Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | ESCO TECHNOLOGIES INC | |
Entity Central Index Key | 0000866706 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | ESE | |
Entity Common Stock, Shares Outstanding | 25,977,687 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 193,949 | $ 174,778 | $ 376,546 | $ 348,273 |
Costs and expenses: | ||||
Cost of sales | 121,946 | 112,370 | 240,854 | 224,106 |
Selling, general and administrative expenses | 41,673 | 40,749 | 82,666 | 82,903 |
Amortization of intangible assets | 4,620 | 4,564 | 9,272 | 9,010 |
Interest expense, net | 1,925 | 2,036 | 3,815 | 4,221 |
Other (income) expenses, net | 2,430 | 1,475 | (4,673) | 1,648 |
Total costs and expenses | 172,594 | 161,194 | 331,934 | 321,888 |
Earnings before income taxes | 21,355 | 13,584 | 44,612 | 26,385 |
Income tax expense (benefit) | 2,558 | 3,590 | 8,498 | (18,280) |
Net earnings | $ 18,797 | $ 9,994 | $ 36,114 | $ 44,665 |
Earnings per share: | ||||
Basic - Net earnings | $ 0.73 | $ 0.39 | $ 1.39 | $ 1.73 |
Diluted - Net earnings | $ 0.72 | $ 0.38 | $ 1.38 | $ 1.72 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Net earnings | $ 18,797 | $ 9,994 | $ 36,114 | $ 44,665 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 677 | 2,837 | (3,852) | 4,125 |
Net unrealized gain on derivative instruments | 126 | 138 | 100 | 155 |
Total other comprehensive income (loss), net of tax | 803 | 2,975 | (3,752) | 4,280 |
Comprehensive income | $ 19,600 | $ 12,969 | $ 32,362 | $ 48,945 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 34,955 | $ 30,477 |
Accounts receivable, net | 159,923 | 163,740 |
Contract assets | 100,540 | 53,034 |
Inventories | 124,493 | 135,416 |
Other current assets | 16,048 | 13,356 |
Total current assets | 435,959 | 396,023 |
Property, plant and equipment, net of accumulated depreciation of $120,886 and $115,728, respectively | 132,806 | 134,954 |
Intangible assets, net of accumulated amortization of $101,546 and $92,274, respectively | 338,514 | 345,353 |
Goodwill | 381,304 | 381,652 |
Other assets | 5,380 | 7,140 |
Total assets | 1,293,963 | 1,265,122 |
Current liabilities: | ||
Current maturities of long-term debt | 20,000 | 20,000 |
Accounts payable | 58,090 | 63,033 |
Contract liabilities | 55,453 | 49,035 |
Accrued salaries | 27,239 | 29,379 |
Accrued other expenses | 41,163 | 39,083 |
Total current liabilities | 201,945 | 200,530 |
Pension obligations | 15,991 | 16,286 |
Deferred tax liabilities | 62,938 | 64,794 |
Other liabilities | 21,693 | 24,102 |
Long-term debt | 197,000 | 200,000 |
Total liabilities | 499,567 | 505,712 |
Shareholders' equity: | ||
Preferred stock, par value $.01 per share, authorized 10,000,000 shares | 0 | 0 |
Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,633,742 and 30,534,786 shares, respectively | 305 | 305 |
Additional paid-in capital | 293,612 | 291,190 |
Retained earnings | 643,018 | 606,837 |
Accumulated other comprehensive loss, net of tax | (35,280) | (31,528) |
Total stockholders' equity before Treasury Stock | 901,655 | 866,804 |
Less treasury stock, at cost: 4,615,627 and 4,623,958 common shares, respectively | (107,259) | (107,394) |
Total shareholders' equity | 794,396 | 759,410 |
Total liabilities and shareholders' equity | $ 1,293,963 | $ 1,265,122 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Property, plant and equipment, net of accumulated depreciation | $ 120,886 | $ 115,728 |
Intangible assets, net of accumulated amortization | $ 101,546 | $ 92,274 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 30,633,742 | 30,534,786 |
Treasury stock, shares | 4,615,627 | 4,623,958 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net earnings | $ 36,114 | $ 44,665 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 18,779 | 18,798 |
Stock compensation expense | 2,557 | 2,648 |
Changes in assets and liabilities | (28,847) | (5,570) |
Change in property, plant and equipment due to gain on sale of building | (8,922) | 0 |
Effect of deferred taxes | (1,856) | (26,533) |
Pension contributions | (833) | (537) |
Net cash provided by operating activities | 16,992 | 33,471 |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | 0 | (11,369) |
Additions to capitalized software | (4,494) | (4,608) |
Capital expenditures | (17,425) | (10,095) |
Proceeds from sale of building and land | 17,201 | 0 |
Net cash used by investing activities | (4,718) | (26,072) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 23,000 | 36,000 |
Principal payments on long-term debt | (26,000) | (46,000) |
Dividends paid | (4,146) | (4,134) |
Other | 370 | 560 |
Net cash used by financing activities | (6,776) | (13,574) |
Effect of exchange rate changes on cash and cash equivalents | (1,020) | 3,564 |
Net increase (decrease) in cash and cash equivalents | 4,478 | (2,611) |
Cash and cash equivalents, beginning of period | 30,477 | 45,516 |
Cash and cash equivalents, end of period | 34,955 | 42,905 |
Supplemental cash flow information: | ||
Interest paid | 3,594 | 4,167 |
Income taxes paid (including state and foreign) | $ 13,450 | $ 3,737 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying consolidated financial statements, in the opinion of management, include all adjustments, consisting 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 for annual financial statements 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, 2018. The Company’s results for the three and six-month periods ended March 31, 2019 are not necessarily indicative of the results for the entire 2019 fiscal year. References to the second quarters of 2019 and 2018 represent the fiscal quarters ended March 31, 2019 and 2018, respectively. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies Update | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE Our significant accounting policies are included in Note 1 of our Annual Report on Form 10-K for the year ended September 30, 2018. On October 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606) . Significant changes to our policies resulting from the adoption are provided below. We adopted ASC 606 using the modified retrospective transition method applied to contracts that were not substantially complete at the end of fiscal year 2018. We recorded a $4.2 million adjustment to increase retained earnings to reflect the cumulative impact of adopting this standard at the beginning of fiscal year 2019, primarily related to certain long-term contracts our Filtration and Technical Packaging segments have that converted to the cost-to-cost method for revenue recognition. The comparative information has not been restated and is reported under the accounting standards in effect for those periods. A reconciliation of the financial statement line items impacted for the three and six months ended March 31, 2019 under ASC 606 to the prior accounting standards is provided in Note 14. Revenue Recognition Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Filtration: Within the Filtration segment, approximately 48% of revenues (approximately 18% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial and military customers and have a single performance obligation as there is only one good promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. The transaction price for these contracts reflects our estimate of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 52 % of the segment’s revenues (approximately 19 % of consolidated revenues) Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Filtration segment contracts the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires substantial judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Test: Within the Test segment, approximately 25% of revenues (approximately 6% of consolidated revenues) are recognized at a point in time when products such as, antennas and probes are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 75% of the segment’s revenues (approximately 17% of consolidated revenues) are recorded over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance 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. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, the Company estimates profit as the difference between total revenue and total estimated cost of a contract and recognizes these revenues and costs based primarily on contract milestones. