Table of Contents
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 5, 2002
ESCO TECHNOLOGIES INC.
(Exact Name of Registrant as Specified in Charter)
| Missouri (State or Other Jurisdiction of Incorporation) |
1-10596 (Commission File Number) |
43-1554045 (I.R.S. Employer Identification No.) |
| 8888 Ladue Road, Suite 200, St. Louis, Missouri (Address of Principal Executive Offices) |
63124-2056 (Zip Code) |
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Registrant’s telephone number, including area code: 314-213-7200
| Item 7. Financial Statements, Pro Forma Financial Information and Exhibits | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 Materials for Presentations | ||||||||
| EX-99.2 Press Release dated June 5, 2002 | ||||||||
Table of Contents
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
| Exhibit No. | Description of Exhibit | |
| 99.1 | Materials for company presentations and included on Registrant’s website. | |
| 99.2 | Press release dated June 5, 2002. |
Item 9. Regulation FD Disclosure
The Registrant intends to use certain materials in connection with company presentations and to include those materials on its website. These materials are attached as Exhibit 99.1 to this Form 8-K and the related press release is attached as Exhibit 99.2 to this Form 8-K.
The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or that the materials contained include material investor information that is not otherwise publicly available. In addition, all of the information in the materials is presented as of June 5, 2002, and the Registrant does not assume any obligation to update such information in the future.
Statements in Exhibit 99.1 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 June 5, 2002. The Registrant does not assume any obligation to update such information in the future. The Registrant’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 Registrant’s operations and business environment including, but not limited to: further weakening of economic conditions in served markets; changes in customer demands or customer insolvencies; electricity shortages; competition; intellectual property rights; consolidation of internal operations; integration of recently acquired businesses; delivery delays or defaults by customers; performance issues with key suppliers and subcontractors; collective bargaining labor disputes; and the Registrant’s successful execution of internal operating plans.
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 hereunto duly authorized.
| ESCO TECHNOLOGIES INC. | ||||
| Dated: June 4, 2002 | By: | /s/ C. J. Kretschmer
C. J. Kretschmer Executive Vice President and Chief Financial Officer |
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Table of Contents
EXHIBIT INDEX
| Exhibit No. | Description of Exhibit | |
| 99.1 | Materials for company presentations and included on Registrant’s website. | |
| 99.2 | Press release dated June 5, 2002. |
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JUNE 2002 NYSE Symbol: ESE |
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Forward-Looking Statement This presentation contains "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 June 5, 2002. 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: further weakening of economic conditions in served markets; changes in customer demands or customer insolvencies; electricity shortages; competition; intellectual property rights; consolidation of internal operations; integration of recently acquired businesses; delivery delays or defaults by customers; performance issues with key suppliers and subcontractors; collective bargaining labor disputes; and the Company's successful execution of internal operating plans. |
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ESCO Heritage Spun-off in 1990 from Emerson Primarily Defense (90%) 7 Acquisitions; 2 Divestitures Sold Last Major Defense Property in September of 1999 NEW ESCO |
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Today, ESCO is... A Leading Provider of Engineered Filtration Products to the Process, Health Care and Transportation Markets Worldwide The Industry Leader in RF Shielding and EMC Test Products A Proven Supplier of Special Purpose Communications Systems based on Patented Proprietary Technology |
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ESCO Products & Applications Filtration Test Communications |
