation of Revenues

The tables below present our revenues by customer type, geographic location, and revenue recognition method for the years ended September 30, 2024 and 2023, as we believe this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The tables also include a reconciliation of the disaggregated revenue within our reportable segments.

Year Ended September 30, 2024

(In thousands)

A&D

USG

Test

Total

Customer type:

Commercial

186,171

361,478

164,321

711,970

Government

262,004

7,583

45,202

314,789

Total revenues

448,175

369,061

209,523

1,026,759

Geographic location:

United States

376,707

240,153

120,500

737,360

International

71,468

128,908

89,023

289,399

Total revenues

448,175

369,061

209,523

1,026,759

Revenue recognition method:

Point in time

213,625

301,200

43,150

557,975

Over time

234,550

67,861

166,373

468,784

Total revenues

448,175

369,061

209,523

1,026,759


Year Ended September 30, 2023
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	170,193		331,836		193,744		695,773
Government		222,250		10,484		27,526		260,260
Total revenues	$	392,443		342,320		221,270		956,033

Geographic location:
United States	$	326,566		220,536		118,289		665,391
International		65,877		121,784		102,981		290,642
Total revenues	$	392,443		342,320		221,270		956,033

Revenue recognition method:
Point in time	$	178,222		281,977		44,042		504,241
Over time		214,221		60,343		177,228		451,792
Total revenues	$	392,443		342,320		221,270		956,033

(b)	Remaining Performance Obligations

Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our performance obligations that we expect to recognize as revenue in future periods when we perform under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery or Indefinite Quantity contracts. At September 30, 2024, we had $879.0 million in remaining performance obligations of which we expect to recognize revenues of approximately 70% in the next twelve months.

(c)	Contract assets, contract liabilities and accounts receivable

We report assets and liabilities related to our contracts with customers on a contract-by-contract basis at the end of each reporting period. At September 30, 2024, our contract assets, contract liabilities and accounts receivable totaled $130.5 million, $134.3 million and $240.7 million, respectively. At September 30, 2023, our contract assets, contract liabilities and accounts receivable totaled $138.6 million, $123.1 million and $198.6 million, respectively. At September 30, 2022, our contract assets, contract liabilities and accounts receivable totaled $125.2 million, $137.6 million and $164.6 million, respectively. During 2024, we recognized approximately $68 million in revenues that were included in the contract liabilities balance at September 30, 2023.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

Income Tax Expense - Additional information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Income Tax Expense
Net operating loss carryforward - foreign	$ 3,855	$ 3,714
Deferred tax assets, operating loss carry forwards, not subject to expiration	11,700
Deferred tax assets, operating loss carry forwards, subject to expiration	2,100
Deferred tax assets, operating loss carry forwards, state and local	500
Deferred tax assets, tax credit carry forwards, research	1,600
State research and other credit carry forwards with expiration date	100
State research and other credit carry forwards without expiration date	1,500
Deferred tax assets, valuation allowance	1,513	1,772
Unrecognized tax benefits	0
Foreign Valuation Allowance
Income Tax Expense
Operating loss carry forwards, valuation allowance	1,000	1,300
State and Local Jurisdiction
Income Tax Expense
Net operating loss carryforward - foreign	13,800
Deferred tax assets, valuation allowance	1,500	1,800
Net change in valuation allowance	(300)	600
Foreign Country
Income Tax Expense
Deferred tax assets, valuation allowance	500	$ 500
Net change in valuation allowance	$ 300

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Inventories
Finished goods	$ 46,586	$ 34,577
Work in process	47,903	42,178
Raw materials	114,675	107,312
Total	$ 209,164	$ 184,067

Acquisitions

12 Months Ended

Sep. 30, 2024

Acquisitions

Acquisitions

2. Acquisitions

2024

On November 9, 2023, we acquired MPE for a purchase price of approximately $56.2 million, net of cash acquired. MPE is a leading global manufacturer of high-performance EMC/EMP filters and capacitor products for military, utility, telecommunication, and other critical infrastructure applications. Since the date of acquisition, the operating results for the MPE business have been included as part of ETS-Lindgren in the Test segment. MPE contributed $10 million in revenue in 2024 since the date of acquisition. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.4 million of accounts receivable, $1.1 million of inventory, $1.7 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $8.1 million of deferred tax liabilities, and $31.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $29.1 million. The acquired goodwill of $30.6 million related to excess value associated with opportunities to expand the services and products that we can offer to our customers. We do not anticipate that the goodwill will be deductible for tax purposes. We paid a $0.2 million working capital settlement in the third quarter of 2024.

2023

On February 1, 2023, we acquired CMT Materials, LLC and its affiliate Engineered Syntactic Systems, LLC (together, CMT) for a purchase price of approximately $18 million, net of cash acquired. CMT, based in Attleboro, Massachusetts, is a supplier of syntactic

materials for buoyancy and specialty applications. Since the date of acquisition, the operating results for the CMT business have been included as part of Globe in the A&D segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $1.7 million of accounts receivable, $3.0 million of inventory, $1.3 million of property, plant and equipment, $1.2 million of accounts payable and accrued expenses, and $7.3 million of identifiable intangible assets mainly consisting of customer relationships totaling $6.2 million. The acquired goodwill of $5.6 million related to excess value associated with opportunities to expand the services and products that we can offer to our customers. The full amount of acquired goodwill is deductible for tax purposes. We received a $0.2 million working capital settlement during the third quarter of 2023.

2022

On November 4, 2021, we acquired Networks Electronic Company, LLC (NEco) for a purchase price of approximately $15.4 million, net of cash acquired. NEco, based in Chatsworth, California, provides miniature electro-explosive devices utilized in mission-critical defense and aerospace applications. Since the date of acquisition, the operating results for the NEco business have been included as part of PTI in the A&D segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.6 million of accounts receivable, $1.5 million of inventory, $0.2 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $8.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $6.3 million. The acquired goodwill of $5.7 million related to excess value associated with opportunities to expand the services and products that we can offer to our customers, with $5.6 million of goodwill deductible for tax purposes.

Acquisitions (Details) - USD ($) $ in Thousands				3 Months Ended		11 Months Ended	12 Months Ended
Acquisitions (Details) - USD ($) $ in Thousands	Nov. 09, 2023	Feb. 01, 2023	Nov. 04, 2021	Jun. 30, 2024	Jun. 30, 2023	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Acquisitions
Payments to acquire businesses net of cash acquired							$ 56,383	$ 17,694	$ 10,906
Goodwill	$ 30,600
Working capital settlement					$ 200
Goodwill						$ 539,899	539,899	503,177	492,700
Revenues							1,026,759	956,033	$ 857,502
Goodwill, tax deductible expenses						15,416	$ 15,416	$ 13,313
MPE Limited (MPE)
Acquisitions
Payments to acquire businesses net of cash acquired	56,200
Fair value of accounts receivable acquired	400
Fair value of inventory acquired	1,100
Fair value of property, plant and equipment acquired	1,700
Fair value of accounts payable and accrued expenses acquired	700
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities	8,100
Business combination recognized identifiable assets acquired and liabilities assumed finite-lived intangibles	29,100
Working capital settlement				$ 200
Revenues						$ 10,000
CMT Materials, LLC and its affiliate Engineered Syntactic Systems, LLC
Acquisitions
Payments to acquire businesses net of cash acquired		$ 18,000
Fair value of accounts receivable acquired		1,700
Fair value of inventory acquired		3,000
Fair value of property, plant and equipment acquired		1,300
Fair value of accounts payable and accrued expenses acquired		1,200
Fair value of identifiable intangible assets acquired		7,300
Goodwill		5,600
Networks electronic company
Acquisitions
Payments to acquire businesses net of cash acquired			$ 15,400
Fair value of accounts receivable acquired			600
Fair value of inventory acquired			1,500
Fair value of property, plant and equipment acquired			200
Fair value of identifiable intangible assets acquired			8,100
Goodwill			5,600
Goodwill			5,700
Business combination recognized identifiable assets acquired and liabilities assumed current liabilities accounts payable			700
Customer Relationships \| MPE Limited (MPE)
Acquisitions
Fair value of identifiable intangible assets acquired	$ 31,100
Customer Relationships \| CMT Materials, LLC and its affiliate Engineered Syntactic Systems, LLC
Acquisitions
Business combination recognized identifiable assets acquired and liabilities assumed finite-lived intangibles		$ 6,200
Customer Relationships \| Networks electronic company
Acquisitions
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets			$ 6,300

Inventories

12 Months Ended

Sep. 30, 2024

Inventories

Inventories

4. Inventories

Inventories consisted of the following at September 30, 2024 and 2023:


(Dollars in thousands)	2024		2023
Finished goods	$	46,586	34,577
Work in process		47,903	42,178
Raw materials		114,675	107,312
Total	$	209,164	184,067

Goodwill and Other Intangible Assets - Intangible assets gross carrying amounts and accumulated amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Goodwill and Other Intangible Assets
Goodwill	$ 539,899	$ 503,177	$ 492,700
Trade names
Goodwill and Other Intangible Assets
Trade names	162,936	161,447
Patents
Goodwill and Other Intangible Assets
Gross carrying amount	2,638	2,516
Less: accumulated amortization	1,415	1,218
Net	1,223	1,298
Capitalized software
Goodwill and Other Intangible Assets
Gross carrying amount	134,119	121,883
Less: accumulated amortization	92,878	80,774
Net	41,241	41,109
Customer relationships
Goodwill and Other Intangible Assets
Gross carrying amount	330,328	296,927
Less: accumulated amortization	132,135	113,311
Net	198,193	183,616
Other
Goodwill and Other Intangible Assets
Gross carrying amount	15,182	14,232
Less: accumulated amortization	11,173	9,578
Net	$ 4,009	$ 4,654

Business Segment Information - Schedule Of Geographic Information Long-Lived Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Long-Lived Assets	$ 170,596	$ 155,484
United States
Long-Lived Assets	152,300	141,900
Canada
Long-Lived Assets	4,200	4,300
Mexico
Long-Lived Assets	6,600	2,400
Other
Long-Lived Assets	$ 7,500	$ 6,900

Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Goodwill and Other Intangible Assets
Amortization expense related to intangible assets	$ 32,804,000	$ 28,953,000	$ 25,936,000
Asset Impairment Charges	0
Fair value of financial instruments	0
Maximum
Goodwill and Other Intangible Assets
Intangible asset amortization fiscal year from 2025 to 2029	33,000,000
Minimum
Goodwill and Other Intangible Assets
Intangible asset amortization fiscal year from 2025 to 2029	$ 31,000,000
Customer Relationships \| Maximum
Goodwill and Other Intangible Assets
Expected remaining useful life	20 years
Customer Relationships \| Minimum
Goodwill and Other Intangible Assets
Expected remaining useful life	13 years
Patents \| Maximum
Goodwill and Other Intangible Assets
Expected remaining useful life	20 years
Patents \| Minimum
Goodwill and Other Intangible Assets
Expected remaining useful life	10 years
Capitalized software \| Maximum
Goodwill and Other Intangible Assets
Expected remaining useful life	7 years
Capitalized software \| Minimum
Goodwill and Other Intangible Assets
Expected remaining useful life	3 years

Business Segment Information - Schedule Of Geographic Information Net Sales (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Net Sales	$ 1,026,759	$ 956,033	$ 857,502
United States
Net Sales	737,360	665,391	603,200
Asia
Net Sales	109,300	116,300	132,700
Europe
Net Sales	93,500	90,400	72,400
Canada
Net Sales	50,700	46,800	31,200
Other
Net Sales	$ 35,900	$ 37,100	$ 18,000

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

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+ Details

Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2024

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

3. Goodwill and Other Intangible Assets

Included on the Consolidated Balance Sheets at September 30, 2024 and 2023 are the following intangible assets gross carrying amounts and accumulated amortization:


(Dollars in thousands)	2024		2023
Goodwill	$	539,899	503,177

Intangible assets with determinable lives:
Patents
Gross carrying amount	$	2,638	2,516
Less: accumulated amortization		1,415	1,218
Net	$	1,223	1,298

Capitalized software
Gross carrying amount	$	134,119	121,883
Less: accumulated amortization		92,878	80,774
Net	$	41,241	41,109

Customer Relationships
Gross carrying amount	$	330,328	296,927
Less: accumulated amortization		132,135	113,311
Net	$	198,193	183,616

Other
Gross carrying amount	$	15,182	14,232
Less: accumulated amortization		11,173	9,578
Net	$	4,009	4,654
Intangible assets with indefinite lives:
Trade names	$	162,936	161,447

We performed our annual evaluation of goodwill and intangible assets for impairment during the fourth quarter of 2024 and concluded that no impairment existed at September 30, 2024. There were no accumulated impairment losses as of September 30, 2024.

The changes in the carrying amount of goodwill attributable to each business segment for 2024 and 2023 are as follows:


(Dollars in millions)	A&D		Test		USG	Total
Balance as of September 30, 2022	$	110.0		34.0	348.7	492.7
Acquisition activity		5.6		—	—	5.6
Foreign currency translation and other		—		—	4.9	4.9
Balance as of September 30, 2023	$	115.6		34.0	353.6	503.2
Acquisition activity		—		30.9	—	30.9
Foreign currency translation and other		—		2.5	3.3	5.8
Balance as of September 30, 2024	$	115.6		67.4	356.9	539.9

Amortization expense related to intangible assets with determinable lives was $32.8 million, $29.0 million and $25.9 million in 2024, 2023 and 2022, respectively. Patents are amortized over the life of the patents, generally ten to twenty years. Capitalized software is amortized over the estimated useful life of the software, generally three to seven years. Customer relationships are generally amortized over thirteen to twenty years. Intangible asset amortization for fiscal years 2025 through 2029 is estimated at approximately $31 million to $33 million per year.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Principles of Consolidation

A. Principles of Consolidation

The Consolidated Financial Statements include the accounts of ESCO Technologies Inc. (ESCO) and its wholly owned subsidiaries. Except where the context indicates otherwise, the terms “Company”, “we”, “our” and “us” are used in this report to refer to ESCO together with its subsidiaries through which its businesses are conducted. All significant intercompany transactions and accounts have been eliminated in consolidation.

Basis of Presentation

B. Basis of Presentation

Our fiscal year ends on September 30. Throughout the Consolidated Financial Statements, unless the context indicates otherwise, references to a year (for example 2024) refer to fiscal year ending on September 30 of that year. Certain items have been reclassified in the prior year financial statements to conform to the presentation and classifications used in the current year. These reclassifications have no effect on the Company’s consolidated results, financial position or cash flows.

Nature of Operations

C. Nature of Operations

We are organized based on the products and services we offer and we currently classify our business operations in three segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG), and RF Test & Measurement (Test).

A&D: The companies within this segment primarily design and manufacture specialty filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; unique filter mechanisms used in micro-propulsion devices for satellites; custom designed filters for manned aircraft and submarines; products and systems to reduce vibration and/or acoustic signatures and otherwise reduce or obscure a vessel’s signature, and other communications, sealing, surface control and hydrodynamic related applications to enhance U.S. Navy maritime survivability; precision-tolerance machined components for the aerospace and defense industry; and metal processing services; and miniature electro-explosive devices for military aircraft ejection seats and missile arming devices.

USG: The companies within this segment provide diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment, as well as decision support tools for the renewable energy industry, primarily wind and solar.

Test: The companies within this segment provide their customers with the ability to identify, measure and control magnetic, electromagnetic and acoustic energy.

In addition, for reporting certain financial information we treat Corporate activities as a separate segment.

Use of Estimates

D. Use of Estimates

The preparation of financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates.

Revenue Recognition

E. Revenue Recognition

We recognize revenue when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. We review contracts to determine whether there are one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, we allocate the expected consideration, or the transaction price, to each performance obligation identified in the contract based on the relative standalone

selling price of each performance obligation. We then recognize revenue for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred.

Payment terms with our customers vary by the type and location of the customer and the products or services offered. We do not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. We account for shipping and handling costs on a gross basis and include them in net sales. We account for taxes collected from customers and remitted to governmental authorities on a net basis and exclude them from net sales.

A&D: Within the A&D segment, approximately 48% of revenues (approximately 21% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial and military customers and have a single performance obligation as there is only one good promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. The transaction price for these contracts reflects our estimate of returns and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to the customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in cost of goods sold in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.

Approximately 52% of the segment’s revenues (approximately 23% of consolidated revenues) are accounted for over time as the product does not have an alternative use and we have an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract.

Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract.

Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Aerospace & Defense segment contracts, as the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this method, we measure the extent of progress towards completion based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and record revenue proportionally as costs are incurred based on an estimated profit margin.

The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable.

Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.

Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. We classify amounts billed and due from our customers in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time.

For contracts where revenue is recognized over time, we recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. We have net revenue recognized in the current year from performance obligations satisfied in the prior year due to changes in our estimated costs to complete the related performance obligations. We recognize anticipated losses on contracts in full in the period in which the losses become known.

USG: Within the USG segment, approximately 82% of revenues (approximately 29% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and is accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. We generally do not treat them as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in the period they are incurred. We record taxes collected from customers and remitted to government authorities on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.

Approximately 18% of the segment’s revenues (approximately 7% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. Typically, the related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and we have a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets.

Included in this category, approximately 4% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the respective software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets.

Test: Within the Test segment, approximately 20% of revenues (approximately 4% of consolidated revenues) are recognized at a point in time when products such as, antennas and probes are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct because the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in the context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.

Approximately 80% of the segment’s revenues (approximately 16% of consolidated revenues) are recorded over time as the product does not have an alternative use and we have an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, we estimate profit as the difference between total revenue and total estimated cost of a contract and recognize these revenues and costs based primarily on contract milestones. The transaction price for our contracts is typically fixed price and represents our best estimate of the consideration we will receive.

We estimate total contract cost utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.

Under the typical payment terms of our fixed price contracts, the customer pays us either based on progress or based on a fixed billing schedule within the contract. Performance-based payments represent interim payments based on noted progress points as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of revenue recognized, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net.

For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. We have net revenue recognized in the current year from performance obligations satisfied in the prior year due to changes in our estimated costs to complete the related performance obligations. We recognize anticipated losses on contracts in full in the period in which the losses become probable and estimable.

Contract Assets and Liabilities

Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. We include liabilities for customer rebates and discounts in other current liabilities in the Consolidated Balance Sheets.

See the further discussion of our revenue recognition in Note 12 below.

Cash and Cash Equivalents

F. Cash and Cash Equivalents

Cash equivalents include temporary investments that are readily convertible into cash, such as money market funds, with original maturities of three months or less. Some of our cash is deposited with financial institutions located throughout the U.S. and at banks in foreign countries where we operate subsidiary offices, and at times may exceed insured limits. Cash and cash equivalents held in foreign bank accounts totaled $59.9 million at September 30, 2024 and we routinely repatriate cash from our foreign subsidiaries.

Accounts Receivable

G. Accounts Receivable

We reduce accounts receivable by an allowance for amounts that we estimate are uncollectible in the future. This estimated allowance is based on Management’s evaluation of the financial condition of the customer and historical write-off experience.

Inventories

H. Inventories

We value inventories at the lower of cost (first-in, first-out) or net realizable value. We regularly review inventories for excess quantities and obsolescence based upon historical experience, specific identification of discontinued items, future demand, and market conditions. Inventories under long-term contracts reflect accumulated production costs, factory overhead, initial tooling and other related costs less the portion of such costs charged to cost of sales.

Property, Plant and Equipment

I. Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation and amortization are computed primarily on a straight-line basis over the estimated useful lives of the assets: buildings, 10–40 years; machinery and equipment, 3–10 years; and office furniture and equipment, 3–10 years. Leasehold improvements are amortized over the remaining term of the applicable lease or their estimated useful lives, whichever is shorter. Long-lived tangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized based on fair value.

Leases

J. Leases

Our lease agreements primarily relate to office space, manufacturing facilities, and machinery and equipment. We determine at lease inception whether an arrangement that provides control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that we will exercise the option, Management includes the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, Management uses our incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement.

Goodwill and Other Long-Lived Intangible Assets

K. Goodwill and Other Long-Lived Intangible Assets

Goodwill represents the excess of purchase price over the fair value of net identifiable assets acquired in business acquisitions. Management annually reviews goodwill and other long-lived assets with indefinite useful lives for impairment or whenever events or changes in circumstances indicate the carrying amount may be less than fair value. If we determine that the carrying value of the long-lived asset or reporting unit is less than fair value, we record a permanent impairment charge for the amount by which the carrying

value of the long-lived asset exceeds its fair value. We measure the fair value of our reporting units based on a discounted cash flow method using a discount rate determined by Management to be commensurate with the risk inherent in each of our reporting units’ current business models. We determine the fair value of trade names using a generally accepted valuation method based on an income approach called the relief from royalty method. During 2024, Management performed a quantitative impairment analysis, which included a detailed calculation of the fair value of our trade names and reporting units related to certain reporting units within these segments. A Step 0 analysis was performed on the other reporting units for which a quantitative analysis was not performed. The results of these impairment analyses indicated that the fair values of the trade names and reporting units are not less than their carrying values. Our estimates of discounted cash flows to derive the fair value were measured in accordance with ASC 350, Intangibles – Goodwill and Other. We are using estimates of discounted cash flows that may change, and if they change negatively it could result in the need to write down those assets to fair value.