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires substantial judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. USG : Within the USG segment, approximately 80% of revenues (approximately 24% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. The related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and the Company has a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 8% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represent our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Technical Packaging: Within the Technical Packaging segment, 100% of the revenues (approximately 10% of consolidated revenues) are recognized over time as the product does not have an alternative use and the Company has an enforceable right to payment. Selecting the method to measure progress towards completion for the contracts requires judgment and is based on the nature of the products to be provided. We use the cost-to-cost method to measure progress for our Technical Packaging segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred. The transaction price for our contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of weeks, minimizing the amount of judgment in developing the cost estimate. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our contracts, the customer is billed upon shipment of product. Amounts billed and due from our customers are classified in Accounts receivable, net. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. Liabilities for customer rebates and discounts are included in other current liabilities in the accompanying balance sheet. |
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS) | 6 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE (EPS) | 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 March 31, Six Months Ended March 31, 2019 2018 2019 2018 Weighted Average Shares Outstanding - Basic 25,918 25,844 25,915 25,840 Dilutive Options and Restricted Shares 118 144 163 195 Adjusted Shares - Diluted 26,036 25,988 26,078 26,035 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | 4. SHARE-BASED COMPENSATION The Company provides compensation benefits to certain key employees under several share-based plans providing for performance-accelerated restricted shares (restricted shares), and to non-employee directors under a non-employee directors compensation plan. Performance-Accelerated Restricted Share Awards Compensation expense related to the restricted share awards was $0.9 million and $2.0 million for the three and six-month periods ended March 31, 2019, respectively, and $1.0 million and $2.1 million for the corresponding periods of 2018. There were 204,392 non-vested shares outstanding as of March 31, 2019. Non-Employee Directors Plan Compensation expense related to the non-employee director grants was $0.3 million and $0.5 million for the three and six-month periods ended March 31, 2019, respectively, and $0.3 million and $0.5 million for the corresponding periods of 2018. The total share-based compensation cost that has been recognized in the results of operations and included within selling, general and administrative expenses (SG&A) was $1.2 million and $2.6 million for the three-and six-month periods ended March 31, 2019, respectively, and $1.3 million and $2.6 million for the three and six-month periods ended March 31, 2018. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $0.3 million and $0.6 million for the three and six-month periods ended March 31, 2019, respectively, and $0.4 million and $0.7 million for the three and six-month periods ended March 31, 2018, respectively. As of March 31, 2019, there was $5.6 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted-average period of 1.2 years. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 5. INVENTORIES Inventories consist of the following: (In thousands) March 31, 2019 September 30, 2018 Finished goods $ 19,029 26,678 Work in process 41,677 47,765 Raw materials 63,787 60,973 Total inventories $ 124,493 135,416 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS Included on the Company’s Consolidated Balance Sheets at March 31, 2019 and September 30, 2018 are the following intangible assets gross carrying amounts and accumulated amortization: (Dollars in thousands) March 31, 2019 September 30, 2018 Goodwill $ 381,304 381,652 Intangible assets with determinable lives: Patents Gross carrying amount $ 1,866 1,833 Less: accumulated amortization 846 791 Net $ 1,020 1,042 Capitalized software Gross carrying amount $ 75,789 71,294 Less: accumulated amortization 45,304 41,624 Net $ 30,485 29,670 Customer relationships Gross carrying amount $ 184,924 185,333 Less: accumulated amortization 53,030 47,802 Net $ 131,894 137,531 Other Gross carrying amount $ 5,303 5,468 Less: accumulated amortization 2,365 2,056 Net $ 2,938 3,412 Intangible assets with indefinite lives: Trade names $ 172,177 173,698 The changes in the carrying amount of goodwill attributable to each business segment for the six months ended March 31, 2019 is as follows: (Dollars in millions) USG Test Filtration Packaging Total Balance as of September 30, 2018 254.1 34.1 73.7 19.8 381.7 Foreign currency translation - - - (0.4 ) (0.4 ) Balance as of March 31, 2019 $ 254.1 34.1 73.7 19.4 381.3 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 6 Months Ended |
Mar. 31, 2019 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
BUSINESS SEGMENT INFORMATION | 7. BUSINESS SEGMENT INFORMATION The Company is organized based on the products and services that it offers, and classifies its business operations in four reportable segments for financial reporting purposes: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG) and Technical Packaging. The Filtration segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), and Mayday Manufacturing Co. and its affiliate Hi-Tech Metals, Inc. (collectively referred to as Mayday). The companies within this segment primarily design and manufacture specialty filtration products, including hydraulic filter elements used in commercial aerospace applications, unique filter mechanisms used in micro-propulsion devices for satellites and custom designed filters for manned and unmanned aircraft; manufacture elastomeric-based signature reduction solutions for the U.S. Navy; and manufacture landing gear components for the aerospace and defense industry. The Test segment’s operations consist primarily of ETS-Lindgren Inc. (ETS-Lindgren). ETS-Lindgren is an industry leader in providing its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. The USG segment’s operations consist primarily of Doble Engineering Company (Doble), Morgan Schaffer Inc. (Morgan Schaffer), and NRG Systems, Inc. (NRG). Doble provides high-end, intelligent diagnostic test solutions for the electric power delivery industry and is a leading supplier of partial discharge testing instruments used to assess the integrity of high voltage power delivery equipment. Morgan Schaffer provides an integrated offering of dissolved gas analysis, oil testing, and data management solutions for the electric power industry. NRG designs and manufactures decision support tools for the renewable energy industry, primarily wind. The Technical Packaging segment’s operations consist of Thermoform Engineered Quality LLC (TEQ) and Plastique Limited and Plastique Sp. z o.o. (together, Plastique). The companies within this segment provide innovative solutions to the medical and commercial markets for thermoformed packages and specialty products using a wide variety of thin gauge plastics and pulp. Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes. Three Months Ended March 31, Six Months Ended March 31, (In thousands) 2019 2018 2019 2018 NET SALES Filtration $ 79,478 65,775 145,702 125,810 Test 42,875 40,805 84,161 78,334 USG 48,890 46,699 104,745 102,453 Technical Packaging 22,706 21,499 41,938 41,676 Consolidated totals $ 193,949 174,778 376,546 348,273 EBIT Filtration $ 17,443 11,118 28,053 20,764 Test 5,554 5,300 8,864 7,895 USG 8,767 5,626 30,313 16,277 Technical Packaging 1,602 1,885 1,708 2,850 Corporate (loss) (10,086 ) (8,309 ) (20,511 ) (17,180 ) Consolidated EBIT 23,280 15,620 48,427 30,606 Less: Interest expense (1,925 ) (2,036 ) (3,815 ) (4,221 ) Earnings before income taxes $ 21,355 13,584 44,612 26,385 Non-GAAP Financial Measures The financial measure “EBIT” is presented in the above table and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Company as well as incentive compensation. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT. The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP. |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
