UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(MARK ONE)

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

                                       OR

(    )  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(D) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM -------- TO--------

     COMMISSION FILE NUMBER 1-10596

                             ESCO TECHNOLOGIES INC.

             (Exact name of registrant as specified in its charter)


MISSOURI                                                      43-1554045
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                       Identification No.)

9900A CLAYTON ROAD
ST. LOUIS, MISSOURI                                           63124-1186
(Address of principal executive                               (Zip Code)
offices)

       Registrant's telephone number, including area code: (314) 213-7200

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No
                                      ---   ----

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the  Exchange  Act.
  Large accelerated filer X Accelerated filer    Non-accelerated filer
                         ---                 ---                       ---

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes    No X
                                               ---   ---

     Indicate the number of shares  outstanding of each of the issuer's class of
common stock, as of the latest practicable date.

Class                                           Outstanding at July 31, 2006
- ----------------------------------------       ------------------------------
[Common stock, $.01 par value per share]       25,821,770 shares


PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

                                                         Three Months Ended
                                                              June 30,
                                                           -------------

                                                        2006            2005
                                                        ----            ----

Net sales                                             $ 123,626        108,800
Costs and expenses:
   Cost of sales (excluding amortization)                77,152         71,732
    Asset impairment                                          -            790
    Amortization of intangible assets                     2,554            475
    Selling, general and administrative expenses         28,385         21,662
   Interest income                                         (195)          (534)
   Other income, net                                       (513)           (38)
                                                          -----         -------
     Total costs and expenses                           107,383         94,087
Earnings before income taxes                             16,243         14,713
Income tax expense                                        5,080          2,312
                                                       --------       --------
Net earnings                                          $  11,163         12,401
                                                         ======         ======

Earnings per share:
    Basic                                             $    0.43           0.49
                                                           ====           ====

   Diluted                                            $    0.42           0.47
                                                           ====           ====

See accompanying notes to consolidated financial statements.


                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

                                                   Nine Months Ended
                                                       June 30,
                                                    -------------

                                                 2006             2005
                                                 ----             ----

Net sales                                     $ 337,096          319,335
Costs and expenses:
   Cost of sales (excluding amortization)       221,654          209,070
   Asset impairment                                   -              790
    Amortization of intangible assets             4,603            1,463
    Selling, general and administrative
    expenses                                     78,574           62,395
   Interest income                               (1,012)          (1,317)
   Other income, net                             (2,440)          (1,207)
                                                 -------           -----
     Total costs and expenses                   301,379          271,194
Earnings before income taxes                     35,717           48,141
Income tax expense                               15,006           14,790
                                                 ------           ------
Net earnings                                  $  20,711           33,351
                                                 ======           ======

Earnings per share:
   Basic                                      $    0.81             1.31
                                                   ====             ====

   Diluted                                    $    0.78             1.27
                                                   ====             ====

See accompanying notes to consolidated financial statements.



                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

                                              June 30,      September 30,
                                                2006             2005
                                               ------           ------
ASSETS                                       (Unaudited)
Current assets:
   Cash and cash equivalents                  $   35,258          104,484
   Accounts receivable, net                       82,744           68,819
   Costs and estimated earnings on
     long-term contracts less progress,
     billings of $5,618 and $7,033,
     respectively                                  2,321            4,392
   Inventories                                    50,208           48,645
   Current portion of deferred tax
     assets                                       26,616           30,219
   Other current assets                           11,487            8,394
                                                --------          -------
       Total current assets                      208,634          264,953

Property, plant and equipment, net                69,363           67,190
Goodwill                                         143,677           68,880
Other assets                                      63,783           27,697
                                                --------         --------
                                              $  485,457          428,720
                                                 =======          =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Short-term borrowings and current
     maturities of long-term debt             $        -                -
   Accounts payable                               46,918           29,299
   Advance payments on long-term
     contracts, less costs
     incurred of $13,544 and $10,949,              5,471            6,773
     respectively
   Accrued salaries                               11,715           12,024
   Accrued other expenses                         21,845           14,661
                                                --------         --------
       Total current liabilities                  85,949           62,757

Deferred income                                    6,452            3,134
Pension obligations                               17,474           17,481
Other liabilities                                 16,761           14,324
Long-term debt                                         -                -
                                               ---------         --------
       Total liabilities                         126,636           97,696
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 28,986,800 and
      28,738,958 shares, respectively                290              287
   Additional paid-in capital                    233,865          228,317
   Retained earnings                             180,074          159,363
   Accumulated other comprehensive
      loss                                        (4,147)          (5,566)
                                                 -------         --------
                                                 410,082          382,401
   Less treasury stock, at cost:
     3,168,426 and 3,175,626 common
     shares, respectively                        (51,261)         (51,377)
                                                 -------          --------
       Total shareholders' equity                358,821          331,024
                                              $  485,457          428,720
                                                 =======          =======

See accompanying notes to consolidated financial statements.



                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)

                                                    Nine Months Ended
                                                        June 30,
                                                       ---------

                                                2006             2005
                                               -------          ------
Cash flows from operating activities:
    Net earnings                              $ 20,711              33,351
    Adjustments    to    reconcile    net
      earnings  to net cash  provided  by
      operating activities:
       Depreciation and amortization            12,407               9,263
       Stock compensation expense                3,660               2,064
       Changes   in   operating   working
         capital                                13,005              (3,020)
       Effect of deferred taxes                    444               3,526
       Other                                    (2,831)                198
                                              --------               -----
          Net cash  provided by operating
              activities                        47,396              45,382
Cash flows from investing activities:
    Acquisition of businesses,  less cash
       acquired                                (91,468)                  -
    Capital expenditures                        (6,753)             (6,580)
    Additions to capitalized software          (24,413)             (4,951)
                                              ---------            -------
       Net   cash   used   by   investing
          activities                          (122,634)            (11,531)
Cash flows from financing activities:
    Borrowings from long-term debt              52,000                   -
    Principal payments on long-term debt
                                               (52,000)               (122)
    Purchases   of  common   stock   into
      treasury                                       -             (24,928)
    Excess   tax   benefit   from   stock
      options exercised                          1,112                   -
    Proceeds   from   exercise  of  stock
      options                                    2,031               2,538
    Other                                        2,869               2,145
                                               -------             -------
       Net  cash   provided   (used)   by
          financing activities                   6,012             (20,367)
                                               -------           ---------
Net (decrease)  increase in cash and cash
    equivalents                                (69,226)             13,484
Cash and cash  equivalents,  beginning of
    period                                     104,484              72,281
                                              ----------          --------
Cash and cash equivalents, end of period
                                              $ 35,258              85,765
                                                ======              ======


See accompanying notes to consolidated financial statements.




                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   BASIS OF PRESENTATION

     The  accompanying  consolidated  financial  statements,  in the  opinion of
     management,  include all  adjustments,  consisting only of normal recurring
     accruals,  necessary for a fair presentation of the results for the interim
     periods presented.  The consolidated  financial statements are presented in
     accordance  with the  requirements  of Form  10-Q and  consequently  do not
     include all the  disclosures  required by accounting  principles  generally
     accepted in the United States of America  (GAAP).  For further  information
     refer to the consolidated  financial  statements and related notes included
     in the  Company's  Annual  Report on Form 10-K for the  fiscal  year  ended
     September 30, 2005.  During 2005,  the Company issued a 2-for-1 stock split
     which  was  effected  as a 100  percent  stock  dividend  and  was  paid on
     September 23, 2005. The prior years common stock and per share amounts have
     been adjusted to reflect the stock split.

     The Company's  business is typically not impacted by seasonality,  however,
     the results for the three and  nine-month  periods  ended June 30, 2006 are
     not necessarily indicative of the results for the entire 2006 fiscal year.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     This Summary of Significant  Accounting Policies supplements the summary in
     the  Company's  Annual  Report  on Form  10-K  for the  fiscal  year  ended
     September 30, 2005.

(a)  Revenue Recognition

     Filtration / Fluid Flow Operating Unit:  Within the Filtration / Fluid Flow
     operating  unit,  approximately  75% of  operating  unit  revenues  (30% of
     consolidated  revenues) are  recognized  when products are delivered  (when
     title and risk of ownership  transfers)  or when services are performed for
     unaffiliated customers.

     Approximately 25% of operating unit revenues (10% of consolidated revenues)
     are recorded  under the  percentage-of-completion  provisions  of SOP 81-1,
     "Accounting    for   Performance   of    Construction-Type    and   Certain
     Production-Type  Contracts."  Products accounted for under SOP 81-1 include
     the design,  development and manufacture of complex fluid control products,
     quiet  valves,  manifolds  and  systems  primarily  for the  aerospace  and
     military  markets.  For arrangements that are accounted for under SOP 81-1,
     the Company  estimates  profit as the  difference  between total  estimated
     revenue  and  total  estimated  cost of a  contract  and  recognizes  these
     revenues and costs based on units delivered.  The  percentage-of-completion
     method of  accounting  involves the use of various  techniques  to estimate
     expected costs at completion.

