Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jun. 30, 2022 | Jul. 31, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-10596 | |
Entity Registrant Name | ESCO TECHNOLOGIES INC. | |
Entity Incorporation, State or Country Code | MO | |
Entity Tax Identification Number | 43-1554045 | |
Entity Address, Address Line One | 9900A CLAYTON ROAD | |
Entity Address, City or Town | ST. LOUIS | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 63124-1186 | |
City Area Code | 314 | |
Local Phone Number | 213-7200 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ESE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,852,570 | |
Entity Central Index Key | 0000866706 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 219,066 | $ 181,394 | $ 601,004 | $ 509,962 |
Costs and expenses: | ||||
Cost of sales | 134,454 | 113,610 | 371,134 | 316,785 |
Selling, general and administrative expenses | 47,479 | 42,882 | 142,073 | 122,628 |
Amortization of intangible assets | 6,406 | 4,864 | 19,383 | 14,729 |
Interest expense, net | 1,331 | 480 | 3,084 | 1,453 |
Other (income) expenses, net | (106) | 615 | (677) | (1,265) |
Total costs and expenses | 189,564 | 162,451 | 534,997 | 454,330 |
Earnings before income taxes | 29,502 | 18,943 | 66,007 | 55,632 |
Income tax expense | 6,329 | 4,034 | 14,727 | 12,501 |
Net earnings | $ 23,173 | $ 14,909 | $ 51,280 | $ 43,131 |
Earnings per share: | ||||
Basic - Net earnings | $ 0.90 | $ 0.57 | $ 1.98 | $ 1.66 |
Diluted - Net earnings | $ 0.89 | $ 0.57 | $ 1.97 | $ 1.65 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net earnings | $ 23,173 | $ 14,909 | $ 51,280 | $ 43,131 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (11,905) | 535 | (17,216) | 6,000 |
Total other comprehensive income (loss), net of tax | (11,905) | 535 | (17,216) | 6,000 |
Comprehensive income | $ 11,268 | $ 15,444 | $ 34,064 | $ 49,131 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 61,019 | $ 56,232 |
Accounts receivable, net of allowance for doubtful accounts of $3,328 and $3,445, respectively | 168,720 | 146,341 |
Contract assets | 115,840 | 93,771 |
Inventories, net | 178,168 | 147,148 |
Other current assets | 29,718 | 22,662 |
Total current assets | 553,465 | 466,154 |
Property, plant and equipment, net of accumulated depreciation of $161,177 and $147,551, respectively | 155,961 | 154,265 |
Intangible assets, net of accumulated amortization of $169,274 and $149,892, respectively | 401,337 | 409,250 |
Goodwill | 503,439 | 504,853 |
Operating lease assets | 28,922 | 31,846 |
Other assets | 9,562 | 10,977 |
Total assets | 1,652,686 | 1,577,345 |
Current liabilities: | ||
Current maturities of long-term debt and short-term borrowings | 20,000 | 20,000 |
Accounts payable | 70,748 | 56,669 |
Contract liabilities | 117,863 | 106,045 |
Accrued salaries | 35,256 | 39,768 |
Accrued other expenses | 48,228 | 52,513 |
Total current liabilities | 292,095 | 274,995 |
Deferred tax liabilities | 82,580 | 73,560 |
Non-current operating lease liabilities | 25,209 | 28,032 |
Other liabilities | 41,920 | 47,062 |
Long-term debt | 181,000 | 134,000 |
Total liabilities | 622,804 | 557,649 |
Shareholders' equity: | ||
Preferred stock, par value $.01 per share, authorized 10,000,000 shares | ||
Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,707,567 and 30,666,173 shares, respectively | 307 | 307 |
Additional paid-in capital | 299,863 | 297,644 |
Retained earnings | 876,050 | 830,989 |
Accumulated other comprehensive loss, net of tax | (19,377) | (2,161) |
Total stockholders' equity before treasury stock | 1,156,843 | 1,126,779 |
Less treasury stock, at cost: 4,854,997 and 4,604,741 common shares, respectively | (126,961) | (107,083) |
Total shareholders' equity | 1,029,882 | 1,019,696 |
Total liabilities and shareholders' equity | $ 1,652,686 | $ 1,577,345 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for Doubtful Accounts Receivable, Current | $ 3,328 | $ 3,445 |
Less accumulated depreciation and amortization | 161,177 | 147,551 |
Accumulated amortization | $ 169,274 | $ 149,892 |
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 | 30,707,567 | 30,666,173 |
Treasury stock, shares | 4,854,997 | 4,604,741 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net earnings | $ 51,280 | $ 43,131 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 36,247 | 30,259 |
Stock compensation expense | 5,318 | 5,386 |
Changes in assets and liabilities | (60,172) | 2,520 |
Gain on sale of building and land | (1,950) | |
Effect of deferred taxes | 9,020 | (3,946) |
Net cash provided by operating activities | 41,693 | 75,400 |
Cash flows from investing activities: | ||
Acquisition of business, net of cash acquired | (15,592) | (6,684) |
Proceeds from sale of building and land | 1,950 | |
Additions to capitalized software | (9,359) | (6,500) |
Capital expenditures | (25,893) | (17,887) |
Net cash used by investing activities | (50,844) | (29,121) |
Cash flows from financing activities: | ||
Proceeds from long-term debt and short-term borrowings | 111,000 | 80,000 |
Principal payments on long-term debt and short-term borrowings | (64,000) | (94,368) |
Purchases of common stock into treasury | (19,878) | |
Dividends paid | (6,219) | (6,251) |
Other | (2,787) | (1,672) |
Net cash provided (used) by financing activities | 18,116 | (22,291) |
Effect of exchange rate changes on cash and cash equivalents | (4,178) | 1,811 |
Net increase in cash and cash equivalents | 4,787 | 25,799 |
Cash and cash equivalents, beginning of period | 56,232 | 52,560 |
Cash and cash equivalents, end of period | 61,019 | 78,359 |
Supplemental cash flow information: | ||
Interest paid | 1,685 | 316 |
Income taxes paid (including state and foreign) | $ 5,574 | $ 21,982 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION | |
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 consolidated annual financial statements by accounting principles generally accepted in the United States of America (GAAP). The Company’s results for the three-month and nine-month periods ended June 30, 2022 are not necessarily indicative of the results for the entire 2022 fiscal year. References to the third quarters of 2022 and 2021 represent the fiscal quarters ended June 30, 2022 and 2021, respectively. The preparation of consolidated 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. Certain prior period deferred revenue amounts have been reclassified to noncurrent to conform with the current year presentation. |