DEBT | 8. DEBT The Company’s debt is summarized as follows: (In thousands) March 31, 2019 September 30, 2018 Total borrowings $ 217,000 220,000 Short-term borrowings and current portion of long-term debt (20,000 ) (20,000 ) Total long-term debt, less current portion $ 197,000 200,000 The Company’s existing credit facility (“the Credit Facility”) matures December 21, 2020. The Credit Facility includes a $450 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of nine banks led by JPMorgan Chase Bank, N.A., as Administrative Agent. At March 31, 2019, the Company had approximately $207.0 million available to borrow under the Credit Facility, and a $250 million increase option, in addition to $35.0 million cash on hand. At March 31, 2019, the Company had $217.0 million of outstanding borrowings under the Credit Facility in addition to outstanding letters of credit of $8.3 million. The Company classified $20.0 million as the current portion of long-term debt as of March 31, 2019, as the Company intends to repay this amount within the next twelve month period; however, the Company has no contractual obligation to repay such amount during the next twelve month period. The Credit Facility requires, as determined by certain financial ratios, a facility fee ranging from 12.5 to 27.5 basis points per year on the unused portion. The terms of the facility provide that interest on borrowings may be calculated at a spread over the London Interbank Offered Rate (LIBOR) or based on the prime rate, at the Company’s election. The facility is secured by the unlimited guaranty of the Company’s material domestic subsidiaries and a 65% pledge of the material foreign subsidiaries’ share equity. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. The weighted average interest rates were 3.20% and 3.23% for the three and six-month periods ending March 31, 2019, respectively, and 2.99% and 2.87% for the corresponding periods of 2018. At March 31, 2019, the Company was in compliance with all debt covenants. |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 6 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX EXPENSE | 9. INCOME TAX EXPENSE The second quarter 2019 effective income tax rate was 12.0% compared to 26.4% in the second quarter of 2018. The income tax expense for the first six months of 2019 was $8.5 million compared to income tax benefit of $18.3 million for the first six months of 2018. The effective income tax rate for the first six months of 2019 was 19.0% compared to (69.3%) for the first six months of 2018. The income tax expense in the second quarter and first six months of 2019 was favorably impacted by tax planning strategies to increase foreign tax credits claimed retrospectively. The Company reduced the valuation allowance for excess foreign tax credits by $2.3 million and recorded an amended return receivable of $0.2 million which favorably impacted the second quarter and year-to-date effective tax rate by 12.1% and 5.8%, respectively. H.R. 1, Tax Cuts and Jobs Act (“TCJA”), was signed into law on December 22, 2017. The total impact of the TCJA in the second quarter and first six months of 2018 was a net expense of $0.7 million and a net benefit of $24.4 million, respectively. The impacts were as follows: First, the Company’s 2018 federal statutory rate dropped from 35.0% to 24.5% which required an adjustment to the value of its deferred tax assets and liabilities. This adjustment ($30.3 million provisional amount recorded in Q1) favorably impacted the year-to-date 2018 effective tax rate by 114.9%. Second, the TCJA subjected the Company’s cumulative foreign earnings to federal income tax ($3.6 million provisional amount of which $2.9 million was recorded in the first quarter of 2018 and $0.7 million was recorded in the second quarter of 2018) which unfavorably impacted the second quarter and year-to-date 2018 effective tax rate by 4.9% and 13.6%, respectively. In the first quarter of 2018, the Company recorded a $2.3 million provisional estimate of the income tax effects of the future repatriation of the cumulative earnings of its foreign subsidiaries which unfavorably impacted the year-to-date effective tax rate by 8.9%. An additional $7.5 million pension contribution for the 2017 plan year was approved during the second quarter of 2018 increasing the value of the deferred tax liability by $1.0 million. This favorable adjustment, net of the $0.3 million unfavorable impact to the 2017 Domestic Production Deduction, favorably impacted the second quarter and year-to-date effective tax rate by 5.8% and 3.0%, respectively. The income tax expense in the second quarter and first six months of 2018 was also unfavorably impacted by the cancellation of debt income triggered by the dissolution of a foreign subsidiary increasing the second quarter and year-to-date effective tax rate by 1.5% and 0.8%, respectively. Provisions under the TCJA that became effective for the Company in the current fiscal year include a further reduction in the U.S. statutory rate to 21%, a new minimum tax on global intangible low-taxed income (“GILTI”), the benefit of the deduction for foreign-derived intangible income (“FDII”), and changes to IRC Section 162(m) related to the deductibility of executive compensation. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | 10. SHAREHOLDERS’ EQUITY The change in shareholders’ equity for the first six months of 2019 is shown below (in thousands): Balance at September 30, 2018 $ 759,410 Net earnings 36,114 Other comprehensive (loss) (3,752 ) Cash dividends (4,146 ) Impact of ASC 606, Revenue Recognition 4,213 Stock compensation plans 2,557 Balance at March 31, 2019 $ 794,396 |
RETIREMENT PLANS
RETIREMENT PLANS | 6 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | 11. RETIREMENT PLANS A summary of net periodic benefit expense for the Company’s defined benefit plans for the three and six-month periods ended March 31, 2019 and 2018 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following: Three Months Six Months (In thousands) 2019 2018 2019 2018 Defined benefit plans Interest cost $ 875 821 1,750 1,641 Expected return on assets (1,086 ) (975 ) (2,172 ) (1,950 ) Amortization of: Prior service cost - - - - Actuarial loss 487 548 974 1,097 Net periodic benefit cost $ 276 394 552 788 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 12. DERIVATIVE FINANCIAL INSTRUMENTS Market risks relating to the Company’s operations result primarily from changes in interest rates and changes in foreign currency exchange rates. The Company is exposed to market risk related to changes in interest rates and selectively uses derivative financial instruments, including forward contracts and swaps, to manage these risks. In 2018, the Company entered into three interest rate swaps with a notional amount of $150 million to hedge some of its exposure to variability in future LIBOR-based interest payments on variable rate debt. In addition, the Company’s Canadian subsidiary Morgan Schaffer enters into foreign exchange contracts to manage foreign currency risk as a portion of their revenue is denominated in U.S. dollars. The Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. All derivative instruments are reported in either accrued expenses or other receivables on the balance sheet at fair value. For derivative instruments designated as cash flow hedges, the gain or loss on the derivative is deferred in accumulated other comprehensive income until recognized in earnings with the underlying hedged item. The interest rate swaps entered into during 2018 were not designated as cash flow hedges and, therefore, the gain or loss on the derivative is reflected in earnings each period. The following is a summary of the notional transaction amounts and fair values for the Company’s outstanding derivative financial instruments by risk category and instrument type as of March 31, 2018: (In thousands) Notional Fair Float Fix Forward contracts 700 GBP 7 Forward contracts 7,500 USD (227 ) Interest rate swap 150,000 USD 327 2.48 % 2.09 % Interest rate swap * 150,000 USD (101 ) N/A 2.24 % *This swap represents a forward contract and will be effective in November 2019. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS The accounting guidance establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Financial Assets and Liabilities The Company has estimated the fair value of its financial instruments as of March 31, 2019 and September 30, 2018 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, inventories, payables, debt and other current assets and liabilities approximate fair value because of the short maturity of those instruments. Fair Value of Financial Instruments The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825 , as presented below as of March 31, 2019 : (In thousands) Level 1 Level 2 Level 3 Total Assets (Liabilities): Forward contracts $ - 6 $ - 6 Valuation was based on third party evidence of similarly priced derivative instruments. Nonfinancial Assets and Liabilities The Company’s nonfinancial assets such as property, plant and equipment, and other intangible assets are not measured at fair value on a recurring basis; however they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. No impairments were recorded during the three and six-month periods ended March 31, 2019. |
