Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Nov. 13, 2022 | Mar. 31, 2022 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2022 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,784,000,000 | ||
Entity Common Stock, Shares Outstanding | 25,885,528 | ||
Entity Central Index Key | 0000866706 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | GRANT THORNTON LLP | ||
Auditor Firm ID | 248 | ||
Auditor Location | St. Louis, Missouri |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net sales | $ 857,502 | $ 715,440 | $ 730,471 |
Costs and expenses: | |||
Cost of sales | 525,457 | 445,045 | 458,311 |
Selling, general and administrative expenses | 195,127 | 167,534 | 159,490 |
Amortization of intangible assets | 25,936 | 20,829 | 21,812 |
Interest expense, net | 4,851 | 2,255 | 6,730 |
Pension plan termination charge | 40,600 | ||
Other (income) expenses, net | (304) | (894) | 7,122 |
Total costs and expenses | 751,067 | 634,769 | 694,065 |
Total income before income taxes | 106,435 | 80,671 | 36,406 |
Income tax expense | 24,115 | 17,175 | 13,510 |
Net earnings from continuing operations | 82,320 | 63,496 | 22,896 |
Net gain on sale from discontinued operations, net of tax expense of $23,501 | 76,515 | ||
Net earnings from discontinued operations | 76,515 | ||
Net earnings | $ 82,320 | $ 63,496 | $ 99,411 |
Basic: | |||
Continuing operations | $ 3.17 | $ 2.44 | $ 0.88 |
Discontinued operations | 2.94 | ||
Net earnings | 3.17 | 2.44 | 3.82 |
Diluted: | |||
Continuing operations | 3.16 | 2.42 | 0.88 |
Discontinued operations | 2.93 | ||
Net earnings | $ 3.16 | $ 2.42 | $ 3.81 |
Average common shares outstanding (in thousands): | |||
Basic | 25,933 | 26,046 | 26,010 |
Diluted | 26,067 | 26,225 | 26,135 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) $ in Thousands | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |
Gain on sale of discontinued operations, tax expense | $ 23,501 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net earnings | $ 82,320 | $ 63,496 | $ 99,411 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (28,876) | 1,496 | 3,172 |
Pension plan termination | 40,600 | ||
Amortization of prior service costs, actuarial losses and other | (727) | (3,455) | |
Total other comprehensive (loss) income, net of tax | (29,603) | 1,496 | 40,317 |
Comprehensive income | $ 52,717 | $ 64,992 | $ 139,728 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 97,724 | $ 56,232 |
Accounts receivable, less allowance for credit losses of $2,612 and $1,949 in 2022 and 2021, respectively | 164,645 | 146,341 |
Contract assets, net | 125,154 | 93,771 |
Inventories, net | 162,403 | 147,148 |
Other current assets | 22,696 | 22,662 |
Total current assets | 572,622 | 466,154 |
Property, plant and equipment: | ||
Land and land improvements | 12,126 | 10,547 |
Buildings and leasehold improvements | 110,306 | 109,279 |
Machinery and equipment | 187,287 | 176,447 |
Construction in progress | 11,576 | 5,543 |
Property, Plant and Equipment, Gross | 321,295 | 301,816 |
Less accumulated depreciation and amortization | (165,322) | (147,551) |
Net property, plant and equipment | 155,973 | 154,265 |
Intangible assets, net | 394,464 | 409,250 |
Goodwill | 492,709 | 504,853 |
Operating lease assets, net | 29,150 | 31,846 |
Other assets | 9,538 | 10,977 |
Total Assets | 1,654,456 | 1,577,345 |
Current liabilities: | ||
Current maturities of long-term debt and short-term borrowings | 20,000 | 20,000 |
Accounts payable | 78,746 | 56,669 |
Contract liabilities, net | 125,009 | 106,045 |
Accrued salaries | 40,572 | 39,768 |
Accrued other expenses | 53,802 | 52,513 |
Total current liabilities | 318,129 | 274,995 |
Deferred tax liabilities, net | 82,023 | 73,560 |
Non-current operating lease liabilities | 24,853 | 28,032 |
Other liabilities | 48,294 | 47,062 |
Long-term debt | 133,000 | 134,000 |
Total liabilities | 606,299 | 557,649 |
Shareholders' equity: | ||
Preferred stock, par value $.01 per share, authorized 10,000,000 shares | ||
Common stock, par value $.01 per share, authorized 50,000,000 shares; issued 30,707,748 and 30,666,173 shares in 2022 and 2021, respectively | 307 | 307 |
Additional paid-in capital | 301,553 | 297,644 |
Retained earnings | 905,022 | 830,989 |
Accumulated other comprehensive loss, net of tax | (31,764) | (2,161) |
Total stockholders' equity before treasury stock | 1,175,118 | 1,126,779 |
Less treasury stock, at cost (4,854,997 and 4,604,741 common shares in 2022 and 2021, respectively) | (126,961) | (107,083) |
Total shareholders' equity | 1,048,157 | 1,019,696 |
Total Liabilities and Shareholders' Equity | $ 1,654,456 | $ 1,577,345 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for Doubtful Accounts Receivable, Current | $ 2,612 | $ 1,949 |
Less accumulated depreciation and amortization | $ 165,322 | $ 147,551 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 30,707,748 | 30,666,173 |
Treasury stock, shares | 4,854,997 | 4,604,741 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Beginning Balance at Sep. 30, 2019 | $ 306 | $ 292,408 | $ 684,741 | $ (43,974) | $ (107,259) | $ 826,222 |
Beginning Balance (in shares) at Sep. 30, 2019 | 30,597 | |||||
Comprehensive income (loss): | ||||||
Net earnings | $ 0 | 0 | 99,411 | 0 | 0 | 99,411 |
Translation adjustments, net of tax | 0 | 0 | 0 | 3,172 | 0 | 3,172 |
Pension termination and net unrecognized actuarial loss, net of tax | 0 | 0 | 0 | 37,145 | 0 | 37,145 |
Cash dividends declared | 0 | 0 | (8,323) | 0 | 0 | (8,323) |
Stock compensation plans, net of tax | $ 0 | 1,274 | 0 | 0 | 125 | 1,399 |
Stock compensation plans, net of tax (in shares) | 49 | |||||
Ending Balance at Sep. 30, 2020 | $ 306 | 293,682 | 775,829 | (3,657) | (107,134) | 959,026 |
Ending Balance (in shares) at Sep. 30, 2020 | 30,646 | |||||
Comprehensive income (loss): | ||||||
Net earnings | $ 0 | 0 | 63,496 | 0 | 0 | 63,496 |
Translation adjustments, net of tax | 0 | 0 | 0 | 1,496 | 0 | 1,496 |
Cash dividends declared | 0 | 0 | (8,336) | 0 | 0 | (8,336) |
Stock compensation plans, net of tax | $ 1 | 3,962 | 0 | 0 | 51 | 4,014 |
Stock compensation plans, net of tax (in shares) | 20 | |||||
Ending Balance at Sep. 30, 2021 | $ 307 | 297,644 | 830,989 | (2,161) | (107,083) | 1,019,696 |
Ending Balance (in shares) at Sep. 30, 2021 | 30,666 | |||||
Comprehensive income (loss): | ||||||
Net earnings | $ 0 | 0 | 82,320 | 0 | 0 | 82,320 |
Net unrecognized actuarial loss - SERP | 0 | 0 | 0 | (727) | 0 | (727) |
Translation adjustments, net of tax | 0 | 0 | 0 | (28,876) | 0 | (28,876) |
Cash dividends declared | 0 | 0 | (8,287) | 0 | 0 | (8,287) |
Purchases of common stock into treasury | 0 | 0 | 0 | 0 | (19,878) | (19,878) |
Stock compensation plans, net of tax | $ 0 | 3,909 | 0 | 0 | 0 | 3,909 |
Stock compensation plans, net of tax (in shares) | 42 | |||||
Ending Balance at Sep. 30, 2022 | $ 307 | $ 301,553 | $ 905,022 | $ (31,764) | $ (126,961) | $ 1,048,157 |
Ending Balance (in shares) at Sep. 30, 2022 | 30,708 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | |||
Translation adjustments, net of tax | $ 0 | $ 0 | $ 0 |
Pension termination and net unrecognized actuarial loss, net of tax | $ 1,161 | ||
Cash dividends declared | $ 0.32 | $ 0.32 | $ 0.32 |
Stock compensation plans, net of tax | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | |||
Net earnings | $ 82,320 | $ 63,496 | $ 99,411 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Net earnings from discontinued operations, net of tax | (76,515) | ||
Depreciation and amortization | 48,343 | 42,049 | 41,338 |
Stock compensation expense | 7,320 | 6,914 | 5,550 |
Changes in assets and liabilities | (11,654) | 15,671 | 26,585 |
Gain on sale of building and land | (1,950) | ||
Effect of deferred taxes on tax provision | 8,946 | (3,041) | (2,785) |
Pension contributions | (25,650) | ||
Pension plan termination charge | 40,600 | ||
Net cash provided by operating activities - continuing operations | 135,275 | 123,139 | 108,534 |
Net cash (used) by discontinued operations | (26,254) | ||
Net cash provided by operating activities | 135,275 | 123,139 | 82,280 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (10,906) | (168,903) | |
Capital expenditures | (32,101) | (26,705) | (32,108) |
Additions to capitalized software | (12,912) | (8,783) | (9,023) |
Proceeds from sale of building and land | 1,950 | ||
Net cash used by investing activities - continuing operations | (55,919) | (202,441) | (41,131) |
Net cash provided by investing activities - discontinued operations | 182,084 | ||
Net cash (used) provided by investing activities | (55,919) | (202,441) | 140,953 |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 100,000 | 216,000 | 12,368 |
Principal payments on long-term debt | (101,000) | (124,368) | (235,000) |
Dividends paid | (8,268) | (8,336) | (8,323) |
Purchases of common stock into treasury | (19,878) | ||
Other | (2,976) | (1,823) | (3,125) |
Net cash (used) provided by financing activities - continuing operations | (32,122) | 81,473 | (234,080) |
Net cash used by financing activities - discontinued operations | (2,140) | ||
Net cash (used) provided by financing activities | (32,122) | 81,473 | (236,220) |
Effect of exchange rate changes on cash and cash equivalents | (5,742) | 1,501 | 3,739 |
Net increase (decrease) in cash and cash equivalents | 41,492 | 3,672 | (9,248) |
Cash and cash equivalents at beginning of year | 56,232 | 52,560 | 61,808 |
Cash and cash equivalents at end of year | 97,724 | 56,232 | 52,560 |
Changes in assets and liabilities: | |||
Accounts receivable, net | (17,676) | 11,266 | 14,633 |
Contract assets and liabilities, net | (12,419) | 8,974 | 35,283 |
Inventories | (13,788) | 612 | (10,340) |
Other assets and liabilities | 9,412 | (477) | (8,609) |
Accounts payable | 21,985 | (688) | (13,275) |
Accrued expenses | 832 | (3,836) | 8,893 |
Changes in assets and liabilities | (11,654) | 15,671 | 26,585 |
Supplemental cash flow information: | |||
Interest paid | 2,835 | 590 | 5,869 |
Income taxes paid (including state & foreign) | $ 9,856 | $ 26,054 | $ 37,714 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies A. Principles of Consolidation The Consolidated Financial Statements include the accounts of ESCO Technologies Inc. (ESCO) and its wholly owned subsidiaries. Except where the context indicates otherwise, the terms “Company”, “we”, “our” and “us” are used in this report to refer to ESCO together with its subsidiaries through which its businesses are conducted. All significant intercompany transactions and accounts have been eliminated in consolidation. B. Basis of Presentation Our fiscal year ends on September 30. Throughout the Consolidated Financial Statements, unless the context indicates otherwise, references to a year (for example 2022) refer to fiscal year ending on September 30 of that year. Certain prior period amounts have been reclassified to conform to the current period presentation. Our former Technical Packaging segment is reflected as discontinued operations in the Consolidated Financial Statements and related notes for all periods presented, in accordance with accounting principles generally accepted in the United States of America (GAAP). C. Nature of Operations We are organized based on the products and services we offer and we currently classify our business operations in three segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG), and RF Shielding and Test (Test). A&D: USG: Test: In addition, for reporting certain financial information we treat Corporate activities as a separate segment. D. Use of Estimates 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. E. Revenue Recognition We recognize revenue when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. We review contracts to determine whether there are one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, we allocate the expected consideration, or the transaction price, to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. We then recognize revenue for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with our customers vary by the type and location of the customer and the products or services offered. We do not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. We account for shipping and handling costs on a gross basis and include them in net sales. We account for taxes collected from customers and remitted to governmental authorities on a net basis and exclude them from net sales. A&D: Approximately 60% of the segment’s revenues (approximately 25% of consolidated revenues) are accounted for over time as the product does not have an alternative use and we have an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract. Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Aerospace & Defense segment contracts, as the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this method, we measure the extent of progress towards completion based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and record revenue proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. We classify amounts billed and due from our customers in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. We have net revenue recognized in the current year from performance obligations satisfied in the prior year due to changes in our estimated costs to complete the related performance obligations. We recognize anticipated losses on contracts in full in the period in which the losses become known. USG: Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. Typically, the related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and we have a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 6% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Test: Approximately 75% of the segment’s revenues (approximately 20% of consolidated revenues) are recorded over time as the product does not have an alternative use and we have an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, we estimate profit as the difference between total revenue and total estimated cost of a contract and recognize these revenues and costs based primarily on contract milestones. The transaction price for our contracts is typically fixed price and represents our best estimate of the consideration we will receive. We estimate total contract cost utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either based on progress or based on a fixed billing schedule within the contract. Performance-based payments represent interim payments based on noted progress points as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of revenue recognized, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. We have net revenue recognized in the current year from performance obligations satisfied in the prior year due to changes in our estimated costs to complete the related performance obligations. We recognize anticipated losses on contracts in full in the period in which the losses become probable and estimable. Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. We include liabilities for customer rebates and discounts in other current liabilities in the Consolidated Balance Sheets. See the further discussion of our revenue recognition in Note 15 below. F. Cash and Cash Equivalents Cash equivalents include temporary investments that are readily convertible into cash, such as money market funds, with original maturities of three months or less. G. Accounts Receivable We reduce accounts receivable by an allowance for amounts that we estimate are uncollectible in the future. This estimated allowance is based on Management’s evaluation of the financial condition of the customer and historical write-off experience. H. Inventories We value inventories at the lower of cost (first-in, first-out) or net realizable value. We regularly review inventories for excess quantities and obsolescence based upon historical experience, specific identification of discontinued items, future demand, and market conditions. Inventories under long-term contracts reflect accumulated production costs, factory overhead, initial tooling and other related costs less the portion of such costs charged to cost of sales. I. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation and amortization are computed primarily on a straight-line basis over the estimated useful lives of the assets: buildings, 10 - 40 years ; machinery and equipment, 3 - 10 years ; and office furniture and equipment, 3 - 10 years . Leasehold improvements are amortized over the remaining term of the applicable lease or their estimated useful lives, whichever is shorter. Long-lived tangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized based on fair value. J. Leases Our lease agreements primarily relate to office space, manufacturing facilities, and machinery and equipment. We determine at lease inception whether an arrangement that provides control over the use of an asset is a lease. We recognize 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. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that we 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 our lease agreements do not explicitly state the discount rate implicit in the lease, Management uses our incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement. K. Goodwill and Other Long-Lived Intangible Assets Goodwill represents the excess of purchase price over the fair value of net identifiable assets acquired in business acquisitions. Management annually reviews goodwill and other long-lived assets with indefinite useful lives for impairment or whenever events or changes in circumstances indicate the carrying amount may be less than fair value. If we determine that the carrying value of the long-lived asset or reporting unit is less than fair value, we record a permanent impairment charge for the amount by which the carrying value of the long-lived asset exceeds its fair value. We measure the fair value of our reporting units based on a discounted cash flow method using a discount rate determined by Management to be commensurate with the risk inherent in each of our reporting units’ current business models. We determine the fair value of trade names using a generally accepted valuation method based on an income approach called the relief from royalty method. During 2022, Management performed a quantitative impairment analysis, which included a detailed calculation of the fair value of our trade names and reporting units related to certain reporting units within these segments. A step 0 analysis was performed on the other reporting units for which a quantitative analysis was not performed. The results of these impairment analyses indicated that the fair values of the trade names and reporting units are not less than their carrying values. Our estimates of discounted cash flows to derive the fair value were measured in accordance with ASC 350, Intangibles – Goodwill and Other Other intangible assets represent costs allocated to identifiable intangible assets, principally customer relationships, capitalized software, patents, trademarks, and technology rights. We amortize intangible assets with estimable useful lives over their respective estimated useful lives to their estimated residual values, and review them for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. See Note 4 regarding goodwill and other intangible assets activity. L. Capitalized Software Costs incurred for the development of computer software that will be sold, leased, or otherwise marketed are charged to research and development expense when incurred, until technological feasibility has been established for the product. Technological feasibility is typically established upon completion of a detailed program design. Costs incurred after this point are capitalized on a project-by-project basis. Capitalized costs consist of internal and external development costs. Upon general release of the product to customers, we cease capitalization and begin amortization, which is calculated on a project-by-project basis as the greater of (1) the ratio of current gross revenues for a product to the total of current and anticipated future gross revenues for the product or (2) the straight-line method over the estimated economic life of the product. We generally amortize software development costs over a three M. Income Taxes We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We may reduce deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We recognize the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. We regularly review our deferred tax assets for recoverability and establish a valuation allowance when Management believes it is more likely than not such assets will not be recovered, taking into consideration historical operating results, expectations of future earnings, tax planning strategies, and the expected timing of the reversals of existing temporary differences. Our policy is to include interest related to unrecognized tax benefits in income tax expense and penalties in operating expense. N. Research and Development Costs Company-sponsored research and development costs include research and development and bid and proposal efforts related to our products and services. We charge Company-sponsored product development costs to expense when incurred. Customer-sponsored research and development costs refer to certain situations whereby customers provide funding to support specific contractually defined research and development costs. We account for customer-sponsored research and development costs incurred pursuant to contracts similarly to other program costs. Total Company and customer-sponsored research and development expenses were approximately $12.3 million, $15.4 million and $13.3 million for 2022, 2021 and 2020, respectively. O. Foreign Currency Translation We translate the financial statements of our foreign operations into U.S. dollars in accordance with FASB ASC Topic 830, Foreign Currency Matters P. Earnings Per Share We calculate basic earnings per share using the weighted average number of common shares outstanding during the period. We calculate diluted earnings per share using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive vesting of unvested restricted units (restricted shares) using the treasury stock method. There are no anti-dilutive shares. The number of shares used in the calculation of earnings per share for each year presented is as follows: (in thousands) 2022 2021 2020 Weighted Average Shares Outstanding — 25,933 26,046 26,010 Dilutive Restricted Shares 134 179 125 Shares — 26,067 26,225 26,135 Q. Share-Based Compensation We provide compensation benefits to certain key employees under several share-based plans providing for performance-accelerated, performance-based and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan for non-employee directors. We measure share-based payment expense at the grant date based on the fair value of the award and recognize it on a straight-line basis over the requisite service period (generally the vesting period of the award) and/or if the performance criteria are deemed probable. R. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss of $(31.8) million at September 30, 2022 consisted primarily of currency translation adjustments. S. Fair Value Measurements Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, we base fair value on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, we apply valuation models. These valuation techniques involve some level of Management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. 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 We have estimated the fair value of our financial instruments as of September 30, 2022 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, payables and other current assets and liabilities approximate fair value because of the short maturity of those instruments. The carrying amounts due under the revolving credit facility approximate fair value as the interest on outstanding borrowings is calculated at a spread over the London Interbank Offered Rate (LIBOR) or based on the prime rate, at our election. Nonfinancial Assets and Liabilities Our nonfinancial assets such as property, plant and equipment, inventories, 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 2022. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2022 | |
Acquisitions | |
