ESCO (ESE) 10-Q 7 Feb 20 2020 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2019	Jan. 31, 2020
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2019
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		25,989,029
Entity Central Index Key	0000866706
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 171,728	$ 163,365
Costs and expenses:
Cost of sales	106,727	102,454
Selling, general and administrative expenses	42,105	38,540
Amortization of intangible assets	5,810	4,400
Interest expense, net	2,421	1,855
Other expenses (income), net	295	(7,379)
Total costs and expenses	157,358	139,870
Earnings before income taxes	14,370	23,495
Income tax expense	3,606	6,145
Earnings from continuing operations	10,764	17,350
Loss from discontinued operations, net of tax expense (benefit) of $269 and $(205)	(601)	(33)
Gain on sale of discontinued operations, net of tax expense of $23,734	76,614
Earnings (loss) from discontinued operations	76,013	(33)
Net earnings	$ 86,777	$ 17,317
Earnings per share:
Basic - Continuing operations	$ 0.41	$ 0.67
Basic - Discontinued operations	2.93	0
Basic - Net earnings	3.34	0.67
Diluted - Continuing operations	0.41	0.66
Diluted - Discontinued operations	2.91	0
Diluted - Net earnings	$ 3.32	$ 0.66

CONSOLIDATED STATEMENTS OF OP_2

CONSOLIDATED STATEMENTS OF OPERATIONS (Paranthetical) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Loss from discontinued operations, tax expense (benefit)	$ 269	$ (205)
Gain on sale of discontinued operations, tax expense	$ 23,734

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net earnings	$ 86,777	$ 17,317
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	3,923	(4,529)
Net unrealized (loss) gain on derivative instruments		(25)
Total other comprehensive income (loss), net of tax	3,923	(4,554)
Comprehensive income	$ 90,700	$ 12,763

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
Current assets:
Cash and cash equivalents	$ 96,692	$ 61,808
Accounts receivable, net	160,714	158,715
Contract assets	93,498	110,211
Inventories	133,977	124,956
Other current assets	13,417	14,190
Assets of discontinued operations - current		25,314
Total current assets	498,298	495,194
Property, plant and equipment, net of accumulated depreciation of $118,248 and $113,520, respectively	135,576	127,843
Intangible assets, net of accumulated amortization of $113,507 and $107,247, respectively	378,248	381,605
Goodwill	390,383	390,256
Operating lease assets	20,209
Other assets	8,855	4,445
Assets of discontinued operations - other		67,377
Total assets	1,431,569	1,466,720
Current liabilities:
Current maturities of long-term debt	20,000	20,000
Accounts payable	53,056	63,800
Contract liabilities	84,813	81,177
Accrued salaries	23,434	37,194
Accrued other expenses	70,727	37,947
Liabilities of discontinued operations - current		11,517
Total current liabilities	252,030	251,635
Pension obligations	23,022	22,682
Deferred tax liabilities	60,486	60,856
Non-current operating lease liabilities	16,009
Other liabilities	34,531	36,326
Long-term debt	130,000	265,000
Liabilities of discontinued operations - other		3,999
Total liabilities	516,078	640,498
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 30,596,940 and 30,596,940 shares, respectively	306	306
Additional paid-in capital	293,056	292,408
Retained earnings	769,439	684,741
Accumulated other comprehensive loss, net of tax	(40,051)	(43,974)
Total stockholders' equity before treasury stock	1,022,750	933,481
Less treasury stock, at cost: 4,615,627 and 4,615,627 common shares, respectively	(107,259)	(107,259)
Total shareholders' equity	915,491	826,222
Total liabilities and shareholders' equity	$ 1,431,569	$ 1,466,720

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
CONSOLIDATED BALANCE SHEETS
Accumulated depreciation	$ 118,248	$ 113,520
Accumulated amortization	$ 113,507	$ 107,247
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	30,596,940	30,596,940
Treasury stock, shares	4,615,627	4,615,627

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net earnings	$ 86,777	$ 17,317
(Earnings) loss from discontinued operations	(76,013)	33
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	10,540	8,566
Stock compensation expense	1,446	1,373
Changes in assets and liabilities	(19,051)	(10,647)
Change in property, plant and equipment due to gain on sale of building		(8,922)
Effect of deferred taxes	(370)	(3,258)
Net cash provided by operating activities - continuing operations	3,329	4,462
Net cash (used) provided by operating activities - discontinued operations	(622)	3,640
Net cash provided by operating activities	2,707	8,102
Cash flows from investing activities:
Proceeds from sale of building and land		17,201
Additions to capitalized software	(1,923)	(2,060)
Capital expenditures	(12,647)	(4,776)
Net cash (used) provided by investing activities - continuing operations	(14,570)	10,365
Proceeds from sale of discontinued operations	183,997
Capital expenditures - discontinued operations	(1,728)	(4,109)
Net cash provided (used) by investing activities - discontinued operations	182,269	(4,109)
Net cash provided (used) by investing activities	167,699	6,256
Cash flows from financing activities:
Proceeds from long-term debt and short-term borrowings	10,000	8,273
Principal payments on long-term debt	(145,000)	(13,000)
Dividends paid	(2,079)	(2,073)
Other		(159)
Net cash used by financing activities - continuing operations	(137,079)	(6,959)
Net cash (used) provided by financing activities - discontinued operations	(2,140)	720
Net cash (used) by financing activities	(139,219)	(6,239)
Effect of exchange rate changes on cash and cash equivalents	3,697	(1,966)
Net increase in cash and cash equivalents	34,884	6,153
Cash and cash equivalents, beginning of period	61,808	30,477
Cash and cash equivalents, end of period	96,692	36,630
Supplemental cash flow information:
Interest paid	2,150	1,983
Income taxes paid (including state and foreign)	$ 305	$ 119

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Dec. 31, 2019
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 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, 2019. Certain 2019 amounts have been reclassified to conform with the 2020 presentation. The Company’s results for the three-month period ended December 31, 2019 are not necessarily indicative of the results for the entire 2020 fiscal year. References to the first quarters of 2020 and 2019 represent the fiscal quarters ended December 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. Beginning in the first quarter of 2020, Management has renamed the Filtration / Fluid Flow (Filtration) segment as Aerospace & Defense (A&D) to better reflect the composition of the segment’s products, end markets and customer characteristics. The A&D’s segment’s individual legal and operating entities, historical financial results, and management structure are unchanged from what was formerly presented as Filtration.