     Communications Segment:  Within the Communications  segment,  approximately
     95% of the segment's revenue  arrangements  (30% of consolidated  revenues)
     contain software components. Revenue under these arrangements is recognized
     in accordance with Statement of Position 97-2 (SOP 97-2), "Software Revenue
     Recognition," as amended by SOP 98-9, "Modification of SOP 97-2,  Software
     Revenue Recognition,  with Respect to Certain  Transactions." The segment's
     software  revenue  arrangements  generally  include  multiple  products and
     services, or "elements" consisting of meter and substation hardware,  meter
     reading system software,  program  management support during the deployment
     period and software support (post-contract customer support,  "PCS"). These
     arrangements  typically  require  the  Company to deliver  software  at the
     inception of the  arrangement  while the hardware,  and program  management
     support are delivered  over the  contractual  deployment  period.  Software
     support is provided during deployment and subsequent thereto.  The software
     element included in such  arrangements is essential to the functionality of
     the  hardware   and,   therefore,   the  hardware  is   considered   to  be
     software-related.  Hardware  is  considered  a  specified  element  in  the
     software  arrangement and vendor-specific  objective evidence of fair value
     ("VSOE")  has been  established  for this  element.  VSOE for the  hardware
     element is determined based on the price when sold separately to customers.
     These revenue arrangements are divided into separate units of accounting if
     the  delivered  item(s) has value to the customer on a  stand-alone  basis,
     there  is  objective  and  reliable  evidence  of  the  fair  value  of the
     undelivered item(s) and  delivery/performance of the undelivered item(s) is
     probable.  For multiple element  arrangements,  revenue is allocated to the
     individual elements based on VSOE of the individual elements.

     The  application  of these  principles  requires  judgment,  including  the
     determination of whether a software  arrangement includes multiple elements
     and  estimates  of  the  fair  value  of  the  elements.  The  VSOE  of the
     undelivered  elements is  determined  based on the  historical  evidence of
     stand-alone  sales of these  elements to customers.  Hardware  revenues are
     generally  recognized  at the  time of  shipment  or  receipt  by  customer
     depending  upon  contract  terms.  VSOE  generally  does not  exist for the
     software  element,  therefore,  the  Company  uses the  residual  method to
     recognize  revenue  when VSOE  exists for all other  undelivered  elements.
     Under the residual  method,  the fair value of the undelivered  elements is
     deferred and the remaining  portion of the arrangement fee is recognized as
     revenue.


     SOP 97-2  requires  the  seller of  software  that  includes  post-contract
     customer support (PCS) to establish VSOE of the undelivered  element of the
     contract in order to account  separately  for the PCS revenue.  The Company
     determines  VSOE by a  consistent  pricing  of PCS and  PCS  renewals  as a
     percentage  of the software  license  fees and by reference to  contractual
     renewals,  when the renewal  terms are  substantive.  Revenues  for PCS are
     recognized  ratably  over the  maintenance  term  specified in the contract
     (generally  in 12 monthly  increments).  Revenues  for  program  management
     support  are  recognized  when  services  have been  provided.  The Company
     determines VSOE for program  management  support based on hourly rates when
     services are performed separately.

     Deferred  revenue is recorded for  products or services  that have not been
     provided but have been invoiced under contractual agreements or paid for by
     a  customer,  or when  products  or  services  have been  provided  but the
     criteria for revenue  recognition have not been met. If there is a customer
     acceptance  provision or there is uncertainty  about  customer  acceptance,
     revenue is deferred until the customer has accepted the product or service.

     Approximately  5% of segment  revenues (1% of  consolidated  revenues)  are
     recognized  when products are  delivered  (when title and risk of ownership
     transfers)  or when  services are  performed  for  unaffiliated  customers.
     Products include the SecurVision digital video surveillance systems.

     Test Segment:  Within the Test segment,  approximately 60% of revenues (20%
     of consolidated  revenues) are recognized when products are delivered (when
     title and risk of ownership  transfers)  or when services are performed for
     unaffiliated  customers.  Certain  arrangements  contain multiple  elements
     which are  accounted  for  under the  provisions  of EITF  00-21,  "Revenue
     Arrangements with Multiple  Deliverables."  The multiple elements generally
     consist of materials and installation services used in the construction and
     installation  of  standard  shielded  enclosures  to  measure  and  contain
     magnetic and  electromagnetic  energy.  The  installation  process does not
     involve  changes to the features or  capabilities of the equipment and does
     not require  proprietary  information  about the equipment in order for the
     installed  equipment to perform to  specifications.  There is objective and
     reliable  evidence of fair value for each of the units of accounting,  as a
     result,  the  arrangement  revenue is allocated  to the  separate  units of
     accounting  based on their relative fair values.  Typically,  fair value is
     the price of the  deliverable  when it is regularly  sold on a  stand-alone
     basis.

     Approximately 40% of the segment's  revenues (9% of consolidated  revenues)
     are recorded  under the  percentage-of-completion  provisions  of SOP 81-1,
     "Accounting   for  the   Performance  of   Construction-Type   and  Certain
     Production-Type Contracts" due to the complex nature of the enclosures that
     are designed and produced  under these  contracts.  Products  accounted for
     under SOP 81-1 include the  construction  and  installation of complex test
     chambers to a buyer's  specifications  that provide its customers  with the
     ability to measure  and  contain  magnetic,  electromagnetic  and  acoustic
     energy.  As discussed above, for arrangements  that are accounted for under
     SOP 81-1,  the Company  estimates  profit as the  difference  between total
     estimated  revenue and total  estimated  cost of a contract and  recognizes
     these  revenues  and costs  based on  either  (a)  units  delivered  or (b)
     contract milestones.

     If a reliable  measure of output cannot be  established  (which  applies in
     less than 8% of Test  segment  revenues  or 2% of  consolidated  revenues),
     input measures (e.g., costs incurred) are used to recognize revenue.  Given
     the nature of the Company's  operations  related to these contracts,  costs
     incurred represent an appropriate measure of progress towards completion.

     The  percentage-of-completion  method  of  accounting  involves  the use of
     various  techniques  to  estimate  expected  costs  at  completion.   These
     estimates are based on Management's  judgment and the Company's substantial
     experience in developing these types of estimates.

(b)  Capitalized Software

     The costs incurred for the  development  of computer  software that will be
     sold, leased, or otherwise marketed are charged to expense when incurred as
     research  and  development   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  in
     accordance with SFAS No. 86, "Accounting for the Costs of Computer Software
     to be Sold,  Leased or  Otherwise  Marketed."  Costs  that are  capitalized
     primarily  consist of external  development  costs. Upon general release of
     the product to  customers,  the Company  ceases  capitalization  and begins
     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.  The Company  generally  amortizes the software  development costs
     over a three to seven year period based upon the estimated  future economic
     life of the product. Factors considered in determining the estimated future
     economic  life of the product  include  anticipated  future  revenues,  and
     changes in software  and  hardware  technologies.  The  carrying  values of
     capitalized  costs are  evaluated  for  impairment  on an  annual  basis to
     determine if  circumstances  exist which indicate the carrying value of the
     asset may not be  recoverable.  If expected cash flows are  insufficient to
     recover  the  carrying  amount of the  asset,  then an  impairment  loss is
     recognized to state the asset at its net realizable value.

3.   EARNINGS PER SHARE (EPS)

     Basic EPS is calculated  using the weighted average number of common shares
     outstanding during the period. Diluted EPS is calculated using the weighted
     average number of common shares  outstanding  during the period plus shares
     issuable  upon the assumed  exercise of dilutive  common share  options and
     vesting of performance-accelerated restricted shares (restricted shares) by
     using  the  treasury  stock  method.  The  number  of  shares  used  in the
     calculation  of earnings per share for each period  presented is as follows
     (in thousands):


                               Three Months Ended           Nine Months Ended
                                    June 30,                    June 30,
                                   -----------                 ----------

                                2006         2005          2006          2005
                               ------       ------        ------        ------
     Weighted Average

     Shares Outstanding -
     Basic
                               25,790       25,424        25,678        25,442

     Dilutive Options and
     Restricted Shares
                                  651          764           740           784
                                -----        -----         -----         -----
     Adjusted Shares-          26,441       26,188        26,418        26,226
     Diluted                   ======       ======        ======        ======


     Options to purchase  32,000 shares of common stock at a price of $54.88 and
     options to purchase  8,000  shares of common  stock at prices  ranging from
     $39.86 - $50.26 were outstanding  during the three month periods ended June
     30, 2006 and 2005,  respectively,  but were not included in the computation
     of diluted EPS because the options'  exercise  prices were greater than the
     average  market price of the common  shares.  The options expire at various
     periods through 2013.  Approximately  12,000 and 38,000  restricted  shares
     were excluded from the respective computation of diluted EPS based upon the
     application  of the treasury stock method for the three month periods ended
     June 30, 2006 and 2005, respectively.

4.   SHARE-BASED COMPENSATION

     Prior to October 1, 2005, the Company  accounted for its stock option plans
     using the intrinsic  value method of accounting  provided under APB Opinion
     No. 25,  "Accounting  for Stock Issued to Employees,"  (APB 25) and related
     interpretations,  as permitted by FASB Statement No. 123,  "Accounting  for
     Stock-Based  Compensation,"  (SFAS 123) under which no compensation expense
     was   recognized  for  stock  option   grants.   Accordingly,   share-based
     compensation  for stock  options was included as a pro forma  disclosure in
     the financial  statement footnotes and continues to be provided for periods
     prior to fiscal 2006.

     Effective  October 1, 2005, the Company adopted the fair value  recognition
     provisions of FASB  Statement  No. 123 (R),  "Share-Based  Payment,"  (SFAS
     123(R))  using  the  modified-prospective  transition  method.  Under  this
     transition method, compensation cost recognized in the first nine months of
     fiscal 2006 includes:

a)   compensation  cost for all share-based  payments granted through  September
     30, 2005, for which the requisite  service period had not been completed as
     of  September  30,  2005,  based on the grant date fair value  estimated in
     accordance with the original provisions of SFAS 123, and

b)   compensation  cost  for all  share-based  payments  granted  subsequent  to
     September  30,  2005,  based on the grant  date  fair  value  estimated  in
     accordance  with the  provisions of SFAS 123(R).  Results for prior periods
     have not been restated.

