SEC Filing - ESCO Technologies Inc.

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              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, 1999

                              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 ELECTRONICS CORPORATION

    (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.)

8888 Ladue Road, Suite 200                         63124-2090
St. Louis, Missouri                                (Zip Code)
(Address of principal executive 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

Number of common stock trust receipts outstanding at July 31,
1999: 12,375,351 receipts.




PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements


        ESCO ELECTRONICS CORPORATION AND SUBSIDIARIES
       Condensed Consolidated Statements of Operations
                         (Unaudited)
       (Dollars in thousands, except per share amounts)


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

                                             1999        1998
                                             ----        ----

Net sales                                  $113,978     98,236
                                            -------     ------
Costs and expenses:
 Cost of sales                               86,027     72,595
 Selling, general and administrative expenses18,934     16,966
 Interest expense                             1,715      2,021
 Other, net                                     989      1,056
                                            -------    -------
    Total costs and expenses                107,665     92,638
                                            -------    -------
Earnings before income taxes                  6,313      5,598
Income tax expense                            2,241      1,751
                                            -------    -------
Net earnings                               $  4,072      3,847
                                            =======    =======
Earnings per share:  - Basic                $   .33        .32
                     - Diluted                  .32        .31
                                             ======    =======


See accompanying notes to condensed consolidated financial
statements



          ESCO ELECTRONICS CORPORATION AND SUBSIDIARIES
         Condensed Consolidated Statements of Operations
                           (Unaudited)
        (Dollars in thousands, except per share amounts)


                                            Nine Months Ended
                                                June 30,
                                            -----------------
                                             1999        1998
                                             ----        ----
Net sales                                  $298,385    262,343
                                            -------    -------
Costs and expenses:
 Cost of sales                              222,504    190,077
 Selling, general and administrative expenses54,748     49,783
 Interest expense                             5,151      5,664
 Other, net                                   4,179      2,774
                                            -------    -------
    Total costs and expenses                286,582    248,298
                                            -------    -------
Earnings before income taxes                 11,803     14,045
Income tax expense                            4,169      4,348
                                            -------    -------
Net earnings before accounting change         7,634      9,697
                                            -------    -------
Cumulative effect of accounting change,
 net of tax                                 (25,009)      -
                                            -------    -------
Net earnings (loss)                       $(17,375)      9,697
                                           =======     =======
Earnings (loss) per share:
   Earnings before accounting change:
                         -  Basic           $   .62        .82
                         -  Diluted             .61        .78
                                             ======     ======

   Net earnings (loss)   -  Basic           $ (1.41)       .82
                         -  Diluted           (1.41)       .78
                                             =======    ======


See accompanying notes to condensed consolidated financial
statements


          ESCO ELECTRONICS CORPORATION AND SUBSIDIARIES
              Condensed Consolidated Balance Sheets
                     (Dollars in thousands)


                                              June 30,   September 30,
                                               1999           1998
                                              --------   -------------
ASSETS                                      (Unaudited)
Current assets:
 Cash and cash equivalents                  $  5,493      4,241
 Accounts receivable, less allowance for doubtful
   accounts of $554 and $664, respectively    48,271     51,530
 Costs and estimated earnings on long-term
   contracts, less progress billings of
   $28,934 and $51,529, respectively          18,888     26,995
 Inventories                                  61,399     81,579
 Other current assets                          3,650      2,776
                                             -------    -------
      Total current assets                   137,701    167,121
Property, plant and equipment, at cost       152,942    150,332
Less accumulated depreciation and amortization 61,535    52,323
                                             -------    -------
      Net property, plant and equipment       91,407     98,009
Excess of cost over net assets of purchased
   businesses, less accumulated amortization
   of $6,326 and $4,557, respectively         70,277     72,512
Deferred tax assets                           52,550     44,740
Other assets                                  23,383     26,920
                                             -------    -------
                                            $375,318    409,302
                                             =======    =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Short-term borrowings and current
   maturities of long-term debt            $ 38,000     30,111
 Accounts payable                             35,081     39,908
 Advance payments on long-term contracts,
   less costs incurred of $33,704 and
   $5,046, respectively                        7,286     11,442
 Accrued expenses and other current
   liabilities                                19,411     25,346
                                             -------    -------
      Total current liabilities               99,778    106,807
                                             -------    -------
Other liabilities                             27,774     28,339
Long-term debt                                43,981     50,077
                                             -------    -------
      Total liabilities                      171,533    185,223
                                             -------    -------
Commitments and contingencies                   -          -
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 12,778,328 and
   12,641,664 shares, respectively               128        126
 Additional paid-in capital                  201,284    200,913
 Retained earnings since elimination of
   deficit at September 30, 1993               9,902     27,277
 Cumulative foreign currency translation adj. (1,247)       520
 Minimum pension liability                    (2,260)    (2,260)
                                             -------    -------
                                             207,807    226,576
 Less treasury stock, at cost; 406,025
   and 234,025 common shares, respectively    (4,022)    (2,497)
                                             -------    -------
      Total shareholders' equity             203,785    224,079
                                             -------    -------
                                            $375,318    409,302
                                             =======    =======