Other intangible assets represent costs allocated to identifiable intangible assets, principally customer relationships, capitalized software, patents, trademarks, and technology rights. We amortize intangible assets with estimable useful lives over their respective estimated useful lives to their estimated residual values, and review them for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable.

See Note 3 regarding goodwill and other intangible assets activity.

Capitalized Software

L. Capitalized Software

Costs incurred for the development of computer software that will be sold, leased, or otherwise marketed are charged to research and development expense when incurred, until technological feasibility has been established for the product. Technological feasibility is typically established upon completion of a detailed program design. Costs incurred after this point are capitalized on a project-by-project basis. Capitalized costs consist of internal and external development costs. Upon general release of the product to customers, we cease capitalization and begin amortization, which is calculated on a project-by-project basis as the greater of (1) the ratio of current gross revenues for a product to the total of current and anticipated future gross revenues for the product or (2) the straight-line method over the estimated economic life of the product. We generally amortize software development costs over a three-to-seven year period based upon the estimated future economic life of the product. Factors we consider in determining the estimated future economic life of the product include anticipated future revenues, and changes in software and hardware technologies. Management annually reviews the carrying values of capitalized costs for impairment or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. If expected cash flows are insufficient to recover the carrying amount of the asset, then we recognize an impairment loss to state the asset at its net realizable value.

Income Taxes

M. Income Taxes

We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We may reduce deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We recognize the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. We regularly review our deferred tax assets for recoverability and establish a valuation allowance when Management believes it is more likely than not such assets will not be recovered, taking into consideration historical operating results, expectations of future earnings, tax planning strategies, and the expected timing of the reversals of existing temporary differences. Our policy is to include interest related to unrecognized tax benefits in income tax expense and penalties in operating expense.

Research and Development Costs

N. Research and Development Costs

Company-sponsored research and development costs include research and development and bid and proposal efforts related to our products and services. We charge Company-sponsored product development costs to expense when incurred. Customer-sponsored research and development costs refer to certain situations whereby customers provide funding to support specific contractually defined research and development costs. We account for customer-sponsored research and development costs incurred pursuant to contracts similarly to other program costs. Total Company and customer-sponsored research and development expenses were approximately $12.0 million, $13.0 million and $12.3 million for 2024, 2023 and 2022, respectively.

Foreign Currency Translation

O. Foreign Currency Translation

We translate the financial statements of our foreign operations into U.S. dollars in accordance with FASB ASC Topic 830, Foreign Currency Matters. We record the resulting translation adjustments as a separate component of accumulated other comprehensive income.

Earnings Per Share

P. Earnings Per Share

We calculate basic earnings per share using the weighted average number of common shares outstanding during the period. We calculate diluted earnings per share using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive vesting of unvested restricted units (restricted shares) using the treasury stock method. There are no anti-dilutive shares.

The number of shares used in the calculation of earnings per share for each year presented is as follows:


(in thousands)	2024	2023	2022
Weighted Average Shares Outstanding — Basic	25,774	25,802	25,933
Dilutive Restricted Shares	98	77	134
Shares — Diluted	25,872	25,879	26,067

Share-Based Compensation

Q. Share-Based Compensation

We provide compensation benefits to certain key employees under several share-based plans providing for performance-accelerated, performance-based and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan for non-employee directors. We measure share-based payment expense at the grant date based on the fair value of the award and recognize it on a straight-line basis over the requisite service period (generally the vesting period of the award) and/or if the performance criteria are deemed probable.

Accumulated Other Comprehensive Loss

R. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss of $(10.8) million at September 30, 2024 and $(24.0) million at September 30, 2023 consisted of currency translation adjustments.

Fair Value Measurements

S. Fair Value Measurements

Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, we base fair value on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, we apply valuation models. These valuation techniques involve some level of Management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

The accounting guidance establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Financial Assets and Liabilities

We have estimated the fair value of our financial instruments as of September 30, 2024 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, payables and other current assets and liabilities approximate fair value because of the short maturity of those instruments. The carrying amounts due under the revolving credit facility approximate fair value as the interest on outstanding borrowings is calculated at a spread over either an Adjusted Term SOFR Rate, Adjusted EURIBOR Rate, Adjusted CDOR Rate, Alternate Base Rate or Daily Simple RFR, at the Company’s election.

Nonfinancial Assets and Liabilities

Our nonfinancial assets such as property, plant and equipment, inventories, and other intangible assets are not measured at fair value on a recurring basis; however they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. No impairments were recorded during 2024.

New Accounting Pronouncements

T. New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant expenses. The new segment disclosures are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Other than additional disclosure, we do not expect a change to our consolidated statements of operations, financial position, or cash flows.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures. This ASU will be effective for fiscal years beginning after December 15, 2024. Other than additional disclosure, we do not expect a change to our consolidated statements of operations, financial position, or cash flows.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses,” which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU will be effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Other than additional disclosure, we do not expect a change to our consolidated statements of operations, financial position, or cash flows.

Business Segment Information (Details) $ in Thousands	12 Months Ended
Business Segment Information (Details) $ in Thousands	Sep. 30, 2024 USD ($) segment	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Business Segment Information
Net sales	$ 1,026,759	$ 956,033	$ 857,502
Consolidated EBIT	145,100	127,700	111,300
Less: Interest expense	(15,200)	(8,800)	(4,900)
Earnings before income taxes	$ 129,889	118,947	106,435
Number of reportable segments \| segment	3
Corporate
Business Segment Information
Consolidated EBIT	$ (54,100)	(53,000)	(47,300)
A&D
Business Segment Information
Net sales	448,175	392,443	351,400
A&D \| Operating Segments
Business Segment Information
Consolidated EBIT	84,700	71,600	68,400
USG
Business Segment Information
Net sales	369,061	342,320	278,400
USG \| Operating Segments
Business Segment Information
Consolidated EBIT	85,900	76,700	57,600
Test
Business Segment Information
Net sales	209,523	221,270	227,700
Test \| Operating Segments
Business Segment Information
Consolidated EBIT	$ 28,600	$ 32,400	$ 32,600

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 65,963	$ 41,866
Accounts receivable, less allowance for credit losses of $2,734 and $2,264 in 2024 and 2023, respectively	240,680	198,557
Contract assets, net	130,534	138,633
Inventories	209,164	184,067
Other current assets	22,308	17,972
Total current assets	668,649	581,095
Property, plant and equipment:
Land and land improvements	12,395	12,382
Buildings and leasehold improvements	125,722	112,765
Machinery and equipment	209,036	186,866
Construction in progress	20,708	18,169
Property, Plant and Equipment, Gross	367,861	330,182
Less accumulated depreciation and amortization	(197,265)	(174,698)
Net property, plant and equipment	170,596	155,484
Intangible assets, net	407,602	392,124
Goodwill	539,899	503,177
Operating lease assets, net	37,744	39,839
Other assets	14,130	11,495
Total Assets	1,838,620	1,683,214
Current liabilities:
Current maturities of long-term debt	20,000	20,000
Accounts payable	98,371	86,973
Contract liabilities, net	124,845	112,277
Accrued salaries	47,651	43,814
Accrued other expenses	58,987	51,587
Total current liabilities	349,854	314,651
Deferred tax liabilities, net	75,333	75,531
Non-current operating lease liabilities	34,810	36,554
Other liabilities	39,273	43,336
Long-term debt	102,000	82,000
Total liabilities	601,270	552,072
Shareholders' equity:
Preferred stock, par value $.01 per share, authorized 10,000,000 shares
Common stock, par value $.01 per share, authorized 50,000,000 shares; issued 30,809,483 and 30,781,699 shares in 2024 and 2023 respectively	308	308
Additional paid-in capital	311,942	304,850
Retained earnings	1,082,950	989,315
Accumulated other comprehensive loss, net of tax	(10,775)	(23,969)
Total stockholders' equity before treasury stock	1,384,425	1,270,504
Less treasury stock, at cost (5,056,771 and 4,995,414 common shares in 2024 and 2023, respectively)	(147,075)	(139,362)
Total shareholders' equity	1,237,350	1,131,142
Total Liabilities and Shareholders' Equity	$ 1,838,620	$ 1,683,214

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

A. Principles of Consolidation

B. Basis of Presentation

C. Nature of Operations

Test: The companies within this segment provide their customers with the ability to identify, measure and control magnetic, electromagnetic and acoustic energy.

In addition, for reporting certain financial information we treat Corporate activities as a separate segment.

D. Use of Estimates

E. Revenue Recognition

The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable.

Contract Assets and Liabilities

See the further discussion of our revenue recognition in Note 12 below.

F. Cash and Cash Equivalents

G. Accounts Receivable

H. Inventories

I. Property, Plant and Equipment

J. Leases

K. Goodwill and Other Long-Lived Intangible Assets

See Note 3 regarding goodwill and other intangible assets activity.

L. Capitalized Software

M. Income Taxes

N. Research and Development Costs

O. Foreign Currency Translation

P. Earnings Per Share

The number of shares used in the calculation of earnings per share for each year presented is as follows:


(in thousands)	2024	2023	2022
Weighted Average Shares Outstanding — Basic	25,774	25,802	25,933
Dilutive Restricted Shares	98	77	134
Shares — Diluted	25,872	25,879	26,067

Q. Share-Based Compensation

R. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss of $(10.8) million at September 30, 2024 and $(24.0) million at September 30, 2023 consisted of currency translation adjustments.

S. Fair Value Measurements

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Financial Assets and Liabilities

Nonfinancial Assets and Liabilities

T. New Accounting Pronouncements

Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Sep. 30, 2024	Nov. 13, 2024
Document And Entity Information [Abstract]
Document Type	10-K
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	1-10596
Entity Registrant Name	ESCO Technologies Inc.
Entity Incorporation, State or Country Code	MO
Entity Tax Identification Number	43-1554045
Entity Address, Address Line One	9900A Clayton Road
Entity Address, City or Town	St. Louis
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63124-1186
City Area Code	314
Local Phone Number	213-7200
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ESE
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,785,481
Entity Central Index Key	0000866706
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	GRANT THORNTON LLP
Auditor Firm ID	248
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
ICFR Auditor Attestation Flag	true
Entity Public Float	$ 2,750,000,000
Auditor Location	St. Louis, Missouri
Document Annual Report	true

Business Segment Information

12 Months Ended

Sep. 30, 2024

Business Segment Information

Business Segment Information

9. Business Segment Information

We are organized based on the products and services we offer, and we classify our continuing business operations in three reportable segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG) and RF Test & Measurement (Test). In addition, for reporting certain financial information we treat Corporate activities as a separate segment.