     As a result of adopting  SFAS 123(R) on October 1, 2005,  the Company's net
     earnings for the three and nine-month  periods ended June 30, 2006 are $0.6
     million and $1.7 million  lower  respectively,  than if it had continued to
     account for share-based compensation under APB 25.

     The Company provides  compensation  benefits to certain key employees under
     several  share-based  plans  providing for employee  stock  options  and/or
     performance-accelerated  restricted  shares  (restricted  shares),  and  to
     non-employee directors under a non-employee directors compensation plan.

     Stock Option Plans

     The Company has various stock option plans that permit the Company to grant
     key  Management  employees (1) options to purchase  shares of the Company's
     common  stock or (2) stock  appreciation  rights with respect to all or any
     part of the  number of  shares  covered  by the  options.  All  outstanding
     options  were  granted at prices  equal to fair market value at the date of
     grant.  The options  granted  prior to  September  30, 2003 have a ten-year
     contractual life from date of issuance, expiring in various periods through
     2013.  Beginning  in fiscal  2004,  the  options  granted  have a five-year
     contractual life from date of issuance.  No stock appreciation  rights have
     been awarded to date.  The  Company's  stock  option  awards are subject to
     graded vesting over a three year service period. Beginning with fiscal 2006
     awards, the Company recognizes  compensation cost on a straight-line  basis
     over the requisite  service  period for the entire  award.  Prior to fiscal
     2006,  the Company  calculated  the pro forma  compensation  cost using the
     graded vesting method (FIN 28 approach).

     The fair value of each option  award is  estimated  as of the date of grant
     using  a  Black-Scholes   option  pricing  model.   The  weighted   average
     assumptions for the periods indicated are noted below.  Expected volatility
     is based on  historical  volatility  of ESCO's  stock  calculated  over the
     expected term of the option. The expected term was calculated in accordance
     with Staff  Accounting  Bulletin  No. 107 using the  simplified  method for
     "plain-vanilla"  options.  The risk-free  rate for the expected term of the
     option is based on the U.S.  Treasury  yield curve in effect at the date of
     grant.

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following weighted-average
     assumptions  used for grants in the three month  period ended June 30, 2006
     and 2005,  respectively:  expected  dividend  yield of 0% in both  periods;
     expected volatility of 28.2% and 27.6%; risk-free interest rate of 5.0% and
     3.7%; and expected term of 3.5 years and 4.17 years.  Pre-tax  compensation
     expense  related  to the stock  option  awards  was $0.6  million  and $1.7
     million  for the third  quarter of 2006 and the first nine  months of 2006,
     respectively.

     The following  summary presents  information  regarding  outstanding  stock
     options as of June 30, 2006 and  changes  during the nine months then ended
     with regard to options under the option plans:



                                               Aggregate       Weighted-Average
                                               Intrinsic       Remaining
                                  Weighted     Value (in       Contractual
                         Shares   Avg. Price   millions)       Life
                        -------   ----------   ---------       ----

    Outstanding at
    October 1, 2005   1,324,548     $20.48


     Granted            320,380     $44.46

     Exercised         (185,561)    $16.09       $6.1

     Cancelled          (25,740)    $35.97
                      ----------   --------

     Outstanding at
     June 30, 2006     1,433,627    $26.14        $38.9       4  years
                     -----------

     Exercisable at
     June 30, 2006       797,726    $16.23        $29.5
                      ==========


     The  weighted-average  grant-date  fair value of options granted during the
     first nine months of fiscal 2006 was $12.11.

     During fiscal 2004, the Board of Directors  authorized and the shareholders
     approved, the 2004 Incentive Compensation Plan, which states, in part, that
     on  February  5,  2004,  there  shall  be added  to the  authorized  shares
     allocated   2,000,000  shares  for  the  grant  of  stock  options,   stock
     appreciation  rights,  performance-accelerated  restricted  stock, or other
     full value  awards.  Of these,  shares up to 600,000  may be  utilized  for
     performance-accelerated restricted stock or other full value awards.

     Restricted Share Awards

     At June 30, 2006,  the maximum  number of restricted  shares  available for
     issue  under  the 2004  Incentive  Compensation  Plan  and the  2001  Stock
     Incentive Plan was 600,000 and 361,162 shares,  respectively.  These shares
     vest over five years with  accelerated  vesting over three years if certain
     performance  targets are achieved.  In these cases,  if it is probable that
     the performance condition will be met, the Company recognizes  compensation
     cost  on  a  straight-line  basis  over  the  shorter  performance  period;
     otherwise,  it will  recognize  compensation  cost over the longer  service
     period.  Compensation  cost for all outstanding  restricted share awards is
     being recognized over the shorter  performance period as it is probable the
     performance  condition will be met. The restricted  share award grants were
     valued  at the  stock  price on the  date of  grant.  Pre-tax  compensation
     expense  related to the  restricted  share awards was $0.2 million and $1.3
     million  for  the  three  and  nine-month  periods  ended  June  30,  2006,
     respectively,  and $0.3 million and $1.6 million for the  respective  prior
     year periods.

     The following summary presents information regarding outstanding restricted
     share awards as of June 30, 2006 and changes during the  nine-month  period
     then ended:


                                                                   Weighted
                                                Shares            Avg. Price
                                               ---------        -------------

     Nonvested at October 1, 2005                 238,436           $23.78
     Granted                                       64,130           $43.02
     Vested                                      (118,736)          $17.41
     Cancelled                                    (10,500)          $32.78
                                                ---------          --------
     Nonvested at June 30, 2006                   173,330           $34.72
                                                   ======



     Non-Employee Directors Plan

     The  non-employee  directors  compensation  plan includes a retainer of 800
     common shares per quarter. Compensation expense related to the non-employee
     directors  was $0.2 million and $0.7  million for the three and  nine-month
     periods  ended  June 30,  2006,  respectively,  and $0.2  million  and $0.5
     million for the respective prior year periods.

     The total share-based compensation cost that has been recognized in results
     of  operations  and included  within SG&A was $1.0 million and $3.7 million
     for the three and nine-month periods ended June 30, 2006, respectively, and
     $0.5 million and $2.1 million for the three and  nine-month  periods  ended
     June 30, 2005,  respectively.  The total income tax benefit  recognized  in
     results of operations for share-based  compensation  arrangements  was $0.3
     million and $1.0 million for the three and  nine-month  periods  ended June
     30, 2006,  respectively and $0.2 million and $0.7 million for the three and
     nine-month periods ended June 30, 2005, respectively.  As of June 30, 2006,
     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 3.75 years.

     Pro Forma Net Earnings

     The following  table provides pro forma net earnings and earnings per share
     had the Company applied the fair value method of SFAS
     123 for the three and nine-month periods ended June 30, 2005:


     (Unaudited)
     (Dollars in thousands,
     except per share amounts)
                                   Three Months Ended        Nine Months Ended
                                           June 30,                  June 30,
                                        -------------               ----------

                                         2005                     2005
                                        ------                   ------
     Net earnings, as reported        $ 12,401                 $ 33,351
     Add: stock-based employee
         compensation expense
         included in reported
         net earnings, net of tax
                                           202                      952
     Less: total stock-based
         employee compensation
         expense determined
         under fair value based
         methods, net of tax
                                          (704)                  (2,549)
                                        ------                  --------

     Pro forma net earnings           $ 11,899                  $ 31,754
                                        ======                   =======

     Net earnings per share:
         Basic - as reported          $   0.49                  $   1.31
                                          ====                       ===
         Basic - pro forma                0.47                      1.25
                                          ====                      ====

         Diluted - as reported        $   0.47                  $   1.27
                                          ====                      ====
         Diluted - pro forma              0.45                      1.21
                                          ====                      ====



5.    ACQUISITIONS

     Effective  February 1, 2006,  the  Company  acquired  the capital  stock of
     Hexagram,  Inc. (Hexagram) for a purchase price of $67.5 million subject to
     a potential  working capital  adjustment.  The  acquisition  agreement also
     provides for contingent  consideration of up to $6.25 million over the five
     year period  following the  acquisition if Hexagram  exceeds  certain sales
     targets.  Hexagram is a RF fixed  network  automatic  meter  reading  (AMR)
     company  headquartered in Cleveland,  Ohio.  Hexagram's annual revenue over
     the past three years has been in the range of $20  million to $35  million.
     The operating  results for  Hexagram,  since the date of  acquisition,  are
     included  within  the   Communications   segment.   The  Company   recorded
     approximately  $55 million of goodwill  and  trademarks  as a result of the
     transaction,  subject to post-closing adjustments including finalization of
     purchase accounting. The Company also recorded $6.6 million of identifiable
     intangible assets consisting primarily of patents and proprietary know-how,
     customer  contracts,  and  order  backlog  which  will  be  amortized  on a
     straight-line  basis over  periods  ranging from six months to seven years.
     The  post-closing  purchase  accounting  items are expected to be completed
     prior to September 30, 2006.

     Effective  November 29, 2005, the Company  acquired Nexus Energy  Software,
     Inc.  (Nexus)  through  an all  cash  for  shares  merger  transaction  for
     approximately $29 million in cash plus contingent cash  consideration  over
     the four year period  following the merger if Nexus  exceeds  certain sales
     targets.   Nexus  is  a  software   company   headquartered  in  Wellesley,
     Massachusetts  with annual  revenues in the past in excess of $10  million.
     The  operating  results  for  Nexus,  since  the date of  acquisition,  are
     included  within  the   Communications   segment.   The  Company   recorded
     approximately  $24  million  of  goodwill  as a result of the  transaction,
     subject to  post-closing  adjustments  including  finalization  of purchase
     accounting.   The  Company  also  recorded  $2.7  million  of  identifiable
     intangible  assets  consisting  primarily of customer  contracts  and order
     backlog  which will be  amortized  on a  straight-line  basis over  periods
     ranging from one year to three years. The post-closing  purchase accounting
     items are expected to be completed prior to September 30, 2006.