See accompanying notes to condensed consolidated financial
statements.


          ESCO ELECTRONICS CORPORATION AND SUBSIDIARIES
         Condensed Consolidated Statements of Cash Flows
                           (Unaudited)
                     (Dollars in thousands)


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

                                               1999        1998
                                               ----        ----
Cash flows from operating activities:
 Net earnings (loss)                        $(17,375)     9,697
 Adjustments to reconcile net earnings
  (loss) to net cash provided (used) by
  operating activities:
     Depreciation and amortization             13,506    13,718
     Changes in operating working capital,
     net of accounting change                 (19,582)  (32,077)
     Effect of accounting change, net of tax   25,009      -
     Other                                      5,885     4,221
                                              -------   -------
      Net cash provided (used) by operating
         activities                             7,443    (4,441)
                                              -------   -------
Cash flows from investing activities:
 Capital expenditures                         (6,615)   (9,839)
 Acquisition of businesses, less cash acquired  -        (4,722)
                                             -------    -------
  Net cash used by investing activities       (6,615)  (14,561)
                                             -------   -------
Cash flows from financing activities:
 Net increase in short-term borrowings         8,000    24,476
 Proceeds from long-term debt                     96      -
 Principal payments on long-term debt         (6,303)   (5,113)
 Other                                        (1,369)   (1,334)
                                             -------   -------
  Net cash provided by financing activities      424    18,029
                                             -------   -------
Net increase in cash and cash equivalents       1,252     (973)
Cash and cash equivalents, beginning of period  4,241     5,818
                                              -------   -------
Cash and cash equivalents, end of period     $  5,493     4,845
                                              =======   =======



See accompanying notes to condensed consolidated financial
statements.


          ESCO ELECTRONICS CORPORATION AND SUBSIDIARIES
      Notes to Condensed Consolidated Financial Statements
                           (Unaudited)

1. BASIS OF PRESENTATION

   The  accompanying condensed 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  condensed consolidated  financial  statements
   are  presented in accordance with the requirements of Form 10-Q
   and  consequently  do  not  include  all  the  disclosures
   required  by  generally  accepted accounting  principles.  For
   further   information  refer  to  the  consolidated  financial
   statements and notes thereto included in the Company's  Annual
   Report  on  Form 10-K for the year ended September  30,  1998.
   Certain  prior year amounts have been reclassified to  conform
   with the fiscal 1999 presentation.

   The  results for the three and nine month periods  ended  June
   30,  1999  are not necessarily indicative of the  results  for
   the entire 1999 fiscal year.