The A&D segment’s operations consist of PTI, VACCO, Crissair, Globe and Mayday. The companies within this segment primarily design and manufacture specialty filtration, fluid control and naval products, including hydraulic filter elements and fluid control devices used in aerospace and defense applications, unique filter mechanisms used in micro-propulsion devices for satellites, custom designed filters for manned aircraft and submarines, products and systems to reduce vibration and/or acoustic signatures and otherwise reduce or obscure a vessel’s signature, and other communications, sealing, surface control and hydrodynamic related applications to enhance U.S. Navy maritime survivability; precision-tolerance machined components for the aerospace and defense industry; metal processing services; and miniature electro-explosive devices utilized in mission-critical defense and aerospace applications.

The USG segment’s operations consist of Doble, Morgan Schaffer and Altanova (collectively, Doble), and NRG. Doble is an industry leader in the development, manufacture and delivery of diagnostic testing and data management solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment, and Altanova’s strong market presence in Europe and Asia provides Doble with a significant international platform. Doble combines three core elements for customers – diagnostic test and condition monitoring instruments, expert consulting, and testing services – and provides access to its large reserve of related empirical knowledge. NRG is a global market leader in the design and manufacture of decision support tools for the renewable energy industry, primarily wind and solar.

The Test segment’s operations consist of ETS-Lindgren Inc., including its related subsidiaries. ETS-Lindgren is an industry leader in designing and manufacturing products and systems to measure and control RF and acoustic energy. It serves the acoustics, medical,

health and safety, electronics, wireless communications, automotive and defense markets, supplying a broad range of turnkey systems, including RF test facilities and measurement systems, acoustic test enclosures, RF and magnetically shielded rooms and secure communication facilities, and providing the design, program management, installation and integration services required to successfully complete these types of facilities. It also supplies a broad range of components including RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software and other test accessories required to perform a variety of tests and measurements, and offers a variety of services including calibration and product tests.

Accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the Consolidated Financial Statements. The operating units within each reporting segment have been aggregated because of similar economic characteristics and meet the other aggregation criteria of FASB ASC 280.

We evaluate the performance of our operating units based on EBIT, which is defined as earnings before interest and taxes. EBIT on a consolidated basis is a non-GAAP financial measure. Intersegment sales and transfers are not significant. Segment assets consist primarily of customer receivables, inventories, capitalized software and fixed assets directly associated with the production processes of the segment. Segment depreciation and amortization is based upon the direct assets listed above.

Net Sales


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	448.2	392.4	351.4
USG		369.1	342.3	278.4
Test		209.5	221.3	227.7
Consolidated totals	$	1,026.8	956.0	857.5

No customer exceeded 10% of consolidated sales in 2024, 2023 or 2022.

EBIT


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	84.7	71.6	68.4
USG		85.9	76.7	57.6
Test		28.6	32.4	32.6
Reconciliation to consolidated totals (Corporate)		(54.1)	(53.0)	(47.3)
Consolidated EBIT		145.1	127.7	111.3
Less: interest expense		(15.2)	(8.8)	(4.9)
Earnings before income tax	$	129.9	118.9	106.4

Identifiable Assets


(Dollars in millions)
Year ended September 30,	2024		2023
A&D	$	391.2	354.7
USG		294.5	254.9
Test		180.9	167.6
Corporate		972.0	906.0
Consolidated totals	$	1,838.6	1,683.2

Corporate consists primarily of deferred taxes, acquired intangible assets including goodwill and cash balances.

Capital Expenditures


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	23.8	12.9	9.4
USG		8.8	4.9	14.4
Test		3.5	4.5	8.3
Corporate		0.1	0.1	—
Consolidated totals	$	36.2	22.4	32.1

In addition to the above amounts, we incurred expenditures for capitalized software of $12.1 million, $12.4 million and $12.9 million in 2024, 2023 and 2022, respectively.

Depreciation and Amortization


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	13.6	12.6	11.1
USG		15.7	14.0	12.6
Test		5.3	5.3	5.4
Corporate		20.8	18.6	19.2
Consolidated totals	$	55.4	50.5	48.3

Depreciation expense of property, plant and equipment was $22.6 million, $21.6 million and $22.4 million for 2024, 2023 and 2022, respectively.

Geographic Information

Net Sales


(Dollars in millions)
Year ended September 30,	2024		2023	2022
United States	$	737.4	665.4	603.2
Asia		109.3	116.3	132.7
Europe		93.5	90.4	72.4
Canada		50.7	46.8	31.2
Other		35.9	37.1	18.0
Consolidated totals	$	1,026.8	956.0	857.5

Long-Lived Assets


(Dollars in millions)
Year ended September 30,	2024		2023
United States	$	152.3	141.9
Canada		4.2	4.3
Mexico		6.6	2.4
Other		7.5	6.9
Consolidated totals	$	170.6	155.5

We attribute net sales to countries based on the location of the customer. We attribute long-lived assets to countries based on the location of the asset.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Beginning balance at Sep. 30, 2021	$ 307,000	$ 297,644,000	$ 830,989,000	$ (2,161,000)	$ (107,083,000)	$ 1,019,696,000
Beginning Balance (in shares) at Sep. 30, 2021	30,666
Comprehensive income (loss):
Net earnings	$ 0	0	82,320,000	0	0	82,320,000
Net unrecognized actuarial loss - SERP	0	0	0	(727,000)	0	(727,000)
Translation adjustments, net of tax of $0	0	0	0	(28,876,000)	0	(28,876,000)
Cash dividends declared ($0.32 per share)	0	0	(8,287,000)	0	0	(8,287,000)
Purchases of common stock into treasury	0	0	0	0	(19,878,000)	(19,878,000)
Stock compensation plans, net of tax of $0	$ 0	3,909,000	0	0	0	3,909,000
Stock compensation plans, net of tax of $0 (in shares)	42
Ending balance at Sep. 30, 2022	$ 307,000	301,553,000	905,022,000	(31,764,000)	(126,961,000)	1,048,157,000
Ending Balance (in shares) at Sep. 30, 2022	30,708
Comprehensive income (loss):
Net earnings	$ 0	0	92,545,000	0	0	92,545,000
Translation adjustments, net of tax of $0	0	0	0	7,795,000	0	7,795,000
Cash dividends declared ($0.32 per share)	0	0	(8,252,000)	0	0	(8,252,000)
Purchases of common stock into treasury	0	0	0	0	(12,401,000)	(12,401,000)
Stock compensation plans, net of tax of $0	$ 1,000	3,297,000	0	0	0	3,298,000
Stock compensation plans, net of tax of $0 (in shares)	74
Ending balance at Sep. 30, 2023	$ 308,000	304,850,000	989,315,000	(23,969,000)	(139,362,000)	1,131,142,000
Ending Balance (in shares) at Sep. 30, 2023	30,782
Comprehensive income (loss):
Net earnings	$ 0	0	101,881,000	0	0	101,881,000
Translation adjustments, net of tax of $0	0	0	0	13,194,000	0	13,194,000
Cash dividends declared ($0.32 per share)	0	0	(8,246,000)	0	0	(8,246,000)
Purchases of common stock into treasury	0	0	0	0	(7,998,000)	(7,998,000)
Stock compensation plans, net of tax of $0	$ 0	7,092,000	0	0	285,000	7,377,000
Stock compensation plans, net of tax of $0 (in shares)	27
Ending balance at Sep. 30, 2024	$ 308,000	$ 311,942,000	$ 1,082,950,000	$ (10,775,000)	$ (147,075,000)	$ 1,237,350,000
Ending Balance (in shares) at Sep. 30, 2024	30,809

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Business Segment Information (Tables)

12 Months Ended

Sep. 30, 2024

Business Segment Information

Schedule of net sales and earnings before income tax

Net Sales


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	448.2	392.4	351.4
USG		369.1	342.3	278.4
Test		209.5	221.3	227.7
Consolidated totals	$	1,026.8	956.0	857.5

No customer exceeded 10% of consolidated sales in 2024, 2023 or 2022.

EBIT


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	84.7	71.6	68.4
USG		85.9	76.7	57.6
Test		28.6	32.4	32.6
Reconciliation to consolidated totals (Corporate)		(54.1)	(53.0)	(47.3)
Consolidated EBIT		145.1	127.7	111.3
Less: interest expense		(15.2)	(8.8)	(4.9)
Earnings before income tax	$	129.9	118.9	106.4

Schedule of Identifiable Assets

Identifiable Assets


(Dollars in millions)
Year ended September 30,	2024		2023
A&D	$	391.2	354.7
USG		294.5	254.9
Test		180.9	167.6
Corporate		972.0	906.0
Consolidated totals	$	1,838.6	1,683.2

Schedule Of Capital Expenditures

Capital Expenditures


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	23.8	12.9	9.4
USG		8.8	4.9	14.4
Test		3.5	4.5	8.3
Corporate		0.1	0.1	—
Consolidated totals	$	36.2	22.4	32.1

Schedule Of Depreciation And Amortization

Depreciation and Amortization


(Dollars in millions)
Year ended September 30,	2024		2023	2022
A&D	$	13.6	12.6	11.1
USG		15.7	14.0	12.6
Test		5.3	5.3	5.4
Corporate		20.8	18.6	19.2
Consolidated totals	$	55.4	50.5	48.3

Schedule Of Geographic Information Net Sale

Net Sales


(Dollars in millions)
Year ended September 30,	2024		2023	2022
United States	$	737.4	665.4	603.2
Asia		109.3	116.3	132.7
Europe		93.5	90.4	72.4
Canada		50.7	46.8	31.2
Other		35.9	37.1	18.0
Consolidated totals	$	1,026.8	956.0	857.5

Schedule Of Geographic Information Long-Lived Assets

Long-Lived Assets


(Dollars in millions)
Year ended September 30,	2024		2023
United States	$	152.3	141.9
Canada		4.2	4.3
Mexico		6.6	2.4
Other		7.5	6.9
Consolidated totals	$	170.6	155.5

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Translation adjustments, net of tax	$ 0	$ 0	$ 0
Cash dividends declared	$ 0.32	$ 0.32	$ 0.32
Stock compensation plans, net of tax	$ 0	$ 0	$ 0

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 101,881	$ 92,545	$ 82,320

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Capital Stock

12 Months Ended

Sep. 30, 2024

Capital Stock

Capital Stock

7. Capital Stock

The 30,809,483 and 30,781,699 common shares as presented in the accompanying Consolidated Balance Sheets at September 30, 2024 and 2023 represent the actual number of shares issued at the respective dates. We held 5,056,771 and 4,995,414 common shares in treasury at September 30, 2024 and 2023, respectively.

