Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Dec. 31, 2017 | Jan. 31, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | ESCO TECHNOLOGIES INC | |
Entity Central Index Key | 866,706 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | ESE | |
Entity Common Stock, Shares Outstanding | 25,844,866 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net sales | $ 173,495 | $ 146,368 |
Costs and expenses: | ||
Cost of sales | 111,736 | 92,914 |
Selling, general and administrative expenses | 42,154 | 33,762 |
Amortization of intangible assets | 4,446 | 3,649 |
Interest expense, net | 2,185 | 684 |
Other expenses (income), net | 173 | (766) |
Total costs and expenses | 160,694 | 130,243 |
Earnings before income taxes | 12,801 | 16,125 |
Income tax (benefit) expense | (21,870) | 5,398 |
Net earnings | $ 34,671 | $ 10,727 |
Earnings per share: | ||
Basic - Net earnings | $ 1.34 | $ 0.42 |
Diluted - Net earnings | $ 1.33 | $ 0.41 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net earnings | $ 34,671 | $ 10,727 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 1,288 | (4,363) |
Net unrealized gain (loss) on derivative instruments | 17 | (133) |
Total other comprehensive income (loss), net of tax | 1,305 | (4,496) |
Comprehensive income | $ 35,976 | $ 6,231 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 41,600 | $ 45,516 |
Accounts receivable, net | 148,502 | 160,580 |
Costs and estimated earnings on long-term contracts, less progress billings of $45,134 and $64,099, respectively | 39,045 | 47,286 |
Inventories | 130,579 | 124,515 |
Other current assets | 13,301 | 14,895 |
Total current assets | 373,027 | 392,792 |
Property, plant and equipment: | ||
Property, plant and equipment, net of accumulated depreciation of $106,791 and $99,650, respectively | 132,790 | 132,748 |
Intangible assets, net of accumulated amortization of $78,325 and $73,879, respectively | 347,578 | 351,134 |
Goodwill | 378,510 | 377,879 |
Other assets | 5,843 | 5,891 |
Total assets | 1,237,748 | 1,260,444 |
Current liabilities: | ||
Current maturities of long-term debt | 20,000 | 20,000 |
Accounts payable | 48,766 | 54,789 |
Advance payments on long-term contracts, less costs incurred of $53,206 and $59,772, respectively | 28,966 | 22,451 |
Accrued salaries | 21,824 | 32,259 |
Current portion of deferred revenue | 25,447 | 28,583 |
Accrued other expenses | 33,029 | 36,887 |
Total current liabilities | 178,032 | 194,969 |
Pension obligations | 30,268 | 30,223 |
Deferred tax liabilities | 57,877 | 86,378 |
Other liabilities | 24,502 | 21,956 |
Long-term debt | 240,000 | 255,000 |
Total liabilities | 530,679 | 588,526 |
Shareholders' equity: | ||
Preferred stock, par value $.01 per share, authorized 10,000,000 shares | 0 | 0 |
Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,468,824 and 30,468,824 shares, respectively | 305 | 305 |
Additional paid-in capital | 290,984 | 289,785 |
Retained earnings | 549,322 | 516,718 |
Accumulated other comprehensive loss, net of tax | (26,003) | (27,308) |
Total stockholders' equity before Treasury Stock | 814,608 | 779,500 |
Less treasury stock, at cost: 4,632,922 and 4,635,622 common shares, respectively | (107,539) | (107,582) |
Total shareholders' equity | 707,069 | 671,918 |
Total liabilities and shareholders' equity | $ 1,237,748 | $ 1,260,444 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Costs and estimated earnings on long-term contracts, progress billings | $ 45,134 | $ 64,099 |
Property, plant and equipment, net of accumulated depreciation | 106,791 | 99,650 |
Intangible assets, net of accumulated amortization | 78,325 | 73,879 |
Advance payments on long-term contracts, costs incurred | $ 53,206 | $ 59,772 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 30,468,824 | 30,468,824 |
Treasury stock, shares | 4,632,922 | 4,635,622 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 34,671 | $ 10,727 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 9,226 | 7,088 |
Stock compensation expense | 1,353 | 1,437 |
Changes in assets and liabilities | 4,507 | (2,053) |
Effect of deferred taxes | (28,501) | (1,393) |
Change in deferred revenue and costs, net | (3,099) | (333) |
Pension contributions | (360) | 0 |
Other | 0 | 263 |
Net cash provided by operating activities | 17,797 | 15,736 |
Cash flows from investing activities: | ||