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS) | 9 Months Ended |
Jun. 30, 2022 | |
EARNINGS PER SHARE (EPS) | |
EARNINGS PER SHARE (EPS) | 2. 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 Nine Months Ended June 30, Ended June 30, 2022 2021 2022 2021 Weighted Average Shares Outstanding — 25,856 26,045 25,959 26,040 Dilutive Restricted Shares 94 169 91 159 Weighted Average Shares Outstanding — 25,950 26,214 26,050 26,199 |
ACQUISITION
ACQUISITION | 9 Months Ended |
Jun. 30, 2022 | |
ACQUISITION | |
ACQUISITION | 3. ACQUISITION On November 4, 2021, the Company acquired Networks Electronic Company, LLC (NEco) for a purchase price of approximately $15.4 million, net of cash acquired. NEco, based in Chatsworth, California, provides miniature electro-explosive devices utilized in mission-critical defense and aerospace applications. Since the date of acquisition, the operating results for the NEco business have been included as part of PTI in the A&D segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.6 million of accounts receivable, $1.5 million of inventory, $0.2 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $8.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $6.3 million. The acquired goodwill of $5.7 million related to excess value associated with opportunities to expand the services and products that the Company can offer to its customers. The Company anticipates that the goodwill will be deductible for tax purposes. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Jun. 30, 2022 | |
Share-Based Compensation | |
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 and/or time-vested restricted stock unit awards, and to non-employee directors under a non-employee directors compensation plan. Performance-Accelerated Restricted Stock Unit (PARS) Awards and Time-Vested Restricted Stock Unit (RSU) Awards Compensation expense related to the PARS/RSU awards was $1.6 million and $4.4 million for the three and nine-month periods ended June 30, 2022, respectively, and $2.5 million and $4.5 million for the corresponding periods in 2021. As of June 30, 2022, there were 265,643 unvested stock units outstanding. Non-Employee Directors Plan Compensation expense related to the non-employee director grants was $0.3 million and $0.9 million for the three and nine-month periods ended June 30, 2022, respectively, and $0.3 million and $1.0 million for the corresponding periods in 2021. 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 $1.9 million and $5.3 million for the three and nine-month periods ended June 30, 2022, respectively, and $2.8 million and $5.5 million for the corresponding periods in 2021. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $0.4 million and $1.0 million for the three and nine-month periods ended June 30, 2022, respectively, and $0.4 million and $1.1 million for the corresponding periods in 2021. As of June 30, 2022, there was $12.9 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 1.9 years. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Jun. 30, 2022 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES Inventories, net, consist of the following: June 30, September 30, (In thousands) 2022 2021 Finished goods $ 39,904 32,998 Work in process 43,408 34,201 Raw materials 94,856 79,949 Total inventories, net $ 178,168 147,148 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS Included on the Company’s Consolidated Balance Sheets at June 30, 2022 and September 30, 2021 are the following intangible assets gross carrying amounts and accumulated amortization: June 30, September 30, (Dollars in thousands) 2022 2021 Goodwill $ 503,439 504,853 Intangible assets with determinable lives: Patents Gross carrying amount $ 2,246 2,131 Less: accumulated amortization 1,059 972 Net $ 1,187 1,159 Capitalized software Gross carrying amount $ 103,030 93,671 Less: accumulated amortization 68,643 63,740 Net $ 34,387 29,931 Customer relationships Gross carrying amount $ 290,133 288,530 Less: accumulated amortization 92,943 80,882 Net $ 197,190 207,648 Other Gross carrying amount $ 13,885 13,080 Less: accumulated amortization 6,629 4,301 Net $ 7,256 8,779 Intangible assets with indefinite lives: Trade names $ 161,317 161,733 The changes in the carrying amount of goodwill attributable to each business segment for the nine months ended June 30, 2022 is as follows: Aerospace (Dollars in millions) USG Test & Defense Total Balance as of September 30, 2021 366.5 34.1 104.3 504.9 Acquisition activity and adjustments — — 5.7 5.7 Foreign currency translation (7.2) — — (7.2) Balance as of June 30, 2022 $ 359.3 34.1 110.0 503.4 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended |
Jun. 30, 2022 | |
BUSINESS SEGMENT INFORMATION | |
BUSINESS SEGMENT INFORMATION | 7. BUSINESS SEGMENT INFORMATION The Company is organized based on the products and services that it offers and classifies its continuing business operations in three reportable segments for financial reporting purposes: Aerospace & Defense, Utility Solutions Group (USG), and RF Shielding and Test (Test). The Aerospace & Defense segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), Mayday Manufacturing Co. (Mayday) and Globe Composite Solutions, LLC (Globe). The companies within this segment primarily design and manufacture specialty filtration, fluid control and naval products, including hydraulic filter elements and fluid control devices used in aerospace and defense applications; unique filter mechanisms used in micro-propulsion devices for satellites, custom designed filters for manned aircraft and submarines; products and systems to reduce vibration and/or acoustic signatures and otherwise reduce or obscure a vessel’s signature, and other communications, sealing, surface control and hydrodynamic related applications to enhance U.S. Navy maritime survivability; precision-tolerance machined components for the aerospace and defense industry; and metal processing services. The USG segment’s operations consist primarily of Doble Engineering Company and related subsidiaries including Morgan Schaffer and Altanova (collectively, Doble), and NRG Systems, Inc. (NRG). Doble is an industry leader in the development, manufacture and delivery of diagnostic testing solutions that enable electric power grid operators to assess the integrity of high voltage power delivery equipment. It combines three core elements for customers – diagnostic test and condition monitoring instruments, expert consulting, and testing services – and provides access to its large reserve of related empirical knowledge. NRG is a global market leader in the design and manufacture of decision support tools for the renewable energy industry, primarily wind and solar. The Test segment’s operations consist primarily of ETS-Lindgren Inc. and related subsidiaries (ETS-Lindgren). ETS-Lindgren is an industry leader in designing and manufacturing products which provide its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. ETS-Lindgren also manufactures radio frequency shielding products and components used by manufacturers of medical equipment, communications systems, electronic products, and shielded rooms for high-security data processing and secure communication. 