In August 2021, our Board of Directors approved a common stock repurchase program authorizing us to repurchase shares of our stock from time to time in Management’s discretion, in the open market or otherwise, up to a maximum total repurchase amount of

$200 million or the maximum amount permitted under our bank credit agreements, if less, over a three-year period expiring September 30, 2024. Under this program we repurchased approximately 80,500 shares in 2024 at an aggregate cost of $8.0 million, approximately 140,000 shares in 2023 at an aggregate cost of $12.4 million, and approximately 257,500 shares in 2022 at an aggregate cost of $20.0 million. We did not repurchase any shares in the fourth quarter of 2024.

In August 2024, our Board renewed the common stock repurchase program for an additional three years expiring September 30, 2027 on terms similar to those of the 2021-2024 program, with a maximum total repurchase amount of $200 million or the maximum amount permitted under our bank credit agreements, if less.

- Definition

The entire disclosure for equity.

+ References

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+ Details

Leases (Tables)

12 Months Ended

Sep. 30, 2024

Leases

Schedule of components of lease costs


	Year Ended		Year Ended
	September 30,		September 30,
(Dollars in thousands)	2024		2023
Finance lease cost:
Amortization	$	1,510		1,572
Interest on lease liabilities		861		925
Operating lease cost		7,634		7,224
Total lease cost	$	10,005		9,721

Schedule of additional information related to leases


	Year Ended			Year Ended
	September 30,			September 30,
(Dollars in thousands)	2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,404			6,964
Operating cash flows from finance leases		861			925
Financing cash flows from finance leases		1,351			1,331

Right-of-use assets obtained in exchange for operating lease liabilities	$	3,563			16,243

Weighted-average remaining lease term:
Operating leases		10.5	yrs		11.1	yrs
Finance leases		10.4	yrs		11.1	yrs
Weighted-average discount rate:
Operating leases		4.6	%		4.5	%
Finance leases		4.7	%		4.6	%

Schedule of reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets

The table below is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on our Consolidated Balance Sheet on September 30, 2024:


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2025	$	6,663		2,233
2026		5,118		2,297
2027		4,813		2,357
2028		4,517		2,417
2029 and thereafter		29,765		14,053
Total minimum lease payments		50,876		23,357
Less: amounts representing interest		11,026		5,373
Present value of net minimum lease payments	$	39,850		17,984
Less: current portion of lease obligations		5,040		1,431
Non-current portion of lease obligations		34,810		16,553

ROU assets	$	37,744		13,683


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2024	$	6,826	2,315
2025		5,645	2,370
2026		4,436	2,434
2027		4,229	2,494
2028 and thereafter		32,806	16,503
Total minimum lease payments		53,942	26,116
Less: amounts representing interest		12,262	6,265
Present value of net minimum lease payments	$	41,680	19,851
Less: current portion of lease obligations		5,126	1,444
Non-current portion of lease obligations		36,554	18,407

ROU assets	$	39,839	15,771

Share-Based Compensation (Details) - USD ($)	12 Months Ended
Share-Based Compensation (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation
Share-Based Payment Arrangement, Expensed and Capitalized, Amount	$ 180,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant	943,707
Vesting period	12 months
Performance-Accelerated Restricted Share (PARS) Awards
Share-Based Compensation
Pretax compensation expense	$ 7,500,000	$ 7,600,000	$ 6,100,000
Vesting period	5 years
Compensation Plan for Non-Employee Directors
Share-Based Compensation
Pretax compensation expense	$ 1,100,000	1,300,000	1,200,000
Total share-based compensation cost	1,900,000
Total income tax benefit recognized		1,300,000	1,500,000
Total unrecognized compensation cost related to share-based compensation arrangements	$ 9,000,000.0
Weighted average period	1 year 2 months 12 days
Compensation Plan for Non-Employee Directors \| Selling, general and administrative expenses
Share-Based Compensation
Total share-based compensation cost	$ 8,600,000	$ 8,900,000	$ 7,300,000
RSU
Share-Based Compensation
Vesting period	3 years 6 months	18 months
Vesting percentage	33.33%

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net earnings	$ 101,881	$ 92,545	$ 82,320
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	13,194	7,795	(28,876)
Amortization of prior service costs, actuarial losses and other			(727)
Total other comprehensive income (loss), net of tax	13,194	7,795	(29,603)
Comprehensive income	$ 115,075	$ 100,340	$ 52,717

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 1,026,759	$ 956,033	$ 857,502
Costs and expenses:
Cost of sales	622,741	580,377	525,457
Selling, general and administrative expenses	224,015	217,110	195,127
Amortization of intangible assets	32,804	28,953	25,936
Interest expense, net	15,247	8,769	4,851
Other expenses (income), net	2,063	1,877	(304)
Total costs and expenses	896,870	837,086	751,067
Earnings before income tax	129,889	118,947	106,435
Income tax expense	28,008	26,402	24,115
Net earnings	$ 101,881	$ 92,545	$ 82,320
Earnings per share:
Basic - Net earnings	$ 3.95	$ 3.59	$ 3.17
Diluted - Net earnings	$ 3.94	$ 3.58	$ 3.16
Average common shares outstanding
Average common shares outstanding - Basic	25,774	25,802	25,933
Average common shares outstanding - Diluted	25,872	25,879	26,067

Commitments and Contingencies

12 Months Ended

Sep. 30, 2024

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

At September 30, 2024, we had $5.0 million in letters of credit outstanding as guarantees of contract performance and cash amounts that exceeded federally insured amounts. As a normal incident of the businesses in which we are engaged, various claims, charges and litigation are asserted or commenced from time to time against us. Additionally, we are currently involved in various stages of investigation and remediation relating to environmental matters. It is the opinion of Management that the aggregate costs involved in the resolution of these matters, and final judgments, if any, which might be rendered against us are adequately accrued, are covered by insurance or are not likely to have a material adverse effect on our financial results as the estimated exposure to loss is not material.

Business Segment Information - Schedule Of Capital Expenditures (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Capital Expenditures	$ 36.2	$ 22.4	$ 32.1
Operating Segments \| A&D
Capital Expenditures	23.8	12.9	9.4
Operating Segments \| USG
Capital Expenditures	8.8	4.9	14.4
Operating Segments \| Test
Capital Expenditures	3.5	4.5	8.3
Corporate
Capital Expenditures	$ 0.1	$ 0.1	$ 0.0

Income Tax Expense (Tables)

12 Months Ended

Sep. 30, 2024

Income Tax Expense

Schedule of the components of income from continuing operations before income taxes


(Dollars in thousands)	2024		2023	2022
United States	$	100,059	98,983	90,674
Foreign		29,830	19,964	15,761
Total income before income taxes	$	129,889	118,947	106,435

Schedule of the principal components of income tax expense (benefit) from continuing operations


(Dollars in thousands)	2024		2023	2022
Federal:
Current	$	25,681	24,192	7,248
Deferred		(7,670)	(5,816)	9,752
State and local:
Current		3,215	3,563	1,635
Deferred		(25)	(1,038)	1,774
Foreign:
Current		8,602	5,694	4,645
Deferred		(1,795)	(193)	(939)
Total	$	28,008	26,402	24,115

Schedule of the actual income tax expense from continuing operations


	2024		2023		2022
Federal corporate statutory rate	21.0	%	21.0	%	21.0	%
State and local, net of Federal benefits	2.4		2.1		2.9
Impact of foreign operations	0.4		0.3		(0.3)
Federal research credit	(0.8)		(1.1)		(0.3)
Executive compensation	0.1		0.9		0.5
Valuation allowance	(0.3)		0.3		(0.3)
U.S. tax on GILTI	2.4		1.2		1.8
GILTI foreign tax credits	(2.0)		(0.9)		(1.5)
FDII deduction	(1.7)		(1.6)		(0.9)
Other, net	0.1		—		(0.2)
Effective income tax rate	21.6	%	22.2	%	22.7	%

Schedule of the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities


(Dollars in thousands)	2024		2023
Deferred tax assets:
Inventories	$	4,577	5,457
Pension and other postretirement benefits		460	658
Capitalized research and development expenditures		9,726	4,114
Lease liabilities		7,451	9,822
Net operating and capital loss carryforwards — domestic		544	553
Net operating loss carryforward — foreign		3,855	3,714
Other compensation-related costs and other cost accruals		10,305	8,691
State credit carryforward		1,601	2,249
Total deferred tax assets		38,519	35,258

Deferred tax liabilities:
ROU assets		(6,895)	(9,822)
Goodwill		(15,416)	(13,313)
Acquisition intangible assets		(66,986)	(61,187)
Depreciation, software amortization		(19,892)	(21,772)
Net deferred tax liabilities before valuation allowance		(70,670)	(70,836)
Less valuation allowance		(1,513)	(1,772)
Net deferred tax liabilities	$	(72,183)	(72,608)

Income Tax Expense - Principal Components Of Income Tax Expense (Benefit) From Continuing Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Federal:
Current	$ 25,681	$ 24,192	$ 7,248
Deferred	(7,670)	(5,816)	9,752
State and local:
Current	3,215	3,563	1,635
Deferred	(25)	(1,038)	1,774
Foreign:
Current	8,602	5,694	4,645
Deferred	(1,795)	(193)	(939)
Total	$ 28,008	$ 26,402	$ 24,115

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2024

Goodwill and Other Intangible Assets

Schedule of intangible assets gross carrying amounts and accumulated amortization


(Dollars in thousands)	2024		2023
Goodwill	$	539,899	503,177

Intangible assets with determinable lives:
Patents
Gross carrying amount	$	2,638	2,516
Less: accumulated amortization		1,415	1,218
Net	$	1,223	1,298

Capitalized software
Gross carrying amount	$	134,119	121,883
Less: accumulated amortization		92,878	80,774
Net	$	41,241	41,109

Customer Relationships
Gross carrying amount	$	330,328	296,927
Less: accumulated amortization		132,135	113,311
Net	$	198,193	183,616

Other
Gross carrying amount	$	15,182	14,232
Less: accumulated amortization		11,173	9,578
Net	$	4,009	4,654
Intangible assets with indefinite lives:
Trade names	$	162,936	161,447

Schedule of carrying amount of goodwill attributable to each business segment


(Dollars in millions)	A&D		Test		USG	Total
Balance as of September 30, 2022	$	110.0		34.0	348.7	492.7
Acquisition activity		5.6		—	—	5.6
Foreign currency translation and other		—		—	4.9	4.9
Balance as of September 30, 2023	$	115.6		34.0	353.6	503.2
Acquisition activity		—		30.9	—	30.9
Foreign currency translation and other		—		2.5	3.3	5.8
Balance as of September 30, 2024	$	115.6		67.4	356.9	539.9

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-2

+ Details

Business Segment Information - Schedule Of Depreciation And Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Depreciation and Amortization	$ 55,409	$ 50,523	$ 48,343
Corporate
Depreciation and Amortization	20,800	18,600	19,200
Operating Segments \| A&D
Depreciation and Amortization	13,600	12,600	11,100
Operating Segments \| USG
Depreciation and Amortization	15,700	14,000	12,600
Operating Segments \| Test
Depreciation and Amortization	$ 5,300	$ 5,300	$ 5,400

Commitments and Contingencies (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies
Letters of credit outstanding, amount	$ 5.0	$ 8.3

Leases

12 Months Ended

Sep. 30, 2024

Leases

Leases

11. Leases

We record our leases in accordance with ASC 842, Leases. We determine at lease inception whether an arrangement that provides control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term (including anticipated renewals). We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that we will exercise the option, Management includes the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, Management uses our incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement.