Acquisition of business, net of cash acquired | (233) | (75,000) |
Additions to capitalized software | (2,083) | (1,433) |
Capital expenditures | (3,606) | (6,989) |
Net cash used by investing activities | (5,922) | (83,422) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 15,000 | 90,000 |
Principal payments on long-term debt | (30,000) | (20,000) |
Dividends paid | (2,067) | (2,057) |
Other | 17 | (134) |
Net cash (used) provided by financing activities | (17,050) | 67,809 |
Effect of exchange rate changes on cash and cash equivalents | 1,259 | (2,193) |
Net decrease in cash and cash equivalents | (3,916) | (2,070) |
Cash and cash equivalents, beginning of period | 45,516 | 53,825 |
Cash and cash equivalents, end of period | 41,600 | 51,755 |
Supplemental cash flow information: | ||
Interest paid | 2,053 | 509 |
Income taxes paid (including state and foreign) | $ 1,025 | $ 1,026 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 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, 2017. The Company’s results for the three-month periods ended December 31, 2017 are not necessarily indicative of the results for the entire 2018 fiscal year. References to the first quarters of 2018 and 2017 represent the fiscal quarters ended December 31, 2017 and 2016, 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. |
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS) | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE (EPS) | 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. There are no anti-dilutive shares. Three Months 2017 2016 Weighted Average Shares Outstanding - Basic 25,836 25,720 Dilutive Options and Restricted Shares 244 259 Adjusted Shares - Diluted 26,080 25,979 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | 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 1.2 337,325 Non-Employee Directors Plan Compensation expense related to the non-employee director grants was $ 0.3 0.2 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 1.4 0.4 0.5 5.3 1.3 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES (In thousands) December 31, September 30, Finished goods $ 29,013 28,127 Work in process 46,668 43,750 Raw materials 54,898 52,638 Total inventories $ 130,579 124,515 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS (Dollars in thousands) December 31, 2017 September 30, 2017 Goodwill $ 378,510 377,879 Intangible assets with determinable lives: Patents Gross carrying amount $ 928 928 Less accumulated amortization 757 750 Net $ 171 178 Capitalized software Gross carrying amount $ 63,842 63,007 Less accumulated amortization 36,081 34,382 Net $ 27,761 28,625 Customer relationships Gross carrying amount $ 182,266 181,891 Less accumulated amortization 39,922 37,364 Net $ 142,344 144,527 Other Gross carrying amount $ 5,336 5,373 Less accumulated amortization 1,565 1,383 Net $ 3,771 3,990 Intangible assets with indefinite lives: Trade names $ 173,531 173,813 (Dollars in millions) USG Test Filtration Packaging Total Balance as of September 30, 2017 250.2 34.1 73.7 19.9 377.9 Acquisition activity working capital adj 0.2 - - - 0.2 Foreign currency translation and other - - - 0.4 0.4 Balance as of December 31, 2017 $ 250.4 34.1 73.7 20.3 378.5 |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Company is organized based on the products and services that it offers, and classifies its business operations in four segments for financial reporting purposes: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG) and Technical Packaging. The Filtration segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), and Mayday Manufacturing Co. and its affiliate Hi-Tech Metals, Inc. (collectively referred to as Mayday). The companies within this segment primarily design and manufacture specialty filtration products, including hydraulic filter elements used in commercial aerospace applications, unique filter mechanisms used in micro-propulsion devices for satellites and custom designed filters for manned and unmanned aircraft; manufacture elastomeric-based signature reduction solutions for the U.S. Navy; and manufacture landing gear components for the aerospace and defense industry. The Test segment’s operations consist primarily of ETS-Lindgren Inc. (ETS-Lindgren). ETS-Lindgren is an industry leader in providing its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. The USG segment’s operations consist primarily of