6.    INVENTORIES

     Inventories consist of the following (in thousands):
                                                  June 30,      September 30,
                                                    2006            2005
                                                    ----            ----

     Finished goods                               $  13,444          14,361
     Work in process, including long- term
          contracts                                  13,246          12,512
     Raw materials                                   23,518          21,772
                                                     ------          ------
          Total inventories                       $  50,208          48,645
                                                     ======          ======



7.   COMPREHENSIVE INCOME

     Comprehensive  income for the  three-month  periods ended June 30, 2006 and
     2005 was $12.2  million  and  $11.2  million,  respectively.  Comprehensive
     income for the  nine-month  periods  ended June 30, 2006 and 2005 was $22.1
     million  and $34.0  million,  respectively.  For the  three and  nine-month
     periods  ended  June 30,  2006,  the  Company's  comprehensive  income  was
     positively  impacted by foreign  currency  translation  adjustments of $1.1
     million  and $1.4  million,  respectively.  For the  three  and  nine-month
     periods  ended  June 30,  2005,  the  Company's  comprehensive  income  was
     negatively  impacted by foreign  currency  translation  adjustments of $1.2
     million and positively impacted by foreign currency translation adjustments
     of $0.7 million, respectively.


8.   BUSINESS SEGMENT INFORMATION

     The Company is organized based on the products and services that it offers.
     Under  this  organizational   structure,  the  Company  operates  in  three
     segments: Filtration/Fluid Flow, Communications and Test. The components of
     the Filtration/Fluid Flow segment are presented separately due to differing
     long-term economics.

     Management evaluates and measures the performance of its operating segments
     based on "Net Sales" and  "EBIT",  which are  detailed in the table  below.
     EBIT is defined as earnings from continuing  operations before interest and
     taxes.  During the second quarter of fiscal 2006,  the Company  changed its
     reporting of goodwill and acquired  intangible  assets  (including  related
     amortization)  from operating segments to Corporate as they are excluded by
     management in assessing the segment's operating  performance.  There was no
     impact on EBIT in the prior periods.



        ($ in thousands)        Three Months ended            Nine Months ended
                                   June 30,                        June 30,
                                  ----------                      ----------

      NET SALES            2006          2005                2006         2005
      ---------            ----          ----                ----         ----

      PTI              $ 11,379        10,262            $ 33,787       30,621
      VACCO               6,551         9,616              22,930       28,787
      Filtertek          24,628        24,774              72,335       70,223
                       --------       -------             -------      -------
      Filtration/Fluid
         Flow            42,558        44,652             129,052      129,631
      Communications     49,251        31,141             111,623      100,759
      Test               31,817        33,007              96,421       88,945
                       --------     ---------           ---------    ---------
      Consolidated
        totals         $123,626       108,800            $337,096      319,335
                        =======       =======             =======      =======


      EBIT
      ----
      PTI                 1,479           585               4,261        2,821
      VACCO               1,388         2,717               4,720        8,473
      Filtertek           2,330         2,585               5,026        6,693
                        -------       -------             -------     --------
      Filtration/Fluid
         Flow             5,197         5,887              14,007       17,987
      Communications     11,369         8,192              20,138       28,446
      Test                4,034         3,274              11,288        8,694
      Corporate          (4,552)       (3,174)            (10,728)     (8,303)
                        --------      --------           ---------    --------
      Consolidated EBIT   16,048        14,179              34,705      46,824
      Add: Interest income   195           534               1,012       1,317
                            ----         -----             -------     -------
      Earnings before
          income taxes  $ 16,243        14,713            $ 35,717      48,141
                          ======        ======              ======      ======


9.   ASSET IMPAIRMENT

     In June 2005,  the Company  abandoned  its plans to  commercialize  certain
     sensor  products  within the  Filtration/Fluid  Flow  segment.  This action
     resulted in an asset impairment charge of $0.8 million to write-off certain
     patents and a related  licensing  agreement to their respective fair market
     values. The Company ended its development  efforts on this program after it
     determined that the market was not developing as quickly as anticipated and
     the expected costs and timeframe to fully  commercialize  the products were
     not acceptable.


10.  RETIREMENT AND OTHER BENEFIT PLANS

     A summary of net periodic benefit expense for the Company's defined benefit
     plans and  postretirement  healthcare  and other benefits for the three and
     nine-month  periods ended June 30, 2006 and 2005 are shown in the following
     tables. Net periodic benefit cost for each period presented is comprised of
     the following:


                                  Three Months Ended        Nine Months Ended
                                       June 30,                 June 30,
                                      ----------               ----------
     (Dollars in thousands)        2006        2005         2006        2005
                                 -------      -------     -------      -------
     Defined benefit plans
          Interest cost           $  635          663      $ 1,935      1,988
          Expected  return  on
            assets                  (696)        (713)      (2,046)    (2,138)
     Amortization of:
          Prior service cost           6            -            6          -
          Actuarial loss              55          125          305        375
                                    ----        -----        -----      -----
     Net periodic benefit cost    $    -           75      $   200        225
                                    ====          ===          ===        ===


     Net periodic  postretirement (retiree medical) benefit cost for each period
     presented is comprised of the following:

                                    Three Months Ended        Nine Months Ended
                                       June 30,                  June 30,
                                     -----------                -----------
     (Dollars in thousands)       2006         2005         2006          2005
                                ------       ------       ------       -------
     Service cost               $    9            8       $   26            23
     Interest cost                  10           10           30            30
     Prior service cost             (1)           -           (3)            -
     Amortization of                (9)          (5)         (15)           (14)
         actuarial gain            ----         ----         ----          ----
     Net periodic
         postretirement
     benefit cost               $     9           13      $    38            39
                                   ====         ====         ====          ====


11.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In  December   2004,  the  FASB  issued  FASB  Staff  Position  FAS  109-2,
     "Accounting and Disclosure  Guidance for the Foreign Earnings  Repatriation
     Provision  within the American  Jobs Creation Act of 2004 (FSP 109-2)." The
     American  Jobs  Creation  Act of 2004,  (the "Act")  provides for a special
     one-time  deduction of 85 percent of certain foreign  earnings  repatriated
     into the U.S. from non-U.S. subsidiaries through September 30, 2006. During
     the second  quarter  ended March 31, 2006,  the Company  repatriated  $28.7
     million  of  foreign  earnings  which  qualify  for  the  special  one-time
     deduction.  Tax expense of $1.7 million was recorded in the second  quarter
     of fiscal 2006 as a result of this repatriation.

     The Company is currently  evaluating the merits of repatriating  additional
     funds under the Act. At June 30,  2006,  the range of  reasonably  possible
     amounts of unremitted  earnings that are being  considered for repatriation
     is between zero and $10.5  million,  which would require the Company to pay
     income taxes in the range of zero to $1.0 million.  Federal income taxes on
     the  repatriated  amounts would be based on the 5.25%  effective  statutory
     rate as provided in the Act, plus  applicable  withholding  taxes. To date,
     the Company has not provided for income taxes on these unremitted  earnings
     generated by non-U.S.  subsidiaries.  As a result,  additional taxes may be
     required  to be  recorded  for any funds  repatriated  under  the Act.  The
     Company  expects to complete its  evaluation of these  additional  funds by
     September 30, 2006.

     In June 2006, the FASB issued FASB  Interpretation  No. 48, "Accounting for
     Uncertainty in Income Taxes, an  Interpretation of FASB Statement No. 109."
     This  Interpretation  is effective for ESCO beginning October 1, 2007. This
     Interpretation  prescribes a recognition  threshold and measurement process
     for the financial  statement  recognition and measurement of a tax position
     taken or  expected to be taken in a tax  return.  The Company is  currently
     evaluating the adoption of this  Interpretation and does not currently have
     an estimate of the impact on the consolidated financial statements.



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

The  following  discussion  refers  to the  Company's  results  from  continuing
operations,  except where noted.  References  to the third  quarters of 2006 and
2005 represent the fiscal quarters ended June 30, 2006 and 2005, respectively.

NET SALES

Net sales  increased  $14.8 million,  or 13.6%,  to $123.6 million for the third
quarter of 2006 from $108.8 million for the third quarter of 2005 including $9.5
million from acquisitions.  Net sales increased $17.8 million, or 5.6% to $337.1
million  for the first nine months of fiscal 2006 from $319.3 for the first nine
months of fiscal 2005  including  $17.2  million  from  acquisitions.  Favorable
foreign  currency values  increased sales by  approximately  $1.1 million in the
third quarter of 2006 and unfavorable foreign currency values decreased sales by
approximately $0.6 million in the first nine months of fiscal 2006.


- -Filtration/Fluid Flow

Net sales  decreased  $2.1  million,  or 4.7%,  to $42.6  million  for the third
quarter  of 2006 from $44.7  million  for the third  quarter of 2005.  Net sales
decreased $0.5 million,  or 0.4%, to $129.1 million for the first nine months of
fiscal 2006 from $129.6  million for the first nine months of fiscal  2005.  The
sales decrease  during the fiscal quarter ended June 30, 2006 as compared to the
prior year quarter is mainly due to the following:  a decrease in defense spares
and T-700 shipments at VACCO of $3.0 million;  a net sales decrease at Filtertek
of $0.2 million;  partially offset by higher commercial  aerospace  shipments at
PTI of $1.1 million. The sales decrease for the first nine months of fiscal 2006
as compared to the prior year period is mainly due to the following:  a decrease
in defense spares and T-700 shipments at VACCO of $5.9 million; partially offset
by higher commercial  aerospace shipments at PTI of $3.2 million and a net sales
increase at Filtertek of $2.1 million driven by higher commercial shipments.