TECHNICAL PACKAGING DIVESTITURE

TECHNICAL PACKAGING DIVESTITURE	3 Months Ended
	Dec. 31, 2019
TECHNICAL PACKAGING DIVESTITURE
TECHNICAL PACKAGING DIVESTITURE	2. TECHNICAL PACKAGING DIVESTITURE On December 31, 2019, the Company completed the sale of its Technical Packaging business segment, consisting of the Company's wholly-owned subsidiaries Thermoform Engineered Quality LLC, Plastique Ltd. and Plastique sp. z o.o. (the "Technical Packaging Business"), to Sonoco Plastics, Inc. and Sonoco Holdings, Inc. ("Buyers"), two wholly-owned subsidiaries of Sonoco Products Company, pursuant to the Equity Purchase Agreement entered into on November 15, 2019. 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. Results of operations, financial position and cash flows for the Technical Packaging business is reflected as discontinued operations in the consolidated financial statements and related notes for all periods presented. The pretax loss recorded in discontinued operations related to the Technical Packaging business was $0.3 million and $0.1 million for the three-month periods ended December 31, 2019 and 2018, respectively. Net sales from the Technical Packaging business were $16.5 million and $19.2 million for the three-month periods ended December 31, 2019 and 2018, respectively. The Company received net proceeds from the sale of approximately $184 million and recorded a $76.6 million after-tax gain on the sale in the first quarter of 2020. The major classes of assets and liabilities of the Technical Packaging business included in the Consolidated Balance Sheet at September 30, 2019 are shown below (in millions). ​ ​ ​ ​ ​ ​ September 30, 2019 Assets: ​ Accounts receivable, net $ 15.7 Contract assets, net ​ 5.1 Inventories ​ 3.9 Other current assets ​ 0.6 Current assets ​ 25.3 Property, plant & equipment, net ​ 33.6 Intangible assets, net ​ 11.4 Goodwill ​ 19.0 Other assets ​ 3.4 Total assets $ 92.7 Liabilities: ​ Accounts payable $ 7.6 Accrued expenses and other current liabilities ​ 3.9 Current liabilities ​ 11.5 Other liabilities ​ 4.0 Total liabilities $ 15.5 ​

ACCOUNTING STANDARDS UPDATE

ACCOUNTING STANDARDS UPDATE	3 Months Ended
	Dec. 31, 2019
ACCOUNTING STANDARDS UPDATE
ACCOUNTING STANDARDS UPDATE	3. ACCOUNTING STANDARDS UPDATE In February 2016, the FASB issued ASU No. 2016-062, " Leases Leases Leases in the

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)	3 Months Ended
	Dec. 31, 2019
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS)	4. 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 December 31, ​ 2019 2018 ​ ​ ​ ​ ​ Weighted Average Shares Outstanding - Basic ​ 25,981 ​ 25,911 Dilutive Options and Restricted Shares 187 209 Adjusted Shares - Diluted 26,168 26,120 ​

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	3 Months Ended
	Dec. 31, 2019
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	5. 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 $1.1 million and $1.1 million for the three-month periods ended December 31, 2019 and 2018, respectively. There were 264,399 non-vested shares outstanding as of December 31, 2019. Non-Employee Directors Plan Compensation expense related to the non-employee director grants was $0.3 million and $0.3 million for the three-month periods ended December 31, 2019 and 2018, respectively. 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 $1.4 million and $1.4 million for the three-month periods ended December 31, 2019 and 2018, respectively. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $0.3 million and $0.3 million for the three-month periods ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there was $7.9 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 1.8 years.

INVENTORIES

INVENTORIES	3 Months Ended
	Dec. 31, 2019
INVENTORIES
INVENTORIES	6. INVENTORIES Inventories, net, from continuing operations consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ September 30, (In thousands) 2019 2019 ​ ​ ​ ​ ​ ​ ​ Finished goods ​ $ 22,472 ​ 23,550 Work in process ​ 33,417 ​ 26,407 Raw materials ​ 78,088 74,999 Total inventories ​ $ 133,977 ​ 124,956 ​

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	3 Months Ended
	Dec. 31, 2019
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	7. GOODWILL AND OTHER INTANGIBLE ASSETS Included on the Company’s Consolidated Balance Sheets at December 31, 2019 and September 30, 2019 are the following intangible assets gross carrying amounts and accumulated amortization from continuing operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ September 30, (Dollars in thousands) 2019 2019 Goodwill ​ $ 390,383 ​ 390,256 ​ ​ ​ ​ ​ ​ ​ Intangible assets with determinable lives: ​ ​ ​ Patents ​ ​ ​ Gross carrying amount ​ $ 2,007 ​ 1,945 Less: accumulated amortization ​ 775 748 Net ​ $ 1,232 ​ 1,197 ​ ​ ​ ​ ​ ​ ​ Capitalized software ​ ​ ​ Gross carrying amount ​ $ 80,886 ​ 78,962 Less: accumulated amortization ​ 51,075 48,530 Net ​ $ 29,811 ​ 30,432 ​ ​ ​ ​ ​ ​ ​ Customer relationships ​ ​ ​ Gross carrying amount ​ $ 227,296 ​ 227,225 Less: accumulated amortization ​ 58,408 55,326 Net ​ $ 168,888 ​ 171,899 ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ Gross carrying amount ​ $ 5,195 ​ 5,441 Less: accumulated amortization ​ 2,800 2,645 Net ​ $ 2,395 ​ 2,796 Intangible assets with indefinite lives: ​ ​ ​ Trade names ​ $ 175,922 ​ 175,281 ​ The changes in the carrying amount of goodwill attributable to each business segment for the three months ended December 31, 2019 is as follows on a continuing operations basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aerospace ​ ​ ​ (Dollars in millions) USG Test & Defense Total Balance as of September 30, 2019 ​ 254.0 ​ 34.1 ​ 102.2 ​ 390.3 Foreign currency translation ​ 0.1 ​ — ​ — ​ 0.1 Balance as of December 31, 2019 ​ $ 254.1 ​ 34.1 ​ 102.2 ​ 390.4 ​