2. EARNINGS PER SHARE

   Basic  earnings  per  share is calculated using  the  weighted
   average  number  of  common  shares  outstanding  during   the
   period.  Diluted  earnings per share 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 performance shares by  using
   the  treasury  stock method. The net loss per  share  for  the
   first  nine months of fiscal 1999, for both basic and  diluted
   loss  per  share,  is  calculated using the  weighted  average
   number  of  common shares outstanding during the  period.  The
   number  of  shares used in the calculation of earnings  (loss)
   per  share  for  each  period  presented  is  as  follows  (in
   thousands):

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

                              1999     1998      1999    1998
                              ----     ----      ----    ----
   Weighted Average Shares
   Outstanding - Basic      12,357  11,965    12,318   11,880
   Dilutive Options and
     Performance Shares        352     534       249      535
                            ------  ------    ------   ------
   Adjusted Shares- Diluted 12,709  12,499    12,567   12,415
                            ------  ======    ======   ======

   Options  to purchase 689,000 shares of common stock at  prices
   ranging  from  $10.78  -  $19.22  per  share  and  options  to
   purchase  77,500  shares  of  common  stock  at  approximately
   $18.00  -  $19.22  were  outstanding  during  the  nine  month
   periods  ended June 30, 1999 and 1998, respectively,  but  were
   not  included  in the respective computations of  diluted  EPS
   because  the  options  exercise price was  greater  than  the
   average  market  price  of the common  shares.  These  options
   expire  in  2007 and 2008. Approximately 166,000  and  113,000
   performance shares were outstanding but unearned at  June  30,
   1999,   and  1998,  respectively,  and  therefore,  were   not
   included  in the respective computations of diluted  EPS.  The
   unearned performance shares expire in 2001.


3. INVENTOREIS

   Inventories consist of the following (dollars in thousands):

                                      June 30,    September 30,
                                        1999          1998
                                        ----          ----
   Finished goods                   $  9,820          9,491
   Work in process, including
     long-term contracts              33,728         54,754
   Raw materials                      17,851         17,334
                                      ------         ------
        Total inventories           $ 61,399         81,579
                                      ======         ======

   Under  the contractual arrangements by which progress payments
   are  received, the U.S. Government has a security interest  in
   the    inventories   associated   with   specific   contracts.
   Inventories  are  net of progress payment  receipts  of  $23.6
   million  and  $14 million at June 30, 1999 and  September  30,
   1998, respectively.

4. CHANGE IN ACCOUNTING PRINCIPLE

   In  April  1998,  the American Institute of  Certified  Public
   Accountants  (AICPA) issued Statement of Position (SOP)  98-5,
   "Reporting on the Costs of Start-up Activities". This  SOP  is
   applicable  to  all  non-governmental  entities  and  provides
   guidance on accounting for start-up activities, including pre-
   contract  start-up  costs  and organization  costs.  SOP  98-5
   broadly  defines  start-up costs as those one-time  activities
   related  to opening a new facility, introducing a new  product
   or service, conducting business in a new territory, conducting
   business   with  a  new  class  of  customer  or  beneficiary,
   initiating   a  new  process  in  an  existing  facility,   or
   commencing  some  new  operation.  Start-up  activities   also
   include   activities  related  to  organizing  a  new  entity,
   commonly referred to as organization costs.

   The  Company  had previously accounted for these  costs  under
   the  existing  guidance provided by SOP  81-1,"Accounting  for
   Performance of Construction-type Contracts." Under  SOP  81-1,
   costs  incurred  for  a  specific  anticipated  contract  were
   capitalized  if those costs could be directly associated  with
   the    specific   anticipated   contract,   and    if    their
   recoverability  from  that contract  was  probable.  SOP  98-5
   amends  SOP  81-1  by  requiring  precontract,  start-up   and
   organization costs to be expensed as incurred.

   The  Company  is required to adopt this change  in  accounting
   principle  no  later  than the first quarter  of  fiscal  year
   2000. The Company decided to adopt the provisions of SOP  98-5
   in  the  first quarter of fiscal year 1999 ended December  31,
   1998.  This change in accounting principle resulted in a  non-
   cash,  after-tax charge of approximately $25 million, and  was
   recognized  as  a  cumulative effect of an accounting  change.
   The  $13.5  million  tax impact of this change  in  accounting
   principle  is  included in deferred tax  assets  at  June  30,
   1999.