- -Communications

Net sales  increased  $18.1  million,  or 58.2%,  to $49.2 million for the third
quarter  of 2006 from $31.1  million  for the third  quarter of 2005.  Net sales
increased  $10.8 million,  or 10.7%, to $111.6 million for the first nine months
of fiscal 2006 from $100.8 million in the prior year period.  The sales increase
in the third  quarter of 2006 as compared  to the prior year  quarter was due to
the  following:  $9.4  million of higher  shipments  of DCSI's  automatic  meter
reading (AMR) products;  contributions by the Hexagram and Nexus acquisitions of
$7.0 million and $2.5 million, respectively; partially offset by $0.7 million of
lower shipments of Comtrak's SecurVision video security products.

The sales  increase  in the first nine  months of fiscal 2006 as compared to the
prior year period was due to the following:  $2.2 million of higher shipments of
DCSI's AMR  products;  $10.9  million in sales from Hexagram and $6.3 million in
sales  from  Nexus;  partially  offset by $8.5  million  of lower  shipments  of
Comtrak's video security products.

The  increase in sales of DCSI's AMR products of $2.2 million for the first nine
months of  fiscal  2006 as  compared  to the prior  year  period  was due to the
following items: an increase in sales to TXU Electric  Delivery Company (TXU) of
$22.8 million in the first nine months of fiscal 2006; partially offset by $14.4
million of lower AMR  product  sales to the COOP  market due to the  decrease in
orders  entered  during the latter half of fiscal 2005 and $6.2 million of lower
sales to Puerto Rico Power Authority (PREPA).

Sales of SecurVision products were $1.5 million for the third quarter of 2006 as
compared to $2.3  million for the prior year third  quarter and $4.4 million for
the first nine months of fiscal  2006 as compared to $12.9  million in the prior
year  nine-month  period.  The decrease in sales in the third  quarter and first
nine months of fiscal 2006 was due to an  acceleration of shipments in the prior
year periods.

In June 2006,  Hexagram  announced it had appointed the Neptune Technology Group
as its exclusive distributor for the Hexagram STAR Wireless Fixed Network System
for the Water Utility,  Water  Sub-Metering and Government Markets in the
U.S.A., Canada, Mexico and Caribbean.

- -Test

For the third quarter of 2006, net sales of $31.8 million were $1.2 million,  or
3.6%, lower than the $33.0 million of net sales recorded in the third quarter of
fiscal 2005. Net sales increased $7.5 million, or 8.4%, to $96.4 million for the
first nine months of fiscal 2006 from $88.9 million for the first nine months of
fiscal 2005.  The sales decrease in the third quarter of 2006 as compared to the
prior year quarter was mainly due to a decrease in government shielding projects
and the timing of large chamber projects in Japan.

The sales  increase  for the first nine  months of fiscal  2006  compared to the
prior year period was primarily due to the following: a $9.8 million increase in
net sales from the Company's U.S.  operations driven by sales of additional test
chambers and higher component sales; partially offset by a $1.1 million decrease
in net sales  from the  Company's  European  operations  due to the  prior  year
completion of several large test chamber projects and a $1.2 million decrease in
net sales from the  Company's  Asian  operations  due to the timing of orders in
Japan.

ORDERS AND BACKLOG

Backlog was $260.0  million at June 30,  2006  compared  with $233.1  million at
September 30, 2005. The Company  received new orders  totaling $109.1 million in
the third  quarter of 2006.  New orders of $49.6  million  were  received in the
third quarter of 2006 related to Filtration/Fluid  Flow products,  $29.7 million
related to Communications products and $29.8 million related to Test products.

The Company received new orders totaling $363.9 million in the first nine months
of 2006  compared  to $321.6  million  in the prior year  period.  New orders of
$134.0  million  were  received  in the first  nine  months of 2006  related  to
Filtration/Fluid  flow  products,   $144.4  million  related  to  Communications
products  (including  $9.4  million of new orders and $6.0  million of  acquired
backlog  from  Hexagram  and $14.6  million of new  orders  and $9.0  million of
acquired  backlog from Nexus) and $85.6 million  related to Test  products.  New
orders of $138.9  million were received in the first nine months of 2005 related
to  Filtration/Fluid  flow products,  $100.1 million  related to  Communications
products and $82.6 million related to Test products.

In  addition,  in November  2005,  DCSI signed an  agreement  with Pacific Gas &
Electric (PG&E) with an anticipated contract value of approximately $300 million
covering five million  endpoints over a five year  deployment  period  currently
scheduled to begin in fiscal 2007.  The Company  received  orders  totaling $2.4
million from PG&E under this agreement  during the first nine months of 2006. On
November  3,  2005,  Hexagram  entered  into a contract  to  provide  equipment,
software  and  services to PG&E in support of the gas utility  portion of PG&E's
AMI project.  The total anticipated  contract revenue from commencement  through
the  five-year  full  deployment  for this  Hexagram  contract is expected to be
approximately $225 million. See "Pacific Gas & Electric."

AMORTIZATION OF INTANGIBLE ASSETS

Amortization  of  intangible  assets was $2.6  million and $4.6  million for the
three and nine-month periods ended June 30, 2006, respectively, compared to $0.5
million and $1.5 million for the respective prior year periods.  Amortization of
intangible  assets in the third  quarter of 2006 and first nine months of fiscal
2006 includes $1.0 million and $1.9 million,  respectively,  of  amortization of
acquired  intangible assets related to the Nexus and Hexagram  acquisitions,  as
described in Note 5 to the consolidated  financial statements.  The amortization
of acquired  intangible  assets  related to Nexus and  Hexagram  are included in
Corporate's  operating results. The remaining  amortization  expenses consist of
other identifiable intangible assets (primarily software, patents and licenses).
During  the three and  nine-month  periods  ended  June 30,  2006,  the  Company
recorded $0.9 million and $1.2 million, respectively, of amortization related to
DCSI's TNG capitalized software.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling,  general and  administrative  (SG&A)  expenses for the third quarter of
2006 were $28.4 million (23.0% of net sales), compared with $21.7 million (19.9%
of net  sales) for the prior year  quarter.  For the first nine  months of 2006,
SG&A  expenses  were  $78.6  million  (23.3% of net sales)  compared  with $62.4
million  (19.5% of net sales) for the prior year  period.  The  increase in SG&A
spending in the fiscal quarter ended June 30, 2006 as compared to the prior year
quarter was primarily due to the following items:  $2.7 million of SG&A expenses
related to Hexagram;  $2.3 million of SG&A expenses  related to Nexus;  and $0.6
million of stock option expense. The increase in SG&A spending in the first nine
months of 2006 as  compared to the prior year  period was  primarily  due to the
following items: $5.1 million of SG&A expenses related to Nexus; $4.2 million of
SG&A expenses related to Hexagram; and $1.7 million of stock option expense.

OTHER (INCOME) EXPENSES, NET

Other  income,  net, was $0.5 million for the third  quarter of 2006 compared to
$0.1 million for the prior year quarter. Other income, net, was $2.4 million for
the first nine months of fiscal 2006 compared to $1.2 million for the prior year
period.  Principal components of other income, net, for the first nine months of
2006  included the  following  items:  $1.8 million  non-cash gain in the second
quarter  representing  the  release of a reserve  related to an  indemnification
obligation  with respect to a previously  divested  subsidiary;  $1.6 million of
royalty income;  partially  offset by a $0.2 million write off of assets related
to a terminated  subcontract  manufacturer.  The  principal  components of other
income,  net, for the first nine months of fiscal 2005  included  the  following
items:  $1.5 million of royalty  income;  and a $0.5 million write down of fixed
assets related to the  termination  of a supply  agreement with a medical device
customer.

EBIT

The Company  evaluates the performance of its operating  segments based on EBIT,
defined below. EBIT was $16.0 million (13.0% of net sales) for the third quarter
of 2006 and $14.2  million  (13.0% of net sales) for the third  quarter of 2005.
For the first nine months of fiscal 2006,  EBIT was $34.7 million  (10.3% of net
sales) and $46.8  million  (14.7% of net  sales)  for the first  nine  months of
fiscal 2005.  The decrease in EBIT for the first nine months of 2006 as compared
to the prior year  period is  primarily  due to the  decrease  in margins in the
Communications segment described below.

This Form 10-Q contains the financial measure "EBIT", which is not calculated in
accordance with generally accepted accounting principles in the United States of
America  (GAAP).  EBIT provides  investors and  Management  with an  alternative
method for assessing the Company's operating results. The Company defines "EBIT"
as earnings from continuing  operations  before  interest and taxes.  Management
evaluates the  performance of its operating  segments based on EBIT and believes
that EBIT is useful to investors to demonstrate the operational profitability of
the  Company's  business  segments by excluding  interest  and taxes,  which are
generally  accounted for across the entire Company on a consolidated basis. EBIT
is also one of the measures  Management uses to determine  resource  allocations
within the Company and incentive compensation.  The following table represents a
reconciliation of EBIT to net earnings.