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION	3 Months Ended
	Dec. 31, 2019
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION	8. 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 (formerly called Filtration/Fluid Flow), RF Shielding and Test (Test), and Utility Solutions Group (USG). 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. and its affiliate Hi-Tech Metals, Inc. (collectively referred to as Mayday) and Globe Composite Solutions, LLC (Globe). The companies within this segment primarily design and manufacture specialty filtration and naval products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; unique filter mechanisms used in micro-propulsion devices for satellites and 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 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. 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. 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 and data management 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. 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 from continuing operations before interest and taxes. The table below is presented on the basis of continuing operations and excludes discontinued operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended December 31, (In thousands) 2019 2018 NET SALES ​ ​ Aerospace & Defense ​ $ 77,511 ​ 66,224 Test ​ 41,383 ​ 41,286 USG ​ 52,834 ​ 55,855 Consolidated totals ​ $ 171,728 ​ 163,365 ​ ​ ​ ​ ​ ​ ​ EBIT ​ ​ ​ Aerospace & Defense ​ $ 12,513 ​ 10,610 Test ​ 4,656 ​ 3,310 USG ​ 9,288 ​ 21,546 Corporate (loss) ​ (9,666) (10,116) Consolidated EBIT ​ 16,791 ​ 25,350 Less: Interest expense ​ (2,421) (1,855) Earnings before income taxes from continuing operations ​ $ 14,370 ​ 23,495 ​ 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 from continuing operations 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	3 Months Ended
	Dec. 31, 2019
DEBT
DEBT	9. DEBT The Company’s debt is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ September 30, (In thousands) 2019 2019 Total borrowings ​ $ 150,000 ​ 285,000 Current portion of long-term debt ​ (20,000) (20,000) Total long-term debt, less current portion ​ $ 130,000 ​ 265,000 ​ On September 27, 2019, the Company entered into a new five-year credit facility (“the Credit Facility”), modifying its previous credit facility which would have matured December 21, 2020. 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 December 31, 2019, the Company had approximately $341 million available to borrow under the Credit Facility, plus the $250 million increase option, in addition to $96.7 million cash on hand. The Company classified $20.0 million as the current portion of long-term debt as of December 31, 2019, 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 $8.5 million at December 31, 2019. Interest on borrowings under the Credit Facility is calculated at a spread over either the London Interbank Offered Rate (LIBOR ), the New York Federal Reserve Bank Rate or the prime rate, 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 3.18% and 3.25% for the three-month periods ending December 31, 2019 and 2018, respectively. As of December 31, 2019, the Company was in compliance with all covenants.

INCOME TAX EXPENSE

INCOME TAX EXPENSE	3 Months Ended
	Dec. 31, 2019
INCOME TAX EXPENSE
INCOME TAX EXPENSE	10. INCOME TAX EXPENSE The first quarter 2020 effective income tax rate from continuing operations was 25.1% compared to 26.2% in the first quarter of 2019. The income tax expense in the first quarter of 2019 was unfavorably impacted by return to provision true-ups increasing the first quarter 2019 effective tax rate by 1.1%.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	3 Months Ended
	Dec. 31, 2019
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY	11. SHAREHOLDERS’ EQUITY The change in shareholders’ equity for the first three months of 2020 and 2019 is shown below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended December 31, ​ 2019 2018 ​ ​ ​ ​ ​ Common stock ​ ​ ​ ​ Beginning balance ​ 306 ​ 305 Stock plans ​ — ​ — Ending balance ​ 306 ​ 305 ​ ​ ​ ​ ​ Additional paid-in-capital ​ ​ ​ ​ Beginning balance ​ 292,408 ​ 291,190 Stock plans ​ (648) ​ 1,103 Ending balance ​ 293,056 ​ 292,293 ​ ​ ​ ​ ​ Retained earnings ​ ​ ​ ​ Beginning balance ​ 684,741 ​ 606,837 Net earnings common stockholders ​ 86,777 ​ 17,317 Dividends paid ​ (2,079) ​ (2,073) Adoption of accounting standards updates ​ — ​ 5,589 Ending balance ​ 769,439 ​ 627,670 ​ ​ ​ ​ ​ Accumulated other comprehensive income (loss) ​ ​ ​ ​ Beginning balance ​ (43,974) ​ (31,528) Foreign currency translation ​ 3,923 ​ (4,529) Forward exchange contracts ​ — ​ (25) Ending balance ​ (40,051) ​ (36,082) ​ ​ ​ ​ ​ Treasury stock ​ ​ ​ ​ Beginning balance ​ (107,259) ​ (107,394) Issued under stock plans ​ — ​ — Ending balance ​ (107,259) ​ (107,394) ​ ​ ​ ​ ​ Total equity ​ 915,491 ​ 776,792 ​

RETIREMENT PLANS

RETIREMENT PLANS	3 Months Ended
	Dec. 31, 2019
RETIREMENT PLANS
RETIREMENT PLANS	12. RETIREMENT PLANS A summary of net periodic benefit expense for the Company’s defined benefit plans for the three-month periods ended December 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 ​ ​ Ended December 31, (In thousands) 2019 2018 Defined benefit plans ​ ​ ​ ​ Interest cost ​ $ 824 ​ 875 Expected return on assets ​ (1,041) ​ (1,086) Amortization of: ​ ​ ​ Prior service cost ​ — ​ — Actuarial loss ​ 543 487 Net periodic benefit cost ​ $ 326 ​ 276 ​

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS	3 Months Ended
	Dec. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL INSTRUMENTS	13. 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 $150 million to hedge some of its exposure to variability in future LIBOR-based interest payments on variable rate debt, of which one swap is outstanding as of December 31, 2019. In addition, the Company’s Canadian subsidiary Morgan Schaffer enters into foreign exchange contracts to manage foreign currency risk as a portion of their revenue is denominated in U.S. dollars. The Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized may differ for open positions, which remain subject to ongoing market price fluctuations until settlement. All derivative instruments are reported in either accrued expenses or other assets on the balance sheet at fair value. For derivative instruments designated as cash flow hedges, the gain or loss on the derivative is deferred in accumulated other comprehensive income until recognized in earnings with the underlying hedged item. The interest rate swaps entered into during 2018 were not designated as cash flow hedges and, therefore, the gain or loss on the derivative is reflected in earnings each period. ​ The following is a summary of the notional transaction amounts and fair values for the Company’s outstanding derivative financial instruments by risk category and instrument type as of December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair ​ ​ ​ ​ ​ Notional ​ Value ​ Fix ​ (In thousands) amount (US$) Rate Forward contracts 5,500 USD 80 Interest rate swap 150,000 USD (918) 2.24 % ​

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Dec. 31, 2019
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	14. 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 December 31, 2019 and September 30, 2019 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 and interest rate swaps are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, as presented below as of December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Level 1 Level 2 Level 3 Total Assets (Liabilities): ​ ​ ​ ​ Forward contracts and interest rate swaps ​ $ — ​ (838) ​ $ — ​ (838) ​ 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-month period ended December 31, 2019.