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 Nine Months Ended June 30, Ended June 30, (In thousands) 2022 2021 2022 2021 NET SALES Aerospace & Defense $ 92,606 85,576 247,671 234,720 USG 67,201 47,704 194,877 141,799 Test 59,259 48,114 158,456 133,443 Consolidated totals $ 219,066 181,394 601,004 509,962 EBIT Aerospace & Defense $ 20,738 16,714 45,042 41,980 USG 13,135 8,227 37,840 27,683 Test 8,354 6,751 20,813 17,781 Corporate (loss) (11,394) (12,269) (34,604) (30,359) Consolidated EBIT 30,833 19,423 69,091 57,085 Less: Interest expense (1,331) (480) (3,084) (1,453) Earnings before income taxes $ 29,502 18,943 66,007 55,632 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 | 9 Months Ended |
Jun. 30, 2022 | |
DEBT | |
DEBT | 8. DEBT The Company’s debt is summarized as follows: June 30, September 30, (In thousands) 2022 2021 Total borrowings $ 201,000 154,000 Current portion of long-term debt (20,000) (20,000) Total long-term debt, less current portion $ 181,000 134,000 The Credit Facility includes a $500 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 eight banks led by JP Morgan Chase Bank, N.A., as Administrative Agent. The Credit Facility matures September 27, 2024. At June 30, 2022, the Company had approximately $291.0 million available to borrow under the Credit Facility, plus the $250 million increase option, subject to lender approval, in addition to $61.0 million cash on hand. The Company classified $20 million as the current portion of long-term debt as of June 30, 2022, as the Company intends to repay this amount within the next twelve months; however, the Company has no contractual obligation to repay such amount during the next twelve months. The letters of credit issued and outstanding under the Credit Facility totaled $7.8 million at June 30, 2022. Interest on borrowings under the Credit Facility is calculated at a spread over either the New York Federal Reserve Bank Rate, the prime rate or the London Interbank Offered Rate (LIBOR), depending on various factors. The Credit Facility also requires a facility fee ranging from 10 to 25 basis points per annum on the unused portion. The Credit Facility is secured by the unlimited guaranty of the Company’s direct and indirect material U.S. subsidiaries and the pledge of 100% of the equity interests of its direct and indirect material foreign subsidiaries. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. The weighted average interest rates were 2.20% and 1.57% for the three and nine-month periods ending June 30, 2022, respectively, and 1.16% and 1.33% for the three and nine-month periods ending June 30, 2021. As of June 30, 2022, the Company was in compliance with all covenants. |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 9 Months Ended |
Jun. 30, 2022 | |
INCOME TAX EXPENSE | |
INCOME TAX EXPENSE | 9. INCOME TAX EXPENSE The third quarter 2022 effective income tax rate was 21.5% compared to 21.3% in the third quarter of 2021. The effective income tax rate in the first nine months of 2022 was 22.3% compared to 22.5% for the first nine months of 2021. The income tax expense in the third quarter and first nine months of 2022 was favorably impacted by tax return to provision true-ups on U.S. tax on the distribution of foreign earnings and the re-rating of deferred taxes as a result of a Vermont law change, decreasing the third quarter and year-to-date effective tax rate by 1.6% and 0.7%, respectively. The income tax expense in the third quarter and first nine months of 2021 was favorably impacted by a tax return to provision true-up for foreign derived intangible income and other 2020 true-ups decreasing the third quarter and year-to-date effective tax rate by 3.9% and 1.2% respectively. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Jun. 30, 2022 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 10. SHAREHOLDERS’ EQUITY The change in shareholders’ equity for the third quarter and first nine months of 2022 and 2021 is shown below (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Common stock Beginning balance 307 306 307 306 Stock plans — 1 — 1 Ending balance 307 307 307 307 Additional paid-in-capital Beginning balance 298,353 295,796 297,644 293,682 Stock plans 1,510 782 2,219 2,896 Ending balance 299,863 296,578 299,863 296,578 Retained earnings Beginning balance 854,946 799,884 830,989 775,829 Net earnings common stockholders 23,173 14,909 51,280 43,131 Dividends paid (2,069) (2,084) (6,219) (6,251) Ending balance 876,050 812,709 876,050 812,709 Accumulated other comprehensive income (loss) Beginning balance (7,472) 1,808 (2,161) (3,657) Foreign currency translation (11,905) 535 (17,216) 6,000 Ending balance (19,377) 2,343 (19,377) 2,343 Treasury stock Beginning balance (124,961) (107,134) (107,083) (107,134) Issued under stock plans /(repurchased) (2,000) 51 (19,878) 51 Ending balance (126,961) (107,083) (126,961) (107,083) Total equity 1,029,882 1,004,854 1,029,882 1,004,854 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jun. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 11. 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 June 30, 2022 and September 30, 2021 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, inventories, payables, 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 and interest rate swaps are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, and are immaterial. 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 nine-month periods ended June 30, 2022 and 2021. |