Our leases for real estate commonly include escalating payments. We include these variable lease payments in the calculation of our ROU asset and lease liability. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease.

In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. Non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred.

Our leases are for office space, manufacturing facilities, and machinery and equipment.

The components of lease costs are shown below:


	Year Ended		Year Ended
	September 30,		September 30,
(Dollars in thousands)	2024		2023
Finance lease cost:
Amortization	$	1,510		1,572
Interest on lease liabilities		861		925
Operating lease cost		7,634		7,224
Total lease cost	$	10,005		9,721

Additional information related to leases is shown below:


	Year Ended			Year Ended
	September 30,			September 30,
(Dollars in thousands)	2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,404			6,964
Operating cash flows from finance leases		861			925
Financing cash flows from finance leases		1,351			1,331

Right-of-use assets obtained in exchange for operating lease liabilities	$	3,563			16,243

Weighted-average remaining lease term:
Operating leases		10.5	yrs		11.1	yrs
Finance leases		10.4	yrs		11.1	yrs
Weighted-average discount rate:
Operating leases		4.6	%		4.5	%
Finance leases		4.7	%		4.6	%


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2025	$	6,663		2,233
2026		5,118		2,297
2027		4,813		2,357
2028		4,517		2,417
2029 and thereafter		29,765		14,053
Total minimum lease payments		50,876		23,357
Less: amounts representing interest		11,026		5,373
Present value of net minimum lease payments	$	39,850		17,984
Less: current portion of lease obligations		5,040		1,431
Non-current portion of lease obligations		34,810		16,553

ROU assets	$	37,744		13,683


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2024	$	6,826	2,315
2025		5,645	2,370
2026		4,436	2,434
2027		4,229	2,494
2028 and thereafter		32,806	16,503
Total minimum lease payments		53,942	26,116
Less: amounts representing interest		12,262	6,265
Present value of net minimum lease payments	$	41,680	19,851
Less: current portion of lease obligations		5,126	1,444
Non-current portion of lease obligations		36,554	18,407

ROU assets	$	39,839	15,771

We include operating and finance lease liabilities in the Consolidated Balance Sheet in accrued other expenses (current portion) and other liabilities (long-term portion). We include operating lease ROU assets as a caption on the Consolidated Balance Sheet and include finance lease ROU assets in Property, plant and equipment on the Consolidated Balance Sheet.

Debt - Additional information (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Aug. 05, 2024
Debt
Available to borrow under the credit facility		$ 373,000
Cash on hand		65,963	$ 41,866
Current maturities of long-term debt		20,000
Letters of credit outstanding, amount		$ 5,000	$ 8,300
Debt, weighted average interest rate		6.72%	5.82%
Debt instrument, interest rate		6.58%
Short-Term debt, maximum month-end outstanding amount		$ 191,000	$ 161,000
Equity interests in direct and indirect material foreign subsidiaries, pledged as collateral (as a percent)	100.00%
Short-Term debt, average outstanding amount		$ 166,600	$ 140,300
Revolving Credit Facility
Debt
Line of credit facility, amount outstanding	$ 500,000
Line of credit facility, commitment fee amount	$ 250,000
Minimum
Debt
Facility fee		12.50%
Maximum
Debt
Incremental term loan		$ 250,000
Facility fee		25.00%
Maximum \| Loan payable
Debt
Credit facility, aggregate principal amount				$ 375,000

Leases - Additional information related to leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 7,404	$ 6,964
Operating cash flows from finance leases	861	925
Financing cash flows from finance leases	1,351	1,331
Right-of-use assets obtained in exchange for operating lease liabilities
Operating leases	$ 3,563	$ 16,243
Weighted-average remaining lease term:
Operating leases	10 years 6 months	11 years 1 month 6 days
Finance leases	10 years 4 months 24 days	11 years 1 month 6 days
Weighted-average discount rate:
Operating leases	4.60%	4.50%
Finance leases	4.70%	4.60%

Inventories (Tables)

12 Months Ended

Sep. 30, 2024

Inventories

Schedule of inventories


(Dollars in thousands)	2024		2023
Finished goods	$	46,586	34,577
Work in process		47,903	42,178
Raw materials		114,675	107,312
Total	$	209,164	184,067

Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of revenues
Revenues	$ 1,026,759	$ 956,033	$ 857,502
Point in time
Disaggregation of revenues
Revenues	557,975	504,241
Over time
Disaggregation of revenues
Revenues	468,784	451,792
United States
Disaggregation of revenues
Revenues	737,360	665,391	603,200
International
Disaggregation of revenues
Revenues	289,399	290,642
Commercial
Disaggregation of revenues
Revenues	711,970	695,773
Government
Disaggregation of revenues
Revenues	314,789	260,260
A&D
Disaggregation of revenues
Revenues	448,175	392,443	351,400
A&D \| Point in time
Disaggregation of revenues
Revenues	213,625	178,222
A&D \| Over time
Disaggregation of revenues
Revenues	234,550	214,221
A&D \| United States
Disaggregation of revenues
Revenues	376,707	326,566
A&D \| International
Disaggregation of revenues
Revenues	71,468	65,877
A&D \| Commercial
Disaggregation of revenues
Revenues	186,171	170,193
A&D \| Government
Disaggregation of revenues
Revenues	262,004	222,250
USG
Disaggregation of revenues
Revenues	369,061	342,320	278,400
USG \| Point in time
Disaggregation of revenues
Revenues	301,200	281,977
USG \| Over time
Disaggregation of revenues
Revenues	67,861	60,343
USG \| United States
Disaggregation of revenues
Revenues	240,153	220,536
USG \| International
Disaggregation of revenues
Revenues	128,908	121,784
USG \| Commercial
Disaggregation of revenues
Revenues	361,478	331,836
USG \| Government
Disaggregation of revenues
Revenues	7,583	10,484
Test
Disaggregation of revenues
Revenues	209,523	221,270	$ 227,700
Test \| Point in time
Disaggregation of revenues
Revenues	43,150	44,042
Test \| Over time
Disaggregation of revenues
Revenues	166,373	177,228
Test \| United States
Disaggregation of revenues
Revenues	120,500	118,289
Test \| International
Disaggregation of revenues
Revenues	89,023	102,981
Test \| Commercial
Disaggregation of revenues
Revenues	164,321	193,744
Test \| Government
Disaggregation of revenues
Revenues	$ 45,202	$ 27,526

Revenues - Remaining Performance Obligations (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Remaining Performance Obligations
Contract assets	$ 130,500	$ 138,600	$ 125,200
Contract liabilities	134,300	123,100	137,600
Accounts receivable	240,680	$ 198,557	$ 164,600
Revenue recognized	68,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Remaining Performance Obligations
Remaining performance obligations amount	$ 879,000
Revenue remaining performance obligation expected timing of satisfaction, Period	12 months
Percentage of remaining performance obligation expected to be recognized	70.00%

Capital Stock (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended	12 Months Ended
Capital Stock (Details) - USD ($) $ in Millions	Aug. 31, 2024	Aug. 31, 2021	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Capital Stock
Common shares as presented in the accompanying Consolidated Balance Sheets			30,809,483	30,809,483	30,781,699
Common shares in treasury			5,056,771	5,056,771	4,995,414
Board of Directors authorized an expanded stock repurchase program	$ 200.0		$ 200.0	$ 200.0
Stock repurchases during period, shares			0	80,500	140,000	257,500
Stock repurchased during period, value				$ 8.0	$ 12.4	$ 20.0
Share Repurchase Program, Period in Force	3 years	3 years

- Definition

Number of shares that have been repurchased during the period and have not been retired and are not held in treasury. Some state laws may govern the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

+ References + Details

- Definition

Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

+ References + Details

Revenues (Tables)

12 Months Ended

Sep. 30, 2024

Revenues

Schedule of disaggregation of revenue by reportable segment

Year Ended September 30, 2024

(In thousands)

A&D

USG

Test

Total

Customer type:

Commercial

186,171

361,478

164,321

711,970

Government

262,004

7,583

45,202

314,789

Total revenues

448,175

369,061

209,523

1,026,759

Geographic location:

United States

376,707

240,153

120,500

737,360

International

71,468

128,908

89,023

289,399

Total revenues

448,175

369,061

209,523

1,026,759

Revenue recognition method:

Point in time

213,625

301,200

43,150

557,975

Over time

234,550

67,861

166,373

468,784

Total revenues

448,175

369,061

209,523

1,026,759


Year Ended September 30, 2023
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	170,193		331,836		193,744		695,773
Government		222,250		10,484		27,526		260,260
Total revenues	$	392,443		342,320		221,270		956,033

Geographic location:
United States	$	326,566		220,536		118,289		665,391
International		65,877		121,784		102,981		290,642
Total revenues	$	392,443		342,320		221,270		956,033

Revenue recognition method:
Point in time	$	178,222		281,977		44,042		504,241
Over time		214,221		60,343		177,228		451,792
Total revenues	$	392,443		342,320		221,270		956,033