REVENUES

REVENUES	3 Months Ended
	Dec. 31, 2019
REVENUES
REVENUES	15. REVENUES Disaggregation of Revenues Revenues by customer type, geographic location, and revenue recognition method for the three-month period ended December 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 each reportable segment on a continuing operations basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aerospace ​ ​ ​ ​ ​ ​ (In thousands) ​ & Defense ​ Test ​ USG ​ Total Customer type: ​ ​ ​ ​ Commercial ​ $ 41,907 ​ $ 35,249 ​ $ 52,235 ​ $ 129,391 U.S. Government ​ 35,604 ​ 6,134 ​ 599 ​ 42,337 Total revenues ​ $ 77,511 ​ $ 41,383 ​ $ 52,834 ​ $ 171,728 ​ ​ ​ ​ ​ ​ ​ ​ ​ Geographic location: ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 64,706 ​ $ 24,837 ​ $ 34,651 ​ $ 124,194 International ​ 12,805 ​ 16,546 ​ 18,183 ​ 47,534 Total revenues ​ $ 77,511 ​ $ 41,383 ​ $ 52,834 ​ $ 171,728 ​ ​ ​ ​ ​ Revenue recognition method: ​ ​ ​ ​ Point in time ​ $ 35,761 ​ $ 7,611 ​ $ 40,315 ​ $ 83,687 Over time ​ 41,750 ​ 33,772 ​ 12,519 ​ 88,041 Total revenues ​ $ 77,511 ​ $ 41,383 ​ $ 52,834 ​ $ 171,728 ​ 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 December 31, 2019, the Company had $500 million in remaining performance obligations of which the Company expects to recognize revenues of approximately 76% 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. At December 31, 2019, contract assets and liabilities totaled $93.5 million and $84.8 million, respectively. During the first quarter of 2020, the Company recognized approximately $26 million in revenues that were included in the contract liabilities balance at the adoption date.

LEASES

LEASES	3 Months Ended
	Dec. 31, 2019
LEASES
LEASES	16. LEASES As described in Note 3, effective October 1, 2019, the Company adopted ASC 842, 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 ​ ​ December 31, (Dollars in thousands) 2019 Finance lease cost ​ Amortization of right-of-use assets ​ $ 622 Interest on lease liabilities ​ 328 Operating lease cost ​ 1,419 Total lease costs ​ $ 2,369 ​ Additional information related to leases are shown below: ​ ​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended ​ ​ December 31, (Dollars in thousands) 2019 Cash paid for amounts included in the measurement of lease liabilities ​ ​ Operating cash flows from operating leases ​ $ 1,408 ​ Operating cash flows from finance leases ​ 138 ​ Financing cash flows from finance leases ​ 351 ​ Right-of-use assets obtained in exchange for lease liabilities ​ ​ Operating leases ​ $ 22,014 ​ Weighted-average remaining lease term ​ ​ Operating leases ​ 6.51 years ​ Finance leases ​ 13.16 years ​ Weighted-average discount rate ​ ​ Operating leases ​ 3.14 % Finance leases ​ 4.28 % ​ 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 December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ Operating Finance Years Ending September 30: Leases Leases 2020 (excluding the three months ended December 31, 2019) ​ $ 3,887 ​ 2,029 2021 ​ 4,451 ​ 2,930 2022 ​ 3,787 ​ 3,011 2023 ​ 2,968 ​ 3,094 2024 and thereafter ​ 7,808 ​ 31,481 Total minimum lease payments ​ 22,901 ​ 42,545 Less: amounts representing interest ​ 2,321 11,144 Present value of net minimum lease payments ​ $ 20,580 ​ 31,401 Less: current portion of lease obligations ​ 4,571 ​ 1,866 Non-current portion of lease obligations ​ 16,009 ​ 29,535 ROU assets ​ $ 20,209 ​ 28,619 ​ Operating lease liabilities are included in the Consolidated Balance Sheet in accrued accrued caption Property As the Company has not restated prior-year information for the adoption of ASC 842, the following presents the Company’s future minimum lease payments for operating and capital leases under ASC 840 for continuing operations as of September 30, 2019: ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2020 ​ $ 5,574 ​ 2,518 2021 ​ 4,558 ​ 2,930 2022 ​ 3,950 ​ 3,012 2023 ​ 3,270 ​ 3,094 2024 and thereafter ​ 8,443 ​ 31,499 Total minimum lease payments ​ $ 25,795 ​ 43,053 Less: amounts representing interest ​ * ​ 11,241 Present value of net minimum lease payments ​ * ​ 31,812 Less: Current portion of lease obligations ​ * ​ 1,832 Non-current portion of lease obligations ​ * ​ 29,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Not applicable for operating leases

TECHNICAL PACKAGING DIVESTITU_2

TECHNICAL PACKAGING DIVESTITURE (Tables)	3 Months Ended
	Dec. 31, 2019
TECHNICAL PACKAGING DIVESTITURE
Schedule of major classes of the Technical Packaging business assets and liabilities held for sale	​ ​ ​ ​ ​ ​ September 30, 2019 Assets: ​ Accounts receivable, net $ 15.7 Contract assets, net ​ 5.1 Inventories ​ 3.9 Other current assets ​ 0.6 Current assets ​ 25.3 Property, plant & equipment, net ​ 33.6 Intangible assets, net ​ 11.4 Goodwill ​ 19.0 Other assets ​ 3.4 Total assets $ 92.7 Liabilities: ​ Accounts payable $ 7.6 Accrued expenses and other current liabilities ​ 3.9 Current liabilities ​ 11.5 Other liabilities ​ 4.0 Total liabilities $ 15.5