Doble Engineering Company (Doble), Morgan Schaffer Inc. (Morgan Schaffer), and NRG Systems, Inc. (NRG). Doble provides high-end, intelligent diagnostic test solutions for the electric power delivery industry and is a leading supplier of partial discharge testing instruments used to assess the integrity of high voltage power delivery equipment. Morgan Schaffer provides an integrated offering of dissolved gas analysis, oil testing, and data management solutions for the electric power industry. NRG designs and manufactures decision support tools for the renewable energy industry, primarily wind. The Technical Packaging segment’s operations consist of Thermoform Engineered Quality LLC (TEQ) and Plastique Limited and Plastique Sp. z o.o. (together, Plastique). The companies within this segment provide innovative solutions to the medical and commercial markets for thermoformed packages and specialty products using a wide variety of thin gauge plastics and pulp. (In thousands) Three Months 2017 2016 NET SALES Filtration $ 60,035 58,785 Test 37,530 33,827 USG 55,754 35,556 Technical Packaging 20,176 18,200 Consolidated totals $ 173,495 146,368 EBIT Filtration $ 9,645 10,726 Test 2,596 2,425 USG 10,651 9,674 Technical Packaging 965 1,031 Corporate (loss) (8,871) (7,047) Consolidated EBIT 14,986 16,809 Less: Interest expense, net (2,185) (684) Earnings before income taxes $ 12,801 16,125 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 GAAP 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 | 3 Months Ended |
Dec. 31, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
DEBT | DEBT (In thousands) December 31, September 30, Total borrowings $ 260,000 275,000 Short-term borrowings and current portion of long-term debt (20,000) (20,000) Total long-term debt, less current portion $ 240,000 255,000 The Company’s existing credit facility (“the Credit Facility”) matures December 21, 2020. The Credit Facility includes a $ 450 250 At December 31, 2017, the Company had approximately $ 181 250 41.6 260 9.0 20.0 The Credit Facility requires, as determined by certain financial ratios, a facility fee ranging from 12.5 27.5 65 2.74 1.61 |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 3 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX EXPENSE | 8. INCOME TAX EXPENSE Income tax benefit in the first quarter of 2018 was $ 21.9 5.4 170.8 33.5 Tax Cuts and Jobs Act 35.0 24.5 30.3 236.8 2.9 22.8 2.3 18.3 Staff Accounting Bulletin No. 118 (SAB 118) was issued by the SEC effective December 22, 2017. SAB 118 allows registrants to record provisional amounts of the income tax effects of the TCJA where the information necessary to complete the accounting under ASC Topic 740 is not available but the amounts are based on reasonable estimates. SAB 118 permits registrants to record adjustments to its provisional amounts during the measurement period (which cannot exceed one year). The Company was able to determine reasonable estimates of the TCJA income tax effects. However, the Company was unable to complete the accounting under ASC Topic 740 for the change in the value of the Company’s deferred tax assets and liabilities as it needs more time to collect and analyze information primarily related to depreciation expense, pension liability, and percentage of completion revenue recognition. The Company was also unable to complete the accounting under ASC Topic 740 for the income tax effects of subjecting the Company’s cumulative foreign earnings to federal income tax as it needs more time to collect and analyze information to compute the cumulative balance of earnings subject to the tax and the amount of foreign tax credit that is available to offset the tax. Since the TCJA subjected the Company’s cumulative foreign earnings to U.S. tax, repatriation of those earnings generally provides that no additional federal tax will be imposed. However, the permissible amount of repatriation can be restricted by local law and a repatriation can result in tax expense due to local country withholding tax, U.S. state tax, and changes in foreign exchange rates. The Company is evaluating these considerations to determine the amount of its foreign subsidiaries’ cumulative earnings it intends to indefinitely reinvest. The TCJA includes a tax on global intangible low-taxed income (“GILTI”). The Company expects it will be subject to this tax. At its January 10, 2018 meeting, the FASB staff indicated that companies should make and disclose a policy election as to whether they will recognize deferred taxes for basis differences expected to reverse as GILTI or whether they will account for GILTI as period costs if and when incurred. Because there are interpretative questions associated with the approach that involves recognizing deferred taxes, the Company will undertake an evaluation of these questions and make the accounting policy election during the SAB 118 measurement period. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 9. SHAREHOLDERS’ EQUITY Balance at September 30, 2017 $ 671,918 Net earnings 34,671 Other comprehensive income 1,305 Cash dividends (2,067) Stock compensation plans 1,242 Balance at December 31, 2017 $ 707,069 |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | 10. RETIREMENT PLANS A summary of net periodic benefit expense for the Company’s defined benefit plans for the three-month periods ended December 31, 2017 and 2016 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following: Three Months (In thousands) 2017 2016 Defined benefit plans Interest cost $ 820 965 Expected return on assets (975) (1,094) Amortization of: Prior service cost - 3 Actuarial loss 549 505 Net periodic benefit cost $ 394 379 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 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. During 2016, the Company entered into several forward contracts to purchase pounds sterling (GBP) to hedge two deferred payments due in connection with the acquisition of Plastique. During the first quarter of 2018, the Company entered into three interest rate swaps with a notional amount of $ 150 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, 2017: (In thousands) Notional Fair Float Fix Forward contracts 1,859 GBP (156) Forward contracts 5,250 USD 33 Forward contracts 200 EUR (10) Interest rate swap 150,000 USD (80) 1.51 % 1.80 % Interest rate swap * 150,000 USD 28 N/A 2.09 % Interest rate swap ** 150,000 USD (20) N/A 2.24 % *This swap represents a forward contract and will be effective in November 2018. **This swap represents a forward contract and will be effective in November 2019. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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, 2017 and September 30, 2017 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 (In thousands) Level 1 Level 2 Level 3 Total Liabilities: Forward contracts and swaps $ - (205) $ - (205) 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, 2017. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING STANDARDS | 13. NEW ACCOUNTING STANDARDS In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, Compensation Retirement Benefits In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedge Activities, Derivatives and Hedging In February 2016, the FASB issued ASU No. 2016-062, Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers |
EARNINGS PER SHARE (EPS) (Table
EARNINGS PER SHARE (EPS) (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands): Three Months 2017 2016 Weighted Average Shares Outstanding - Basic 25,836 25,720 Dilutive Options and Restricted Shares 244 259 Adjusted Shares - Diluted 26,080 25,979 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventories | Inventories consist of the following: (In thousands) December 31, September 30, Finished goods $ 29,013 28,127 Work in process 46,668 43,750 Raw materials 54,898 52,638 Total inventories $ 130,579 124,515 |
GOODWILL AND OTHER INTANGIBLE22
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Included on the Company’s Consolidated Balance Sheets at December 31, 2017 and September 30, 2017 are the following intangible assets gross carrying amounts and accumulated amortization: (Dollars in thousands) December 31, 2017 September 30, 2017 Goodwill $ 378,510 377,879 Intangible assets with determinable lives: Patents Gross carrying amount $ 928 928 Less accumulated amortization 757 750 Net $ 171 178 Capitalized software Gross carrying amount $ 63,842 63,007 Less accumulated amortization 36,081 34,382 Net $ 27,761 28,625 Customer relationships Gross carrying amount $ 182,266 181,891 Less accumulated amortization 39,922 37,364 Net $ 142,344 144,527 Other Gross carrying amount $ 5,336 5,373 Less accumulated amortization 1,565 1,383 Net $ 3,771 3,990 Intangible assets with indefinite lives: Trade names $ 173,531 173,813 |