Acquisitions | 2. Acquisitions 2022 On November 4, 2021, we acquired Networks Electronic Company, LLC (NEco) for a purchase price of approximately $15.4 million, net of cash acquired. NEco, based in Chatsworth, California, provides miniature electro-explosive devices utilized in mission-critical defense and aerospace applications. Since the date of acquisition, the operating results for the NEco business have been included as part of PTI in the A&D segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.6 million of accounts receivable, $1.5 million of inventory, $0.2 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $8.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $6.3 million. The acquired goodwill of $5.7 million related to excess value associated with opportunities to expand the services and products that the Company can offer to its customers. We anticipate that the goodwill will be deductible for tax purposes. 2021 On August 9, 2021 we acquired the assets of Phenix Technologies, Inc. (Phenix), for a purchase price of approximately $47.2 million in cash. Phenix, based in Accident, Maryland, is a leading designer and manufacturer of high voltage, high current, high power test systems and components and solutions supporting the electric utility industry, high voltage test laboratories, and field service organizations worldwide. Since the date of acquisition, the operating results for the Phenix business have been included as part of the USG segment. The acquisition date fair value of the assets acquired and liabilities assumed were as follows: approximately $2.6 million of accounts receivable, $5.8 million of inventory, $8.0 million of property, plant and equipment, $6.2 million of accounts payable and accrued expenses, $3.7 million for tradenames, $9.6 million of customer relationships and $0.5 million of miscellaneous items. The tradename was determined to have an indefinite useful life and the customer relationships were determined to have a useful life of 13 years. The acquired goodwill of $18.7 million relates to excess value associated with opportunities to expand the services and products that the Company can offer to its customers, with approximately $15 million of goodwill deductible for tax purposes. During the fourth quarter of 2022, the Company received $4.6 million upon finalization of the working capital adjustment. On July 29, 2021 we acquired I.S.A. – Altanova Group S.r.l., (Altanova), headquartered in Taino, Italy, for a purchase price of approximately $115 million, net of cash acquired. Altanova is a supplier of diagnostic products, monitoring systems and services related to power generation, transmission and distribution networks, renewable energy and storage, and process industries to customers in more than 100 countries. Since the date of acquisition, the operating results for the Altanova business have been included as part of the USG segment. The acquisition date fair value of the assets acquired and liabilities assumed were as follows: $9.7 million of accounts receivable, $5.6 million of inventory, $1.2 million of property, plant and equipment, $9.0 million of other assets, $12.8 million of accounts payable and accrued expenses, $6.9 million of other liabilities, $16.7 million of deferred tax liabilities, $50.5 million of customer relationships and $4.3 million of tradenames. The tradename was determined to have a useful life of ten years and the customer relationships were determined to have a useful life of twenty years. The acquired goodwill of $71.1 million relates to the excess value associated with opportunities to expand the services and products that the Company can offer to its customers, access to new markets, and synergies anticipated by combining Altanova with existing USG businesses. The goodwill is not deductible for tax purposes. We accounted for these acquisitions using the purchase method of accounting, and accordingly, we allocated the respective purchase prices to the assets (including intangible assets) acquired and liabilities assumed based on estimated fair values at the date of acquisition. We have included the financial results from these acquisitions in our financial statements from the date of acquisition. |
Technical Packaging Divestiture
Technical Packaging Divestiture | 12 Months Ended |
Sep. 30, 2022 | |
Technical Packaging Divestiture | |
Technical Packaging Divestiture | 3. Technical Packaging Divestiture In December 2019, we completed the sale of our Technical Packaging business segment, consisting of our 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 (NYSE:SON). 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 are reflected as discontinued operations in the Consolidated Financial Statements and related notes for all periods presented. Net sales and pretax (loss) from the Technical Packaging business were $16.5 million and $(0.3) million, respectively, in 2020. We received net proceeds from the sale of approximately $184 million and recorded $76.5 million after-tax |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets Included on the Consolidated Balance Sheets at September 30, 2022 and 2021 are the following intangible assets gross carrying amounts and accumulated amortization: (Dollars in thousands) 2022 2021 Goodwill $ 492,709 504,853 Intangible assets with determinable lives: Patents Gross carrying amount $ 2,353 2,131 Less: accumulated amortization 1,091 972 Net $ 1,262 1,159 Capitalized software Gross carrying amount $ 106,583 93,671 Less: accumulated amortization 70,476 63,740 Net $ 36,107 29,931 Customer Relationships Gross carrying amount $ 287,447 288,530 Less: accumulated amortization 96,921 80,882 Net $ 190,526 207,648 Other Gross carrying amount $ 13,985 13,177 Less: accumulated amortization 7,440 4,398 Net $ 6,545 8,779 Intangible assets with indefinite lives: Trade names $ 160,024 161,733 We performed our annual evaluation of goodwill and intangible assets for impairment during the fourth quarter of 2022 and concluded that no impairment existed at September 30, 2022. There were no accumulated impairment losses as of September 30, 2022. The changes in the carrying amount of goodwill attributable to each business segment for 2022 and 2021 are as follows: (Dollars in millions) A&D Test USG Total Balance as of September 30, 2020 $ 102.1 34.1 271.9 408.1 Acquisition activity 2.2 — 95.2 97.4 Foreign currency translation and other — — (0.6) (0.6) Balance as of September 30, 2021 $ 104.3 34.1 366.5 504.9 Acquisition activity 5.7 — (4.7) 1.0 Foreign currency translation and other — (0.1) (13.1) (13.2) Balance as of September 30, 2022 $ 110.0 34.0 348.7 492.7 Amortization expense related to intangible assets with determinable lives was $25.9 million, $20.8 ten three thirteen |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable, net of the allowance for credit losses, consisted of the following at September 30, 2022 and 2021: (Dollars in thousands) 2022 2021 Commercial $ 151,565 128,952 U.S. Government and prime contractors 13,080 17,389 Total $ 164,645 146,341 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Sep. 30, 2022 | |
Inventories, Net | |
Inventories, Net | 6. Inventories, Net Inventories, net, from continuing operations consisted of the following at September 30, 2022 and 2021: (Dollars in thousands) 2022 2021 Finished goods $ 32,471 32,998 Work in process 38,492 34,201 Raw materials 91,440 79,949 Total $ 162,403 147,148 |
Income Tax Expense
Income Tax Expense | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Expense | |
Income Tax Expense | 7. Income Tax Expense We allocated total income tax expense for the years ended September 30, 2022, 2021 and 2020 to income tax expense as follows: (Dollars in thousands) 2022 2021 2020 Income tax expense from continuing operations $ 24,115 17,175 13,510 Income tax expense from discontinued operations — — 23,501 Total income tax expense (benefit) $ 24,115 17,175 37,011 The components of income from continuing operations before income taxes for 2022, 2021 and 2020 consisted of the following: (Dollars in thousands) 2022 2021 2020 United States $ 90,674 70,214 23,951 Foreign 15,761 10,457 12,455 Total income before income taxes $ 106,435 80,671 36,406 The principal components of income tax expense (benefit) from continuing operations for 2022, 2021 and 2020 consist of: (Dollars in thousands) 2022 2021 2020 Federal: Current $ 7,248 14,807 10,495 Deferred 9,752 (1,598) 1,311 State and local: Current 1,635 2,257 1,984 Deferred 1,774 (786) (932) Foreign: Current 4,645 2,922 2,875 Deferred (939) (427) (2,223) Total $ 24,115 17,175 13,510 The actual income tax expense from continuing operations for 2022, 2021 and 2020 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows: 2022 2021 2020 Federal corporate statutory rate 21.0 % 21.0 % 21.0 % State and local, net of Federal benefits 2.9 1.9 2.3 Impact of foreign operations (0.3) (0.4) 1.3 Federal research credit (0.3) (0.9) (3.7) Executive compensation 0.5 0.9 1.6 Valuation allowance (0.3) — (6.8) U.S. tax on GILTI 1.8 1.0 3.2 GILTI foreign tax credits (1.5) (0.6) (2.7) FDII deduction (0.9) (1.7) (2.6) Pension plan termination charge — — 23.4 Other, net (0.2) 0.1 0.1 Effective income tax rate 22.7 % 21.3 % 37.1 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2022 and 2021 are presented below: (Dollars in thousands) 2022 2021 Deferred tax assets: Inventories $ 4,990 4,267 Pension and other postretirement benefits 664 859 Timing differences related to revenue recognition 61 9,365 Lease liabilities 7,073 7,614 Net operating and capital loss carryforwards — domestic 575 542 Net operating loss carryforward — foreign 3,396 4,279 Other compensation-related costs and other cost accruals 9,032 8,174 State credit carryforward 1,676 2,639 Foreign credit carryforward 203 192 Total deferred tax assets 27,670 37,931 Deferred tax liabilities: ROU assets (7,073) (7,614) Goodwill (11,691) (13,746) Acquisition intangible assets (62,051) (62,052) Depreciation, software amortization (24,503) (22,418) Net deferred tax liabilities before valuation allowance (77,648) (67,899) Less valuation allowance (1,208) (2,011) Net deferred tax liabilities $ (78,856) (69,910) We had a foreign net operating loss (NOL) carryforward of $12.1 million at September 30, 2022, which reflects tax loss carryforwards in Germany, South Africa, Canada, Japan and the United Kingdom. Approximately $10.4 million of the tax loss carryforwards have no expiration date while the remaining $1.7 million will expire between 2031 and 2041. We had net foreign credit carryforwards of $0.2 million, that will expire between 2041 and 2042.We had deferred tax assets related to state NOL carryforwards of $0.6 million at September 30, 2022 which expire between 2025 and 2042. We also had net state research and other credit carryforwards of $1.7 million of which $0.9 million expires between 2024 and 2037. The remaining $0.8 million does not have an expiration date. The valuation allowance for deferred tax assets as of September 30, 2022 and 2021 was $ 1.2 2.0 As of September 30, 2022, the Company does not have any material unrecognized tax benefits. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2022 | |
Debt | |
Debt | 8. Debt Debt consists of the following at September 30, 2022 and 2021: (Dollars in thousands) 2022 2021 Total borrowings $ 153,000 154,000 Current portion of long-term debt and short-term borrowings (20,000) (20,000) Total long-term debt, less current portion $ 133,000 134,000 The Credit Facility includes a $500 million revolving line of credit as well as provisions allowing for an 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, with balance due by this date. Interest on borrowings under the Credit Facility is calculated at a spread over either the New York Federal Reserve Bank Rate, the prime rate, or the London Interbank Offered Rate (LIBOR), depending on various factors. The Credit Facility also requires a facility fee ranging from 10 to 25 basis points per annum on the unused portion. The interest rate spreads and the facility fee are subject to increase or decrease depending on the Company’s leverage ratio. The Credit Facility is secured by the unlimited guaranty of our direct and indirect material U.S. subsidiaries and the pledge of 100% of the equity interests of our direct and indirect material foreign subsidiaries. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. As of September 30, 2022, we were in compliance with all covenants. At September 30, 2022, we had approximately $339 million available to borrow under the Credit Facility, plus the $250 million increase option subject to the lenders’ consent, in addition to $97.7 million cash on hand. We classified $20 million as the current portion of long-term debt as of September 30, 2022, as we intend to repay this amount within the next twelve months; however, we have no contractual obligation to repay such amount during the next twelve months. During 2022 and 2021, our maximum aggregate short-term borrowings at any month-end were $208 million and $174 million, respectively, and the average aggregate short-term borrowings and outstanding based on month-end balances were $189.8 million and $71.3 million, respectively. The weighted average interest rates were 2.11% and 1.20% for 2022 and 2021, respectively. As of September 30, 2022, the interest rate on our debt was 4.12%. The letters of credit issued and outstanding under the Credit Facility totaled $8.0 million and $8.5 million at September 30, 2022 and 2021, respectively. |