                            Three Months ended               Nine Months ended
                                 June 30,                         June 30,
($ in thousands)               -----------                      -----------

                          2006           2005             2006           2005
                          ----           ----             ----           ----
EBIT                   $16,048         14,179          $34,705         46,824
Interest income            195            534            1,012          1,317

Less: Income taxes       5,080          2,312           15,006         14,790
                       -------        -------        ---------       --------
Net earnings           $11,163         12,401          $20,711         33,351
                        ======         ======          =======         ======



- -Filtration/Fluid Flow

EBIT was $5.2 million (12.2% of net sales) and $5.9 million (13.2% of net sales)
in the third quarters of 2006 and 2005,  respectively,  and $14.0 million (10.9%
of net sales) and $18.0 million (13.9% of net sales) in the first nine months of
fiscal 2006 and 2005, respectively. For the third quarter of 2006 as compared to
the prior year quarter, EBIT decreased $0.7 million due to the following: a $1.3
million decrease at VACCO due to lower defense spares shipments;  a $0.3 million
decrease at Filtertek; partially offset by a $0.9 million increase at PTI due to
continued  strengthening of the commercial  aerospace market. For the first nine
months of fiscal 2006 as compared to the prior year period,  EBIT decreased $4.0
million  due to the  following:  a $3.8  million  decrease at VACCO due to lower
defense spares shipments; a $1.7 million decrease at Filtertek; partially offset
by a $1.4  million  increase at PTI.  Filtertek's  third  quarter and first nine
months of fiscal 2005 included $1.0 million and $1.9 million,  respectively,  of
cost reimbursement  related to a supply agreement with a medical device customer
which was  terminated in fiscal 2005.  In the third quarter of fiscal 2005,  PTI
recorded  an  asset  impairment  charge  of  $0.8  million.  See  Note  9 to the
consolidated financial statements for further discussion.

- -Communications

EBIT in the  third  quarter  of 2006 was  $11.4  million  (23.2%  of net  sales)
compared to EBIT of $8.2 million (26.4% of net sales) in the prior year quarter.
For the first nine months of fiscal 2006,  EBIT was $20.1 million  (18.0% of net
sales)  compared to $28.4 million (28.2% of net sales) in the prior year period.
The  increase  in EBIT in the  third  quarter  of 2006 was due to the  following
items: a $3.6 million  increase at DCSI  resulting from increased  sales; a $0.6
million  increase  related to Hexagram;  partially offset by a $0.6 million EBIT
loss at Nexus due to customer delays and a $0.4 million  decrease at Comtrak due
to lower shipments of its video security products.  The decrease in EBIT for the
first nine  months of fiscal  2006  compared to the prior year period was mainly
due to the following  items: a $4.5 million decrease at DCSI due to product mix,
charges  related to  subcontractor  and  warranty  issues  recorded in the first
quarter of 2006 and  amortization  of TNG software;  a $3.6 million  decrease at
Comtrak due to lower  shipments of its video security  products;  a $0.7 million
EBIT loss at Nexus due to customer delays and additional  SG&A spending  related
to marketing and new product development initiatives; partially offset by a $0.6
million increase related to Hexagram.

- -Test

EBIT in the third  quarter  of 2006 was $4.0  million  (12.6%  of net  sales) as
compared to $3.3 million (10.0% of net sales) in the prior year quarter. For the
first nine months of fiscal 2006, EBIT was $11.3 million (11.7% of net sales) as
compared  to $8.7  million  (9.8% of net sales) in the prior year  period.  EBIT
increased  $0.7  million and $2.6  million  over the prior year quarter and nine
month period, respectively,  due to the favorable changes in sales mix resulting
from  additional  sales of test  chambers,  antennas  and other  components.  In
addition, EBIT in the first nine months of fiscal 2005 was adversely affected by
installation cost overruns incurred on certain government  shielding projects in
foreign locations, as well as increased material costs (steel and copper).

- -Corporate

Corporate  costs  included in EBIT were $4.6  million and $10.7  million for the
three and nine-month periods ended June 30, 2006, respectively, compared to $3.2
million and $8.3 million for the  respective  prior year  periods.  In the third
quarter of 2006, Corporate costs included the following: $1.0 million of pre-tax
amortization of acquired  intangible  assets related to Nexus and Hexagram;  and
$0.6 million of pre-tax stock option expense.  In the first nine months of 2006,
Corporate costs included the following:  $1.9 million of pre-tax amortization of
acquired  intangible  assets  related  to Nexus and  Hexagram;  $1.7  million of
pre-tax stock option expense;  partially  offset by a $1.8 million non-cash gain
representing the release of a reserve related to an  indemnification  obligation
with respect to a previously divested subsidiary.

INTEREST INCOME, NET

Interest  income,  net,  was $0.2  million  and $1.0  million  for the three and
nine-month  periods  ended June 30,  2006,  respectively,  compared  to interest
income,  net, of $0.5  million and $1.3  million for the  respective  prior year
periods.  The  decrease  in  interest  income  in the third  quarter  of 2006 as
compared to the prior year  quarter was due to lower  average  cash  balances on
hand.

INCOME TAX EXPENSE

The third quarter 2006 effective  income tax rate was 31.3% compared to 15.7% in
the third  quarter  of 2005.  The  effective  income  tax rate in the first nine
months of fiscal 2006 was 42.0% compared to 30.7% in the prior year period.  The
third quarter 2006 income tax expense was  favorably  impacted by a $1.0 million
research tax credit.  The effect of the  research tax credit  impacted the third
quarter 2006 rate by 6.0%. The increase in the effective  income tax rate in the
first nine  months of fiscal  2006 as compared to the prior year period was also
affected  by the impact of  repatriating  $28.7  million of cash held by foreign
subsidiaries  into the United  States under the tax  provisions  of the American
Jobs Creation Act of 2004.  The effect of the  repatriation  impacted the fiscal
2006  second  quarter  effective  income  tax  expense by $1.7  million  and the
effective rate by 10.9%. In addition,  lower volume of profit  contributions  of
the Company's foreign  operations  (primarily Puerto Rico due to the lower sales
to PREPA)  impacted  the tax rate.  The third  quarter  2005 income tax rate was
impacted by an  adjustment  to income tax expense due to the Company  finalizing
certain  foreign tax returns in June;  an  adjustment  to the 2005 tax provision
resulting from higher foreign  sourced pretax income;  and a favorable state tax
rate  adjustment.  The  third  quarter  2005  effective  tax  rate,  absent  the
adjustments  mentioned  above,  would have been  approximately  33%. The Company
estimates the annual effective tax rate for fiscal 2006 to be approximately 41%.

During the third  quarter of 2006,  the Company  began an analysis of  available
research tax credits and filed its 2005 U.S.  tax return  which  included a $1.0
million research credit.  Under current law, the research tax credit expired for
research expenditures incurred after December 31, 2005. The Company expects that
a research  credit of $0.2 million will be reflected in its 2006 U.S. income tax
return. The Company will continue to evaluate the amount of research credit that
is available  for years prior to 2005 and expects that this  evaluation  will be
completed by September 30, 2006.

CAPITAL RESOURCES AND LIQUIDITY

Working capital  (current assets less current  liabilities)  decreased to $122.7
million at June 30, 2006 from $202.2  million at September 30, 2005.  During the
first nine months of 2006,  cash decreased  $69.2 million,  primarily due to the
approximately  $91 million,  net,  paid for the Nexus and Hexagram  acquisitions
offset by cash generated by operations.  Accounts receivable  increased by $13.9
million in the first nine months of 2006,  of which $5.9 million  related to the
acquisitions  of Nexus and  Hexagram;  $3.5  million  related to the  Filtration
segment due to timing and volume of sales;  and $3.5 million related to DCSI due
to timing of sales.  Accounts  payable  increased by $17.6  million in the first
nine months of 2006, of which $1.7 million related to the  acquisitions of Nexus
and Hexagram and $10.0 million related to DCSI due to timing of vendor payments.

Net cash  provided by operating  activities  was $47.4 million and $45.4 million
for the nine-month periods ended June 30, 2006 and 2005, respectively.

Capital expenditures were $6.8 million and $6.6 million in the first nine months
of fiscal 2006 and 2005, respectively.  Major expenditures in the current period
included manufacturing equipment used in the Filtration/Fluid Flow businesses.

At June 30, 2006,  other assets  (non-current)  of $63.8 million  included $39.5
million of capitalized software.  Approximately $34.9 million of the capitalized
software balance represents external  development costs on software  development
called "TNG" within the Communications segment to further penetrate the investor
owned utility (IOU) market.  TNG is being developed in conjunction  with a third
party  software  contractor.  TNG is being  deployed to  efficiently  handle the
additional  levels  of  communications  dictated  by the  size  of  the  service
territories  and the frequency of reads that are required  under  time-of-use or
critical peak pricing  scenarios  needed to meet the requirements of large IOUs.
At June 30,  2006,  the  Company  had  approximately  $4 million of  commitments
related to TNG  version  1.6 which is  expected  to be spent over the next three
months.  The  Company  expects to spend up to $7 million in fiscal  2007 on TNG.
Amortization  of TNG is on a  straight-line  basis over seven years and began in
March 2006.  The Company  has  recorded  $1.2  million in  amortization  expense
related to TNG in the first nine months of fiscal 2006.

The closure and  relocation of the Filtertek  Puerto Rico facility was completed
in March 2004. The Puerto Rico facility is included in other current assets with
a  carrying  value of $3.6  million  at June 30,  2006.  The  facility  is being
marketed for sale.

In October 2004,  the Company  entered into a $100 million  five-year  revolving
bank  credit  facility  with a $50  million  increase  option  that  has a final
maturity and  expiration  date of October 6, 2009. At June 30, 2006, the Company
had approximately $99.2 million available to borrow under the credit facility in
addition to $35.3  million cash on hand.  At June 30,  2006,  the Company had no
borrowings,  and  outstanding  letters of credit of $1.7 million  ($0.8  million
outstanding  under the  credit  facility).  On  February  1, 2006,  the  Company
borrowed $47 million to partially  fund the  acquisition  of Hexagram  which was
subsequently  repaid from the foreign cash  repatriation  by March 31, 2006. The
interest  rate on this debt was  approximately  5.3%.  During  April  2006,  the
Company  borrowed $5 million  which was  subsequently  repaid prior to April 30,
2006.  The interest rate on this debt was 7.75%.  Cash flow from  operations and
borrowings  under the  Company's  bank credit  facility are expected to meet the
Company's capital requirements and operational needs for the foreseeable future.