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ESCO Business Profile - FY '00 vs '01 RF Shielding & Test $63.0M 21% Filtration $181.7M 61% Other $12.8 4% Communications $42.7M 14% Fiscal 2000 Sales = $300.2M RF Shielding & Test $85.5M 25% Filtration $188.2M 55% Other $12.1 3% Communications $59.1M 17% Fiscal 2001 Sales = $344.9M |
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ESCO Served Markets - FY 2001 Consumer & Appliance 7% Automotive Products 14% Commercial Aerospace 9% Defense Aerospace 12% Electronics 13% Healthcare 18% Commercial 16% Industrial 11% |
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ESCO will sustain its Momentum through Continued Investment in New Products Ongoing Performance Improvement Actions Selective Acquisitions Supported by A Strong Balance Sheet -- AND - A Dedicated Management Team whose Interests are Strongly Aligned with the Shareholders ESCO Strategy |
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Financial Goals New ESCO 5 Year View Sales Growth > 10% CAGR EBIT Margin > or equal to 13% EPS Growth > 15% CAGR |
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MOMENTUM Revenue Growth CAGR = 20% 1999 238.4 2000 300.2 2001 344.9 Acquisition Related Growth $25.7M (11%) $28.6M (10%) (1) Excludes Divested Defense Unit. |
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Income Statement (In Millions) FY 2001 FY 2000 Operations Operations % Change Net Sales $344.9 $300.2 14.9% Gross Profit 108.4 91.9 18.0% % Sales 31.4% 30.6% EBIT (1) 30.9 24.7 25.1% % Sales 9.0% 8.2% Net Earnings 19.6 16.0 22.5% % Sales 5.7% 5.3% EPS - Diluted (4) (2)$1.53 (3)$1.26 21.4% EBITDA 42.5 36.3 17.1% % Sales 12.3% 12.1% (1) Excludes Goodwill Amort of: FY '01 = $3.5M & FY '00 = $2.6M (Pretax) (2) Excludes Elimination of the Net Deferred Tax Valuation Allowance of $.99 per share (3) Excludes Non-recurring Gain of $.22 Related to Property Divestitures (4) EPS Table: Approximate GAAP Non-recurring Goodwill EPS from EPS Reported Items Amortization Operations 2000 1.33 (0.22) 0.15 1.26 2001 2.35 (0.99) 0.17 1.53 |
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Net Sales EBIT EBIT Margin Segment 2001 2000 2001 2000 2001 2000 Filtration 188.2 181.7 13.5 14.3 7.2% 7.9% Test 85.5 63.0 8.9 5.4 10.4% 8.6% Comm 59.1 42.7 11.9 8.2 20.1% 19.2% Other 12.1 12.8 (3.4) (3.2) -28.1% -25.0% Totals 344.9 300.2 30.9 24.7 9.0% 8.2% ESCO Segment Performance Years ended September 30 Dollars in Millions EBIT Excludes Goodwill Amortization |
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New Product Sales Outlook 49% Increase ESCO Patents Over 150 Issued Over 100 Pending $47.1 15.7% Sales FY’00 $70.1 20.3% Sales FY’01 Includes Products Introduced During Prior 3 Years |
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Engineering Investment Filtration 50% RF Shielding & Test 17% Communications 27% Other 6% FY ’01 Engineering Expenditures = $25.4M (7.4% Sales) Engineering Force Count ~ 260 |
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ESCO Performance Improvement Actions FY ’01 Selected Data Sales up 14.9% over prior year Force count reduced 2.2% compared to prior year 3 Facilities Closed; Sq. Ft. Reduced 6.5% Operating Margin improvement of 0.7% Ongoing Test Consolidation in Austin — Will be complete Q2, FY’02 European Work Transfer Initiatives Advanced Automation Make / Buy |
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ESCO Acquisitions: FY '00 - '02 |
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Balance Sheet (In Millions) |
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Dedicated Management Executive Equity Ownership Program Outright Ownership of 3X & 5X Total Cash Compensation Board of Directors Ownership Program 5X Retainer Broad Stock Option Incentive Program (Approx. 200 Management Participants) Economic Profit Improvement is an Incentive Compensation Component |
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ESCO Strategy ESCO will sustain its Momentum through Continued Investment in New Products Ongoing Performance Improvement Actions Selective Acquisitions Supported by A Strong Balance Sheet -- AND - A Dedicated Management Team whose Interests are Strongly Aligned with the Shareholders |
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ESCO TECHNOLOGIES SEGMENT PROFILES |
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Filtration Segment Picture Collage |
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Filtration Segment ESCO Addressable Market ~$5B Served Markets Industrial Process (20%) Transportation Health Care (19%) Auto (20%) Consumer & Appl. (13%) Aero (28%) Broad Blue Chip Customer Base: 2001 CONTRIBUTION Sales $188.2M 55% EBIT $13.5M 44% |