REVENUES
REVENUES | 9 Months Ended |
Jun. 30, 2022 | |
REVENUES | |
REVENUES | 12. REVENUES Disaggregation of Revenues Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2022 are presented in the tables 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 tables below also include a reconciliation of the disaggregated revenue within each reportable segment. Three Months Ended June 30, 2022 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 38,918 $ 65,610 $ 54,449 $ 158,977 U.S. Government 53,688 1,591 4,810 60,089 Total revenues $ 92,606 $ 67,201 $ 59,259 $ 219,066 65 Geographic location: United States $ 79,536 $ 41,822 $ 34,662 $ 156,020 International 13,070 25,379 24,597 63,046 Total revenues $ 92,606 $ 67,201 $ 59,259 $ 219,066 Revenue recognition method: Point in time $ 35,238 $ 53,656 $ 15,827 $ 104,721 Over time 57,368 13,545 43,432 114,345 Total revenues $ 92,606 $ 67,201 $ 59,259 $ 219,066 Nine months ended June 30, 2022 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 100,407 $ 191,832 $ 147,390 $ 439,629 U.S. Government 147,264 3,045 11,066 161,375 Total revenues $ 247,671 $ 194,877 $ 158,456 $ 601,004 Geographic location: United States $ 212,849 $ 122,021 $ 88,708 $ 423,578 International 34,822 72,856 69,748 177,426 Total revenues $ 247,671 $ 194,877 $ 158,456 $ 601,004 Revenue recognition method: Point in time $ 99,464 $ 155,693 $ 43,488 $ 298,645 Over time 148,207 39,184 114,968 302,359 Total revenues $ 247,671 $ 194,877 $ 158,456 $ 601,004 Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2021 are presented in the tables below. Three months ended June 30, 2021 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 34,708 $ 46,735 $ 42,063 $ 123,506 U.S. Government 50,868 969 6,051 57,888 Total revenues $ 85,576 $ 47,704 $ 48,114 $ 181,394 Geographic location: United States $ 75,701 $ 32,111 $ 27,719 $ 135,531 International 9,875 15,593 20,395 45,863 Total revenues $ 85,576 $ 47,704 $ 48,114 $ 181,394 Revenue recognition method: Point in time $ 37,513 $ 35,242 $ 9,673 $ 82,428 Over time 48,063 12,462 38,441 98,966 Total revenues $ 85,576 $ 47,704 $ 48,114 $ 181,394 Nine months ended June 30, 2021 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 95,712 $ 139,149 $ 118,089 $ 352,950 U.S. Government 139,008 2,650 15,354 157,012 Total revenues $ 234,720 $ 141,799 $ 133,443 $ 509,962 Geographic location: United States $ 205,527 $ 96,601 $ 73,950 $ 376,078 International 29,193 45,198 59,493 133,884 Total revenues $ 234,720 $ 141,799 $ 133,443 $ 509,962 Revenue recognition method: Point in time $ 103,492 $ 105,173 $ 27,789 $ 236,454 Over time 131,228 36,626 105,654 273,508 Total revenues $ 234,720 $ 141,799 $ 133,443 $ 509,962 Revenue Recognition Payment terms with our customers vary by the type and location of the customer and the products or services offered. Arrangements with customers that include payment terms extending beyond one year are not significant. The transaction price for these contracts reflects our estimate of returns and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we 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. 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. 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. For our overtime revenue recognized using the output method of costs incurred, 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 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. In addition, in the USG segment, we recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for certain of our USG segment contracts. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. In addition, in the Test segment, 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. Remaining Performance Obligations Remaining performance obligations, which is the equivalent of backlog, represent the expected transaction price allocated to contracts that the Company expects to recognize as revenue in future periods when the Company performs 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 June 30, 2022, the Company had $706.8 million in remaining performance obligations of which the Company expects to recognize revenues of approximately 80% in the next twelve months. Contract assets and liabilities Assets and liabilities related to contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. 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. At June 30, 2022, contract assets and liabilities totaled $115.8 million and $122.2 million, respectively. During the first nine months of 2022, the Company recognized approximately $74 million in revenues that were included in the contract liabilities balance at September 30, 2021. The increase in net contract assets in the first nine months of 2022 was due to revenue being recognized for performance completed during the period that exceeded customer billings. The increase in net contract liabilities in the first nine months of 2022 was due to higher payments received in advance of revenue recognition criteria being met under the Company’s contracts with customers. At October 1, 2020, contract assets and liabilities totaled $94.3 million and $100.6 million, respectively. |
LEASES
LEASES | 9 Months Ended |
Jun. 30, 2022 | |
LEASES | |
LEASES | 13. LEASES The Company determines at lease inception whether an arrangement that provides control over the use of an asset is a lease. The Company recognizes at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. The Company has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of the Company’s leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that the Company will exercise the option, Management includes the impact of the option in the lease term for purposes of determining total future lease payments. As most of the Company’s lease agreements do not explicitly state the discount rate implicit in the lease, Management uses the Company’s incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement. The Company’s leases for real estate commonly include escalating payments. These variable lease payments are included in the calculation of the ROU asset and lease liability. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. Non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. The Company’s leases are for office space, manufacturing facilities, and machinery and equipment. The components of lease costs are shown below: Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2022 2021 Finance lease cost Amortization of right-of-use assets $ 393 $ 492 Interest on lease liabilities 242 306 Operating lease cost 2,104 1,471 Total lease costs $ 2,739 $ 2,269 Nine Months Nine Months Ended Ended June 30, June 30, (Dollars in thousands) 2022 2021 Finance lease cost Amortization of right-of-use assets $ 1,179 $ 1,477 Interest on lease liabilities 734 929 Operating lease cost 4,709 4,347 Total lease costs $ 6,622 $ 6,753 Additional information related to leases are shown below: Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,989 $ 1,320 Operating cash flows from finance leases 242 306 Financing cash flows from finance leases 307 428 Right-of-use assets obtained in exchange for operating lease liabilities 760 12,780 Nine Months Ended Nine Months Ended June 30, June 30, (Dollars in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,502 $ 4,102 Operating cash flows from finance leases 734 915 Financing cash flows from finance leases 911 1,261 Right-of-use assets obtained in exchange for operating lease liabilities 1,813 12,780 June 30, 2022 June 30, 2021 Weighted-average remaining lease term Operating leases 9.8 years 10.3 years Finance leases 12.3 years 11.9 years Weighted-average discount rate Operating leases 3.11 % 3.12 % Finance leases 4.59 % 4.31 % The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on our Consolidated Balance Sheet on June 30, 2022: (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2022 (excluding the nine months ended June 30, 2022) $ 1,316 552 2023 5,126 2,256 2024 4,330 2,315 2025 3,751 2,370 2026 and thereafter 20,251 21,431 Total minimum lease payments 34,774 28,924 Less: amounts representing interest 4,999 7,429 Present value of net minimum lease payments $ 29,775 21,495 Less: current portion of lease obligations 4,566 1,304 Non-current portion of lease obligations 25,209 20,191 ROU assets $ 28,922 17,736 Operating lease liabilities are included in the Consolidated Balance Sheet in accrued other expenses (current portion) and as a caption on the Consolidated Balance Sheet Balance Sheet ROU ROU |
EARNINGS PER SHARE (EPS) (Table
EARNINGS PER SHARE (EPS) (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
EARNINGS PER SHARE (EPS) | |
Schedule of weighted average number of shares used in the calculation of earnings per share | Three Months Nine Months Ended June 30, Ended June 30, 2022 2021 2022 2021 Weighted Average Shares Outstanding — 25,856 26,045 25,959 26,040 Dilutive Restricted Shares 94 169 91 159 Weighted Average Shares Outstanding — 25,950 26,214 26,050 26,199 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
INVENTORIES | |
Schedule of inventories | June 30, September 30, (In thousands) 2022 2021 Finished goods $ 39,904 32,998 Work in process 43,408 34,201 Raw materials 94,856 79,949 Total inventories, net $ 178,168 147,148 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill and intangible assets | June 30, September 30, (Dollars in thousands) 2022 2021 Goodwill $ 503,439 504,853 Intangible assets with determinable lives: Patents Gross carrying amount $ 2,246 2,131 Less: accumulated amortization 1,059 972 Net $ 1,187 1,159 Capitalized software Gross carrying amount $ 103,030 93,671 Less: accumulated amortization 68,643 63,740 Net $ 34,387 29,931 Customer relationships Gross carrying amount $ 290,133 288,530 Less: accumulated amortization 92,943 80,882 Net $ 197,190 207,648 Other Gross carrying amount $ 13,885 13,080 Less: accumulated amortization 6,629 4,301 Net $ 7,256 8,779 Intangible assets with indefinite lives: Trade names $ 161,317 161,733 |
Schedule of carrying amount of goodwill attributable to each business segment | Aerospace (Dollars in millions) USG Test & Defense Total Balance as of September 30, 2021 366.5 34.1 104.3 504.9 Acquisition activity and adjustments — — 5.7 5.7 Foreign currency translation (7.2) — — (7.2) Balance as of June 30, 2022 $ 359.3 34.1 110.0 503.4 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
BUSINESS SEGMENT INFORMATION | |
Schedule of Net Sales and Earnings Before Income Tax | Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2022 2021 2022 2021 NET SALES Aerospace & Defense $ 92,606 85,576 247,671 234,720 USG 67,201 47,704 194,877 141,799 Test 59,259 48,114 158,456 133,443 Consolidated totals $ 219,066 181,394 601,004 509,962 EBIT Aerospace & Defense $ 20,738 16,714 45,042 41,980 USG 13,135 8,227 37,840 27,683 Test 8,354 6,751 20,813 17,781 Corporate (loss) (11,394) (12,269) (34,604) (30,359) Consolidated EBIT 30,833 19,423 69,091 57,085 Less: Interest expense (1,331) (480) (3,084) (1,453) Earnings before income taxes $ 29,502 18,943 66,007 55,632 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
DEBT | |
Schedule of debt | June 30, September 30, (In thousands) 2022 2021 Total borrowings $ 201,000 154,000 Current portion of long-term debt (20,000) (20,000) Total long-term debt, less current portion $ 181,000 134,000 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
SHAREHOLDERS' EQUITY | |
Schedule of change in shareholders' equity | The change in shareholders’ equity for the third quarter and first nine months of 2022 and 2021 is shown below (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Common stock Beginning balance 307 306 307 306 Stock plans — 1 — 1 Ending balance 307 307 307 307 Additional paid-in-capital Beginning balance 298,353 295,796 297,644 293,682 Stock plans 1,510 782 2,219 2,896 Ending balance 299,863 296,578 299,863 296,578 Retained earnings Beginning balance 854,946 799,884 830,989 775,829 Net earnings common stockholders 23,173 14,909 51,280 43,131 Dividends paid (2,069) (2,084) (6,219) (6,251) Ending balance 876,050 812,709 876,050 812,709 Accumulated other comprehensive income (loss) Beginning balance (7,472) 1,808 (2,161) (3,657) Foreign currency translation (11,905) 535 (17,216) 6,000 Ending balance (19,377) 2,343 (19,377) 2,343 Treasury stock Beginning balance (124,961) (107,134) (107,083) (107,134) Issued under stock plans /(repurchased) (2,000) 51 (19,878) 51 Ending balance (126,961) (107,083) (126,961) (107,083) Total equity 1,029,882 1,004,854 1,029,882 1,004,854 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
REVENUES | |