Capital Stock
Capital Stock | 12 Months Ended |
Sep. 30, 2022 | |
Capital Stock | |
Capital Stock | 9. Capital Stock The 30,707,748 and 30,666,173 common shares as presented in the accompanying Consolidated Balance Sheets at September 30, 2022 and 2021 represent the actual number of shares issued at the respective dates. We held 4,854,997 and 4,604,741 common shares in treasury at September 30, 2022 and 2021, respectively. In August 2021, our Board of Directors approved a new common stock repurchase program authorizing us to repurchase shares of our stock from time to time in Management’s discretion, in the open market or otherwise, up to a maximum total repurchase amount of $200 million (or the maximum amount permitted under our bank credit agreements, if less). This program is scheduled to expire September 30, 2024. We repurchased approximately 257,500 shares under this program in 2022 at an aggregate cost of $20.0 million. We did no t repurchase any shares in 2021 or 2020. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation | |
Share-Based Compensation | 10. Share-Based Compensation We provide compensation benefits to certain key employees under several share-based plans providing for performance-accelerated and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan for non-employee directors. As of September 30, 2022, our equity compensation plans had a total of 580,437 shares authorized and available for future issuance. Performance-Accelerated Restricted Stock Unit (PARS) Awards, Time-Vested Restricted Stock Unit (RSU) Awards, and Performance Share Unit (PSU) Awards A PARS award represents the right to receive a specified number of shares of Company common stock if and when the award vests. A PARS award is not stock and does not give the recipient any rights as a shareholder until it vests and is paid out in shares of stock. PARS awards currently outstanding have a five-year vesting period, with accelerated vesting if certain targets based on market conditions are achieved. In these cases, if it is probable that the performance condition will be met, the Company recognizes compensation cost on a straight-line basis over the shorter performance period; otherwise, it will recognize compensation cost over the longer service period. Compensation cost for the outstanding PARS awards is being recognized over the shorter performance period, as it is probable the performance condition will be met. The PARS award grants were valued at the stock price on the date of grant. The terms of the RSU awards are similar to those of the PARS awards, but without any provision for acceleration of the vesting date. Each RSU represents the right to receive one share of Company common stock if the recipient remains continuously employed by the Company until the award vests, in this case 3 Beginning in fiscal year 2022, the Company granted PSU awards with a three-year vesting period, with each PSU representing the right to receive one share of Company common stock if certain performance targets are achieved. The targets are based on achieving certain EBITDA metrics and a Total Shareholder return (rTSR) metric over a three-year period. Pretax compensation expense related to the above awards for continuing operations was $6.1 million, $5.6 million and $4.3 million for 2022, 2021 and 2020, respectively. The following summary presents information regarding outstanding share-based compensation awards as of the specified dates, and changes during the specified periods: FY 2022 FY 2021 FY 2020 Estimated Estimated Estimated Weighted Weighted Weighted Shares Avg. Price Shares Avg. Price Shares Avg. Price Nonvested at October 1, 226,705 $ 76.15 220,300 $ 66.55 281,004 $ 59.72 Granted 117,045 82.54 51,476 108.05 45,723 74.80 Vested (75,327) 56.87 (35,753) 64.40 (89,822) 50.51 Cancelled (3,056) 89.51 (9,318) 70.50 (16,605) 60.48 Nonvested at September 30, 265,367 $ 84.29 226,705 $ 76.15 220,300 $ 66.55 Compensation Plan for Non-Employee Directors In addition to an annual cash retainer, we provide each non-employee director with an annual equity award having a grant date market value of $180,000 , based on the NYSE closing price of the Company’s stock on the date of grant. For calendar years prior to 2021, the award consisted of actual shares of Company stock, but beginning in January 2021, the award has been in the form of Restricted Stock Units, each of which represents the right to receive one share of Company stock at the end of a one-year vesting period. At the end of the vesting period, each award will be converted into the right to receive the same number of actual shares of common stock, plus additional shares representing the value of the quarterly dividends which would have accrued on the underlying shares during the vesting period. Compensation expense related to the non-employee director grants was $1.2 million, $1.3 million and $1.3 million for 2022, 2021 and 2020, respectively. Total Share-Based Compensation The total share-based compensation cost that has been recognized in results of operations and included within SG&A from continuing operations was $7.3 million, $6.9 million and $5.6 million for 2022, 2021 and 2020, respectively. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $1.5 million, $1.4 million and $1.2 million for 2022, 2021 and 2020, respectively. As of September 30, 2022, there was $11.2 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 1.7 |
Retirement and Other Benefit Pl
Retirement and Other Benefit Plans | 12 Months Ended |
Sep. 30, 2022 | |
Retirement and Other Benefit Plans | |
Retirement and Other Benefit Plans | 11. Retirement and Other Benefit Plans On November 14, 2019, our Board of Directors approved a resolution to terminate the Company’s defined benefit pension plan (the Plan) effective as of February 29, 2020. In connection with the termination, we contributed $25.7 million of cash to the Plan during 2020, settled approximately $32.4 million of Plan liabilities during 2020 through lump-sum payments from existing plan assets to eligible participants who elected to receive them, and recorded approximately $40.6 million of charges associated with these settlements. During 2020, we settled approximately $69.1 million of Plan liabilities by entering into an agreement to purchase annuities from a third-party insurance company. This agreement covered active and former employees and their beneficiaries, with the insurance company assuming the future annuity payments for these individuals. Substantially all our domestic employees are covered by a defined contribution plan maintained by the Company. In addition, we offer unfunded post-retirement pre-Medicare health insurance benefits to a small number of eligible retirees and employees. We formerly provided unfunded post-retirement life insurance to qualifying retired employees who retired before 2005, but ceased providing this coverage on July 31, 2020. There was no financial impact of this plan in 2022. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Sep. 30, 2022 | |
Business Segment Information | |
Business Segment Information | 12. Business Segment Information We are organized based on the products and services we offer, and we classify our continuing business operations in three reportable segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG) and RF Shielding and Test (Test). In addition, for reporting certain financial information we treat Corporate activities as a separate segment. The former Technical Packaging segment was divested in December 2019 and is reflected as discontinued operations for 2020. The A&D segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Mayday Manufacturing Co. (Mayday), Westland Technologies, Inc. (Westland), Globe Composite Solutions, LLC (Globe) and Networks Electronic Company, LLC (NEco).The companies within this segment primarily design and manufacture specialty filtration, fluid control and naval products, including hydraulic filter elements and fluid control devices used in aerospace and defense applications, unique filter mechanisms used in micro-propulsion devices for satellites, custom designed filters for manned aircraft and submarines, products and systems to reduce vibration and/or acoustic signatures and otherwise reduce or obscure a vessel’s signature, and other communications, sealing, surface control and hydrodynamic related applications to enhance U.S. Navy maritime survivability; precision-tolerance machined components for the aerospace and defense industry; metal processing services; and miniature electro-explosive devices utilized in mission-critical defense and aerospace applications. The USG segment’s operations consist of Doble Engineering Company and related subsidiaries including Morgan Schaffer and Altanova (collectively, Doble), and NRG Systems, Inc. (NRG). Doble is an industry leader in the development, manufacture and delivery of diagnostic testing and data management solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment. It combines three core elements for customers – diagnostic test and condition monitoring instruments, expert consulting, and testing services – and provides access to its large reserve of related empirical knowledge. NRG is a global market leader in the design and manufacture of decision support tools for the renewable energy industry, primarily wind and solar. The recent acquisition of Altanova not only complements our existing products and services but its strong market share in Europe and Asia provides a significant international platform for our USG segment. The Test segment’s operations consist of ETS-Lindgren Inc. and related subsidiaries (ETS-Lindgren). ETS-Lindgren is an industry leader in designing and manufacturing products which provide its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. It supplies its customers with a broad range of isolated environments and turnkey systems, including RF test facilities, acoustic test enclosures, RF and magnetically shielded rooms, secure communication facilities, RF measurement systems and broadcast and recording studios. Many of these facilities include proprietary features such as shielded doors and windows. ETS-Lindgren also provides the design, program management, installation and integration services required to successfully complete these types of facilities. ETS-Lindgren also supplies customers with a broad range of components including RF absorptive materials, RF filters, active compensation systems, antennas, antenna masts, turntables and electric and magnetic probes, RF test cells, proprietary measurement software and other test accessories required to perform a variety of tests. ETS-Lindgren offers a variety of services including calibration for antennas and field probes, chamber certification, field surveys, customer training and a variety of product tests. ETS-Lindgren serves the acoustics, medical, health and safety, electronics, wireless communications, automotive and defense markets. Accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the Consolidated Financial Statements. The operating units within each reporting segment have been aggregated because of similar economic characteristics and meet the other aggregation criteria of FASB ASC 280. We evaluate the performance of our operating units based on EBIT, which is defined as earnings before interest and taxes. EBIT on a consolidated basis is a non-GAAP financial measure. Intersegment sales and transfers are not significant. Segment assets consist primarily of customer receivables, inventories, capitalized software and fixed assets directly associated with the production processes of the segment. Segment depreciation and amortization is based upon the direct assets listed above. The tables below are presented on the basis of continuing operations and exclude discontinued operations. Net Sales (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 