EARNINGS PER SHARE (EPS) (Table

EARNINGS PER SHARE (EPS) (Tables)	3 Months Ended
	Dec. 31, 2019
EARNINGS PER SHARE (EPS)
Schedule of weighted average number of shares used in the calculation of earnings per share	​ ​ ​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended December 31, ​ 2019 2018 ​ ​ ​ ​ ​ Weighted Average Shares Outstanding - Basic ​ 25,981 ​ 25,911 Dilutive Options and Restricted Shares 187 209 Adjusted Shares - Diluted 26,168 26,120

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Dec. 31, 2019
INVENTORIES
Schedule of inventories	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ September 30, (In thousands) 2019 2019 ​ ​ ​ ​ ​ ​ ​ Finished goods ​ $ 22,472 ​ 23,550 Work in process ​ 33,417 ​ 26,407 Raw materials ​ 78,088 74,999 Total inventories ​ $ 133,977 ​ 124,956

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	3 Months Ended
	Dec. 31, 2019
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of goodwill and intangible assets	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ September 30, (Dollars in thousands) 2019 2019 Goodwill ​ $ 390,383 ​ 390,256 ​ ​ ​ ​ ​ ​ ​ Intangible assets with determinable lives: ​ ​ ​ Patents ​ ​ ​ Gross carrying amount ​ $ 2,007 ​ 1,945 Less: accumulated amortization ​ 775 748 Net ​ $ 1,232 ​ 1,197 ​ ​ ​ ​ ​ ​ ​ Capitalized software ​ ​ ​ Gross carrying amount ​ $ 80,886 ​ 78,962 Less: accumulated amortization ​ 51,075 48,530 Net ​ $ 29,811 ​ 30,432 ​ ​ ​ ​ ​ ​ ​ Customer relationships ​ ​ ​ Gross carrying amount ​ $ 227,296 ​ 227,225 Less: accumulated amortization ​ 58,408 55,326 Net ​ $ 168,888 ​ 171,899 ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ Gross carrying amount ​ $ 5,195 ​ 5,441 Less: accumulated amortization ​ 2,800 2,645 Net ​ $ 2,395 ​ 2,796 Intangible assets with indefinite lives: ​ ​ ​ Trade names ​ $ 175,922 ​ 175,281
Schedule of carrying amount of goodwill attributable to each business segment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aerospace ​ ​ ​ (Dollars in millions) USG Test & Defense Total Balance as of September 30, 2019 ​ 254.0 ​ 34.1 ​ 102.2 ​ 390.3 Foreign currency translation ​ 0.1 ​ — ​ — ​ 0.1 Balance as of December 31, 2019 ​ $ 254.1 ​ 34.1 ​ 102.2 ​ 390.4

BUSINESS SEGMENT INFORMATION (T

BUSINESS SEGMENT INFORMATION (Tables)	3 Months Ended
	Dec. 31, 2019
BUSINESS SEGMENT INFORMATION
Schedule of Net Sales and Earnings Before Income Tax	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended December 31, (In thousands) 2019 2018 NET SALES ​ ​ Aerospace & Defense ​ $ 77,511 ​ 66,224 Test ​ 41,383 ​ 41,286 USG ​ 52,834 ​ 55,855 Consolidated totals ​ $ 171,728 ​ 163,365 ​ ​ ​ ​ ​ ​ ​ EBIT ​ ​ ​ Aerospace & Defense ​ $ 12,513 ​ 10,610 Test ​ 4,656 ​ 3,310 USG ​ 9,288 ​ 21,546 Corporate (loss) ​ (9,666) (10,116) Consolidated EBIT ​ 16,791 ​ 25,350 Less: Interest expense ​ (2,421) (1,855) Earnings before income taxes from continuing operations ​ $ 14,370 ​ 23,495 ​

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Dec. 31, 2019
DEBT
Schedule of debt	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ September 30, (In thousands) 2019 2019 Total borrowings ​ $ 150,000 ​ 285,000 Current portion of long-term debt ​ (20,000) (20,000) Total long-term debt, less current portion ​ $ 130,000 ​ 265,000

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	3 Months Ended
	Dec. 31, 2019
SHAREHOLDERS' EQUITY
Schedule of change in shareholders' equity	The change in shareholders’ equity for the first three months of 2020 and 2019 is shown below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended December 31, ​ 2019 2018 ​ ​ ​ ​ ​ Common stock ​ ​ ​ ​ Beginning balance ​ 306 ​ 305 Stock plans ​ — ​ — Ending balance ​ 306 ​ 305 ​ ​ ​ ​ ​ Additional paid-in-capital ​ ​ ​ ​ Beginning balance ​ 292,408 ​ 291,190 Stock plans ​ (648) ​ 1,103 Ending balance ​ 293,056 ​ 292,293 ​ ​ ​ ​ ​ Retained earnings ​ ​ ​ ​ Beginning balance ​ 684,741 ​ 606,837 Net earnings common stockholders ​ 86,777 ​ 17,317 Dividends paid ​ (2,079) ​ (2,073) Adoption of accounting standards updates ​ — ​ 5,589 Ending balance ​ 769,439 ​ 627,670 ​ ​ ​ ​ ​ Accumulated other comprehensive income (loss) ​ ​ ​ ​ Beginning balance ​ (43,974) ​ (31,528) Foreign currency translation ​ 3,923 ​ (4,529) Forward exchange contracts ​ — ​ (25) Ending balance ​ (40,051) ​ (36,082) ​ ​ ​ ​ ​ Treasury stock ​ ​ ​ ​ Beginning balance ​ (107,259) ​ (107,394) Issued under stock plans ​ — ​ — Ending balance ​ (107,259) ​ (107,394) ​ ​ ​ ​ ​ Total equity ​ 915,491 ​ 776,792

RETIREMENT PLANS (Tables)