Schedule of disaggregation of revenue by reportable segment | Three Months Ended June 30, 2022 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 38,918 $ 65,610 $ 54,449 $ 158,977 U.S. Government 53,688 1,591 4,810 60,089 Total revenues $ 92,606 $ 67,201 $ 59,259 $ 219,066 65 Geographic location: United States $ 79,536 $ 41,822 $ 34,662 $ 156,020 International 13,070 25,379 24,597 63,046 Total revenues $ 92,606 $ 67,201 $ 59,259 $ 219,066 Revenue recognition method: Point in time $ 35,238 $ 53,656 $ 15,827 $ 104,721 Over time 57,368 13,545 43,432 114,345 Total revenues $ 92,606 $ 67,201 $ 59,259 $ 219,066 Nine months ended June 30, 2022 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 100,407 $ 191,832 $ 147,390 $ 439,629 U.S. Government 147,264 3,045 11,066 161,375 Total revenues $ 247,671 $ 194,877 $ 158,456 $ 601,004 Geographic location: United States $ 212,849 $ 122,021 $ 88,708 $ 423,578 International 34,822 72,856 69,748 177,426 Total revenues $ 247,671 $ 194,877 $ 158,456 $ 601,004 Revenue recognition method: Point in time $ 99,464 $ 155,693 $ 43,488 $ 298,645 Over time 148,207 39,184 114,968 302,359 Total revenues $ 247,671 $ 194,877 $ 158,456 $ 601,004 Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2021 are presented in the tables below. Three months ended June 30, 2021 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 34,708 $ 46,735 $ 42,063 $ 123,506 U.S. Government 50,868 969 6,051 57,888 Total revenues $ 85,576 $ 47,704 $ 48,114 $ 181,394 Geographic location: United States $ 75,701 $ 32,111 $ 27,719 $ 135,531 International 9,875 15,593 20,395 45,863 Total revenues $ 85,576 $ 47,704 $ 48,114 $ 181,394 Revenue recognition method: Point in time $ 37,513 $ 35,242 $ 9,673 $ 82,428 Over time 48,063 12,462 38,441 98,966 Total revenues $ 85,576 $ 47,704 $ 48,114 $ 181,394 Nine months ended June 30, 2021 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 95,712 $ 139,149 $ 118,089 $ 352,950 U.S. Government 139,008 2,650 15,354 157,012 Total revenues $ 234,720 $ 141,799 $ 133,443 $ 509,962 Geographic location: United States $ 205,527 $ 96,601 $ 73,950 $ 376,078 International 29,193 45,198 59,493 133,884 Total revenues $ 234,720 $ 141,799 $ 133,443 $ 509,962 Revenue recognition method: Point in time $ 103,492 $ 105,173 $ 27,789 $ 236,454 Over time 131,228 36,626 105,654 273,508 Total revenues $ 234,720 $ 141,799 $ 133,443 $ 509,962 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
LEASES | |
Schedule of components of lease costs | Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2022 2021 Finance lease cost Amortization of right-of-use assets $ 393 $ 492 Interest on lease liabilities 242 306 Operating lease cost 2,104 1,471 Total lease costs $ 2,739 $ 2,269 Nine Months Nine Months Ended Ended June 30, June 30, (Dollars in thousands) 2022 2021 Finance lease cost Amortization of right-of-use assets $ 1,179 $ 1,477 Interest on lease liabilities 734 929 Operating lease cost 4,709 4,347 Total lease costs $ 6,622 $ 6,753 |
Schedule of additional information related to leases | Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,989 $ 1,320 Operating cash flows from finance leases 242 306 Financing cash flows from finance leases 307 428 Right-of-use assets obtained in exchange for operating lease liabilities 760 12,780 Nine Months Ended Nine Months Ended June 30, June 30, (Dollars in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,502 $ 4,102 Operating cash flows from finance leases 734 915 Financing cash flows from finance leases 911 1,261 Right-of-use assets obtained in exchange for operating lease liabilities 1,813 12,780 June 30, 2022 June 30, 2021 Weighted-average remaining lease term Operating leases 9.8 years 10.3 years Finance leases 12.3 years 11.9 years Weighted-average discount rate Operating leases 3.11 % 3.12 % Finance leases 4.59 % 4.31 % |
Schedule of reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets | (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2022 (excluding the nine months ended June 30, 2022) $ 1,316 552 2023 5,126 2,256 2024 4,330 2,315 2025 3,751 2,370 2026 and thereafter 20,251 21,431 Total minimum lease payments 34,774 28,924 Less: amounts representing interest 4,999 7,429 Present value of net minimum lease payments $ 29,775 21,495 Less: current portion of lease obligations 4,566 1,304 Non-current portion of lease obligations 25,209 20,191 ROU assets $ 28,922 17,736 |
EARNINGS PER SHARE (EPS) (Detai
EARNINGS PER SHARE (EPS) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
EARNINGS PER SHARE (EPS) | ||||
Weighted Average Shares Outstanding - Basic | 25,856 | 26,045 | 25,959 | 26,040 |
Dilutive Restricted Shares | 94 | 169 | 91 | 159 |
Weighted Average Shares Outstanding - Diluted | 25,950 | 26,214 | 26,050 | 26,199 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Nov. 04, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Payments to acquire businesses net of cash acquired | $ 15,592 | $ 6,684 | ||
Goodwill | $ 503,439 | $ 504,853 | ||
Networks Electronic Company, LLC | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses net of cash acquired | $ 15,400 | |||
Business combination recognized identifiable assets acquired and liabilities assumed current assets receivables | 600 | |||
Business combination recognized identifiable assets acquired and liabilities assumed inventory | 1,500 | |||
Business combination recognized identifiable assets acquired and liabilities assumed, property, plant and equipment | 200 | |||
Business combination recognized identifiable assets acquired and liabilities assumed current liabilities accounts payable | 700 | |||
Business combination recognized identifiable assets acquired and liabilities assumed intangible assets other than goodwill | 8,100 | |||
Goodwill | 5,700 | |||
Networks Electronic Company, LLC | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Business combination recognized identifiable assets acquired and liabilities assumed finite-lived intangibles | $ 6,300 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
SHARE-BASED COMPENSATION | ||||
Total unrecognized compensation cost related to share-based compensation arrangements | $ 12.9 | $ 12.9 | ||
Selling, general and administrative expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation cost | 1.9 | $ 2.8 | 5.3 | $ 5.5 |
Performance-Accelerated Restricted Share Awards | ||||
SHARE-BASED COMPENSATION | ||||
Pretax compensation expense | $ 1.6 | 2.5 | $ 4.4 | 4.5 |
Non-vested shares | 265,643 | 265,643 | ||