351.4 314.8 351.9 USG 278.4 202.9 191.7 Test 227.7 197.7 186.9 Consolidated totals $ 857.5 715.4 730.5 No customer exceeded 10% of consolidated sales in 2022 or 2021 and one customer exceeded 10% of consolidated sales in 2020. EBIT (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 68.4 56.5 69.9 USG 57.6 40.9 24.4 Test 32.6 27.6 27.2 Reconciliation to consolidated totals (Corporate) (47.3) (42.1) (78.4) Consolidated EBIT 111.3 82.9 43.1 Less: interest expense (4.9) (2.2) (6.7) Earnings before income tax $ 106.4 80.7 36.4 Identifiable Assets (Dollars in millions) Year ended September 30, 2022 2021 A&D $ 295.2 270.0 USG 220.0 197.5 Test 174.6 153.6 Corporate 964.7 956.2 Consolidated totals $ 1,654.5 1,577.3 Corporate consists primarily of deferred taxes, acquired intangible assets including goodwill and cash balances. Capital Expenditures (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 9.4 10.4 15.9 USG 14.4 11.6 12.4 Test 8.3 4.7 3.6 Corporate — — 0.2 Consolidated totals $ 32.1 26.7 32.1 In addition to the above amounts, we incurred expenditures for capitalized software of $12.9 million, $8.8 million and $9.0 million in 2022, 2021 and 2020, respectively. Depreciation and Amortization (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 11.1 10.4 9.4 USG 12.6 13.5 14.4 Test 5.4 5.2 5.0 Corporate 19.2 12.9 12.5 Consolidated totals $ 48.3 42.0 41.3 Depreciation expense of property, plant and equipment was $22.4 million, $21.2 million and $19.5 million for 2022, 2021 and 2020, respectively. Geographic Information Net Sales (Dollars in millions) Year ended September 30, 2022 2021 2020 United States $ 603.2 517.0 529.4 Asia 122.4 92.3 96.3 Europe 72.4 53.5 51.3 Canada 31.2 27.0 31.7 India 10.3 12.4 10.3 Other 18.0 13.2 11.5 Consolidated totals $ 857.5 715.4 730.5 Long-Lived Assets (Dollars in millions) Year ended September 30, 2022 2021 United States $ 141.5 141.0 Mexico 5.8 3.8 Other 8.7 9.5 Consolidated totals $ 156.0 154.3 We attribute net sales to countries based on the location of the customer. We attribute long-lived assets to countries based on the location of the asset. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies At September 30, 2022, we had $8.0 million in letters of credit outstanding as guarantees of contract performance and cash amounts that exceeded federally insured amounts. As a normal incident of the businesses in which we are engaged, various claims, charges and litigation are asserted or commenced from time to time against us. Additionally, we are currently involved in various stages of investigation and remediation relating to environmental matters. It is the opinion of Management that the aggregate costs involved in the resolution of these matters, and final judgments, if any, which might be rendered against us are adequately accrued, are covered by insurance or are not likely to have a material adverse effect on our financial results as the estimated exposure to loss is not material. |
Leases
Leases | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 14. Leases Effective October 1, 2019 we adopted ASC 842, Leases the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, Management uses our incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement. Our leases for real estate commonly include escalating payments. We include these variable lease payments in the calculation of our 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. Our leases are for office space, manufacturing facilities, and machinery and equipment. The components of lease costs are shown below: Year Ended Year Ended September 30, September 30, (Dollars in thousands) 2022 2021 Finance lease cost: Amortization $ 1,572 2,413 Interest on lease liabilities 973 1,235 Operating lease cost 6,347 5,879 Total lease cost $ 8,892 9,527 Additional information related to leases is shown below: Year Ended Year Ended September 30, September 30, (Dollars in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,101 5,504 Operating cash flows from finance leases 973 1,228 Financing cash flows from finance leases 1,224 1,757 Right-of-use assets obtained in exchange for operating lease liabilities $ 4,160 15,609 Weighted-average remaining lease term: Operating leases 9.3 yrs 10.3 yrs Finance leases 12.0 yrs 11.7 yrs Weighted-average discount rate: Operating leases 3.2 % 3.1 % Finance leases 4.6 % 4.2 % The table below 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 September 30, 2022: (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2023 $ 5,953 2,256 2024 5,132 2,315 2025 3,790 2,370 2026 2,881 2,434 2027 and thereafter 17,029 18,997 Total minimum lease payments 34,785 28,372 Less: amounts representing interest 4,760 7,189 Present value of net minimum lease payments $ 30,025 21,183 Less: current portion of lease obligations 5,172 1,331 Non-current portion of lease obligations 24,853 19,852 ROU assets $ 29,150 17,343 The table below 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 September 30, 2021: (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2022 $ 5,448 3,153 2023 4,679 3,235 2024 4,032 3,319 2025 3,654 3,399 2026 and thereafter 20,453 25,516 Total minimum lease payments 38,266 38,622 Less: amounts representing interest 5,691 9,092 Present value of net minimum lease payments $ 32,575 29,530 Less: current portion of lease obligations 4,543 2,180 Non-current portion of lease obligations 28,032 27,350 ROU assets $ 31,846 24,964 We include operating and finance lease liabilities in the Consolidated Balance Sheet in accrued other expenses (current portion) and other liabilities (long-term portion). We include operating lease ROU assets as a caption on the Consolidated Balance Sheet and include finance lease ROU assets in Property, plant and equipment on the Consolidated Balance Sheet. |
Revenues
Revenues | 12 Months Ended |
Sep. 30, 2022 | |
Revenues | |
Revenues | 15. Revenues (a) Disaggregation of Revenues The tables below present our revenues by customer type, geographic location, and revenue recognition method for the years ended September 30, 2022 and 2021, as we believe this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The tables also include a reconciliation of the disaggregated revenue within our reportable segments. Year Ended September 30, 2022 (In thousands) A&D USG Test Total Customer type: Commercial $ 144,305 272,432 209,016 625,753 Government 207,108 5,935 18,706 231,749 Total revenues $ 351,413 278,367 227,722 857,502 Geographic location: United States $ 299,158 180,586 123,428 603,172 International 52,255 97,781 104,294 254,330 Total revenues $ 351,413 278,367 227,722 857,502 Revenue recognition method: Point in time $ 144,039 224,502 58,522 427,063 Over time 207,374 53,865 169,200 430,439 Total revenues $ 351,413 278,367 227,722 857,502 Year Ended September 30, 2021 (In thousands) A&D USG Test Total Customer type: Commercial $ 130,217 199,111 177,601 506,929 Government 184,607 3,797 20,107 208,511 Total revenues $ 314,824 202,908 197,708 715,440 Geographic location: United States $ 275,976 140,545 100,438 516,959 International 38,848 62,363 97,270 198,481 Total revenues $ 314,824 202,908 197,708 715,440 Revenue recognition method: Point in time $ 136,449 153,163 40,609 330,221 Over time 178,375 49,745 157,099 385,219 Total revenues $ 314,824 202,908 197,708 715,440 (b) Remaining Performance Obligations Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenue in future periods when we perform under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At September 30, 2022, we had $695.0 million in remaining performance obligations of which we expect to recognize revenues of approximately 80% in the next twelve months. (c) Contract assets and contract liabilities We report assets and liabilities related to our contracts with customers on a contract-by-contract basis at the end of each reporting period. At September 30, 2022, our contract assets and contract liabilities totaled $125.2 million and $137.6 million, respectively. At September 30, 2021, our contract assets and contract liabilities totaled $93.8 million and $108.8 million, respectively. During 2022, we recognized approximately $83.8 million in revenues that were included in the contract liabilities balance at September 30, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Principles Of Consolidation | A. Principles of Consolidation The Consolidated Financial Statements include the accounts of ESCO Technologies Inc. (ESCO) and its wholly owned subsidiaries. Except where the context indicates otherwise, the terms “Company”, “we”, “our” and “us” are used in this report to refer to ESCO together with its subsidiaries through which its businesses are conducted. All significant intercompany transactions and accounts have been eliminated in consolidation. |
Basis Of Presentation | B. Basis of Presentation Our fiscal year ends on September 30. Throughout the Consolidated Financial Statements, unless the context indicates otherwise, references to a year (for example 2022) refer to fiscal year ending on September 30 of that year. Certain prior period amounts have been reclassified to conform to the current period presentation. Our former Technical Packaging segment is reflected as discontinued operations in the Consolidated Financial Statements and related notes for all periods presented, in accordance with accounting principles generally accepted in the United States of America (GAAP). |
Nature Of Operations | C. Nature of Operations We are organized based on the products and services we offer and we currently classify our business operations in three segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG), and RF Shielding and Test (Test). A&D: USG: Test: In addition, for reporting certain financial information we treat Corporate activities as a separate segment. |
Use Of Estimates | D. Use of Estimates 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. |
Revenue Recognition | E. Revenue Recognition We recognize revenue when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. We review contracts to determine whether there are one or multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, we allocate the expected consideration, or the transaction price, to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. We then recognize revenue for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Payment terms with our customers vary by the type and location of the customer and the products or services offered. We do not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. We account for shipping and handling costs on a gross basis and include them in net sales. We account for taxes collected from customers and remitted to governmental authorities on a net basis and exclude them from net sales. A&D: Approximately 60% of the segment’s revenues (approximately 25% of consolidated revenues) are accounted for over time as the product does not have an alternative use and we have an enforceable right to payment for costs incurred plus a reasonable margin or the inventory is owned by the customer. The related contracts are primarily cost-plus or fixed price contracts related to the design, development and manufacture of complex fluid control products, quiet valves, manifolds, shock and vibration dampening, thermal insulation and systems primarily for the commercial aerospace and military (U.S. Government) markets. The contracts may contain multiple products, which are capable of being distinct as the customer could benefit from each product on its own or together with other readily available resources. Each product is separately identifiable from the other products in the contract. Therefore, each product is distinct in context of the contract and will be accounted for as a separate performance obligation. Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications are for products that are not distinct from the existing contract and are accounted for as part of that existing contract. Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion for the commercial and military contracts requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our Aerospace & Defense segment contracts, as the rate at which costs are incurred to fulfill a contract best depicts the transfer of control to the customer. Under this method, we measure the extent of progress towards completion based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and record revenue proportionally as costs are incurred based on an estimated profit margin. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees that can increase the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all other information that is reasonably available to us. Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. We classify amounts billed and due from our customers in Accounts receivable, net. For short term fixed price and cost-type contracts, we are generally paid within a short period of time. For contracts where revenue is recognized over time, we recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. We have net revenue recognized in the current year from performance obligations satisfied in the prior year due to changes in our estimated costs to complete the related performance obligations. We recognize anticipated losses on contracts in full in the period in which the losses become known. USG: Approximately 20% of the segment’s revenues (approximately 6% of consolidated revenues) are recognized over time as services are performed. The services accounted for under this method include an obligation to provide testing services using hardware and embedded software, software maintenance, training, lab testing, and consulting services. Typically, the related contracts contain a bundle of goods and services that are integrated in the context of the contract. Therefore, the goods and services are not distinct and we have a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We will recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for our USG segment contracts. The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, which is typically received upon commencement of the contract, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Included in this category, approximately 6% of the segment’s revenues (approximately 2% of consolidated revenues) are recognized based on the terms of the software contract. For contracts that transfer a software license to the customer, revenue will be recognized at a point in time. These type of software contracts represent a right to use the software, or a functional license, in which revenue should be recognized upon transfer of the license. For contracts in software as a service (SaaS) arrangements, revenue will be recognized over time. The customer receives and consumes the benefits of the SaaS arrangement through access to the system which is for a stated period. We will recognize revenue based on each day of providing access (straight-line over the contract term). The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Under the typical payment terms of our software contracts, the customer pays us in advance of when services are performed. Because of the timing difference of revenue recognition and customer payment, these contracts result in deferred revenue, which we present as contract liabilities, in the Consolidated Balance Sheets. Test: Approximately 75% of the segment’s revenues (approximately 20% of consolidated revenues) are recorded over time as the product does not have an alternative use and we have an enforceable right to payment for costs incurred plus a reasonable margin. Products accounted for under this guidance include the construction and installation of test chambers to a buyer’s specifications that provide its customers with the ability to measure and contain magnetic, electromagnetic and acoustic energy. The goods and services related to each installed test chamber are not distinct due to the significant amount of integration provided and each installed chamber is accounted for as a single performance obligation. Selecting the method to measure progress towards completion for these contracts requires judgment and is based on the nature of the products and service to be provided. We use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. For arrangements that are accounted for under this guidance, we estimate profit as the difference between total revenue and total estimated cost of a contract and recognize these revenues and costs based primarily on contract milestones. The transaction price for our contracts is typically fixed price and represents our best estimate of the consideration we will receive. We estimate total contract cost utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to a year, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. Under the typical payment terms of our fixed price contracts, the customer pays us either based on progress or based on a fixed billing schedule within the contract. Performance-based payments represent interim payments based on noted progress points as the work progresses. Because of the timing difference of revenue recognition and customer billing, these contracts result in revenue recognized in excess of billings and billings in excess of revenue recognized, which we present as contract assets and contract liabilities, respectively, in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. For contracts where revenue is recognized over time, we generally recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. We have net revenue recognized in the current year from performance obligations satisfied in the prior year due to changes in our estimated costs to complete the related performance obligations. We recognize anticipated losses on contracts in full in the period in which the losses become probable and estimable. Contract Assets and Liabilities Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities include deposits, deferred revenue, upfront payments and billings in excess of revenue recognized. We include liabilities for customer rebates and discounts in other current liabilities in the Consolidated Balance Sheets. See the further discussion of our revenue recognition in Note 15 below. |
Cash And Cash Equivalents | F. Cash and Cash Equivalents Cash equivalents include temporary investments that are readily convertible into cash, such as money market funds, with original maturities of three months or less. |
Accounts Receivable | G. Accounts Receivable We reduce accounts receivable by an allowance for amounts that we estimate are uncollectible in the future. This estimated allowance is based on Management’s evaluation of the financial condition of the customer and historical write-off experience. |
Inventories | H. Inventories We value inventories at the lower of cost (first-in, first-out) or net realizable value. We regularly review inventories for excess quantities and obsolescence based upon historical experience, specific identification of discontinued items, future demand, and market conditions. Inventories under long-term contracts reflect accumulated production costs, factory overhead, initial tooling and other related costs less the portion of such costs charged to cost of sales. |
Property, Plant And Equipment | I. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation and amortization are computed primarily on a straight-line basis over the estimated useful lives of the assets: buildings, 10 - 40 years ; machinery and equipment, 3 - 10 years ; and office furniture and equipment, 3 - 10 years . Leasehold improvements are amortized over the remaining term of the applicable lease or their estimated useful lives, whichever is shorter. Long-lived tangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized based on fair value. |
Leases | J. Leases Our lease agreements primarily relate to office space, manufacturing facilities, and machinery and equipment. We determine at lease inception whether an arrangement that provides control over the use of an asset is a lease. We recognize 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. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that we 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 our lease agreements do not explicitly state the discount rate implicit in the lease, Management uses our incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement. |
Goodwill And Other Long-Lived Assets | K. Goodwill and Other Long-Lived Intangible Assets Goodwill represents the excess of purchase price over the fair value of net identifiable assets acquired in business acquisitions. Management annually reviews goodwill and other long-lived assets with indefinite useful lives for impairment or whenever events or changes in circumstances indicate the carrying amount may be less than fair value. If we determine that the carrying value of the long-lived asset or reporting unit is less than fair value, we record a permanent impairment charge for the amount by which the carrying value of the long-lived asset exceeds its fair value. We measure the fair value of our reporting units based on a discounted cash flow method using a discount rate determined by Management to be commensurate with the risk inherent in each of our reporting units’ current business models. We determine the fair value of trade names using a generally accepted valuation method based on an income approach called the relief from royalty method. During 2022, Management performed a quantitative impairment analysis, which included a detailed calculation of the fair value of our trade names and reporting units related to certain reporting units within these segments. A step 0 analysis was performed on the other reporting units for which a quantitative analysis was not performed. The results of these impairment analyses indicated that the fair values of the trade names and reporting units are not less than their carrying values. Our estimates of discounted cash flows to derive the fair value were measured in accordance with ASC 350, Intangibles – Goodwill and Other Other intangible assets represent costs allocated to identifiable intangible assets, principally customer relationships, capitalized software, patents, trademarks, and technology rights. We amortize intangible assets with estimable useful lives over their respective estimated useful lives to their estimated residual values, and review them for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. See Note 4 regarding goodwill and other intangible assets activity. |
Capitalized Software | L. Capitalized Software Costs incurred for the development of computer software that will be sold, leased, or otherwise marketed are charged to research and development expense when incurred, until technological feasibility has been established for the product. Technological feasibility is typically established upon completion of a detailed program design. Costs incurred after this point are capitalized on a project-by-project basis. Capitalized costs consist of internal and external development costs. Upon general release of the product to customers, we cease capitalization and begin amortization, which is calculated on a project-by-project basis as the greater of (1) the ratio of current gross revenues for a product to the total of current and anticipated future gross revenues for the product or (2) the straight-line method over the estimated economic life of the product. We generally amortize software development costs over a three |
Income Taxes | M. Income Taxes We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We may reduce deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We recognize the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. We regularly review our deferred tax assets for recoverability and establish a valuation allowance when Management believes it is more likely than not such assets will not be recovered, taking into consideration historical operating results, expectations of future earnings, tax planning strategies, and the expected timing of the reversals of existing temporary differences. Our policy is to include interest related to unrecognized tax benefits in income tax expense and penalties in operating expense. |
Research And Development Costs | N. Research and Development Costs Company-sponsored research and development costs include research and development and bid and proposal efforts related to our products and services. We charge Company-sponsored product development costs to expense when incurred. Customer-sponsored research and development costs refer to certain situations whereby customers provide funding to support specific contractually defined research and development costs. We account for customer-sponsored research and development costs incurred pursuant to contracts similarly to other program costs. Total Company and customer-sponsored research and development expenses were approximately $12.3 million, $15.4 million and $13.3 million for 2022, 2021 and 2020, respectively. |