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Filtration Growth Drivers
Leadership Position in Certain Niches Driven by |
| RF Shielding & Test Segment |
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RF Shielding & Test
Market Profile
2001 CONTRIBUTION |
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RF Shielding & Test ESCO is the global leader of radio frequency (RF) shielding and electromagnetic compatibility (EMC) test products. Growth Drivers MRI Proliferation of Electronic Devices International Calibration Services |
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Communications Segment TWACS(r) System |
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Communications Market Profile ESCO Addressable Market North American Automatic Meter Reading (AMR) ~ $6B 97 Million Meters 70% Investor Owned 15% Municipal 15% Co-op Plus Developing Demand Side Management International Served Markets Industrial (93%) - Electronics (7%) Customer Base: 2001 CONTRIBUTION Sales $59.1M 17% EBIT $11.9M 38% |
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Two-way Automatic Communications System TWACS(r) Power Line Based Fixed Network System Most Capable Proven System Available 40 North American Utilities, 3.5M End Points Can be Deployed System-wide Versatility / Value-Added Features Two-way Load Control Time of Use Outage Mapping Clearly the Best Solution for Rural Areas and Broken Terrain Cost Reliability Incorporates Patented Proprietary Technology |
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Communications Growth Drivers Market Deregulation Driving More Attention to Efficiency and Customer Care $ - Meter Reading Cost - Theft - Call Center Cost Customer - Billing Accuracy - Call Center Responsiveness - Outage Restoration ESCO Existing Product Attributes Investment in New Product Features / Further Differentiation |
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ESCO TECHNOLOGIES YTD PERFORMANCE |
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Income Statement (In Millions) &nbs p; 6 Mo's YTD 6 Mo's YTD &nbs p; FY 2002 FY 2001 &nbs p; Operations Operations % Change Net Sales $172.6 $169.8 1.6% Gross Profit 56.0 52.5 6.7% % Sales 32.4% 30.9% EBIT 16.2 (1) 15.3 5.9% % Sales 9.4% 9.0% Net Earnings 10.0% 9.3 7.5% % Sales 5.8% 5.5% EPS - Diluted(2) $0.77 $0.73 5.5% EBITDA 22.3 21.3 4.7% % Sales 12.9% 12.5% (1) FY '01 results reported as if FAS 142 had been implemented. (2) EPS Table: EPS 2001 2002 GAAP Reported 0.65 0.77 Non-recurring Items - - - - Goodwill Amortization 0.08 - - Approximate EPS from Operations 0.73 0.77 |
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ESCO Segment Performance Net Sales EBIT EBIT Margin Segment YTD 2002 YTD 2001 YTD 2002 YTD 2001 2002 2001 Filtation 92.4 91.1 5.4 5.4 5.8% 5.9% Test 34.5 44.0 2.3 4.4 6.7% 10.0% Comm 39.8 29.0 9.2 6.9 23.1% 23.8% Other 5.9 5.7 (0.7) (1.4) -11.9% -24.6% Totals 172.6 169.8 16.2 15.3 9.4% 9.0% Six Months Ended March 31 Dollars in Millions EBIT Excludes Goodwill Amortization |
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Balance Sheet (In Millions) 3/31/02 Cash & Equivalents $12.6 Accounts Receivable 68.0 Inventory 50.0 Other Current Assets 21.4 --Includes Tax Total Current Assets $152.0 Effected NOL of Property, Plant & Equip, Net 66.0 $41.4M, retained Other Assets 165.4 --from former defense Total Assets $383.4 subsidiaries. Current Maturities - LTD $0.1 Current Liabilities 61.4 Other Liabilities 16.2 Long Term Debt 8.1 Total Liabilities 85.8 Shareholders Equity 297.6 Total Liabilities & Equity $383.4 |
| JUNE 2002 |
EXHIBIT 99.2 NEWS FROM [ESCO TECHNOLOGIES LOGO] FOR MORE INFORMATION CONTACT: FOR MEDIA INQUIRIES: PATRICIA K. MOORE DAVID P. GARINO DIRECTOR, INVESTOR RELATIONS (314) 982-0551 ESCO TECHNOLOGIES INC. (314) 213-7277 ESCO PUBLISHES UPDATED PRESENTATION ON ITS WEBSITE St. Louis, MO, June 5, 2002 -- ESCO Technologies Inc. (NYSE: ESE) announced today it will post an updated Company presentation on its website, WWW.ESCOTECHNOLOGIES.COM. The presentation includes a summary statement covering the Company's strategy, the five-year financial objectives and an overview of each of the Company's three primary segments. The information will be posted on the Company's website today. ESCO, headquartered in St. Louis, is a leading supplier of engineered filtration products to the process, health care and transportation markets worldwide. In addition, the Company is the industry leader in RF shielding and EMC test products and also markets proprietary, special purpose communications systems.