Schedule of Goodwill | The changes in the carrying amount of goodwill attributable to each business segment for the three months ended December 31, 2017 is as follows: (Dollars in millions) USG Test Filtration Packaging Total Balance as of September 30, 2017 250.2 34.1 73.7 19.9 377.9 Acquisition activity working capital adj 0.2 - - - 0.2 Foreign currency translation and other - - - 0.4 0.4 Balance as of December 31, 2017 $ 250.4 34.1 73.7 20.3 378.5 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Schedule Of Net Sales And Earnings Before Income Tax | Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes. (In thousands) Three Months 2017 2016 NET SALES Filtration $ 60,035 58,785 Test 37,530 33,827 USG 55,754 35,556 Technical Packaging 20,176 18,200 Consolidated totals $ 173,495 146,368 EBIT Filtration $ 9,645 10,726 Test 2,596 2,425 USG 10,651 9,674 Technical Packaging 965 1,031 Corporate (loss) (8,871) (7,047) Consolidated EBIT 14,986 16,809 Less: Interest expense, net (2,185) (684) Earnings before income taxes $ 12,801 16,125 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule Of Debt | The Company’s debt is summarized as follows: (In thousands) December 31, September 30, Total borrowings $ 260,000 275,000 Short-term borrowings and current portion of long-term debt (20,000) (20,000) Total long-term debt, less current portion $ 240,000 255,000 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule Of Change In Equity | The change in shareholders’ equity for the first three months of 2018 is shown below (in thousands): Balance at September 30, 2017 $ 671,918 Net earnings 34,671 Other comprehensive income 1,305 Cash dividends (2,067) Stock compensation plans 1,242 Balance at December 31, 2017 $ 707,069 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule Of Components Of Net Periodic Benefit Cost For Plans | A summary of net periodic benefit expense for the Company’s defined benefit plans for the three-month periods ended December 31, 2017 and 2016 is shown in the following table. Net periodic benefit cost for each period presented is comprised of the following: Three Months (In thousands) 2017 2016 Defined benefit plans Interest cost $ 820 965 Expected return on assets (975) (1,094) Amortization of: Prior service cost - 3 Actuarial loss 549 505 Net periodic benefit cost $ 394 379 |
DERIVATIVE FINANCIAL INSTRUME27
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Derivative Financial Instruments | The following is a summary of the notional transaction amounts and fair values for the Company’s outstanding derivative financial instruments by risk category and instrument type as of December 31, 2017: (In thousands) Notional Fair Float Fix Forward contracts 1,859 GBP (156) Forward contracts 5,250 USD 33 Forward contracts 200 EUR (10) Interest rate swap 150,000 USD (80) 1.51 % 1.80 % Interest rate swap * 150,000 USD 28 N/A 2.09 % Interest rate swap ** 150,000 USD (20) N/A 2.24 % *This swap represents a forward contract and will be effective in November 2018. **This swap represents a forward contract and will be effective in November 2019. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Instruments | The Company’s forward contracts are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, as presented below as of December 31, 2017: (In thousands) Level 1 Level 2 Level 3 Total Liabilities: Forward contracts and swaps $ - (205) $ - (205) |
EARNINGS PER SHARE (EPS) (Numbe
EARNINGS PER SHARE (EPS) (Number Of Shares Used In The Calculation Of Earnings Per Share) (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Earning Per Share [Line Items] | ||
Weighted Average Shares Outstanding - Basic | 25,836 | 25,720 |
Dilutive Options and Restricted Shares | 244 | 259 |
Adjusted Shares - Diluted | 26,080 | 25,979 |
SHARE-BASED COMPENSATION (Narra
SHARE-BASED COMPENSATION (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation cost | $ 1.4 | $ 1.4 |
Performance-Accelerated Restricted Share (PARS) Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Pretax compensation expense | $ 1.1 | 1.2 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Beginning Balance | 337,325 | |
Non-Employee Directors Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total income tax benefit recognized | $ 0.4 | 0.5 |