RETIREMENT PLANS (Tables)	3 Months Ended
	Dec. 31, 2019
RETIREMENT PLANS
Schedule of components of net periodic benefit cost	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended December 31, (In thousands) 2019 2018 Defined benefit plans ​ ​ ​ ​ Interest cost ​ $ 824 ​ 875 Expected return on assets ​ (1,041) ​ (1,086) Amortization of: ​ ​ ​ Prior service cost ​ — ​ — Actuarial loss ​ 543 487 Net periodic benefit cost ​ $ 326 ​ 276

DERIVATIVE FINANCIAL INSTRUME_2

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Dec. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Schedule of outstanding derivative financial instruments	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair ​ ​ ​ ​ ​ Notional ​ Value ​ Fix ​ (In thousands) amount (US$) Rate Forward contracts 5,500 USD 80 Interest rate swap 150,000 USD (918) 2.24 %

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Dec. 31, 2019
FAIR VALUE MEASUREMENTS
Schedule of 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, as presented below as of December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Level 1 Level 2 Level 3 Total Assets (Liabilities): ​ ​ ​ ​ Forward contracts and interest rate swaps ​ $ — ​ (838) ​ $ — ​ (838)

REVENUES (Tables)

REVENUES (Tables)	3 Months Ended
	Dec. 31, 2019
REVENUES
Schedule of disaggregation of revenue by reportable segment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aerospace ​ ​ ​ ​ ​ ​ (In thousands) ​ & Defense ​ Test ​ USG ​ Total Customer type: ​ ​ ​ ​ Commercial ​ $ 41,907 ​ $ 35,249 ​ $ 52,235 ​ $ 129,391 U.S. Government ​ 35,604 ​ 6,134 ​ 599 ​ 42,337 Total revenues ​ $ 77,511 ​ $ 41,383 ​ $ 52,834 ​ $ 171,728 ​ ​ ​ ​ ​ ​ ​ ​ ​ Geographic location: ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 64,706 ​ $ 24,837 ​ $ 34,651 ​ $ 124,194 International ​ 12,805 ​ 16,546 ​ 18,183 ​ 47,534 Total revenues ​ $ 77,511 ​ $ 41,383 ​ $ 52,834 ​ $ 171,728 ​ ​ ​ ​ ​ Revenue recognition method: ​ ​ ​ ​ Point in time ​ $ 35,761 ​ $ 7,611 ​ $ 40,315 ​ $ 83,687 Over time ​ 41,750 ​ 33,772 ​ 12,519 ​ 88,041 Total revenues ​ $ 77,511 ​ $ 41,383 ​ $ 52,834 ​ $ 171,728 ​

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Dec. 31, 2019
LEASES
Schedule of components of lease costs	​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended ​ ​ December 31, (Dollars in thousands) 2019 Finance lease cost ​ Amortization of right-of-use assets ​ $ 622 Interest on lease liabilities ​ 328 Operating lease cost ​ 1,419 Total lease costs ​ $ 2,369
Schedule of additional information related to leases	​ ​ ​ ​ ​ ​ ​ Three Months ​ ​ Ended ​ ​ December 31, (Dollars in thousands) 2019 Cash paid for amounts included in the measurement of lease liabilities ​ ​ Operating cash flows from operating leases ​ $ 1,408 ​ Operating cash flows from finance leases ​ 138 ​ Financing cash flows from finance leases ​ 351 ​ Right-of-use assets obtained in exchange for lease liabilities ​ ​ Operating leases ​ $ 22,014 ​ Weighted-average remaining lease term ​ ​ Operating leases ​ 6.51 years ​ Finance leases ​ 13.16 years ​ Weighted-average discount rate ​ ​ Operating leases ​ 3.14 % Finance leases ​ 4.28 %
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 2020 (excluding the three months ended December 31, 2019) ​ $ 3,887 ​ 2,029 2021 ​ 4,451 ​ 2,930 2022 ​ 3,787 ​ 3,011 2023 ​ 2,968 ​ 3,094 2024 and thereafter ​ 7,808 ​ 31,481 Total minimum lease payments ​ 22,901 ​ 42,545 Less: amounts representing interest ​ 2,321 11,144 Present value of net minimum lease payments ​ $ 20,580 ​ 31,401 Less: current portion of lease obligations ​ 4,571 ​ 1,866 Non-current portion of lease obligations ​ 16,009 ​ 29,535 ROU assets ​ $ 20,209 ​ 28,619
Schedule of future minimum lease payments for operating and capital leases under ASC 840	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2020 ​ $ 5,574 ​ 2,518 2021 ​ 4,558 ​ 2,930 2022 ​ 3,950 ​ 3,012 2023 ​ 3,270 ​ 3,094 2024 and thereafter ​ 8,443 ​ 31,499 Total minimum lease payments ​ $ 25,795 ​ 43,053 Less: amounts representing interest ​ * ​ 11,241 Present value of net minimum lease payments ​ * ​ 31,812 Less: Current portion of lease obligations ​ * ​ 1,832 Non-current portion of lease obligations ​ * ​ 29,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

TECHNICAL PACKAGING DIVESTITU_3

TECHNICAL PACKAGING DIVESTITURE (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)item	Dec. 31, 2018USD ($)	Sep. 30, 2019USD ($)
TECHNICAL PACKAGING DIVESTITURE
Net proceeds from sale of discontinued operations	$ 183,997
After-tax gain on the sale of business	76,614
Assets:
Current assets			$ 25,314
Liabilities:
Current liabilities			11,517
Other liabilities			3,999
Disposed of by Sale | Technical Packaging Business
TECHNICAL PACKAGING DIVESTITURE
Pretax loss recorded in discontinued operations	300	$ 100
Net sales	16,500	$ 19,200
Net proceeds from sale of discontinued operations	184,000
After-tax gain on the sale of business	$ 76,600
Assets:
Accounts receivable, net			15,700
Contract assets, net			5,100
Inventories			3,900
Other current assets			600
Current assets			25,300
Property, plant & equipment, net			33,600
Intangible assets, net			11,400
Goodwill			19,000
Other assets			3,400
Total assets			92,700
Liabilities:
Accounts payable			7,600
Accrued expenses and other current liabilities			3,900
Current liabilities			11,500
Other liabilities			4,000
Total liabilities			$ 15,500
Disposed of by Sale | Technical Packaging Business | Sonoco Products Company
TECHNICAL PACKAGING DIVESTITURE
Number of wholly-owned subsidiaries of the buyers | item	2