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
CONSOLIDATED BALANCE SHEETS
Net of allowance for credit losses	$ 2,734	$ 2,264
Preferred stock, par value per share	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	30,809,483	30,781,699
Treasury stock, shares	5,056,771	4,995,414

Income Tax Expense - Schedule Of Actual Income Tax Expense (Benefit) From Continuing Operations (Details)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Income Tax Expense
Federal corporate statutory rate	21.00%	21.00%	21.00%
State and local, net of Federal benefits	2.40%	2.10%	2.90%
Impact of foreign operations	0.40%	0.30%	(0.30%)
Federal research credit	(0.80%)	(1.10%)	(0.30%)
Executive compensation	0.10%	0.90%	0.50%
Valuation allowance	(0.30%)	0.30%	(0.30%)
U.S. tax on GILTI	2.40%	1.20%	1.80%
Foreign tax credits	(2.00%)	(0.90%)	(1.50%)
FDII deduction	(1.70%)	(1.60%)	(0.90%)
Other, net	0.10%	0.00%	(0.20%)
Effective income tax rate	21.60%	22.20%	22.70%

Leases - Reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Operating leases
2024	$ 6,663	$ 6,826
2025	5,118	5,645
2026	4,813	4,436
2027	4,517	4,229
2028 and thereafter	29,765	32,806
Total minimum lease payments	50,876	53,942
Less: amounts representing interest	11,026	12,262
Present value of net minimum lease payments	39,850	41,680
Less: current portion of lease obligations	5,040	5,126
Non-current portion of lease obligations	34,810	36,554
ROU assets	$ 37,744	$ 39,839
Location of operating lease liabilities included on Consolidated Balance Sheets	Accrued other expenses	Accrued other expenses
Finance leases
2024	$ 2,233	$ 2,315
2025	2,297	2,370
2026	2,357	2,434
2027	2,417	2,494
2028 and thereafter	14,053	16,503
Total minimum lease payments	23,357	26,116
Less: amounts representing interest	5,373	6,265
Present value of net minimum lease payments	17,984	19,851
Less: current portion of lease obligations	1,431	1,444
Non-current portion of lease obligations	16,553	18,407
ROU assets	$ 13,683	$ 15,771
Location of finance lease liabilities included on Consolidated Balance Sheets	Accrued other expenses	Accrued other expenses
Location of finance lease ROU assets included on Consolidated Balance Sheets	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net

Income Tax Expense - Components Of Income From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Income Tax Expense
United States	$ 100,059	$ 98,983	$ 90,674
Foreign	29,830	19,964	15,761
Earnings before income tax	$ 129,889	$ 118,947	$ 106,435

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

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+ Details

Summary of Significant Accounting Policies- Additional Information (Details) shares in Thousands	12 Months Ended
	Sep. 30, 2024 USD ($) segment shares	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Significant Accounting Policies
Number of Reportable Segments \| segment	3
Accumulated other comprehensive loss, net of tax	$ (10,775,000)	$ (23,969,000)
Cash and cash equivalents held in bank	$ 59,900,000
Option to extend	true
Research and development expenses	$ 12,000,000.0	$ 13,000,000.0	$ 12,300,000
Number of Anti dilutive shares \| shares	0
Fair value of financial instruments	$ 0
Maximum
Significant Accounting Policies
Lease term	20 years
Maximum \| Capitalized software
Significant Accounting Policies
Estimated useful lives	7 years
Maximum \| Building
Significant Accounting Policies
Estimated useful lives	40 years
Maximum \| Machinery and Equipment
Significant Accounting Policies
Estimated useful lives	10 years
Maximum \| Office Furniture And Equipment
Significant Accounting Policies
Estimated useful lives	10 years
Minimum \| Capitalized software
Significant Accounting Policies
Estimated useful lives	3 years
Minimum \| Building
Significant Accounting Policies
Estimated useful lives	10 years
Minimum \| Machinery and Equipment
Significant Accounting Policies
Estimated useful lives	3 years
Minimum \| Office Furniture And Equipment
Significant Accounting Policies
Estimated useful lives	3 years
USG Segment
Significant Accounting Policies
Percentage of segment revenues recognized when services are performed or when products are delivered	82.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	29.00%
Percentage of segment revenues recognized on straight line basis	18.00%
Percentage on consolidated revenues recognized on straight line basis	7.00%
Test Segment
Significant Accounting Policies
Percentage of segment revenues recognized when services are performed or when products are delivered	20.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	4.00%
Percentage of segment revenues recorded under percentage of completion method	80.00%
Percentage of consolidated revenues recorded under percentage of completion method	16
Software Contract
Significant Accounting Policies
Percentage of segment revenues recognized when services are performed or when products are delivered	4.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	2.00%
Aero Space Defense
Significant Accounting Policies
Percentage of segment revenues recognized when services are performed or when products are delivered	48.00%
Percentage of consolidated revenues recognized when services are performed or when products are delivered	21.00%
Percentage of segment revenues recorded over time	52.00%
Percentage of consolidate revenues recorded over time	23.00%

Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Debt
Total borrowings	$ 122,000	$ 102,000
Current portion of long-term debt and short-term borrowings	(20,000)	(20,000)
Total long-term debt, less current portion	$ 102,000	$ 82,000

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Business Segment Information - Schedule Of Identifiable Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Identifiable Assets	$ 1,838,620	$ 1,683,214
Operating Segments \| A&D
Identifiable Assets	391,200	354,700
Operating Segments \| USG
Identifiable Assets	294,500	254,900
Operating Segments \| Test
Identifiable Assets	180,900	167,600
Corporate
Other Assets	$ 972,000	$ 906,000

- Definition

Amount of asset recognized for present right to economic benefit.

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+ Details

Income Tax Expense

12 Months Ended

Sep. 30, 2024

Income Tax Expense

Income Tax Expense

5. Income Tax Expense

The components of income before income taxes for 2024, 2023 and 2022 consisted of the following:


(Dollars in thousands)	2024		2023	2022
United States	$	100,059	98,983	90,674
Foreign		29,830	19,964	15,761
Total income before income taxes	$	129,889	118,947	106,435

The principal components of income tax expense (benefit) for 2024, 2023 and 2022 consist of:


(Dollars in thousands)	2024		2023	2022
Federal:
Current	$	25,681	24,192	7,248
Deferred		(7,670)	(5,816)	9,752
State and local:
Current		3,215	3,563	1,635
Deferred		(25)	(1,038)	1,774
Foreign:
Current		8,602	5,694	4,645
Deferred		(1,795)	(193)	(939)
Total	$	28,008	26,402	24,115

The actual income tax expense for 2024, 2023 and 2022 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows:


	2024		2023		2022
Federal corporate statutory rate	21.0	%	21.0	%	21.0	%
State and local, net of Federal benefits	2.4		2.1		2.9
Impact of foreign operations	0.4		0.3		(0.3)
Federal research credit	(0.8)		(1.1)		(0.3)
Executive compensation	0.1		0.9		0.5
Valuation allowance	(0.3)		0.3		(0.3)
U.S. tax on GILTI	2.4		1.2		1.8
GILTI foreign tax credits	(2.0)		(0.9)		(1.5)
FDII deduction	(1.7)		(1.6)		(0.9)
Other, net	0.1		—		(0.2)
Effective income tax rate	21.6	%	22.2	%	22.7	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2024 and 2023 are presented below:


(Dollars in thousands)	2024		2023
Deferred tax assets:
Inventories	$	4,577	5,457
Pension and other postretirement benefits		460	658
Capitalized research and development expenditures		9,726	4,114
Lease liabilities		7,451	9,822
Net operating and capital loss carryforwards — domestic		544	553
Net operating loss carryforward — foreign		3,855	3,714
Other compensation-related costs and other cost accruals		10,305	8,691
State credit carryforward		1,601	2,249
Total deferred tax assets		38,519	35,258

Deferred tax liabilities:
ROU assets		(6,895)	(9,822)
Goodwill		(15,416)	(13,313)
Acquisition intangible assets		(66,986)	(61,187)
Depreciation, software amortization		(19,892)	(21,772)
Net deferred tax liabilities before valuation allowance		(70,670)	(70,836)
Less valuation allowance		(1,513)	(1,772)
Net deferred tax liabilities	$	(72,183)	(72,608)

We had a foreign net operating loss (NOL) carryforward of $13.8 million at September 30, 2024, which reflects tax loss carryforwards in Germany, Canada, Japan, and the United Kingdom. Approximately $11.7 million of the tax loss carryforwards have no expiration date while the remaining $2.1 million will expire between 2031 and 2042.We had deferred tax assets related to state NOL carryforwards of $0.5 million at September 30, 2024 which expire between 2025 and 2044. We also had state research and other credit carryforwards of $1.6 million of which $0.1 million expires in 2039. The remaining $1.5 million does not have an expiration date.

The valuation allowance for deferred tax assets as of September 30, 2024 and 2023 was $1.5 million and $1.8 million, respectively. The net change in the total valuation allowance for each of the years ended September 30, 2024 and 2023 was a decrease of $0.3 million and an increase of $0.6 million, respectively. In addition, we maintained a valuation allowance against state NOL carryforwards that are not expected to be realized in future periods of $0.5 million at September 30 of both 2024 and 2023. Lastly, we released a valuation allowance against foreign deferred tax assets of $0.3 million in the year ended September 30, 2024, which resulted in a valuation allowance against foreign deferred assets which may not be realized in future periods of $1.0 million and $1.3 million at September 30, 2024 and 2023, respectively.

As of September 30, 2024, the Company does not have any material unrecognized tax benefits.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

Share-Based Compensation

12 Months Ended

Sep. 30, 2024

Share-Based Compensation

Share-Based Compensation

8. Share-Based Compensation

We provide compensation benefits to certain key employees under several share-based plans providing for performance-accelerated and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan for non-employee directors. As of September 30, 2024, our equity compensation plans had a total of 943,707 shares authorized and available for future issuance.

Performance-Accelerated Restricted Stock Unit (PARS) Awards, Time-Vested Restricted Stock Unit (RSU) Awards, and Performance Share Unit (PSU) Awards

PARS awards represented the right to receive a specified number of shares of Company common stock if and when the award vested. PARS awards were last granted in fiscal 2020, and the last outstanding PARS awards vested in October 2024. PARS awards were not stock and did not give the recipient any rights as a shareholder until it vested and was paid out in shares of stock. PARS awards had a five-year vesting period, with accelerated vesting if certain targets based on market conditions are achieved. In these cases, if it was probable that the performance condition would be met, the Company recognized compensation cost on a straight-line basis over the shorter performance period; otherwise, it would recognize compensation cost over the longer service period. Compensation cost for the PARS awards outstanding during fiscal 2023 and 2024 was recognized over the shorter performance period, as it was probable the performance condition would be met. The PARS award grants were valued at the stock price on the date of grant.

