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ESCO Technologies Inc. Reports Operating Results (10-K)

November 29, 2010 | About:
10qk

10qk

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ESCO Technologies Inc. (ESE) filed Annual Report for the period ended 2010-09-30.

Esco Technologies Inc. has a market cap of $949.38 million; its shares were traded at around $35.85 with a P/E ratio of 21.34 and P/S ratio of 1.56. The dividend yield of Esco Technologies Inc. stocks is 0.89%. Esco Technologies Inc. had an annual average earning growth of 12.7% over the past 10 years. GuruFocus rated Esco Technologies Inc. the business predictability rank of 2.5-star.ESE is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Pioneer Investments.

Highlight of Business Operations:

Aclara RF provides, through its STAR® network, wireless radio frequency (RF) data communications systems to gas, water and electric utilities for advanced metering infrastructure (AMI) applications. The STAR® network provides accurate and timely billing, high/low consumption reporting, and non-revenue water loss detection. In November 2005, Aclara RF entered into a contract with Pacific Gas & Electric Company (PG&E) to provide its communications system for the gas meter portion of PG&Es AMI project, and also gave PG&E the option to purchase Aclara RFs fixed network systems for the electric portion of the Project. In fiscal 2010, total revenue received by the Company from PG&E for all sales was $55.9 million, representing 9.2% of the Companys consolidated revenue. Of this amount, $53.5 million was attributable to the 2005 gas meter contract. Total revenue of $244 million from this contract had been recorded through September 30, 2010. Sales under this contract are currently nearing completion. Revenue from STAR® network products, which may be considered a class of similar products, accounted for approximately 17%, 25% and 17% of the Companys total revenue in fiscal years 2010, 2009 and 2008, respectively.

Total Company backlog at September 30, 2010 was $360.6 million, representing an increase of $61.2 million (20.4%) from the beginning of the fiscal year backlog of $299.4 million. The backlog of firm orders at September 30, 2010 and September 30, 2009, respectively, was: $153.5 million and $132.4 million for Utility Solutions; $74.3 million and $54.2 million for Test; and $132.8 million and $112.8 million for Filtration. As of September 30, 2010, it is estimated that domestic customers accounted for approximately 75% of the Companys total firm orders, and international customers accounted for approximately 25%. Of the Companys total backlog of orders at September 30, 2010, approximately 88% is expected to be completed in the fiscal year ending September 30, 2011.

The Company performs research and development at its own expense, and also engages in research and development funded by customers. For the fiscal years ended September 30, 2010, 2009 and 2008, total Company-sponsored research and development expenses were approximately $32.2 million, $32.0 million and $33.0 million, respectively. Total customer-sponsored research and development expenses were approximately $4.0 million, $2.9 million and $5.3 million for the fiscal years ended September 30, 2010, 2009 and 2008, respectively. All of the foregoing expense amounts exclude certain engineering costs primarily associated with product line extensions, modifications and maintenance, which amounted to approximately $13.3 million, $14.4 million and $8.6 million for the fiscal years ended September 30, 2010, 2009 and 2008, respectively.

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