ACCOUNTING STANDARDS UPDATE (De

ACCOUNTING STANDARDS UPDATE (Details) $ in Thousands	Dec. 31, 2019USD ($)
ACCOUNTING STANDARDS UPDATE
Right-of-use assets	$ 20,209
Right-of-use liabilities	16,009
Restatement adjustment | Lease Standard
ACCOUNTING STANDARDS UPDATE
Right-of-use assets	20,000
Right-of-use liabilities	$ 20,000

EARNINGS PER SHARE (EPS) (Detai

EARNINGS PER SHARE (EPS) (Details) - shares shares in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
EARNINGS PER SHARE (EPS)
Weighted Average Shares Outstanding - Basic	25,981	25,911
Dilutive Options and Restricted Shares	187	209
Adjusted Shares - Diluted	26,168	26,120

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Selling, general and administrative expenses
SHARE-BASED COMPENSATION
Total share-based compensation cost	$ 1.4	$ 1.4
Performance-Accelerated Restricted Share Awards
SHARE-BASED COMPENSATION
Pretax compensation expense	$ 1.1	1.1
Non-vested shares	264,399
Non-Employee Directors Plan
SHARE-BASED COMPENSATION
Pretax compensation expense	$ 0.3	0.3
Total income tax benefit recognized	0.3	$ 0.3
Total unrecognized compensation cost related to share-based compensation arrangements	$ 7.9
Remaining weighted-average period for recognition of total unrecognized compensation cost	1 year 9 months 18 days

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
INVENTORIES
Finished goods	$ 22,472	$ 23,550
Work in process	33,417	26,407
Raw materials	78,088	74,999
Total inventories	$ 133,977	$ 124,956

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill	$ 390,383	$ 390,256
Less: accumulated amortization	113,507	107,247
Patents
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	2,007	1,945
Less: accumulated amortization	775	748
Net	1,232	1,197
Capitalized software
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	80,886	78,962
Less: accumulated amortization	51,075	48,530
Net	29,811	30,432
Customer relationships
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	227,296	227,225
Less: accumulated amortization	58,408	55,326
Net	168,888	171,899
Other
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	5,195	5,441
Less: accumulated amortization	2,800	2,645
Net	2,395	2,796
Trade names
GOODWILL AND OTHER INTANGIBLE ASSETS
Trade names	$ 175,922	$ 175,281

GOODWILL AND OTHER INTANGIBLE_4

GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)
Changes in goodwill
Goodwill, Beginning Balance	$ 390,256
Foreign currency translation	100
Goodwill, Ending Balance	390,383
USG
Changes in goodwill
Goodwill, Beginning Balance	254,000
Foreign currency translation	100
Goodwill, Ending Balance	254,100
Test
Changes in goodwill
Goodwill, Beginning Balance	34,100
Goodwill, Ending Balance	34,100
Aerospace & Defense
Changes in goodwill
Goodwill, Beginning Balance	102,200
Goodwill, Ending Balance	$ 102,200

BUSINESS SEGMENT INFORMATION (D

BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
BUSINESS SEGMENT INFORMATION
NET SALES	$ 171,728	$ 163,365
Consolidated EBIT	16,791	25,350
Less: Interest expense	(2,421)	(1,855)
Earnings before income taxes from continuing operations	14,370	23,495
Aerospace & Defense
BUSINESS SEGMENT INFORMATION
NET SALES	77,511	66,224
Consolidated EBIT	12,513	10,610
Test
BUSINESS SEGMENT INFORMATION
NET SALES	41,383	41,286
Consolidated EBIT	4,656	3,310
USG
BUSINESS SEGMENT INFORMATION
NET SALES	52,834	55,855
Consolidated EBIT	9,288	21,546
Corporate (loss)
BUSINESS SEGMENT INFORMATION
Consolidated EBIT	$ (9,666)	$ (10,116)

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
DEBT
Total borrowings	$ 150,000	$ 285,000
Current portion of long-term debt	(20,000)	(20,000)
Total long-term debt, less current portion	$ 130,000	$ 265,000

DEBT - Additional information (

DEBT - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019
DEBT
Available to borrow under the credit facility	$ 341,000
Cash on hand	96,692		$ 61,808
Letters of Credit Outstanding, Amount	$ 8,500
Equity interests in direct and indirect material foreign subsidiaries, pledged as collateral (as a percent)	100.00%
Weighted average interest rates	3.18%	3.25%
Long-term Debt, Current Maturities	$ 20,000
Revolving Credit Facility
DEBT
Line of Credit Facility, Amount Outstanding	500,000
Line of Credit Facility, Commitment Fee Amount	250,000
Maximum
DEBT
Incremental term loan	$ 250,000

INCOME TAX EXPENSE (Details)

INCOME TAX EXPENSE (Details)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
INCOME TAX EXPENSE
Effective Income Tax Rate Reconciliation, Percent	26.20%	25.10%
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent	1.10%

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Changes in shareholder's equity
Beginning Balance	$ 826,222
Net earnings common stockholders	86,777	$ 17,317
Ending Balance	915,491	776,792
Common Stock
Changes in shareholder's equity
Beginning Balance	306	305
Ending Balance	306	305
Common Stock Including Additional Paid in Capital
Changes in shareholder's equity
Beginning Balance	292,408	291,190
Stock compensation plans	(648)	1,103
Ending Balance	293,056	292,293
Retained Earnings
Changes in shareholder's equity
Beginning Balance	684,741	606,837
Net earnings common stockholders	86,777	17,317
Dividends paid	(2,079)	(2,073)
Adoption of accounting standards updates		5,589
Ending Balance	769,439	627,670
Accumulated other comprehensive income (loss)
Changes in shareholder's equity
Beginning Balance	(43,974)	(31,528)
Foreign currency translation	3,923	(4,529)
Forward exchange contracts		(25)
Ending Balance	(40,051)	(36,082)
Treasury Stock
Changes in shareholder's equity
Beginning Balance	(107,259)	(107,394)
Ending Balance	$ (107,259)	$ (107,394)

RETIREMENT PLANS (Details)