   The  after-tax  charge  related to precontract  start-up,  and
   organization  costs  incurred  in  anticipation  of   specific
   future  contract awards which were based on specific customer-
   identified requirements. The after-tax charge is comprised  of
   the  following programs: the Tunner 60K aircraft cargo  loader
   at   SEI  ($17.2  million);  the  Quiktrak  automatic  vehicle
   location  system at the Comtrak division of SEI ($2  million);
   the  advanced  video  surveillance  system  (Securvision)  at
   Comtrak   ($2   million);  the  Seawolf  (U.S.   Navy   attack
   submarine)  valve  and  manifold ship  set  program  at  Vacco
   Industries  ($1.9  million); and other  minor  programs  which
   aggregate $1.9 million.

   The  impact  of adopting SOP 98-5 on the results of operations
   for  the nine month period ended June 30, 1999 was an increase
   to  net  earnings of approximately $1.4 million, or  $.11  per
   share.  The favorable impact noted is primarily the net result
   of   the  absence  of  amortization  expense  related  to  the
   previously  capitalized  start-up  costs,  net  of  additional
   costs  expensed.  The  after tax charge  to  net  earnings  of
   adopting  SOP  98-5 amounted to $25.0 million,  or  $2.03  per
   basic and diluted share.

5. COMPREHENSIVE INCOME (LOSS)

   Effective  October 1, 1998, the Company adopted  Statement  of
   Financial  Accounting  Standards (SFAS)  No.  130,  "Reporting
   Comprehensive  Income". SFAS No. 130 requires the  Company  to
   disclose  all  non-owner changes included in  equity  but  not
   included in net earnings (loss) in a financial statement  that
   is  displayed  with  the same prominence  as  other  financial
   statements.  Prior  year amounts have been  conformed  to  the
   current year presentation.

   Comprehensive  income for the three month periods  ended  June
   30,  1999  and  1998  was  $  4.0 million  and  $3.6  million,
   respectively.  Comprehensive income (loss)for the  nine  month
   periods  ended June 30, 1999 and 1998 was ($18.5) million  and
   $9.2   million,   respectively.  The  Company's  comprehensive
   income   and  loss  is  impacted  only  by  foreign   currency
   translation adjustments, net of tax.


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


RESULTS OF OPERATIONS-    Three months ended June 30, 1999
                          compared with three months ended June 30,
                          1998.

Net  sales of $114.0 million for the third quarter of fiscal 1999
increased  $15.7 million (16.0%) from net sales of $98.2  million
for  the third quarter of fiscal 1998. The sales increase in  the
current quarter is the result of: increased defense sales (TUNNER
aircraft  cargo loaders) at Systems and Electronics, Inc.  (SEI);
increased commercial sales at Distribution Control Systems,  Inc.
(DCSI)  related  to  the PREPA contract; and the  impact  of  the
fiscal  1998  commercial acquisition of PTI  Advanced  Filtration
(PTA).

Commercial  sales  were $59.4 million (52.1%) and  defense  sales
were  $54.6 million (47.9%) for the third quarter of fiscal 1999,
compared  with  commercial and defense  sales  of  $55.1  million
(56.1%)  and  $43.1 million (43.9%), respectively, in  the  third
quarter  of fiscal 1998. The increase in defense sales is related
to the TUNNER program at SEI noted above.

Order  backlog  was  $356.4 million at  June  30,  1999.  Backlog
decreased  from  $382.4 million at March  31,  1999  due  to  the
increased  TUNNER deliveries versus the timing of the receipt  of
new  orders.  During  the fiscal 1999 third quarter,  new  orders
aggregating  $88.0  million were received, compared  with  $130.1
million in the third quarter of fiscal 1998. The most significant
orders  in  the  current  period were for TUNNER  aircraft  cargo
loader   support  items,  filtration/fluid  flow  products,   and
automatic   meter   reading  equipment.  The  1998   amount   was
significantly higher as it included the $50 million  PREPA  order
at DCSI.

The  gross profit margin was 24.5% in the third quarter of fiscal
1999  and  26.1% in the third quarter of fiscal 1998.  The  gross
margin  decreased  in the third quarter of  fiscal  1999  due  to
changes  in sales mix which resulted in lower margins contributed
from  the  defense segment. Gross profit margin in the commercial
segment was consistent with the prior year.