Acquisitions

Effective  February 1, 2006, the Company acquired the capital stock of Hexagram,
Inc.  (Hexagram)  for a purchase  price of $67.5 million  subject to a potential
working  capital  adjustment.   The  acquisition  agreement  also  provides  for
contingent  consideration  of up to $6.25  million  over the  five  year  period
following the acquisition if Hexagram exceeds certain sales targets. Hexagram is
a RF fixed  network AMR company  headquartered  in Cleveland,  Ohio.  Hexagram's
annual revenue over the past three years has been in the range of $20 million to
$35 million. The operating results for Hexagram,  since the date of acquisition,
are  included  within  the   Communications   segment.   The  Company   recorded
approximately  $55  million  of  goodwill  and  trademarks  as a  result  of the
transaction,  subject to  post-closing  adjustments  including  finalization  of
purchase  accounting.  The Company also  recorded  $6.6 million of  identifiable
intangible  assets  consisting  primarily of patents and  proprietary  know-how,
customer contracts, and order backlog which will be amortized on a straight-line
basis over  periods  ranging from six months to seven  years.  The  post-closing
purchase  accounting  items are expected to be completed  prior to September 30,
2006.

Effective  November 29, 2005, the Company acquired Nexus Energy  Software,  Inc.
(Nexus) through an all cash for shares merger  transaction for approximately $29
million in cash plus  contingent  cash  consideration  over the four year period
following the merger if Nexus exceeds certain sales targets. Nexus is a software
company  headquartered in Wellesley,  Massachusetts  with annual revenues in the
past in excess of $10 million.  The operating results for Nexus,  since the date
of acquisition,  are included  within the  Communications  segment.  The Company
recorded  approximately  $24 million of goodwill as a result of the transaction,
subject  to  post-closing   adjustments   including   finalization  of  purchase
accounting.  The Company also recorded $2.7 million of  identifiable  intangible
assets  consisting  of  customer  contracts  and  backlog  value  which  will be
amortized on a  straight-line  basis over periods ranging from one year to three
years. The post-closing  purchase  accounting items are expected to be completed
prior to September 30, 2006.

Pacific Gas & Electric

On November 7, 2005, the Company announced that DCSI had entered into a contract
to provide equipment,  software and services to Pacific Gas & Electric (PG&E) in
support of the electric portion of PG&E's Advanced Metering Infrastructure (AMI)
project.  PG&E's  current  AMI  project  plan calls for the  purchase  of TWACS
communication equipment for approximately five million electric customers over a
five-year  period  after  the   commencement  of  full  deployment.   The  total
anticipated   contract  value  from  commencement  through  the  five-year  full
deployment  period is expected to be  approximately  $300 million.  PG&E has the
right to purchase additional  equipment and services to support existing and new
customers through the twenty to twenty-five year term of the contract. Equipment
will be  purchased  by PG&E only upon  issuance of  purchase  orders and release
authorizations.  PG&E will  continue to have the right to  purchase  products or
services from other suppliers for the electric portion of the AMI project.  Full
deployment  is  contingent  upon  satisfactory  system  testing,  and final PG&E
management approval,  all of which are currently expected to be concluded during
fiscal 2007.  On July 20,  2006,  the  California  Public  Utilities  Commission
approved PG&E's AMI project.  DCSI has agreed to deliver to PG&E versions of its
newly developed TNG software as they become available and are tested. Acceptance
of the final  version for which DCSI has committed is currently  anticipated  in
the latter  portion of fiscal  2007.  Until such  acceptance  is  obtained,  the
Company  will be required  under U.S.  financial  accounting  standards to defer
revenue  recognition.  The contract provides for liquidated damages in the event
of DCSI's late  development  or delivery of hardware and software,  and includes
indemnification and other customary  provisions.  The contract may be terminated
by PG&E for default,  for its  convenience  and in the event of a force  majeure
lasting  beyond  certain  prescribed  periods.  The Company has  guaranteed  the
obligations of DCSI under the contract.  If PG&E terminates the contract for its
convenience, DCSI will be entitled to recover certain costs.

On  November 3, 2005,  Hexagram  entered  into a contract to provide  equipment,
software  and  services to PG&E in support of the gas utility  portion of PG&E's
AMI project.  The total anticipated  contract revenue from commencement  through
the five-year full deployment is expected to be approximately  $225 million.  As
with DCSI's  contract with PG&E,  discussed  above,  equipment will be purchased
only upon issuance of purchase orders and release authorizations,  and PG&E will
continue to have the right to purchase products or services from other suppliers
for the gas utility  portion of the AMI project.  Full  deployment is contingent
upon satisfactory system testing, and final PG&E management approval,  which are
expected to be concluded  during fiscal 2006. On July 20, 2006,  the  California
Public Utilities  Commission approved PG&E's AMI project.  The contract provides
for liquidated damages in the event of late deliveries, includes indemnification
and other customary  provisions,  and may be terminated by PG&E for default, for
its  convenience  and in the event of a force  majeure  lasting  beyond  certain
prescribed  periods.  The Company has guaranteed the performance of the contract
by Hexagram.


CRITICAL ACCOUNTING POLICIES

Management has evaluated the accounting  policies used in the preparation of the
Company's financial  statements and related notes and believes those policies to
be reasonable and appropriate.  Certain of these accounting policies require the
application  of  significant  judgment by  Management  in selecting  appropriate
assumptions  for  calculating  financial  estimates.   By  their  nature,  these
judgments are subject to an inherent degree of uncertainty.  These judgments are
based on historical experience, trends in the industry,  information provided by
customers and information  available from other outside sources, as appropriate.
The most significant areas involving  Management  judgments and estimates may be
found in the Critical Accounting Policies section of Management's Discussion and
Analysis and in Note 1 to the Consolidated Financial Statements contained in the
Company's  Annual  Report on Form 10-K for the fiscal year ended  September  30,
2005 at Exhibit  13, as  supplemented  by Note 2 to the  Consolidated  Financial
Statements in Item 1 hereof.

OTHER MATTERS

Contingencies

As a normal incident of the businesses in which the Company is engaged,  various
claims, charges and litigation are asserted or commenced against the Company. In
the opinion of  Management,  final  judgments,  if any,  which might be rendered
against the Company in current  litigation are adequately  reserved,  covered by
insurance,  or  would  not  have a  material  adverse  effect  on its  financial
statements.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued FASB Staff Position FAS 109-2, "Accounting and
Disclosure Guidance for the Foreign Earnings  Repatriation  Provision within the
American  Jobs Creation Act of 2004 (FSP 109-2)." The American Jobs Creation Act
of 2004, (the "Act") provides for a special one-time  deduction of 85 percent of
certain foreign earnings  repatriated  into the U.S. from non-U.S.  subsidiaries
through  September 30, 2006. During the second quarter ended March 31, 2006, the
Company  repatriated  $28.7  million of foreign  earnings  which qualify for the
special  one-time  deduction.  Tax expense of $1.7  million was  recorded in the
second quarter of fiscal 2006 as a result of this repatriation.

The Company is currently evaluating the merits of repatriating  additional funds
under the Act. At June 30, 2006,  the range of  reasonably  possible  amounts of
unremitted  earnings that are being  considered for repatriation is between zero
and $10.5  million,  which would  require the Company to pay income taxes in the
range of zero to $1.0 million.  Federal income taxes on the repatriated  amounts
would be based on the 5.25%  effective  statutory  rate as  provided in the Act,
plus  applicable  withholding  taxes.  To date, the Company has not provided for
income taxes on these unremitted earnings generated by non-U.S. subsidiaries. As
a  result,  additional  taxes  may be  required  to be  recorded  for any  funds
repatriated under the Act. The Company expects to complete its evaluation of the
repatriation of these additional funds by September 30, 2006.

In June 2006,  the FASB  issued  FASB  Interpretation  No. 48,  "Accounting  for
Uncertainty in Income Taxes, an  Interpretation of FASB Statement No. 109." This
Interpretation   is  effective  for  ESCO  beginning   October  1,  2007.   This
Interpretation  prescribes a recognition  threshold and measurement  process for
the financial  statement  recognition and measurement of a tax position taken or
expected to be taken in a tax return.  The Company is currently  evaluating  the
adoption of this  Interpretation  and does not currently have an estimate of the
impact on the consolidated financial statements.