Foreign Currency Translation | O. Foreign Currency Translation We translate the financial statements of our foreign operations into U.S. dollars in accordance with FASB ASC Topic 830, Foreign Currency Matters |
Earnings Per Share | P. Earnings Per Share We calculate basic earnings per share using the weighted average number of common shares outstanding during the period. We calculate diluted earnings per share using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive vesting of unvested restricted units (restricted shares) using the treasury stock method. There are no anti-dilutive shares. The number of shares used in the calculation of earnings per share for each year presented is as follows: (in thousands) 2022 2021 2020 Weighted Average Shares Outstanding — 25,933 26,046 26,010 Dilutive Restricted Shares 134 179 125 Shares — 26,067 26,225 26,135 |
Share-Based Compensation | Q. Share-Based Compensation We provide compensation benefits to certain key employees under several share-based plans providing for performance-accelerated, performance-based and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan for non-employee directors. We measure share-based payment expense at the grant date based on the fair value of the award and recognize it on a straight-line basis over the requisite service period (generally the vesting period of the award) and/or if the performance criteria are deemed probable. |
Accumulated Other Comprehensive Loss | R. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss of $(31.8) million at September 30, 2022 consisted primarily of currency translation adjustments. |
Fair Value Measurements | S. Fair Value Measurements Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, we base fair value on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, we apply valuation models. These valuation techniques involve some level of Management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. 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 We have estimated the fair value of our financial instruments as of September 30, 2022 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, payables and other current assets and liabilities approximate fair value because of the short maturity of those instruments. The carrying amounts due under the revolving credit facility approximate fair value as the interest on outstanding borrowings is calculated at a spread over the London Interbank Offered Rate (LIBOR) or based on the prime rate, at our election. Nonfinancial Assets and Liabilities Our nonfinancial assets such as property, plant and equipment, inventories, 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 2022. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of shares used in the calculation of earnings per share | (in thousands) 2022 2021 2020 Weighted Average Shares Outstanding — 25,933 26,046 26,010 Dilutive Restricted Shares 134 179 125 Shares — 26,067 26,225 26,135 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill and intangible assets | Included on the Consolidated Balance Sheets at September 30, 2022 and 2021 are the following intangible assets gross carrying amounts and accumulated amortization: (Dollars in thousands) 2022 2021 Goodwill $ 492,709 504,853 Intangible assets with determinable lives: Patents Gross carrying amount $ 2,353 2,131 Less: accumulated amortization 1,091 972 Net $ 1,262 1,159 Capitalized software Gross carrying amount $ 106,583 93,671 Less: accumulated amortization 70,476 63,740 Net $ 36,107 29,931 Customer Relationships Gross carrying amount $ 287,447 288,530 Less: accumulated amortization 96,921 80,882 Net $ 190,526 207,648 Other Gross carrying amount $ 13,985 13,177 Less: accumulated amortization 7,440 4,398 Net $ 6,545 8,779 Intangible assets with indefinite lives: Trade names $ 160,024 161,733 |
Schedule of carrying amount of goodwill attributable to each business segment | (Dollars in millions) A&D Test USG Total Balance as of September 30, 2020 $ 102.1 34.1 271.9 408.1 Acquisition activity 2.2 — 95.2 97.4 Foreign currency translation and other — — (0.6) (0.6) Balance as of September 30, 2021 $ 104.3 34.1 366.5 504.9 Acquisition activity 5.7 — (4.7) 1.0 Foreign currency translation and other — (0.1) (13.1) (13.2) Balance as of September 30, 2022 $ 110.0 34.0 348.7 492.7 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable | |
Schedule of accounts, receivable, net of the allowance for credit losses | (Dollars in thousands) 2022 2021 Commercial $ 151,565 128,952 U.S. Government and prime contractors 13,080 17,389 Total $ 164,645 146,341 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Inventories, Net | |
Schedule of inventories, net | (Dollars in thousands) 2022 2021 Finished goods $ 32,471 32,998 Work in process 38,492 34,201 Raw materials 91,440 79,949 Total $ 162,403 147,148 |
Income Tax Expense (Tables)
Income Tax Expense (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Expense | |
Schedule of the components of income from continuing operations before income taxes | We allocated total income tax expense for the years ended September 30, 2022, 2021 and 2020 to income tax expense as follows: (Dollars in thousands) 2022 2021 2020 Income tax expense from continuing operations $ 24,115 17,175 13,510 Income tax expense from discontinued operations — — 23,501 Total income tax expense (benefit) $ 24,115 17,175 37,011 The components of income from continuing operations before income taxes for 2022, 2021 and 2020 consisted of the following: (Dollars in thousands) 2022 2021 2020 United States $ 90,674 70,214 23,951 Foreign 15,761 10,457 12,455 Total income before income taxes $ 106,435 80,671 36,406 |
Schedule of the principal components of income tax expense (benefit) from continuing operations | The principal components of income tax expense (benefit) from continuing operations for 2022, 2021 and 2020 consist of: (Dollars in thousands) 2022 2021 2020 Federal: Current $ 7,248 14,807 10,495 Deferred 9,752 (1,598) 1,311 State and local: Current 1,635 2,257 1,984 Deferred 1,774 (786) (932) Foreign: Current 4,645 2,922 2,875 Deferred (939) (427) (2,223) Total $ 24,115 17,175 13,510 |
Schedule of the actual income tax expense from continuing operations | The actual income tax expense from continuing operations for 2022, 2021 and 2020 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows: 2022 2021 2020 Federal corporate statutory rate 21.0 % 21.0 % 21.0 % State and local, net of Federal benefits 2.9 1.9 2.3 Impact of foreign operations (0.3) (0.4) 1.3 Federal research credit (0.3) (0.9) (3.7) Executive compensation 0.5 0.9 1.6 Valuation allowance (0.3) — (6.8) U.S. tax on GILTI 1.8 1.0 3.2 GILTI foreign tax credits (1.5) (0.6) (2.7) FDII deduction (0.9) (1.7) (2.6) Pension plan termination charge — — 23.4 Other, net (0.2) 0.1 0.1 Effective income tax rate 22.7 % 21.3 % 37.1 % |
Schedule of the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2022 and 2021 are presented below: (Dollars in thousands) 2022 2021 Deferred tax assets: Inventories $ 4,990 4,267 Pension and other postretirement benefits 664 859 Timing differences related to revenue recognition 61 9,365 Lease liabilities 7,073 7,614 Net operating and capital loss carryforwards — domestic 575 542 Net operating loss carryforward — foreign 3,396 4,279 Other compensation-related costs and other cost accruals 9,032 8,174 State credit carryforward 1,676 2,639 Foreign credit carryforward 203 192 Total deferred tax assets 27,670 37,931 Deferred tax liabilities: ROU assets (7,073) (7,614) Goodwill (11,691) (13,746) Acquisition intangible assets (62,051) (62,052) Depreciation, software amortization (24,503) (22,418) Net deferred tax liabilities before valuation allowance (77,648) (67,899) Less valuation allowance (1,208) (2,011) Net deferred tax liabilities $ (78,856) (69,910) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Debt | |
Schedule of debt | Debt consists of the following at September 30, 2022 and 2021: (Dollars in thousands) 2022 2021 Total borrowings $ 153,000 154,000 Current portion of long-term debt and short-term borrowings (20,000) (20,000) Total long-term debt, less current portion $ 133,000 134,000 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation | |
Summary Of outstanding share-based compensation awards | The following summary presents information regarding outstanding share-based compensation awards as of the specified dates, and changes during the specified periods: FY 2022 FY 2021 FY 2020 Estimated Estimated Estimated Weighted Weighted Weighted Shares Avg. Price Shares Avg. Price Shares Avg. Price Nonvested at October 1, 226,705 $ 76.15 220,300 $ 66.55 281,004 $ 59.72 Granted 117,045 82.54 51,476 108.05 45,723 74.80 Vested (75,327) 56.87 (35,753) 64.40 (89,822) 50.51 Cancelled (3,056) 89.51 (9,318) 70.50 (16,605) 60.48 Nonvested at September 30, 265,367 $ 84.29 226,705 $ 76.15 220,300 $ 66.55 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Business Segment Information | |
Schedule of Net Sales and Earnings Before Income Tax | Net Sales (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 351.4 314.8 351.9 USG 278.4 202.9 191.7 Test 227.7 197.7 186.9 Consolidated totals $ 857.5 715.4 730.5 No customer exceeded 10% of consolidated sales in 2022 or 2021 and one customer exceeded 10% of consolidated sales in 2020. EBIT (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 68.4 56.5 69.9 USG 57.6 40.9 24.4 Test 32.6 27.6 27.2 Reconciliation to consolidated totals (Corporate) (47.3) (42.1) (78.4) Consolidated EBIT 111.3 82.9 43.1 Less: interest expense (4.9) (2.2) (6.7) Earnings before income tax $ 106.4 80.7 36.4 |
Schedule of Identifiable Assets | Identifiable Assets (Dollars in millions) Year ended September 30, 2022 2021 A&D $ 295.2 270.0 USG 220.0 197.5 Test 174.6 153.6 Corporate 964.7 956.2 Consolidated totals $ 1,654.5 1,577.3 |
Schedule Of Capital Expenditures | Capital Expenditures (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 9.4 10.4 15.9 USG 14.4 11.6 12.4 Test 8.3 4.7 3.6 Corporate — — 0.2 Consolidated totals $ 32.1 26.7 32.1 |
Schedule Of Depreciation And Amortization | Depreciation and Amortization (Dollars in millions) Year ended September 30, 2022 2021 2020 A&D $ 11.1 10.4 9.4 USG 12.6 13.5 14.4 Test 5.4 5.2 5.0 Corporate 19.2 12.9 12.5 Consolidated totals $ 48.3 42.0 41.3 |
Schedule Of Geographic Information Net Sale | Net Sales (Dollars in millions) Year ended September 30, 2022 2021 2020 United States $ 603.2 517.0 529.4 Asia 122.4 92.3 96.3 Europe 72.4 53.5 51.3 Canada 31.2 27.0 31.7 India 10.3 12.4 10.3 Other 18.0 13.2 11.5 Consolidated totals $ 857.5 715.4 730.5 |
Schedule Of Geographic Information Long-Lived Assets | Long-Lived Assets (Dollars in millions) Year ended September 30, 2022 2021 United States $ 141.5 141.0 Mexico 5.8 3.8 Other 8.7 9.5 Consolidated totals $ 156.0 154.3 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of components of lease costs | The components of lease costs are shown below: Year Ended Year Ended September 30, September 30, (Dollars in thousands) 2022 2021 Finance lease cost: Amortization $ 1,572 2,413 Interest on lease liabilities 973 1,235 Operating lease cost 6,347 5,879 Total lease cost $ 8,892 9,527 |
Schedule of additional information related to leases | Additional information related to leases is shown below: Year Ended Year Ended September 30, September 30, (Dollars in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,101 5,504 Operating cash flows from finance leases 973 1,228 Financing cash flows from finance leases 1,224 1,757 Right-of-use assets obtained in exchange for operating lease liabilities $ 4,160 15,609 Weighted-average remaining lease term: Operating leases 9.3 yrs 10.3 yrs Finance leases 12.0 yrs 11.7 yrs Weighted-average discount rate: Operating leases 3.2 % 3.1 % Finance leases 4.6 % 4.2 % |