Selling, general and administrative (SG&A) expenses for the third
quarter of fiscal 1999 were $18.9 million, or 16.6% of net sales,
compared with $17.0 million, or 17.3% of net sales, for the  same
period  a year ago. The percentage decrease is the result of  the
higher  sales level in fiscal 1999. The increase in SG&A spending
is  primarily related to the fiscal 1998 acquisition of PTA being
included in the fiscal 1999 results.

Interest expense was $1.7 million in the third quarter of fiscal
1999 compared to $2.0 million in the same period of fiscal 1998.
The  decrease  is  due  to the reduction of average  outstanding
borrowings resulting from a more favorable timing of cash flows.

Other  costs  and expenses, net, were $1.0 million in  the  third
quarter  of  fiscal 1999, compared with the $1.1 million  in  the
same  period  of fiscal 1998. The fiscal 1999 amount  includes  a
$.6M gain on the sale of certain plant and equipment at Filtertek
and  Rantec. The gain was partially offset by additional goodwill
amortization expense associated with the 1998 acquisitions of PTA
and Euroshield.

The  effective  income tax rate in the third quarter  of  fiscal
1999  was 35.5% compared to 31.3% in the third quarter of fiscal
1998.  The  effective tax rate in the fiscal 1998 third  quarter
was  favorably  impacted  by  the earnings  contributed  by  the
Company's Puerto Rican operations.


RESULTS OF OPERATIONS-  Nine months ended June 30, 1999 compared
                        with nine months ended June 30, 1998

Net  sales of $298.4 million for the first nine months of  fiscal
1999  increased  $36.1 million (13.8%) from net sales  of  $262.3
million  for  the  first nine months of fiscal  1998.  The  sales
increase  in  the  current  period is the  result  of:  increased
defense  sales (TUNNER aircraft cargo loaders) at SEI;  increased
commercial  sales  at  DCSI related to the  PREPA  contract;  the
impact  of  the fiscal 1998 commercial acquisition  of  PTA;  and
additional sales of filtration products at Filtertek.

Commercial sales increased 15.6% over prior year and were  $168.8
million (56.6%) and defense sales were $129.6 million (43.4%) for
the  first  nine months of fiscal 1999, compared with  commercial
and  defense sales of $145.9 million (55.6%) and $116.4  million,
(44.4%) respectively, in the first nine months of fiscal 1998.

Order  backlog increased $64.3 million (22.0%) to $356.4  million
at  June 30, 1999, compared with $292.1 million at September  30,
1998.  During  the first nine months of fiscal 1999,  new  orders
aggregating  $362.7 million were received, compared  with  $319.4
million (13.6% increase) in the first nine months of fiscal 1998.
The  most  significant  orders in the  current  period  were  for
filtration/fluid  flow products, TUNNER aircraft  cargo  loaders,
M1000  tank  transporters,  electromagnetic  compatibility   test
equipment, and automatic meter reading equipment.

The gross profit percentage was 25.4% in the first nine months of
fiscal  1999  and 27.5% in the first nine months of fiscal  1998.
The  fiscal  1999 gross profit percentage decreased  from  fiscal
1998  due  to  lower margins in the defense segment  at  SEI  and
Rantec.  The 1999 gross margin was also lower due to the residual
impact   of   Hurricane  Georges  on  Filtertek's  Puerto   Rican
operation,  and a general slowdown experienced in some industrial
markets.

Selling,  general and administrative expense for the  first  nine
months  of fiscal 1999 were $54.7 million, or 18.3% of net sales,
compared  with $49.8 million or 19.0% of net sales, for the  same
period  a year ago. The increase in fiscal 1999 SG&A spending  is
primarily  related  to the fiscal 1998 acquisitions  of  PTA  and
Euroshield being included in the fiscal 1999 results.
Interest expense decreased to $5.2 million from $5.7 million as a
result  of  lower average outstanding borrowings in  fiscal  1999
compared to fiscal 1998.

Other  costs  and expenses, net, were $4.2 million in  the  first
nine  months of fiscal 1999 compared to $2.8 million in the  same
period  of fiscal 1998. The net increase in fiscal 1999  reflects
additional  goodwill  amortization expense  associated  with  the
acquisitions  of  PTA  and  Euroshield  and  increases  in  other
miscellaneous charges. The fiscal 1998 amount was impacted by the
favorable modification of a royalty agreement.