REVENUES
REVENUES | 6 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUES | 14. REVENUES Disaggregation of Revenues Our revenues by customer type, geographic location, and revenue recognition method for the three and six-month periods ended March 31, 2019 are presented in the table below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The table below also includes a reconciliation of the disaggregated revenue within our reportable segments. Three Months Ended March 31, 2019 (In thousands) Filtration Test USG Technical Packaging Total Customer type: Commercial $ 46,325 $ 37,451 $ 47,551 $ 22,630 $ 153,957 Government 33,153 5,424 1,339 76 39,992 Total revenues $ 79,478 $ 42,875 $ 48,890 $ 22,706 $ 193,949 Geographic location: United States $ 66,068 $ 26,694 $ 33,798 $ 11,457 $ 138,017 International 13,410 16,181 15,092 11,249 55,932 Total revenues $ 79,478 $ 42,875 $ 48,890 $ 22,706 $ 193,949 Revenue recognition method: Point in time $ 42,400 $ 12,166 $ 36,874 $ - $ 91,440 Over time 37,078 30,709 12,016 22,706 102,509 Total revenues $ 79,478 $ 42,875 $ 48,890 $ 22,706 $ 193,949 Six Months Ended March 31, 2019 (In thousands) Filtration Test USG Technical Packaging Total Customer type: Commercial $ 83,546 $ 73,688 $ 102,206 $ 41,744 $ 301,184 Government 62,156 10,473 2,539 194 75,362 Total revenues $ 145,702 $ 84,161 $ 104,745 $ 41,938 $ 376,546 Geographic location: United States $ 120,833 $ 55,148 $ 73,879 $ 21,306 $ 271,166 International 24,869 29,013 30,866 20,632 105,380 Total revenues $ 145,702 $ 84,161 $ 104,745 $ 41,938 $ 376,546 Revenue recognition method: Point in time $ 74,214 $ 22,608 $ 81,107 $ - $ 177,929 Over time 71,488 61,553 23,638 41,938 198,617 Total revenues $ 145,702 $ 84,161 $ 104,745 $ 41,938 $ 376,546 Remaining Performance Obligations Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenue in future periods when we perform under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At March 31, 2019, we had $436.1 million in remaining performance obligations of which we expect to recognize revenues of 83% Contract assets and liabilities Assets and liabilities related to our contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At March 31, 2019, contract assets and liabilities totaled $100.5 million and $55.5 million, respectively. Upon adoption of ASC 606 on October 1, 2018, contract assets and liabilities related to our contracts with customers were $87 million and $51 million, respectively. During the first six months of 2019, we recognized approximately $30 million in revenues that were included in the contract liabilities balance at the adoption date. Reconciliation of ASC 606 to Prior Accounting Standards The amount by which each financial statement line item is affected in 2019 as a result of applying the new accounting standard as discussed in Note 2 is presented below: March 31, 2019 (In thousands) As Reported Effect of the adoption of ASC 606 Under Prior Accounting Consolidated Balance Sheets Contract assets (1) $ 100,540 $ (39,565 ) $ 60,975 Inventories 124,493 34,692 159,185 Total current assets 435,959 (4,874 ) 431,085 Total assets 1,293,963 (4,874 ) 1,289,089 Contract liabilities (2) 55,453 1,754 57,207 Total current liabilities 201,945 1,754 203,699 Deferred tax liabilities 62,938 (1,122 ) 61,816 Total liabilities 499,567 631 500,198 Retained earnings 643,018 (5,505 ) 637,513 Total shareholders’ equity 794,396 (5,505 ) 788,891 Total liabilities and shareholders’ equity $ 1,293,963 (4,874 ) 1,289,089 (1) Previously “cost and estimated earnings on long-term contracts” (2) Previously “advance payments on long-term contracts” and “current portion of deferred revenue” Three Months Ended March 31, 2019 (In thousands, except per share amounts) As Reported Effect of the adoption of ASC 606 Under Prior Accounting Consolidated Statements of Operations Net sales $ 193,949 $ (2,879 ) $ 191,070 Cost of sales 121,946 (3,719 ) 118,227 Total costs and expenses 172,594 (3,719 ) 168,875 Earnings before income tax 21,355 839 22,194 Income tax expense (benefit) 2,558 117 2,675 Net earnings 18,797 723 19,520 Earnings per share: Basic: Net earnings $ 0.73 $ 0.02 $ 0.75 Diluted: Net earnings $ 0.72 $ 0.03 $ 0.75 Consolidated Statements of Comprehensive Income Net earnings $ 18,797 $ 723 $ 19,520 Comprehensive income 19,600 723 20,323 Six Months Ended March 31, 2019 (In thousands, except per share amounts) As Reported Effect of the adoption of ASC 606 Under Prior Accounting Consolidated Statements of Operations Net sales $ 376,546 $ (5,779 ) $ 370,767 Cost of sales 240,854 (6,981 ) 233,873 Total costs and expenses 331,934 (6,981 ) 324,953 Earnings before income tax 44,612 1,201 45,813 Income tax expense (benefit) 8,498 228 8,726 Net earnings 36,114 973 37,087 Earnings per share: Basic: Net earnings $ 1.39 $ 0.04 $ 1.43 Diluted: Net earnings $ 1.38 $ 0.04 $ 1.42 Consolidated Statements of Comprehensive Income Net earnings $ 36,114 $ 973 $ 37,087 Comprehensive income 32,363 973 33,336 Consolidated Statements of Cash flows Net earnings $ 36,114 $ 973 $ 37,087 Adjustments to reconcile net earnings to net cash provided by operating activities: Change in assets and liabilities $ (28,847 ) (973 ) $ (29,820 ) Net cash provided by operating activities 16,992 - 16,992 |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING STANDARDS | 15. NEW ACCOUNTING STANDARDS In February 2016, the FASB issued ASU No. 2016-062, Leases (Topic 842) , which, among other things, requires an entity to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. This standard will increase an entities’ reported assets and liabilities. The standard is effective for fiscal years beginning after December 15, 2018 and mandates a modified retrospective transition period for all entities. The Company is currently assessing the impact of this standard on its consolidated financial statements and related disclosures. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory , which eliminates the exception for all intra-entity sale of assets other than inventory. This standard is effective for annual periods beginning after December 15, 2017. There was no significant impact to the Company’s consolidated financial statements as a result of adopting this new standard. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. Filtration: Within the Filtration segment, approximately 48% of revenues (approximately 18% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial and military customers and have a single performance obligation as there is only one good promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. The transaction price for these contracts reflects our estimate of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 52 % of the segment’s revenues (approximately 19 % of consolidated revenues) Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Filtration segment contracts the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires substantial judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. Test: Within the Test segment, approximately 25% of revenues (approximately 6% of consolidated revenues) are recognized at a point in time when products such as, antennas and probes are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 75% of the segment’s revenues (approximately 17% of consolidated revenues) are recorded over time as the product does not have an alternative use and the Company has an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance 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. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, the Company estimates profit as the difference between total revenue and total estimated cost of a contract and recognizes these revenues and costs based primarily on contract milestones. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires substantial judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. USG : Within the USG segment, approximately 80% of revenues (approximately 24% of consolidated revenues) are recognized at a point in time when products are shipped (when control of the goods transfers) to unaffiliated customers. The related contracts are with commercial customers. The contracts may contain multiple products which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. The transaction price for these contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Amounts billed to customers for shipping and handling are included in the transaction price as the related activities are performed prior to customer obtaining control of the products. They generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer and are expensed in selling, general, and other costs in the period they are incurred. Taxes collected from customers and remitted to government authorities are recorded on a net basis. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. The related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and the Company has a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 8% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represent our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Technical Packaging: Within the Technical Packaging segment, 100% of the revenues (approximately 10% of consolidated revenues) are recognized over time as the product does not have an alternative use and the Company has an enforceable right to payment. Selecting the method to measure progress towards completion for the contracts requires judgment and is based on the nature of the products to be provided. We use the cost-to-cost method to measure progress for our Technical Packaging segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred. The transaction price for our contracts reflects our estimate of variable consideration in the form of returns, rebates and discounts, which are based on historical, current and forecasted information to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of weeks, minimizing the amount of judgment in developing the cost estimate. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our contracts, the customer is billed upon shipment of product. Amounts billed and due from our customers are classified in Accounts receivable, net. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. |
Contract Assets and Liabilities | Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. Liabilities for customer rebates and discounts are included in other current liabilities in the accompanying balance sheet. |
EARNINGS PER SHARE (EPS) (Table
EARNINGS PER SHARE (EPS) (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Weighted Average Shares Outstanding - Basic 25,918 25,844 25,915 25,840 Dilutive Options and Restricted Shares 118 144 163 195 Adjusted Shares - Diluted 26,036 25,988 26,078 26,035 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventories | Inventories consist of the following: (In thousands) March 31, 2019 September 30, 2018 Finished goods $ 19,029 26,678 Work in process 41,677 47,765 Raw materials 63,787 60,973 Total inventories $ 124,493 135,416 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Included on the Company’s Consolidated Balance Sheets at March 31, 2019 and September 30, 2018 are the following intangible assets gross carrying amounts and accumulated amortization: (Dollars in thousands) March 31, 2019 September 30, 2018 Goodwill $ 381,304 381,652 Intangible assets with determinable lives: Patents Gross carrying amount $ 1,866 1,833 Less: accumulated amortization 846 791 Net $ 1,020 1,042 Capitalized software Gross carrying amount $ 75,789 71,294 Less: accumulated amortization 45,304 41,624 Net $ 30,485 29,670 Customer relationships Gross carrying amount $ 184,924 185,333 Less: accumulated amortization 53,030 47,802 Net $ 131,894 137,531 Other Gross carrying amount $ 5,303 5,468 Less: accumulated amortization 2,365 2,056 Net $ 2,938 3,412 Intangible assets with indefinite lives: Trade names $ 172,177 173,698 |
Schedule of Goodwill | The changes in the carrying amount of goodwill attributable to each business segment for the six months ended March 31, 2019 is as follows: (Dollars in millions) USG Test Filtration Packaging Total Balance as of September 30, 2018 254.1 34.1 73.7 19.8 381.7 Foreign currency translation - - - (0.4 ) (0.4 ) Balance as of March 31, 2019 $ 254.1 34.1 73.7 19.4 381.3 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Schedule Of Net Sales And Earnings Before Income Tax | Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes. Three Months Ended March 31, Six Months Ended March 31, (In thousands) 2019 2018 2019 2018 NET SALES Filtration $ 79,478 65,775 145,702 125,810 Test 42,875 40,805 84,161 78,334 USG 48,890 46,699 104,745 102,453 Technical Packaging 22,706 21,499 41,938 41,676 Consolidated totals $ 193,949 174,778 376,546 348,273 EBIT Filtration $ 17,443 11,118 28,053 20,764 Test 5,554 5,300 8,864 7,895 USG 8,767 5,626 30,313 16,277 Technical Packaging 1,602 1,885 1,708 2,850 Corporate (loss) (10,086 ) (8,309 ) (20,511 ) (17,180 ) Consolidated EBIT 23,280 15,620 48,427 30,606 Less: Interest expense (1,925 ) (2,036 ) (3,815 ) (4,221 ) Earnings before income taxes $ 21,355 13,584 44,612 26,385 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule Of Debt | The Company’s debt is summarized as follows: (In thousands) March 31, 2019 September 30, 2018 Total borrowings $ 217,000 220,000 Short-term borrowings and current portion of long-term debt (20,000 ) (20,000 ) Total long-term debt, less current portion $ 197,000 200,000 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule Of Change In Equity | The change in shareholders’ equity for the first six months of 2019 is shown below (in thousands): Balance at September 30, 2018 $ 759,410 Net earnings 36,114 Other comprehensive (loss) (3,752 ) Cash dividends (4,146 ) Impact of ASC 606, Revenue Recognition 4,213 Stock compensation plans 2,557 Balance at March 31, 2019 $ 794,396 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule Of Components Of Net Periodic Benefit Cost For Plans | A summary of net periodic benefit expense for the Company’s defined benefit plans for the three and six-month periods ended March 31, 2019 and 2018 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following: Three Months Six Months (In thousands) 2019 2018 2019 2018 Defined benefit plans Interest cost $ 875 821 1,750 1,641 Expected return on assets (1,086 ) (975 ) (2,172 ) (1,950 ) Amortization of: Prior service cost - - - - Actuarial loss 487 548 974 1,097 Net periodic benefit cost $ 276 394 552 788 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Derivative Financial Instruments | The following is a summary of the notional transaction amounts and fair values for the Company’s outstanding derivative financial instruments by risk category and instrument type as of March 31, 2018: (In thousands) Notional Fair Float Fix Forward contracts 700 GBP 7 Forward contracts 7,500 USD (227 ) Interest rate swap 150,000 USD 327 2.48 % 2.09 % Interest rate swap * 150,000 USD (101 ) N/A 2.24 % *This swap represents a forward contract and will be effective in November 2019. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Instruments | The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825 , as presented below as of March 31, 2019 : (In thousands) Level 1 Level 2 Level 3 Total Assets (Liabilities): Forward contracts $ - 6 $ - 6 |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Disaggregation of Revenue | Our revenues by customer type, geographic location, and revenue recognition method for the three and six-month periods ended March 31, 2019 are presented in the table below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The table below also includes a reconciliation of the disaggregated revenue within our reportable segments. Three Months Ended March 31, 2019 (In thousands) Filtration Test USG Technical Packaging Total Customer type: Commercial $ 46,325 $ 37,451 $ 47,551 $ 22,630 $ 153,957 Government 33,153 5,424 1,339 76 39,992 Total revenues $ 79,478 $ 42,875 $ 48,890 $ 22,706 $ 193,949 Geographic location: United States $ 66,068 $ 26,694 $ 33,798 $ 11,457 $ 138,017 International 13,410 16,181 15,092 11,249 55,932 Total revenues $ 79,478 $ 42,875 $ 48,890 $ 22,706 $ 193,949 Revenue recognition method: Point in time $ 42,400 $ 12,166 $ 36,874 $ - $ 91,440 Over time 37,078 30,709 12,016 22,706 102,509 Total revenues $ 79,478 $ 42,875 $ 48,890 $ 22,706 $ 193,949 Six Months Ended March 31, 2019 (In thousands) Filtration Test USG Technical Packaging Total Customer type: Commercial $ 83,546 $ 73,688 $ 102,206 $ 41,744 $ 301,184 Government 62,156 10,473 2,539 194 75,362 Total revenues $ 145,702 $ 84,161 $ 104,745 $ 41,938 $ 376,546 Geographic location: United States $ 120,833 $ 55,148 $ 73,879 $ 21,306 $ 271,166 International 24,869 29,013 30,866 20,632 105,380 Total revenues $ 145,702 $ 84,161 $ 104,745 $ 41,938 $ 376,546 Revenue recognition method: Point in time $ 74,214 $ 22,608 $ 81,107 $ - $ 177,929 Over time 71,488 61,553 23,638 41,938 198,617 Total revenues $ 145,702 $ 84,161 $ 104,745 $ 41,938 $ 376,546 |
Amount of Each Financial Statement Line Item Affected When Applying New Accounting Standard | The amount by which each financial statement line item is affected in 2019 as a result of applying the new accounting standard as discussed in Note 2 is presented below: March 31, 2019 (In thousands) As Reported Effect of the adoption of ASC 606 Under Prior Accounting Consolidated Balance Sheets Contract assets (1) $ 100,540 $ (39,565 ) $ 60,975 Inventories 124,493 34,692 159,185 Total current assets 435,959 (4,874 ) 431,085 Total assets 1,293,963 (4,874 ) 1,289,089 Contract liabilities (2) 55,453 1,754 57,207 Total current liabilities 201,945 1,754 203,699 Deferred tax liabilities 62,938 (1,122 ) 61,816 Total liabilities 499,567 631 500,198 Retained earnings 643,018 (5,505 ) 637,513 Total shareholders’ equity 794,396 (5,505 ) 788,891 Total liabilities and shareholders’ equity $ 1,293,963 (4,874 ) 1,289,089 (1) Previously “cost and estimated earnings on long-term contracts” (2) Previously “advance payments on long-term contracts” and “current portion of deferred revenue” Three Months Ended March 31, 2019 (In thousands, except per share amounts) As Reported Effect of the adoption of ASC 606 Under Prior Accounting Consolidated Statements of Operations Net sales $ 193,949 $ (2,879 ) $ 191,070 Cost of sales 121,946 (3,719 ) 118,227 Total costs and expenses 172,594 (3,719 ) 168,875 Earnings before income tax 21,355 839 22,194 Income tax expense (benefit) 2,558 117 2,675 Net earnings 18,797 723 19,520 Earnings per share: Basic: Net earnings $ 0.73 $ 0.02 $ 0.75 Diluted: Net earnings $ 0.72 $ 0.03 $ 0.75 Consolidated Statements of Comprehensive Income Net earnings $ 18,797 $ 723 $ 19,520 Comprehensive income 19,600 723 20,323 Six Months Ended March 31, 2019 (In thousands, except per share amounts) As Reported Effect of the adoption of ASC 606 Under Prior Accounting Consolidated Statements of Operations Net sales $ 376,546 $ (5,779 ) $ 370,767 Cost of sales 240,854 (6,981 ) 233,873 Total costs and expenses 331,934 (6,981 ) 324,953 Earnings before income tax 44,612 1,201 45,813 Income tax expense (benefit) 8,498 228 8,726 Net earnings 36,114 973 37,087 Earnings per share: Basic: Net earnings $ 1.39 $ 0.04 $ 1.43 Diluted: Net earnings $ 1.38 $ 0.04 $ 1.42 Consolidated Statements of Comprehensive Income Net earnings $ 36,114 $ 973 $ 37,087 Comprehensive income 32,363 973 33,336 Consolidated Statements of Cash flows Net earnings $ 36,114 $ 973 $ 37,087 Adjustments to reconcile net earnings to net cash provided by operating activities: Change in assets and liabilities $ (28,847 ) (973 ) $ (29,820 ) Net cash provided by operating activities 16,992 - 16,992 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UPDATE (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cumulative Effect on Retained Earnings, Tax | $ 4.2 |
Usg [Member] | |
Percentage of segment revenues recognized when services are performed for unaffiliated customers or when products are delivered | 80.00% |
Percentage of consolidated revenues recognized when services are performed for unaffiliated customers or when products are delivered | 24.00% |
Percentage of segment revenues recorded under percentage of completion method | 20.00% |
Percentage of consolidated revenues recorded under percentage of completion method | 6.00% |
Filtration [Member] | |
Percentage of segment revenues recognized when services are performed for unaffiliated customers or when products are delivered | 48.00% |
Percentage of consolidated revenues recognized when services are performed for unaffiliated customers or when products are delivered | 18.00% |
Percentage of segment revenues recorded under percentage of completion method | 52.00% |
Percentage of consolidated revenues recorded under percentage of completion method | 19.00% |
Test [Member] | |
Percentage of segment revenues recognized when services are performed for unaffiliated customers or when products are delivered | 25.00% |
Percentage of consolidated revenues recognized when services are performed for unaffiliated customers or when products are delivered | 6.00% |
Percentage of segment revenues recorded under percentage of completion method | 75.00% |
Percentage of consolidated revenues recorded under percentage of completion method | 17.00% |
Technical Packaging [Member] | |
Percentage of segment revenues recognized when services are performed for unaffiliated customers or when products are delivered | 100.00% |
Percentage of consolidated revenues recognized when services are performed for unaffiliated customers or when products are delivered | 10.00% |
Software Contract [Member] | |
Percentage of segment revenues recognized when services are performed for unaffiliated customers or when products are delivered | 8.00% |
Percentage of consolidated revenues recognized when services are performed for unaffiliated customers or when products are delivered | 2.00% |
EARNINGS PER SHARE (EPS) (Numbe
EARNINGS PER SHARE (EPS) (Number Of Shares Used In The Calculation Of Earnings Per Share) (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted Average Shares Outstanding — Basic | 25,918 | 25,844 | 25,915 | 25,840 |
Dilutive Options and Restricted Shares | 118 | 144 | 163 | 195 |
Adjusted Shares - Diluted | 26,036 | 25,988 | 26,078 | 26,035 |
SHARE-BASED COMPENSATION (Narra
SHARE-BASED COMPENSATION (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation cost | $ 1.2 | $ 1.3 | $ 2.6 | $ 2.6 |
Performance-Accelerated Restricted Share (PARS) Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | $ 0.9 | 1 | $ 2 | 2.1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 204,392 | 204,392 | ||
Non-Employee Directors Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total income tax benefit recognized | $ 0.3 | 0.4 | $ 0.6 | 0.7 |
Pretax compensation expense | 0.3 | $ 0.3 | 0.5 | $ 0.5 |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 5.6 | $ 5.6 | ||
Remaining weighted-average period for recognition of total unrecognized compensation cost | 1 year 2 months 12 days |
INVENTORIES (Schedule Of Invent
INVENTORIES (Schedule Of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Inventory [Line Items] | ||
Finished goods | $ 19,029 | $ 26,678 |
Work in process | 41,677 | 47,765 |
Raw materials | 63,787 | 60,973 |
Total inventories | $ 124,493 | $ 135,416 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule Of Intangible Assets Gross Carrying Amounts And Accumulated Amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill | $ 381,304 | $ 381,652 |
Less: accumulated amortization | 101,546 | 92,274 |
Patents [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 1,866 | 1,833 |
Less: accumulated amortization | 846 | 791 |
Net | 1,020 | 1,042 |
Capitalized software [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 75,789 | 71,294 |
Less: accumulated amortization | 45,304 | 41,624 |