FORWARD LOOKING STATEMENTS

Statements in this report that are not strictly historical are "forward looking"
statements  within the  meaning of the safe  harbor  provisions  of the  federal
securities  laws.  Forward  looking  statements  include  those  relating to the
estimates  or  projections  made in  connection  with the  Company's  accounting
policies,   annual  effective  tax  rate,   research  tax  credits,   timing  of
Communications  segment commitments and expenditures,  outcome of current claims
and litigation, future cash flow, capital requirements and operational needs for
the  foreseeable  future,  the ultimate  values and timing of revenues under the
DCSI / PG&E contract and the Hexagram / PG&E  contract,  the start of deployment
under the Company's PG&E  contracts,  the future  delivery and acceptance of the
TNG software by PG&E,  timing of spending  for TNG  commitments,  completion  of
Hexagram and Nexus post-closing  purchase accounting items, the amounts, if any,
and timing of  additional  foreign  earnings  repatriated  into the U.S. and the
additional taxes resulting from such repatriation.  Investors are cautioned that
such  statements  are only  predictions,  and speak  only as of the date of this
report.  The Company's  actual results in the future may differ  materially from
those projected in the forward-looking statements due to risks and uncertainties
that exist in the Company's operations and business environment  including,  but
not limited to: PG&E's Board of Directors and PG&E's management impacting PG&E's
AMI projects; the timing and success of DCSI's software development efforts; the
timing and  content of purchase  order  releases  under  PG&E's  contracts;  the
Company's successful performance under the PG&E contracts; weakening of economic
conditions  in  served  markets;   changes  in  customer   demands  or  customer
insolvencies; competition; intellectual property rights; successful execution of
the planned sale of the Company's Puerto Rico facility;  material changes in the
costs of certain raw  materials  including  steel,  copper and  petroleum  based
resins; delivery delays or defaults by customers; termination for convenience of
customer contracts;  timing and magnitude of future contract awards; performance
issues with key suppliers,  customers and subcontractors;  collective bargaining
and  labor  disputes;  changes  in laws and  regulations  including  changes  in
accounting  standards  and  taxation  requirements;  changes  in foreign or U.S.
business  conditions  affecting  the  distribution  of foreign  earnings;  costs
relating to environmental  matters;  litigation  uncertainty;  and the Company's
successful execution of internal operating plans.





ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to the Company's  operations result primarily from changes
in interest rates and changes in foreign currency exchange rates. There has been
no material change to the Company's risks since September 30, 2005. Refer to the
Company's  Annual  Report on Form 10-K for the fiscal year ended  September  30,
2005 for further discussion about market risk.

ITEM 4.       CONTROLS AND PROCEDURES

The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation of Management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the period covered
by this  report.  Based upon that  evaluation,  the  Company's  Chief  Executive
Officer and Chief  Financial  Officer  concluded  that the Company's  disclosure
controls and procedures were effective as of that date.  Disclosure controls and
procedures  are  controls  and  procedures  that are  designed  to  ensure  that
information required to be disclosed in Company reports filed or submitted under
the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed,
summarized and reported within the time periods  specified in the Securities and
Exchange Commission's rules and forms. There has been no change in the Company's
internal  control over financial  reporting (as defined in Rule 13a-15(f)  under
the Exchange Act) during the period  covered by this report that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

                                                       PART II OTHER INFORMATION




ITEM 2.       UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In August 2004, the Company's  Board of Directors  approved the extension of the
previously  authorized  (February  2001) open  market  common  stock  repurchase
program  originally  authorizing up to 2.6 million  shares,  which is subject to
market  conditions and other factors and covers the period through September 30,
2006.  At June  30,  2006,  the  Company  had  1,152,966  shares  remaining  for
repurchase under this program.  There were no stock repurchases during the first
nine months of fiscal 2006.


ITEM 6.       EXHIBITS

a)   Exhibits
     Exhibit
     Number

        3.1       Restated Articles of         Incorporated by reference
                  Incorporation                to Form 10-K for the
                                               fiscal year ended
                                               September 30, 1999, at
                                               Exhibit 3(a)

        3.2       Amended Certificate of       Incorporated by reference
                  Designation Preferences      to Form 10-Q for the
                  and Rights of Series A       fiscal quarter ended March
                  Participating Cumulative     31, 2000, at Exhibit 4(e)
                  Preferred Stock of the
                  Registrant

        3.3       Articles of Merger           Incorporated by reference
                  effective July 10, 2000      to Form 10-Q for the
                                               fiscal quarter ended June
                                               30, 2000, at Exhibit 3(c)

        3.4       Bylaws, as amended and       Incorporated by reference
                  restated.                    to Form 10-K for the
                                               fiscal year ended
                                               September 30, 2003, at
                                               Exhibit 3.4

        4.1       Specimen Common Stock        Incorporated by reference
                  Certificate                  to Form 10-Q for the
                                               fiscal quarter ended June
                                               30, 2000, at Exhibit 4(a)

        4.2       Specimen Rights              Incorporated by reference
                  Certificate                  to Current Report on Form
                                               8-K dated February 3,
                                               2000, at Exhibit B to
                                               Exhibit 4.1

        4.3       Rights Agreement dated       Incorporated by reference
                  as of September 24, 1990     to Current Report on Form
                  (as amended and Restated     8-K dated February 3,
                  as of February 3, 2000)      2000, at Exhibit 4.1
                  between the Registrant
                  and Registrar and
                  Transfer Company, as
                  successor  Rights Agent

        4.4       Credit Agreement dated     Incorporated by reference to
                  as of October 6, 2004      Form10-K for the fiscal year
                  among the Registrant,      ended September 30, 2004, at
                  Wells Fargo Bank,          Exhibit 4.4
                  N.A., as agent, and
                  the lenders listed
                  therein

         4.5      Consent and waiver to      Incorporated by reference to
                  Credit Agreement           Current Report on Form 8-K
                  (listed as 4.4, above)     dated February 2, 2006 at
                  dated as of January        Exhibit 4.1
                  20, 2006

        31.1      Certification of Chief
                  Executive Officer
                  relating to Form 10-Q
                  for period ended June
                  30, 2006

        31.2      Certification of Chief
                  Financial Officer
                  relating to Form 10-Q
                  for period ended June
                  30, 2006

         32       Certification of Chief
                  Executive Officer and
                  Chief Financial
                  Officer relating to
                  Form 10-Q for period
                  ended June 30, 2006



SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                ESCO TECHNOLOGIES INC.

                /s/ Gary E. Muenster
                Gary E. Muenster
                Senior Vice President and Chief Financial Officer
                (As duly authorized officer and principal accounting
                officer of the registrant)





Dated:   August 9, 2006



Exhibit 31.1
                            CERTIFICATIONS

              I, V.L. Richey, Jr., certify that:

     1.   I  have  reviewed  this   quarterly   report  on  Form  10-Q  of  ESCO
          Technologies Inc.;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and we have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this quarterly report is being prepared;

          b.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          c.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

     5.   The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting,  to the  registrant's  auditors  and the audit and  finance
          committee  of  the   registrant's   board  of  directors  (or  persons
          performing the equivalent functions):


          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


     Date:    August 9, 2006


                             (s) V.L. Richey, Jr.
                            V.L. Richey, Jr.
                            Chief Executive Officer


Exhibit 31.2
                            CERTIFICATIONS

              I, G.E. Muenster, certify that:

          1.   I have  reviewed  this  quarterly  report  on  Form  10-Q of ESCO
               Technologies Inc.;

          2.   Based on my knowledge, this quarterly report does not contain any
               untrue  statement of a material  fact or omit to state a material
               fact  necessary  to make  the  statements  made,  in light of the
               circumstances   under  which  such   statements  were  made,  not
               misleading  with respect to the period  covered by this quarterly
               report;

          3.   Based  on my  knowledge,  the  financial  statements,  and  other
               financial  information included in this quarterly report,  fairly
               present in all material respects the financial condition, results
               of  operations  and cash flows of the  registrant as of, and for,
               the periods presented in this quarterly report;

          4.   The registrant's  other certifying  officer and I are responsible
               for   establishing  and  maintaining   disclosure   controls  and
               procedures  (as  defined  in  Exchange  Act Rules  13a-15(e)  and
               15d-15(e)) for the registrant and we have:

               a.   Designed such disclosure controls and procedures,  or caused
                    such disclosure controls and procedures to be designed under
                    our  supervision,   to  ensure  that  material   information
                    relating  to  the  registrant,  including  its  consolidated
                    subsidiaries,  is made  known to us by others  within  those
                    entities,  particularly  during  the  period  in which  this
                    quarterly report is being prepared;

               b.   Evaluated the  effectiveness of the registrant's  disclosure
                    controls  and  procedures  and  presented in this report our
                    conclusions   about  the  effectiveness  of  the  disclosure
                    controls and procedures, as of the end of the period covered
                    by this report based on such evaluation; and

               c.   Disclosed  in this  report  any  change in the  registrant's
                    internal  control over  financial  reporting  that  occurred
                    during the  registrant's  most recent  fiscal  quarter  (the
                    registrant's  fourth fiscal quarter in the case of an annual
                    report)  that  has  materially  affected,  or is  reasonably
                    likely  to  materially  affect,  the  registrant's  internal
                    control over financial reporting; and

     5.   The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting,  to the  registrant's  auditors  and the audit and  finance
          committee  of  the   registrant's   board  of  directors  (or  persons
          performing the equivalent functions):

          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.



     Date:    August 9, 2006


                                (s) G.E. Muenster
                                G.E. Muenster
                                Chief Financial Officer


EXHIBIT 32


                       CERTIFICATION PURSUANT TO
                        18 U.S.C. SECTION 1350,
                        AS ADOPTED PURSUANT TO
             SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



      In connection with the quarterly report of ESCO Technologies
Inc. (the "Company") on Form 10-Q for the period ended June 30, 2006
as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), we, V. L. Richey, Jr., Chief Executive Officer
of the Company, and G. E. Muenster, Chief Financial Officer of the
Company, certify, to the best of our knowledge, pursuant to 18 U.S.C.
 1350, as adopted pursuant to  906 of the Sarbanes-Oxley Act of
2002, that:

         (1)      The Report fully complies with the requirements of
                  Section 13(a) or 15(d) of the Securities Exchange
                  Act of 1934; and

         (2)      The information contained in the Report fairly
                  presents, in all material respects, the financial
                  condition and results of operations of the Company.




         Dated:   August 9, 2006
                                       /s/ V.L. Richey, Jr.
                                       V.L. Richey, Jr.
                                       Chief Executive Officer
                                       ESCO Technologies Inc.

                                       /s/ G.E. Muenster
                                       G.E. Muenster
                                       Chief Financial Officer
                                       ESCO Technologies Inc.