The terms of the Company’s RSU awards are similar to those of the PARS awards, but without any provision for acceleration of the vesting date. Each RSU represents the right to receive one share of Company common stock if the recipient remains continuously employed by the Company until the award vests. RSU awards granted prior to fiscal 2023 were normally granted in the spring with full vesting approximately 3 ½ years after the effective award date, while RSU awards granted in fiscal 2023 were normally granted in the spring with vesting one-third at the end of each November beginning approximately 18 months after the award date, and RSU awards granted in fiscal 2024 were granted in the fall with vesting one-third at the end of each November beginning approximately 12 months after the award date. The RSU award grants were valued at the stock price on the date of grant.

Beginning in fiscal 2022, the Company granted PSU awards with a three-year vesting period, with each PSU representing the right to receive one share of Company common stock if certain performance targets are achieved. The targets are based on achieving certain EBITDA metrics and a Total Shareholder return (rTSR) metric over a three-year period. Beginning in fiscal 2023, the Company granted PSU awards with a three-year vesting period, with performance targets based on achieving certain EBITDA and Return on Invested Capital (ROIC) metrics and utilizing a rTSR modifier.

Pretax compensation expense related to the above awards was $7.5 million, $7.6 million and $6.1 million for 2024, 2023 and 2022, respectively.

The following summary presents information regarding outstanding share-based compensation awards as of the specified dates, and changes during the specified periods:


	FY 2024			FY 2023			FY 2022
		Estimated			Estimated			Estimated
		Weighted			Weighted			Weighted
	Shares	Avg. Price		Shares	Avg. Price		Shares	Avg. Price
Nonvested at October 1,	189,725	$	94.91	265,367	$	84.29	226,705	$	76.15
Granted	78,016		108.16	84,880		93.64	117,045		82.54
Vested	(34,753)		96.52	(119,811)		82.28	(75,327)		56.87
Cancelled	(12,230)		94.91	(40,711)		85.00	(3,056)		89.51
Nonvested at September 30,	220,758	$	102.40	189,725	$	94.91	265,367	$	84.29

Compensation Plan for Non-Employee Directors

In addition to an annual cash retainer, we provide each non-employee director with an annual equity award having a grant date market value of $180,000, based on the NYSE closing price of the Company’s stock on the date of grant. The award is in the form of Restricted Stock Units, each of which represents the right to receive one share of Company stock at the end of a one-year vesting period. At the end of the vesting period, each award will be converted into the right to receive the same number of actual shares of common stock, plus additional shares representing the value of the quarterly dividends which would have accrued on the underlying shares during the vesting period. Compensation expense related to the non-employee director grants was $1.1 million, $1.3 million and $1.2 million for 2024, 2023 and 2022, respectively.

Total Share-Based Compensation

The total share-based compensation cost that has been recognized in results of operations and included within SG&A was $8.6 million, $8.9 million and $7.3 million for 2024, 2023 and 2022, respectively. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $1.9 million, $1.3 million and $1.5 million for 2024, 2023 and 2022, respectively. As of September 30, 2024, there was $9.0 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 1.2 years.

Debt

12 Months Ended

Sep. 30, 2024

Debt

Debt

6. Debt

Debt consists of the following at September 30, 2024 and 2023:


(Dollars in thousands)	2024		2023
Total borrowings	$	122,000	102,000
Current portion of long-term debt and short-term borrowings		(20,000)	(20,000)
Total long-term debt, less current portion	$	102,000	82,000

On August 30, 2023, the Company entered into a new five-year credit facility (“the Credit Facility"), replacing its previous credit facility which would have matured September 27, 2024. The Credit Facility included a $500 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of seven banks led by JP Morgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and Commerce Bank and TD Bank, N.A. as co-documentation agents. The Credit Facility matures August 30, 2028, with balance due by this date.

On August 5, 2024, the Company and certain of its subsidiaries entered into Amendment No. 1 (the “Amendment”) to the Credit Facility which, among other things, (i) implements a senior incremental delayed draw term loan credit facility in an aggregate principal amount of up to $375 million (the “Incremental Facility”), and (ii) permits the direct or indirect acquisition by the Registrant or certain of its subsidiaries of all of the issued and outstanding shares of Ultra PMES Limited, Measurement Systems, Inc., EMS Development Corporation, and DNE Technologies, Inc. (the “SM&P Acquisition”), pursuant to and in accordance with the terms and conditions of that certain Sale and Purchase Agreement, dated July 8, 2024, among Ultra Electronics Holdings Limited, as parent seller, the Registrant, as guarantor, and certain of the Registrant’s subsidiaries as buyers. The proceeds of the loans drawn under the Incremental Facility will be applied to pay a portion of the cash consideration for the SM&P Acquisition and other customary fees, premiums, expenses and costs incurred in connection with the SM&P Acquisition.

Interest on borrowings under the Credit Facility is calculated at a spread over either an Adjusted Term SOFR Rate, Adjusted EURIBOR Rate, Adjusted CDOR Rate, Alternate Base Rate or Daily Simple RFR, at the Company’s election. The Credit Facility also requires a facility fee ranging from 12.5 to 25 basis points per annum on the unused portion. The interest rate spreads and the facility fee are subject to increase or decrease depending on the Company’s leverage ratio.

The Credit Facility is secured by the unlimited guaranty of our direct and indirect material U.S. subsidiaries and the pledge of 100% of the equity interests of our direct and indirect material foreign subsidiaries. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. As of September 30, 2024, we were in compliance with all covenants.

At September 30, 2024, we had approximately $373 million available to borrow under the Credit Facility, excluding the Incremental Facility, plus the $250 million increase option subject to the lenders’ consent, in addition to $66.0 million cash on hand. We classified $20 million as the current portion of long-term debt as of September 30, 2024, as we intend to repay at least this amount within the next twelve months; however, we have no contractual obligation to repay such amount during the next twelve months.

During 2024 and 2023, our maximum aggregate short-term borrowings at any month-end were $191 million and $161 million, respectively, and the average aggregate short-term borrowings outstanding based on month-end balances were $166.6 million and $140.3 million, respectively. The weighted average interest rates were 6.72% and 5.82% for 2024 and 2023, respectively. As of September 30, 2024, the interest rate on our debt was 6.58%. The letters of credit issued and outstanding under the Credit Facility totaled $5.0 million and $8.3 million at September 30, 2024 and 2023, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Goodwill and Other Intangible Assets - Changes in carrying amount of goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Goodwill and Other Intangible Assets
Beginning Balance	$ 503,177	$ 492,700
Acquisition activity	30,900	5,600
Foreign currency translation and other	5,800	4,900
Ending Balance	539,899	503,177
Test
Goodwill and Other Intangible Assets
Beginning Balance	34,000	34,000
Acquisition activity	30,900
Foreign currency translation and other	2,500
Ending Balance	67,400	34,000
A&D
Goodwill and Other Intangible Assets
Beginning Balance	115,600	110,000
Acquisition activity		5,600
Ending Balance	115,600	115,600
USG
Goodwill and Other Intangible Assets
Beginning Balance	353,600	348,700
Foreign currency translation and other	3,300	4,900
Ending Balance	$ 356,900	$ 353,600

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

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+ Details

Income Tax Expense - Tax Effects Of Temporary Differences That Give Rise To Significant Portions Of The Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Deferred tax assets:
Inventories	$ 4,577	$ 5,457
Pension and other postretirement benefits	460	658
Capitalized research and development expenditures	9,726	4,114
Lease liabilities	7,451	9,822
Net operating and capital loss carryforwards - domestic	544	553
Net operating loss carryforward - foreign	3,855	3,714
Other compensation-related costs and other cost accruals	10,305	8,691
State credit carryforward	1,601	2,249
Total deferred tax assets	38,519	35,258
Deferred tax liabilities:
ROU assets	(6,895)	(9,822)
Goodwill	(15,416)	(13,313)
Acquisition intangible assets	(66,986)	(61,187)
Depreciation, software amortization	(19,892)	(21,772)
Net deferred tax liabilities before valuation allowance	(70,670)	(70,836)
Less valuation allowance	(1,513)	(1,772)
Net deferred tax liabilities	$ (72,183)	$ (72,608)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Schedule of shares used in the calculation of earnings per share


(in thousands)	2024	2023	2022
Weighted Average Shares Outstanding — Basic	25,774	25,802	25,933
Dilutive Restricted Shares	98	77	134
Shares — Diluted	25,872	25,879	26,067

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net earnings	$ 101,881	$ 92,545	$ 82,320
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	55,409	50,523	48,343
Stock compensation expense	8,599	8,910	7,320
Changes in assets and liabilities	(29,385)	(68,821)	(11,654)
Effect of deferred taxes on tax provision	(8,962)	(6,267)	8,946
Net cash provided by operating activities	127,542	76,890	135,275
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	(56,383)	(17,694)	(10,906)
Capital expenditures	(36,166)	(22,377)	(32,101)
Additions to capitalized software	(12,090)	(12,397)	(12,912)
Net cash used by investing activities	(104,639)	(52,468)	(55,919)
Cash flows from financing activities:
Proceeds from long-term debt	217,000	103,000	100,000
Principal payments on long-term debt	(197,000)	(154,000)	(101,000)
Dividends paid	(8,246)	(8,252)	(8,268)
Purchases of common stock into treasury	(7,998)	(12,401)	(19,878)
Debt issuance costs	(2,988)	(1,826)
Other	(1,541)	(4,851)	(2,976)
Net cash used by financing activities	(773)	(78,330)	(32,122)
Effect of exchange rate changes on cash and cash equivalents	1,967	(1,950)	(5,742)
Net increase (decrease) in cash and cash equivalents	24,097	(55,858)	41,492
Cash and cash equivalents at beginning of year	41,866	97,724	56,232
Cash and cash equivalents at end of year	65,963	41,866	97,724
Changes in assets and liabilities:
Accounts receivable, net	(40,928)	(32,151)	(17,676)
Contract assets and liabilities, net	20,869	(26,025)	(12,419)
Inventories	(23,486)	(18,466)	(13,788)
Other assets and liabilities	(8,407)	434	9,412
Accounts payable	10,702	7,045	21,985
Accrued expenses	11,865	342	832
Changes in assets and liabilities	(29,385)	(68,821)	(11,654)
Supplemental cash flow information:
Interest paid	14,535	8,662	2,835
Income taxes paid (including state & foreign)	$ 38,007	$ 30,244	$ 9,856