The  effective income tax rate in the first nine months of fiscal
1999  was 35.3% compared with 31.0% for the first nine months  of
fiscal  1998.  The lower effective tax rate for  the  first  nine
months of fiscal 1998 is attributable to the earnings contributed
from  the Company's Puerto Rican operations, and refunds received
relating  to  state  and  local taxes. Management  estimates  the
annual  effective  tax rate for fiscal 1999 to  be  approximately
35%.

As  discussed  in  Note  4  of  Notes to  Condensed  Consolidated
Financial Statements, the Company adopted the provisions  of  SOP
98-5  in  the  first  quarter  of fiscal  1999.  This  change  in
accounting principle resulted in a non-cash, after-tax charge  of
approximately  $25 million, and was recognized  as  a  cumulative
effect of an accounting change.



FINANCIAL CONDITION

Working capital decreased to $37.9 million at June 30, 1999 from
$60.3  million  at  September 30, 1998,  primarily  due  to  the
inventory  adjustments  related  to  the  change  in  accounting
principle  noted above (SOP 98-5). During the first nine  months
of fiscal 1999: accounts receivable decreased by $3.3 million as
a  result of the timing of sales and collections throughout  the
period; costs and estimated earnings on long-term contracts  and
inventories   decreased  in  the  aggregate  by  $28.3   million
primarily  due to the adoption of SOP 98-5, partially offset  by
increased  production  requirements to  satisfy  the  additional
sales requirements expected over the balance of fiscal 1999; and
accounts payable and accrued expenses decreased by $10.8 million
due to the timing of payments.

Net  cash  provided by operating activities was $7.4 million  in
the  first nine months of fiscal 1999 compared to net cash  used
by  operating activities of $4.4 million in the same  period  of
fiscal  1998.  The prior year cash used by operating  activities
was  primarily  impacted  by inventory requirements  and  vendor
payments.

Cash  flow from operations and borrowings under the bank  credit
facility are expected to provide adequate resources to meet  the
Company's  capital requirements and operational  needs  for  the
foreseeable future.

The  Company's primary market risk exposure is its debt. All  of
the  Company's  debt is priced at a percentage over  LIBOR.  The
Company has reduced this risk through a rate swap agreement that
provides  a  cap on LIBOR of 7% on $40 million of the  long-term
debt  through  September 30, 1999. The  Company  does  not  have
significant  risk  or  exposure  to  fluctuations   in   foreign
currencies,  which are hedged in part through  the  purchase  of
forward currency contracts.

Capital expenditures were $6.6 million in the first nine  months
of  fiscal  1999  compared with $9.8 million in  the  comparable
period  of fiscal 1998. Major expenditures in the current period
included manufacturing equipment at Filtertek and PTI.


THE YEAR 2000 ISSUE

The Year 2000 ("Y2K") issue refers to the inability of a date-
sensitive computer program to recognize a two-digit date field
designated as "00" as the year 2000. Mistaking "00" for 1900
could result in a system failure or miscalculations causing
disruptions to operations, including manufacturing, a temporary
inability to process transactions, send invoices, or engage in
other normal business activities. This is a significant issue
for most, if not all, companies with far reaching implications,
some of which cannot be anticipated or predicted with any degree
of certainty.


STATE OF READINESS

The  Company  has  designated a corporate Y2K coordination  team
comprised  of various senior management members. Each  operating
unit  has  identified a Y2K coordinator responsible for planning
and  monitoring  their Y2K program and reporting  on  a  regular
basis to the corporate team. The Company continues to assess the
magnitude  of its Y2K issue and has already determined  that  it
may  be  required to modify or replace certain portions  of  its
software  and  hardware so that its computer  systems  including
information  technology and non-information technology  will  be
able  to  function properly beyond December 31, 1999.  This  may
require replacement, reprogramming or other remedial action. The
Company  is also communicating with its suppliers and  customers
to  determine the extent of the Company's vulnerability  to  the
failure  of third parties to remediate their own Y2K  issue.  In
conjunction with this assessment, the Company is finalizing  its
action  plans  to address the Y2K issue, including contingencies
to  address unforeseen problems. The Company plans to  use  both
internal  and  external resources to complete Y2K reprogramming,
software replacement and testing.