Pretax compensation expense | 0.3 | $ 0.2 |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 5.3 | |
Remaining weighted-average period for recognition of total unrecognized compensation cost | 1 year 3 months 18 days |
INVENTORIES (Schedule Of Invent
INVENTORIES (Schedule Of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Inventory [Line Items] | ||
Finished goods | $ 29,013 | $ 28,127 |
Work in process | 46,668 | 43,750 |
Raw materials | 54,898 | 52,638 |
Total inventories | $ 130,579 | $ 124,515 |
GOODWILL AND OTHER INTANGIBLE32
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule Of Intangible Assets Gross Carrying Amounts And Accumulated Amortization) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Goodwill and Other Intangible Assets [Line Items] | ||
Goodwill | $ 378,510 | $ 377,879 |
Less: accumulated amortization | 78,325 | 73,879 |
Patents [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 928 | 928 |
Less: accumulated amortization | 757 | 750 |
Net | 171 | 178 |
Capitalized Software [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 63,842 | 63,007 |
Less: accumulated amortization | 36,081 | 34,382 |
Net | 27,761 | 28,625 |
Customer relationships [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 182,266 | 181,891 |
Less: accumulated amortization | 39,922 | 37,364 |
Net | 142,344 | 144,527 |
Other [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Gross carrying amount | 5,336 | 5,373 |
Less: accumulated amortization | 1,565 | 1,383 |
Net | 3,771 | 3,990 |
Trade names [Member] | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Trade names | $ 173,531 | $ 173,813 |
GOODWILL AND OTHER INTANGIBLE33
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule Of Changes In The Carrying Amount Of Goodwill Attributable To Business Segment) (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 377,879 |
Acquisition activity - working capital adj | 200 |
Foreign currency translation and other | 400 |
Goodwill, Ending Balance | 378,510 |
Filtration [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 73,700 |
Acquisition activity - working capital adj | 0 |
Foreign currency translation and other | 0 |
Goodwill, Ending Balance | 73,700 |
Test [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 34,100 |
Acquisition activity - working capital adj | 0 |
Foreign currency translation and other | 0 |
Goodwill, Ending Balance | 34,100 |
Utility Solutions [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 250,200 |
Acquisition activity - working capital adj | 200 |
Foreign currency translation and other | 0 |
Goodwill, Ending Balance | 250,400 |
Technical Packaging [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 19,900 |
Acquisition activity - working capital adj | 0 |
Foreign currency translation and other | 400 |
Goodwill, Ending Balance | $ 20,300 |
BUSINESS SEGMENT INFORMATION (S
BUSINESS SEGMENT INFORMATION (Schedule Of Net Sales And Earnings Before Income Tax) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
NET SALES | $ 173,495 | $ 146,368 |
Consolidated EBIT | 14,986 | 16,809 |
Less: Interest expense, net | (2,185) | (684) |
Earnings before income taxes | 12,801 | 16,125 |
Filtration [Member] | ||
Segment Reporting Information [Line Items] | ||
NET SALES | 60,035 | 58,785 |
Consolidated EBIT | 9,645 | 10,726 |
Test [Member] | ||
Segment Reporting Information [Line Items] | ||
NET SALES | 37,530 | 33,827 |
Consolidated EBIT | 2,596 | 2,425 |
Utility Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
NET SALES | 55,754 | 35,556 |
Consolidated EBIT | 10,651 | 9,674 |
Technical Packaging [Member] | ||
Segment Reporting Information [Line Items] | ||
NET SALES | 20,176 | 18,200 |
Consolidated EBIT | 965 | 1,031 |
Corporate (loss) [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated EBIT | $ (8,871) | $ (7,047) |
DEBT (Schedule Of Debt) (Detail
DEBT (Schedule Of Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
Total borrowings | $ 260,000 | $ 275,000 |
Short-term borrowings and current portion of long-term debt | (20,000) | (20,000) |
Total long-term debt, less current portion | $ 240,000 | $ 255,000 |
DEBT (Narrative) (Details)
DEBT (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Available to borrow under the credit facility | $ 181,000 | |||
Cash on hand | $ 41,600 | $ 51,755 | $ 45,516 | $ 53,825 |
Percentage of foreign subsidiaries' share equity | 65.00% | |||