RETIREMENT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
RETIREMENT PLANS
Interest cost	$ 824	$ 875
Expected return on assets	(1,041)	(1,086)
Actuarial loss	(543)	(487)
Net periodic benefit cost	$ 326	$ 276

DERIVATIVE FINANCIAL INSTRUME_3

DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands	Dec. 31, 2019USD ($)
Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Notional amount	$ 150,000
Fair Value	$ (918)
Fix Rate	2.24%
Forward contracts
DERIVATIVE FINANCIAL INSTRUMENTS
Notional amount	$ 5,500
Fair Value	$ 80

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Forward contracts and interest rate swaps $ in Thousands	Dec. 31, 2019USD ($)
DERIVATIVE FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments	$ (838)
Level 2
DERIVATIVE FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments	$ (838)

REVENUES - Disaggregation of Re

REVENUES - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of revenues
Total revenues	$ 171,728	$ 163,365
Point in time
Disaggregation of revenues
Total revenues	83,687
Over time
Disaggregation of revenues
Total revenues	88,041
United States
Disaggregation of revenues
Total revenues	124,194
International
Disaggregation of revenues
Total revenues	47,534
Commercial
Disaggregation of revenues
Total revenues	129,391
U.S. Government
Disaggregation of revenues
Total revenues	42,337
Aerospace & Defense
Disaggregation of revenues
Total revenues	77,511	66,224
Aerospace & Defense | Point in time
Disaggregation of revenues
Total revenues	35,761
Aerospace & Defense | Over time
Disaggregation of revenues
Total revenues	41,750
Aerospace & Defense | United States
Disaggregation of revenues
Total revenues	64,706
Aerospace & Defense | International
Disaggregation of revenues
Total revenues	12,805
Aerospace & Defense | Commercial
Disaggregation of revenues
Total revenues	41,907
Aerospace & Defense | U.S. Government
Disaggregation of revenues
Total revenues	35,604
Test
Disaggregation of revenues
Total revenues	41,383	41,286
Test | Point in time
Disaggregation of revenues
Total revenues	7,611
Test | Over time
Disaggregation of revenues
Total revenues	33,772
Test | United States
Disaggregation of revenues
Total revenues	24,837
Test | International
Disaggregation of revenues
Total revenues	16,546
Test | Commercial
Disaggregation of revenues
Total revenues	35,249
Test | U.S. Government
Disaggregation of revenues
Total revenues	6,134
USG
Disaggregation of revenues
Total revenues	52,834	$ 55,855
USG | Point in time
Disaggregation of revenues
Total revenues	40,315
USG | Over time
Disaggregation of revenues
Total revenues	12,519
USG | United States
Disaggregation of revenues
Total revenues	34,651
USG | International
Disaggregation of revenues
Total revenues	18,183
USG | Commercial
Disaggregation of revenues
Total revenues	52,235
USG | U.S. Government
Disaggregation of revenues
Total revenues	$ 599

REVENUES - Remaining Performanc

REVENUES - Remaining Performance Obligations (Details) $ in Millions	Dec. 31, 2019USD ($)
Remaining Performance Obligations
Revenue, Remaining Performance Obligation, Amount	$ 500
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized as of December 31, 2019	76.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months

REVENUES - Contract assets and

REVENUES - Contract assets and liabilities (Details) $ in Millions	3 Months Ended
	Dec. 31, 2019USD ($)
REVENUES
Contract with Customer, Asset, Net	$ 93.5
Contract with Customer, Liability	84.8
Contract with Customer, Liability, Revenue Recognized	$ 26

LEASES - Components of lease co

LEASES - Components of lease costs (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)
Leases
Option to extend	true
Finance lease cost
Amortization of right-of-use assets	$ 622
Interest on lease liabilities	328
Operating lease cost	1,419
Total lease costs	$ 2,369
Maximum
Leases
Lease term	20 years

LEASES - Additional information

LEASES - Additional information related to leases (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 1,408
Operating cash flows from finance leases	138
Financing cash flows from finance leases	351
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$ 22,014
Weighted-average remaining lease term
Operating leases	6 years 6 months 3 days
Finance leases	13 years 1 month 28 days
Weighted-average discount rate
Operating leases	3.14%
Finance leases	4.28%

LEASES - Reconciliation of futu

LEASES - Reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets (Details) $ in Thousands	Dec. 31, 2019USD ($)
Operating leases
2020 (excluding the three months ended December 31, 2019)	$ 3,887
2021	4,451
2022	3,787
2023	2,968
2024 and thereafter	7,808
Total minimum lease payments	22,901
Less: amounts representing interest	2,321
Present value of net minimum lease payments	20,580
Less: Current portion of lease obligations	4,571
Non-current portion of lease obligations	16,009
Operating lease assets	20,209
Finance leases
2020 (excluding the three months ended December 31, 2019)	2,029
2021	2,930
2022	3,011
2023	3,094
2024 and thereafter	31,481
Total minimum lease payments	42,545
Less: amounts representing interest	11,144
Present value of net minimum lease payments	31,401
Less: Current portion of lease obligations	1,866
Non-current portion of lease obligations	29,535
ROU assets	$ 28,619
Location of operating lease liabilities included on Consolidated Balance Sheets	us-gaap:OtherAccruedLiabilitiesCurrent us-gaap:OperatingLeaseLiabilityNoncurrent
Location of finance lease liabilities included on Consolidated Balance Sheets	us-gaap:OtherAccruedLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent
Location of operating lease ROU assets included on Consolidated Balance Sheets	us-gaap:OperatingLeaseRightOfUseAsset
Location of finance lease ROU assets included on Consolidated Balance Sheets	us-gaap:PropertyPlantAndEquipmentNet

LEASES - Future minimum lease p

LEASES - Future minimum lease payments for operating and capital leases under ASC 840 (Details) $ in Thousands	Sep. 30, 2019USD ($)
Operating leases
2020	$ 5,574
2021	4,558
2022	3,950
2023	3,270
2024 and thereafter	8,443
Total minimum lease payments	25,795
Finance leases
2020	2,518
2021	2,930
2022	3,012
2023	3,094
2024 and thereafter	31,499
Total minimum lease payments	43,053
Less: amounts representing interest	11,241
Present value of net minimum lease payments	31,812
Less: Current portion of lease obligations	1,832
Non-current portion of lease obligations	$ 29,980