COSTS TO ADDRESS THE Y2K ISSUE

Preliminary plans anticipate completion of the Y2K remedial work
by  September  30,  1999.  To date,  the  Company  has  incurred
approximately $2.9 million related to the Y2K remedial work. The
total cost of the Y2K remedial work is estimated to be less than
$4  million  and will be expensed as incurred over  the  next  3
months. The expected costs of the project and the date on  which
the Company plans to complete the Y2K remediation work are based
on management's best estimates, which were derived from numerous
assumptions  about future events, including the availability  of
certain  resources, third-party modification  plans,  and  other
factors. However, there can be no guarantee that these estimates
will be achieved and actual results could differ materially from
those   plans.  Specific  factors  that  might  cause   material
differences  include, but are not limited to,  the  availability
and  cost  of personnel trained in this area and the ability  to
identify and correct all relevant computer codes.


RISK ANALYSIS

Like most large business entities, the Company is dependent upon
its  own  internal technology and relies upon timely performance
by  its business partners. The Company's Y2K program is designed
to  identify  and minimize its Y2K risk and includes significant
testing and refinement of its internal systems to ensure, to the
extent feasible, all systems will function before and after  the
Year 2000. The Company is continually updating its understanding
of  the  Y2K  risks  posed  to its business  partners  based  on
information obtained through surveys and interviews. This review
will continue throughout calendar year 1999.


CONTINGENCY PLANS

Following  its  risk analysis as described above, the  Company's
Y2K  program  includes  a contingency planning  phase  in  which
appropriate  plans  are  currently  being  made  to  attempt  to
minimize disruption to the Company's operations in the event  of
a  Y2K  failure. The Company is formulating plans  to  handle  a
variety of failure scenarios, including failures of its internal
systems,  as well as failures of significant business  partners.
The  level  of  planning  required is a function  of  the  risks
ascertained  through  the Company's investigating  efforts.  The
Company  anticipates contingency planning across the  enterprise
will be completed by the end of calendar year 1999.

While  no  assurances  can be given, because  of  the  Company's
extensive  efforts to formulate and carry-out an  effective  Y2K
program, the Company believes its program will be completed on a
timely  basis and should effectively minimize disruption to  the
Company's operations due to the Year 2000 issue.


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. Investors  are
cautioned  that such statements are only predictions, and  speak
only  as  of the date of this report. Actual results may  differ
due  to  risks  and  uncertainties which are  described  in  the
Company's Form 10-K for fiscal year 1998, on page 39 of the 1998
Annual  Report  to  Shareholders and in "The  Year  2000  Issue"
section above.




ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK.

See discussion at "Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition".



                    PART II OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

a)  Exhibits.           NONE



b)Reports on Form 8-K.  There were no reports on Form 8-K filed
                        during the quarter ended June 30, 1999.



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 ELECTRONICS CORPORATION

                                    /s/Philip M. Ford
                                    Philip M. Ford
                                    Senior Vice President
                                    and Chief Financial Officer
                                    (as duly authorized officer
                                    and principal financial
Dated: August 13, 1999              officer of the registrant)

  

 5
 1,000

                             
                   9-MOS
                          SEP-30-1999
                               JUN-30-1999
                                           5,493
                                         0
                                   48,825
                                       554
                                     61,399
                               137,701
                                         152,942
                                  61,535
                                 375,318
                           99,778
                                              0
                                0
                                          0
                                           128
                                     203,657
                   375,318
                                        298,385
                               298,385
                                          222,504
                                  277,252
                                 4,179
                                     0
                               5,151
                                 11,803
                                     4,169
                              7,634
                                       0
                                      0
                                     (25,009)
                                  (17,375)
                                   (1.41)
                                   (1.38)

THIS NUMBER DOES NOT INCLUDE $18.9 MILLION OF COSTS AND ESTIMATED EARNINGS ON
LONG-TERM CONTRACTS.