Compensation Plan for Non-Employee Directors | ||||
SHARE-BASED COMPENSATION | ||||
Pretax compensation expense | $ 0.3 | 0.3 | $ 0.9 | 1 |
Total income tax benefit recognized | $ 0.4 | $ 0.4 | $ 1 | $ 1.1 |
Vesting period | 1 year 10 months 24 days |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
INVENTORIES | ||
Finished goods | $ 39,904 | $ 32,998 |
Work in process | 43,408 | 34,201 |
Raw materials | 94,856 | 79,949 |
Total inventories, net | $ 178,168 | $ 147,148 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill | $ 503,439 | $ 504,853 |
Less: accumulated amortization | 169,274 | 149,892 |
Patents | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 2,246 | 2,131 |
Less: accumulated amortization | 1,059 | 972 |
Net | 1,187 | 1,159 |
Capitalized software | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 103,030 | 93,671 |
Less: accumulated amortization | 68,643 | 63,740 |
Net | 34,387 | 29,931 |
Customer relationships | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 290,133 | 288,530 |
Less: accumulated amortization | 92,943 | 80,882 |
Net | 197,190 | 207,648 |
Other | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross carrying amount | 13,885 | 13,080 |
Less: accumulated amortization | 6,629 | 4,301 |
Net | 7,256 | 8,779 |
Trade names | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Trade names | $ 161,317 | $ 161,733 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Changes in goodwill | |
Balance as of September 30, 2021 | $ 504,853 |
Acquisition activity and adjustments | 5,700 |
Foreign currency translation | (7,200) |
Balance as of March 31, 2022 | 503,439 |
USG | |
Changes in goodwill | |
Balance as of September 30, 2021 | 366,500 |
Foreign currency translation | (7,200) |
Balance as of March 31, 2022 | 359,300 |
Test | |
Changes in goodwill | |
Balance as of September 30, 2021 | 34,100 |
Balance as of March 31, 2022 | 34,100 |
Aerospace & Defense | |
Changes in goodwill | |
Balance as of September 30, 2021 | 104,300 |
Acquisition activity and adjustments | 5,700 |
Balance as of March 31, 2022 | $ 110,000 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) segment | Jun. 30, 2021 USD ($) | |
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | $ 219,066 | $ 181,394 | $ 601,004 | $ 509,962 |
EBIT | 30,833 | 19,423 | 69,091 | 57,085 |
Less: Interest expense | (1,331) | (480) | (3,084) | (1,453) |
Earnings before income taxes | 29,502 | 18,943 | $ 66,007 | 55,632 |
Number of reportable segments | segment | 3 | |||
Aerospace & Defense | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 92,606 | 85,576 | $ 247,671 | 234,720 |
EBIT | 20,738 | 16,714 | 45,042 | 41,980 |
USG | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 67,201 | 47,704 | 194,877 | 141,799 |
EBIT | 13,135 | 8,227 | 37,840 | 27,683 |
Test | ||||
BUSINESS SEGMENT INFORMATION | ||||
NET SALES | 59,259 | 48,114 | 158,456 | 133,443 |
EBIT | 8,354 | 6,751 | 20,813 | 17,781 |
Corporate (loss) | ||||
BUSINESS SEGMENT INFORMATION | ||||
EBIT | $ (11,394) | $ (12,269) | $ (34,604) | $ (30,359) |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
DEBT | ||
Total borrowings | $ 201,000 | $ 154,000 |
Current portion of long-term debt | (20,000) | (20,000) |
Total long-term debt, less current portion | $ 181,000 | $ 134,000 |
DEBT - Additional information (
DEBT - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
DEBT | |||||
Available to borrow under the credit facility | $ 291,000 | $ 291,000 | |||
Cash on hand | 61,019 | 61,019 | $ 56,232 | ||
Long-term Debt, Current Maturities | 20,000 | 20,000 | |||
Letters of Credit Outstanding, Amount | $ 7,800 | $ 7,800 | |||
Equity interests in direct and indirect material foreign subsidiaries, pledged as collateral (as a percent) | 100% | 100% | |||
Revolving Credit Facility | |||||
DEBT | |||||
Line of Credit Facility, Amount Outstanding | $ 500,000 | $ 500,000 | |||
Line of Credit Facility, Commitment Fee Amount | $ 250,000 | ||||
Debt Instrument, Interest Rate | 2.20% | 1.16% | 1.57% | 1.33% | |
Maximum | |||||
DEBT | |||||
Incremental term loan | $ 250,000 | $ 250,000 |
INCOME TAX EXPENSE (Details)
INCOME TAX EXPENSE (Details) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
INCOME TAX EXPENSE | ||||
Effective income tax rate | 21.50% | 21.30% | 22.30% | 22.50% |
Decreasing the effective tax rate | 1.60% | 3.90% | 0.70% | 1.20% |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Changes in shareholder's equity | ||||
Beginning Balance | $ 1,019,696 | |||
Net earnings common stockholders | $ 23,173 | $ 14,909 | 51,280 | $ 43,131 |
Ending Balance | 1,029,882 | 1,004,854 | 1,029,882 | 1,004,854 |
Common Stock | ||||
Changes in shareholder's equity | ||||
Beginning Balance | 307 | 306 | 307 | 306 |
Stock plans | 1 | 1 | ||
Ending Balance | 307 | 307 | 307 | 307 |
Additional Paid-In Capital | ||||
Changes in shareholder's equity | ||||
Beginning Balance | 298,353 | 295,796 | 297,644 | 293,682 |
Stock plans | 1,510 | 782 | 2,219 | 2,896 |
Ending Balance | 299,863 | 296,578 | 299,863 | 296,578 |
Retained Earnings | ||||
Changes in shareholder's equity | ||||
Beginning Balance | 854,946 | 799,884 | 830,989 | 775,829 |
Net earnings common stockholders | 23,173 | 14,909 | 51,280 | 43,131 |
Dividends paid | (2,069) | (2,084) | (6,219) | (6,251) |
Ending Balance | 876,050 | 812,709 | 876,050 | 812,709 |
Accumulated Other Comprehensive Income (Loss) | ||||
Changes in shareholder's equity | ||||
Beginning Balance | (7,472) | 1,808 | (2,161) | (3,657) |
Foreign currency translation | (11,905) | 535 | (17,216) | 6,000 |
Ending Balance | (19,377) | 2,343 | (19,377) | 2,343 |
Treasury Stock | ||||
Changes in shareholder's equity | ||||
Beginning Balance | (124,961) | (107,134) | (107,083) | (107,134) |
Issued under stock plans /(repurchased) | (2,000) | 51 | (19,878) | 51 |
Ending Balance | $ (126,961) | $ (107,083) | $ (126,961) | $ (107,083) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
FAIR VALUE MEASUREMENTS | ||
Fair Value of Financial Instruments | $ 0 | $ 0 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | $ 219,066 | $ 181,394 | $ 601,004 | $ 509,962 |
Point in time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 104,721 | 82,428 | 298,645 | 236,454 |
Over time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 114,345 | 98,966 | 302,359 | 273,508 |
United States [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 156,020 | 135,531 | 423,578 | 376,078 |
International | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 63,046 | 45,863 | 177,426 | 133,884 |
Commercial | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 158,977 | 123,506 | 439,629 | 352,950 |
Government [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 60,089 | 57,888 | 161,375 | 157,012 |
Aerospace & Defense | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 92,606 | 85,576 | 247,671 | 234,720 |
Aerospace & Defense | Point in time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 35,238 | 37,513 | 99,464 | 103,492 |
Aerospace & Defense | Over time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 57,368 | 48,063 | 148,207 | 131,228 |
Aerospace & Defense | United States [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 79,536 | 75,701 | 212,849 | 205,527 |
Aerospace & Defense | International | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 13,070 | 9,875 | 34,822 | 29,193 |
Aerospace & Defense | Commercial | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 38,918 | 34,708 | 100,407 | 95,712 |
Aerospace & Defense | Government [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 53,688 | 50,868 | 147,264 | 139,008 |
USG | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 67,201 | 47,704 | 194,877 | 141,799 |
USG | Point in time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 53,656 | 35,242 | 155,693 | 105,173 |
USG | Over time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 13,545 | 12,462 | 39,184 | 36,626 |
USG | United States [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 41,822 | 32,111 | 122,021 | 96,601 |
USG | International | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 25,379 | 15,593 | 72,856 | 45,198 |
USG | Commercial | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 65,610 | 46,735 | 191,832 | 139,149 |
USG | Government [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 1,591 | 969 | 3,045 | 2,650 |
Test | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 59,259 | 48,114 | 158,456 | 133,443 |
Test | Point in time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 15,827 | 9,673 | 43,488 | 27,789 |
Test | Over time | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 43,432 | 38,441 | 114,968 | 105,654 |
Test | United States [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 34,662 | 27,719 | 88,708 | 73,950 |
Test | International | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 24,597 | 20,395 | 69,748 | 59,493 |
Test | Commercial | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | 54,449 | 42,063 | 147,390 | 118,089 |
Test | Government [Member] | ||||
Disaggregation of revenues | ||||
Revenue from contract with customer excluding assessed tax | $ 4,810 | $ 6,051 | $ 11,066 | $ 15,354 |
REVENUES - Remaining Performanc
REVENUES - Remaining Performance Obligations (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2022 | Oct. 01, 2020 | |
Remaining Performance Obligations | ||
Remaining performance obligations amount | $ 706.8 | |
Revenue Recognized | 74 | |
Contract assets | 115.8 | |
Contract liabilities | $ 122.2 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Remaining Performance Obligations | ||
Contract assets | $ 94.3 | |
Contract liabilities | $ 100.6 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | ||
Remaining Performance Obligations | ||
Percentage of remaining performance obligation expected to be recognized | 80% | |
Revenue remaining performance obligation expected timing of satisfaction, Period | 12 months |
LEASES - Components of lease co
LEASES - Components of lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases | ||||
Option to extend | true | |||
Finance lease cost | ||||
Amortization of right-of-use assets | $ 393 | $ 492 | $ 1,179 | $ 1,477 |
Interest on lease liabilities | 242 | 306 | 734 | 929 |
Operating lease cost | 2,104 | 1,471 | 4,709 | 4,347 |
Total lease costs | $ 2,739 | $ 2,269 | $ 6,622 | $ 6,753 |
Maximum | ||||
Leases | ||||
Lease term | 20 years | 20 years |
LEASES - Additional information
LEASES - Additional information related to leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating cash flows from operating leases | $ 1,989 | $ 1,320 | $ 4,502 | $ 4,102 |
Operating cash flows from finance leases | 242 | 306 | 734 | 915 |
Financing cash flows from finance leases | 307 | 428 | 911 | 1,261 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 760 | $ 12,780 | $ 1,813 | $ 12,780 |
Weighted-average remaining lease term | ||||
Operating leases | 9 years 9 months 18 days | 10 years 3 months 18 days | 9 years 9 months 18 days | 10 years 3 months 18 days |
Finance leases | 12 years 3 months 18 days | 11 years 10 months 24 days | 12 years 3 months 18 days | 11 years 10 months 24 days |
Weighted-average discount rate | ||||
Operating leases | 3.11% | 3.12% | 3.11% | 3.12% |
Finance leases | 4.59% | 4.31% | 4.59% | 4.31% |
LEASES - Reconciliation of futu
LEASES - Reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Operating leases | ||
2022 (excluding the nine months ended June 30, 2022) | $ 1,316 | |
2023 | 5,126 | |
2024 | 4,330 | |
2025 | 3,751 | |
2026 and thereafter | 20,251 | |
Total minimum lease payments | 34,774 | |
Less: amounts representing interest | 4,999 | |
Present value of net minimum lease payments | $ 29,775 | |
Location of operating lease liabilities included on Consolidated Balance Sheets | Accrued other expenses, Other liabilities | |
Less: current portion of lease obligations | $ 4,566 | |
Non-current portion of lease obligations | 25,209 | $ 28,032 |
ROU assets | $ 28,922 | $ 31,846 |
Location of operating lease ROU assets included on Consolidated Balance Sheets | ROU assets | |
Finance leases | ||
2022 (excluding the nine months ended June 30, 2022) | $ 552 | |
2023 | 2,256 | |
2024 | 2,315 | |
2025 | 2,370 | |
2026 and thereafter | 21,431 | |
Total minimum lease payments | 28,924 | |
Less: amounts representing interest | 7,429 | |
Present value of net minimum lease payments | $ 21,495 | |
Location of finance lease liabilities included on Consolidated Balance Sheets | Accrued other expenses, Other liabilities | |
Less: current portion of lease obligations | $ 1,304 | |
Non-current portion of lease obligations | 20,191 | |
ROU assets | $ 17,736 | |
Location of finance lease ROU assets included on Consolidated Balance Sheets | Property, Plant and Equipment, Net |