Net | 30,485 | 29,670 |
Customer relationships [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 184,924 | 185,333 |
Less: accumulated amortization | 53,030 | 47,802 |
Net | 131,894 | 137,531 |
Other [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 5,303 | 5,468 |
Less: accumulated amortization | 2,365 | 2,056 |
Net | 2,938 | 3,412 |
Trade names [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Trade names | $ 172,177 | $ 173,698 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule Of Changes In The Carrying Amount Of Goodwill Attributable To Business Segment) (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 381,652 |
Foreign currency translation | (400) |
Goodwill, Ending Balance | 381,304 |
Filtration [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 73,700 |
Foreign currency translation | 0 |
Goodwill, Ending Balance | 73,700 |
Test [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 34,100 |
Foreign currency translation | 0 |
Goodwill, Ending Balance | 34,100 |
Utility Solutions [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 254,100 |
Foreign currency translation | 0 |
Goodwill, Ending Balance | 254,100 |
Packaging [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 19,800 |
Foreign currency translation | (400) |
Goodwill, Ending Balance | $ 19,400 |
BUSINESS SEGMENT INFORMATION (S
BUSINESS SEGMENT INFORMATION (Schedule Of Net Sales And Earnings Before Income Tax) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
NET SALES | $ 193,949 | $ 174,778 | $ 376,546 | $ 348,273 |
Consolidated EBIT | 23,280 | 15,620 | 48,427 | 30,606 |
Less: Interest expense | (1,925) | (2,036) | (3,815) | (4,221) |
Earnings before income taxes | 21,355 | 13,584 | 44,612 | 26,385 |
Filtration [Member] | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES | 79,478 | 65,775 | 145,702 | 125,810 |
Consolidated EBIT | 17,443 | 11,118 | 28,053 | 20,764 |
Test [Member] | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES | 42,875 | 40,805 | 84,161 | 78,334 |
Consolidated EBIT | 5,554 | 5,300 | 8,864 | 7,895 |
USG [Member] | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES | 48,890 | 46,699 | 104,745 | 102,453 |
Consolidated EBIT | 8,767 | 5,626 | 30,313 | 16,277 |
Technical Packaging [Member] | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES | 22,706 | 21,499 | 41,938 | 41,676 |
Consolidated EBIT | 1,602 | 1,885 | 1,708 | 2,850 |
Corporate (loss) [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated EBIT | $ (10,086) | $ (8,309) | $ (20,511) | $ (17,180) |
DEBT (Schedule Of Debt) (Detail
DEBT (Schedule Of Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||
Total borrowings | $ 217,000 | $ 220,000 |
Short-term borrowings and current portion of long-term debt | (20,000) | (20,000) |
Total long-term debt, less current portion | $ 197,000 | $ 200,000 |
DEBT (Narrative) (Details)
DEBT (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||||||
Available to borrow under the credit facility | $ 207,000 | $ 207,000 | ||||
Cash on hand | $ 34,955 | $ 42,905 | 34,955 | $ 42,905 | $ 30,477 | $ 45,516 |
Percentage of foreign subsidiaries' share equity | 65.00% | |||||
Letters of Credit Outstanding, Amount | $ 8,300 | 8,300 | ||||
Line of Credit Facility, Amount Outstanding | $ 217,000 | $ 217,000 | ||||
Weighted average interest rates | 3.20% | 2.99% | 3.23% | 2.87% | ||
Long-term Debt, Current Maturities | $ 20,000 | $ 20,000 | $ 20,000 | |||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Amount Outstanding | 450,000 | 450,000 | ||||
Line of Credit Facility, Commitment Fee Amount | $ 250,000 | |||||
Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility fees | 12.50% | |||||
Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Incremental term loan | $ 250,000 | $ 250,000 | ||||
Credit facility fees | 27.50% |
INCOME TAX EXPENSE (Narrative)
INCOME TAX EXPENSE (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Expense [Line Items] | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 2,300 | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 24.50% | 19.00% | 69.30% | |||
Effective Income Tax Rate Reconciliation, Percent | 12.00% | 26.40% | |||||
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Percent | 4.90% | 13.60% | |||||
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | $ 2,300 | ||||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Domestic, Percent | 8.90% | ||||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Domestic, Amount | $ 700 | $ 2,900 | $ 3,600 | ||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 12.10% | 114.90% | 5.80% | 5.80% | 3.00% | ||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 30,300 | ||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Amount | $ 200 | ||||||
Postemployment Benefits Liability | $ 7,500 | $ 7,500 | |||||
Increase in Deferred Tax Liabilities | $ 1,000 | 1,000 | |||||
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount | $ 300 | ||||||
Effective Income Tax Rate Reconciliation, Disposition of Business, Percent | 1.50% | 0.80% | |||||
Income Tax Expense (Benefit) | $ 2,558 | $ 3,590 | $ 8,498 | $ (18,280) | |||
Tax Cuts And Jobs Act [Member] | |||||||
Income Tax Expense [Line Items] | |||||||
Income Tax Expense (Benefit) | $ 700 | $ 24,400 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule Of Change In Equity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Balance | $ 759,410 | |||
Net earnings | $ 18,797 | $ 9,994 | 36,114 | $ 44,665 |
Other comprehensive (loss) | 803 | $ 2,975 | (3,752) | $ 4,280 |
Cash dividends | (4,146) | |||
Impact of ASC 606, Revenue Recognition | 4,213 | |||
Stock compensation plans | 2,557 | |||
Balance | $ 794,396 | $ 794,396 |
RETIREMENT PLANS (Schedule Of C
RETIREMENT PLANS (Schedule Of Components Of Net Periodic Benefit Cost For Plans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Interest cost | $ 875 | $ 821 | $ 1,750 | $ 1,641 |
Expected return on assets | (1,086) | (975) | (2,172) | (1,950) |
Amortization of Prior service cost | 0 | 0 | 0 | 0 |
Amortization of Actuarial loss | 487 | 548 | 974 | 1,097 |
Net periodic benefit cost | $ 276 | $ 394 | $ 552 | $ 788 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule of Outstanding Derivative Financial Instruments) (Details) £ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018GBP (£) | |
Interest Rate Swap [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount | $ 150,000 | $ 150,000 | ||
Fair Value | $ 327 | |||
Float Rate | 2.48% | 2.48% | ||
Fix Rate | 2.09% | 2.09% | ||
Interest Rate Swap One [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount | [1] | $ 150,000 | ||
Fair Value | [1] | $ (101) | ||
Fix Rate | [1] | 2.24% | 2.24% | |
Forward Contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount | £ | £ 700 | |||
Fair Value | £ | £ 7 | |||
Forward Contracts One [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount | $ 7,500 | |||
Fair Value | $ (227) | |||
[1] | This swap represents a forward contract and will be effective in November 2019. |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details) - Interest Rate Swap [Member] $ in Thousands | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, Notional Amount | $ 150,000 | $ 150,000 |
Derivative, Number of Instruments Held | 3 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Fair Value of Financial Instruments) (Details) - Forward Contracts [Member] - Interest Rate Swap [Member] $ in Thousands | Mar. 31, 2019USD ($) |
Derivative [Line Items] | |
Fair Value of Financial Instruments | $ 6 |
Fair Value, Inputs, Level 1 [Member] | |
Derivative [Line Items] | |
Fair Value of Financial Instruments | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Derivative [Line Items] | |
Fair Value of Financial Instruments | 6 |
Fair Value, Inputs, Level 3 [Member] | |
Derivative [Line Items] | |
Fair Value of Financial Instruments | $ 0 |
REVENUES (Schedule Of Revenues)
REVENUES (Schedule Of Revenues) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 193,949 | $ 174,778 | $ 376,546 | $ 348,273 |
Point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 91,440 | 177,929 | ||
Over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 102,509 | 198,617 | ||
United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 138,017 | 271,166 | ||
International [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 55,932 | 105,380 | ||
Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 153,957 | 301,184 | ||
Government [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 39,992 | 75,362 | ||
Filtration [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 79,478 | 65,775 | 145,702 | 125,810 |
Filtration [Member] | Point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 42,400 | 74,214 | ||
Filtration [Member] | Over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 37,078 | 71,488 | ||
Filtration [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 66,068 | 120,833 | ||
Filtration [Member] | International [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13,410 | 24,869 | ||
Filtration [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 46,325 | 83,546 | ||
Filtration [Member] | Government [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 33,153 | 62,156 | ||
Test [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 42,875 | 40,805 | 84,161 | 78,334 |
Test [Member] | Point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12,166 | 22,608 | ||
Test [Member] | Over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 30,709 | 61,553 | ||
Test [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 26,694 | 55,148 | ||
Test [Member] | International [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,181 | 29,013 | ||
Test [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 37,451 | 73,688 | ||
Test [Member] | Government [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,424 | 10,473 | ||
USG [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 48,890 | 46,699 | 104,745 | 102,453 |
USG [Member] | Point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36,874 | 81,107 | ||
USG [Member] | Over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12,016 | 23,638 | ||
USG [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 33,798 | 73,879 | ||
USG [Member] | International [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 15,092 | 30,866 | ||
USG [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 47,551 | 102,206 | ||
USG [Member] | Government [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,339 | 2,539 | ||
Technical Packaging [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 22,706 | $ 21,499 | 41,938 | $ 41,676 |
Technical Packaging [Member] | Point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Technical Packaging [Member] | Over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 22,706 | 41,938 | ||
Technical Packaging [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 11,457 | 21,306 | ||
Technical Packaging [Member] | International [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 11,249 | 20,632 | ||
Technical Packaging [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 22,630 | 41,744 | ||
Technical Packaging [Member] | Government [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 76 | $ 194 |
REVENUES (Amount Of Each Financ
REVENUES (Amount Of Each Financial Statement to apply New Accounting Standard) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | ||
Consolidated Balance Sheets | ||||||
Contract assets | $ 100,540 | $ 100,540 | $ 53,034 | |||
Inventories | 124,493 | 124,493 | 135,416 | |||
Total current assets | 435,959 | 435,959 | 396,023 | |||
Total assets | 1,293,963 | 1,293,963 | 1,265,122 | |||
Contract liabilities | 55,453 | 55,453 | 49,035 | |||
Total current liabilities | 201,945 | 201,945 | 200,530 | |||
Deferred tax liabilities | 62,938 | 62,938 | ||||
Total liabilities | 499,567 | 499,567 | 505,712 | |||
Retained earnings | 643,018 | 643,018 | 606,837 | |||
Total shareholders' equity | 794,396 | 794,396 | 759,410 | |||
Total liabilities and shareholders' equity | 1,293,963 | 1,293,963 | $ 1,265,122 | |||
Consolidated Statements of Operations | ||||||
Net sales | 193,949 | $ 174,778 | 376,546 | $ 348,273 | ||
Cost of sales | 121,946 | 112,370 | 240,854 | 224,106 | ||
Total costs and expenses | 172,594 | 161,194 | 331,934 | 321,888 | ||
Earnings before income tax | 21,355 | 13,584 | 44,612 | 26,385 | ||
Income tax (benefit) expense | 2,558 | 3,590 | 8,498 | (18,280) | ||
Net earnings | $ 18,797 | $ 9,994 | $ 36,114 | $ 44,665 | ||
Basic: | ||||||
Net earnings | $ 0.73 | $ 0.39 | $ 1.39 | $ 1.73 | ||
Diluted: | ||||||
Net earnings | $ 0.72 | $ 0.38 | $ 1.38 | $ 1.72 | ||
Consolidated Statements of Comprehensive Income | ||||||
Net earnings | $ 18,797 | $ 9,994 | $ 36,114 | $ 44,665 | ||
Comprehensive income | 19,600 | 12,969 | 32,362 | 48,945 | ||
Consolidated Statements of Cash flows | ||||||
Net earnings | 18,797 | $ 9,994 | 36,114 | 44,665 | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
Change in assets and liabilities | (28,847) | (5,570) | ||||
Net cash provided by operating activities | 16,992 | $ 33,471 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||
Consolidated Balance Sheets | ||||||
Contract assets | [1] | (39,565) | (39,565) | |||
Inventories | 34,692 | 34,692 | ||||
Total current assets | (4,874) | (4,874) | ||||
Total assets | (4,874) | (4,874) | ||||
Contract liabilities | [2] | 1,754 | 1,754 | |||
Total current liabilities | 1,754 | 1,754 | ||||
Deferred tax liabilities | (1,122) | (1,122) | ||||
Total liabilities | 631 | 631 | ||||
Retained earnings | (5,505) | (5,505) | ||||
Total shareholders' equity | (5,505) | (5,505) | ||||
Total liabilities and shareholders' equity | (4,874) | (4,874) | ||||
Consolidated Statements of Operations | ||||||
Net sales | (2,879) | (5,779) | ||||
Cost of sales | (3,719) | (6,981) | ||||
Total costs and expenses | (3,719) | (6,981) | ||||
Earnings before income tax | 839 | 1,201 | ||||
Income tax (benefit) expense | 117 | 228 | ||||
Net earnings | $ 723 | $ 973 | ||||
Basic: | ||||||
Net earnings | $ 0.02 | $ 0.04 | ||||
Diluted: | ||||||
Net earnings | $ 0.03 | $ 0.04 | ||||
Consolidated Statements of Comprehensive Income | ||||||
Net earnings | $ 723 | $ 973 | ||||
Comprehensive income | 723 | 973 | ||||
Consolidated Statements of Cash flows | ||||||
Net earnings | 723 | 973 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
Change in assets and liabilities | (973) | |||||
Net cash provided by operating activities | 0 | |||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||||
Consolidated Balance Sheets | ||||||
Contract assets | [1] | 60,975 | 60,975 | |||
Inventories | 159,185 | 159,185 | ||||
Total current assets | 431,085 | 431,085 | ||||
Total assets | 1,289,089 | 1,289,089 | ||||
Contract liabilities | [2] | 57,207 | 57,207 | |||
Total current liabilities | 203,699 | 203,699 | ||||
Deferred tax liabilities | 61,816 | 61,816 | ||||
Total liabilities | 500,198 | 500,198 | ||||
Retained earnings | 637,513 | 637,513 | ||||
Total shareholders' equity | 788,891 | 788,891 | ||||
Total liabilities and shareholders' equity | 1,289,089 | 1,289,089 | ||||
Consolidated Statements of Operations | ||||||
Net sales | 191,070 | 370,767 | ||||
Cost of sales | 118,227 | 233,873 | ||||
Total costs and expenses | 168,875 | 324,953 | ||||
Earnings before income tax | 22,194 | 45,813 | ||||
Income tax (benefit) expense | 2,675 | 8,726 | ||||
Net earnings | $ 19,520 | $ 37,087 | ||||
Basic: | ||||||
Net earnings | $ 0.75 | $ 1.43 | ||||
Diluted: | ||||||
Net earnings | $ 0.75 | $ 1.42 | ||||
Consolidated Statements of Comprehensive Income | ||||||
Net earnings | $ 19,520 | $ 37,087 | ||||
Comprehensive income | 20,323 | 33,336 | ||||
Consolidated Statements of Cash flows | ||||||
Net earnings | $ 19,520 | 37,087 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
Change in assets and liabilities | (29,820) | |||||
Net cash provided by operating activities | $ 16,992 | |||||
[1] | Previously “cost and estimated earnings on long-term contracts” | |||||
[2] | Previously “advance payments on long-term contracts” and “current portion of deferred revenue” |
REVENUES (Narrative) (Details)
REVENUES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Revenue, Remaining Performance Obligation, Amount | $ 436,100 | $ 436,100 | |
Percentage of Revenue Expected to be Recognized in Next Twelve Months | 83.00% | ||
Contract with Customer, Asset, Net | $ 87,000 | 87,000 | |
Contract with Customer, Liability | 51,000 | 51,000 | |
Contract with Customer, Liability, Revenue Recognized | 30,000 | ||
Contract with Customer, Asset, Net, Current | 100,540 | 100,540 | $ 53,034 |
Contract with Customer, Liability, Current | $ 55,453 | $ 55,453 | $ 49,035 |