Letters of Credit Outstanding, Amount | $ 9,000 | |||
Line of Credit Facility, Amount Outstanding | $ 260,000 | |||
Weighted average interest rates | 2.74% | 1.61% | ||
Long-term Debt, Current Maturities | $ 20,000 | $ 20,000 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Amount Outstanding | 450,000 | |||
Line of Credit Facility, Commitment Fee Amount | $ 250,000 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility fees | 12.50% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Incremental term loan | $ 250,000 | |||
Credit facility fees | 27.50% |
INCOME TAX EXPENSE (Narrative)
INCOME TAX EXPENSE (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Expense [Line Items] | ||
Effective Income Tax Rate Reconciliation, Percent | 170.80% | 33.50% |
Income Tax Expense (Benefit) | $ (21,870) | $ 5,398 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 24.50% | 35.00% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 30,300 | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 236.80% | |
Effective Income Tax Rate Reconciliation, Tax Settlement, Domestic, Amount | $ 2,900 | |
Effective Income Tax Rate Reconciliation, Tax Settlement, Domestic, Percent | 22.80% | |
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | $ 2,300 | |
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Percent | 18.30% | |
Tax Cuts and Jobs Act [Member] | ||
Income Tax Expense [Line Items] | ||
Income Tax Expense (Benefit) | $ 25,100 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule Of Change In Equity) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Balance | $ 671,918 | |
Net earnings | 34,671 | $ 10,727 |
Other comprehensive income | 1,305 | $ (4,496) |
Cash dividends | (2,067) | |
Stock compensation plans | 1,242 | |
Ending Balance | $ 707,069 |
RETIREMENT PLANS (Schedule Of C
RETIREMENT PLANS (Schedule Of Components Of Net Periodic Benefit Cost For Plans) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined benefit plans | ||
Interest cost | $ 820 | $ 965 |
Expected return on assets | (975) | (1,094) |
Amortization of Prior service cost | 0 | 3 |
Amortization of Actuarial loss | 549 | 505 |
Net periodic benefit cost | $ 394 | $ 379 |
DERIVATIVE FINANCIAL INSTRUME40
DERIVATIVE FINANCIAL INSTRUMENTS (Schedule of Outstanding Derivative Financial Instruments) (Details) € in Thousands, £ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017EUR (€) | |||
Interest Rate Swap [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | $ 150,000 | |||||
Fair Value | $ (80) | |||||
Float Rate | 1.51% | 1.51% | 1.51% | |||
Fix Rate | 1.80% | 1.80% | 1.80% | |||
Interest Rate Swap one [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | $ 150,000 | [1] | ||||
Fair Value | $ 28 | [1] | ||||
Float Rate | [1] | [1] | [1] | |||
Fix Rate | 2.09% | [1] | 2.09% | [1] | 2.09% | [1] |
Interest Rate Swap Two [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | $ 150,000 | [2] | ||||
Fair Value | $ (20) | [2] | ||||
Float Rate | [2] | [2] | [2] | |||
Fix Rate | 2.24% | [2] | 2.24% | [2] | 2.24% | [2] |
Forward Contracts [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | £ | £ 1,859 | |||||
Fair Value | $ (156) | |||||
Forward Contracts One [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | 5,250 | |||||
Fair Value | 33 | |||||
Forward Contracts Two [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | € | € 200 | |||||
Fair Value | $ (10) | |||||
[1] | This swap represents a forward contract and will be effective in November 2018. | |||||
[2] | This swap represents a forward contract and will be effective in November 2019. |
DERIVATIVE FINANCIAL INSTRUME41
DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Interest Rate Swap [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, Notional Amount | $ 150,000 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Fair Value of Financial Instruments) (Details) - Forward Contracts [Member] - Swap [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Derivative [Line Items] | |
Fair Value of Financial Instruments | $ (205) |
Fair Value, Inputs, Level 1 [Member] | |
Derivative [Line Items] | |
Fair Value of Financial Instruments | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Derivative [Line Items] | |
Fair Value of Financial Instruments | (205) |
Fair Value, Inputs, Level 3 [Member] | |
Derivative [Line Items] | |
Fair Value of Financial Instruments | $ 0 |