Schedule of reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets | The table below 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 September 30, 2022: (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2023 $ 5,953 2,256 2024 5,132 2,315 2025 3,790 2,370 2026 2,881 2,434 2027 and thereafter 17,029 18,997 Total minimum lease payments 34,785 28,372 Less: amounts representing interest 4,760 7,189 Present value of net minimum lease payments $ 30,025 21,183 Less: current portion of lease obligations 5,172 1,331 Non-current portion of lease obligations 24,853 19,852 ROU assets $ 29,150 17,343 The table below 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 September 30, 2021: (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2022 $ 5,448 3,153 2023 4,679 3,235 2024 4,032 3,319 2025 3,654 3,399 2026 and thereafter 20,453 25,516 Total minimum lease payments 38,266 38,622 Less: amounts representing interest 5,691 9,092 Present value of net minimum lease payments $ 32,575 29,530 Less: current portion of lease obligations 4,543 2,180 Non-current portion of lease obligations 28,032 27,350 ROU assets $ 31,846 24,964 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Revenues | |
Schedule of disaggregation of revenue by reportable segment | Year Ended September 30, 2022 (In thousands) A&D USG Test Total Customer type: Commercial $ 144,305 272,432 209,016 625,753 Government 207,108 5,935 18,706 231,749 Total revenues $ 351,413 278,367 227,722 857,502 Geographic location: United States $ 299,158 180,586 123,428 603,172 International 52,255 97,781 104,294 254,330 Total revenues $ 351,413 278,367 227,722 857,502 Revenue recognition method: Point in time $ 144,039 224,502 58,522 427,063 Over time 207,374 53,865 169,200 430,439 Total revenues $ 351,413 278,367 227,722 857,502 Year Ended September 30, 2021 (In thousands) A&D USG Test Total Customer type: Commercial $ 130,217 199,111 177,601 506,929 Government 184,607 3,797 20,107 208,511 Total revenues $ 314,824 202,908 197,708 715,440 Geographic location: United States $ 275,976 140,545 100,438 516,959 International 38,848 62,363 97,270 198,481 Total revenues $ 314,824 202,908 197,708 715,440 Revenue recognition method: Point in time $ 136,449 153,163 40,609 330,221 Over time 178,375 49,745 157,099 385,219 Total revenues $ 314,824 202,908 197,708 715,440 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Number Of Shares Used In Calculation Of Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |||
Weighted Average Shares Outstanding - Basic | 25,933 | 26,046 | 26,010 |
Dilutive Restricted Shares | 134 | 179 | 125 |
Shares - Diluted | 26,067 | 26,225 | 26,135 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies- Additional Information (Details) | 12 Months Ended | ||
Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | Sep. 30, 2020 USD ($) | |
Significant Accounting Policies | |||
Number of Reportable Segments | segment | 3 | ||
Accumulated other comprehensive loss, net of tax | $ (31,764,000) | $ (2,161,000) | |
Option to extend | true | ||
Research and development expenses | $ 12,300,000 | $ 15,400,000 | $ 13,300,000 |
Fair value of financial instruments | $ 0 | ||
Maximum | |||
Significant Accounting Policies | |||
Lease term | 20 years | ||
Estimated useful lives | 7 years | ||
Maximum | Building | |||
Significant Accounting Policies | |||
Estimated useful lives | 40 years | ||
Maximum | Machinery and Equipment | |||
Significant Accounting Policies | |||
Estimated useful lives | 10 years | ||
Maximum | Office Furniture And Equipment | |||
Significant Accounting Policies | |||
Estimated useful lives | 10 years | ||
Minimum | |||
Significant Accounting Policies | |||
Estimated useful lives | 3 years | ||
Minimum | Building | |||
Significant Accounting Policies | |||
Estimated useful lives | 10 years | ||
Minimum | Machinery and Equipment | |||
Significant Accounting Policies | |||
Estimated useful lives | 3 years | ||
Minimum | Office Furniture And Equipment | |||
Significant Accounting Policies | |||
Estimated useful lives | 3 years | ||
USG Segment | |||
Significant Accounting Policies | |||
Percentage of segment revenues recognized when services are performed or when products are delivered | 80% | ||
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 25% | ||
Percentage of segment revenues recognized on straight line basis | 20% | ||
Percentage on consolidated revenues recognized on straight line basis | 6% | ||
Test Segment | |||
Significant Accounting Policies | |||
Percentage of segment revenues recognized when services are performed or when products are delivered | 25% | ||
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 7% | ||
Percentage of segment revenues recorded under percentage of completion method | 75% | ||
Percentage of consolidated revenues recorded under percentage of completion method | 20 | ||
Software Contract | |||
Significant Accounting Policies | |||
Percentage of segment revenues recognized when services are performed or when products are delivered | 6% | ||
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 2% | ||
Aero Space Defense | |||
Significant Accounting Policies | |||
Percentage of segment revenues recognized when services are performed or when products are delivered | 40% | ||
Percentage of consolidated revenues recognized when services are performed or when products are delivered | 17% | ||
Percentage of segment revenues recorded over time | 60% | ||
Percentage of consolidate revenues recorded over time | 25% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Nov. 04, 2021 | Aug. 09, 2021 | Jul. 29, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Business Acquisition | ||||||
Payments to acquire businesses net of cash acquired | $ 10,906 | $ 168,903 | ||||
Goodwill, tax deductible expenses | 11,691 | 13,746 | ||||
Goodwill | 492,709 | $ 504,853 | $ 408,100 | |||
Phenix Technologies | ||||||
Business Acquisition | ||||||
Payments to acquire businesses net of cash acquired | $ 47,200 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed current assets receivables | 2,600 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed inventory | 5,800 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed, property, plant and equipment | 8,000 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed current liabilities accounts payable | 6,200 | |||||
Goodwill, tax deductible expenses | 15,000 | |||||
Amount received on finalization of working capital adjustment | $ 4,600 | |||||
Goodwill | 18,700 | |||||
Networks electronic company | ||||||
Business Acquisition | ||||||
Payments to acquire businesses net of cash acquired | $ 15,400 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed current assets receivables | 600 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed inventory | 1,500 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed, property, plant and equipment | 200 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed current liabilities accounts payable | 700 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed intangible assets other than goodwill | 8,100 | |||||
Goodwill | 5,700 | |||||
I.s.a. Altanova Group S.r.l. Altanova | ||||||
Business Acquisition | ||||||
Payments to acquire businesses net of cash acquired | $ 115,000 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed current assets receivables | 9,700 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed inventory | 5,600 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed, property, plant and equipment | 1,200 | |||||
Business combination recognized identifiable assets acquired and liabilities assumed current liabilities accounts payable | 12,800 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | 16,700 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 9,000 | |||||
Business Combination, Contingent Consideration, Liability | 6,900 | |||||
Goodwill | 71,100 | |||||
Customer Relationships | Phenix Technologies | ||||||
Business Acquisition | ||||||
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets | $ 9,600 | |||||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 13 years | |||||
Customer Relationships | Networks electronic company | ||||||
Business Acquisition | ||||||
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets | $ 6,300 | |||||
Customer Relationships | I.s.a. Altanova Group S.r.l. Altanova | ||||||
Business Acquisition | ||||||
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets | $ 50,500 | |||||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 20 years | |||||
Customer Relationships and Developed Technology | Phenix Technologies | ||||||
Business Acquisition | ||||||
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets | $ 500 | |||||
Trade Names | Phenix Technologies | ||||||
Business Acquisition | ||||||
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets | $ 3,700 | |||||
Trade Names | I.s.a. Altanova Group S.r.l. Altanova | ||||||
Business Acquisition | ||||||
Business combination recognized identifiable assets acquired and liabilities assumed indefinite-lived intangible assets | $ 4,300 | |||||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 10 years |
Technical Packaging Divestitu_2
Technical Packaging Divestiture (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 subsidiary | Jun. 30, 2020 USD ($) | Sep. 30, 2021 | Sep. 30, 2020 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
After-tax gain on the sale of business | $ 76,515 | |||
Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | After-tax gain on the sale of business | |||
Working capital adjustment | $ 200 | |||
Technical Packaging Business | Discontinued Operations Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Net sales | 16,500 | |||
Pretax (loss) earnings | (300) | |||
Proceeds from sale of discontinued operations | 184,000 | |||
After-tax gain on the sale of business | $ 76,500 | |||
Technical Packaging Business | Sonoco Products Company | Discontinued Operations Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Number Of Wholly Owned Subsidiaries of the Company | subsidiary | 2 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
Goodwill and Other Intangible Assets | |||
Goodwill | $ 492,709 | $ 504,853 | $ 408,100 |
Trade names | |||
Goodwill and Other Intangible Assets | |||
Trade names | 160,024 | 161,733 | |
Patents | |||
Goodwill and Other Intangible Assets | |||
Gross carrying amount | 2,353 | 2,131 | |
Less: accumulated amortization | 1,091 | 972 | |
Net | 1,262 | 1,159 | |
Capitalized software | |||
Goodwill and Other Intangible Assets | |||
Gross carrying amount | 106,583 | 93,671 | |
Less: accumulated amortization | 70,476 | 63,740 | |
Net | 36,107 | 29,931 | |
Customer Relationships | |||
Goodwill and Other Intangible Assets | |||
Gross carrying amount | 287,447 | 288,530 | |
Less: accumulated amortization | 96,921 | 80,882 | |
Net | 190,526 | 207,648 | |
Other | |||
Goodwill and Other Intangible Assets | |||
Gross carrying amount | 13,985 | 13,177 | |
Less: accumulated amortization | 7,440 | 4,398 | |
Net | $ 6,545 | $ 8,779 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Changes in carrying amount of goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Other Intangible Assets | ||
Beginning Balance | $ 504,853 | $ 408,100 |
Acquisition activity | 1,000 | 97,400 |
Foreign currency translation and other | (13,200) | (600) |
Ending Balance | 492,709 | 504,853 |
USG | ||
Goodwill and Other Intangible Assets | ||
Beginning Balance | 366,500 | 271,900 |
Acquisition activity | (4,700) | 95,200 |
Foreign currency translation and other | (13,100) | (600) |
Ending Balance | 348,700 | 366,500 |
Test | ||
Goodwill and Other Intangible Assets | ||
Beginning Balance | 34,100 | 34,100 |
Foreign currency translation and other | (100) | |
Ending Balance | 34,000 | 34,100 |
A&D | ||
Goodwill and Other Intangible Assets | ||
Beginning Balance | 104,300 | 102,100 |
Acquisition activity | 5,700 | 2,200 |
Ending Balance | $ 110,000 | $ 104,300 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Other Intangible Assets | |||
Amortization expense related to intangible assets | $ 25,936,000 | $ 20,829,000 | $ 21,812,000 |
Finite-Lived Intangible Asset, Expected Amortization, Year One | 18,500,000 | ||
Finite-Lived Intangible Asset, Expected Amortization, Year Two | 17,000,000 | ||
Asset Impairment Charges | 0 | ||
Fair value of financial instruments | $ 0 | ||
Customer Relationships | Maximum | |||
Goodwill and Other Intangible Assets | |||
Expected remaining useful life | 20 years | ||
Customer Relationships | Minimum | |||
Goodwill and Other Intangible Assets | |||
Expected remaining useful life | 13 years | ||
Patents | Maximum | |||
Goodwill and Other Intangible Assets | |||
Expected remaining useful life | 20 years | ||
Patents | Minimum | |||
Goodwill and Other Intangible Assets | |||
Expected remaining useful life | 10 years | ||
Capitalized software | Maximum | |||
Goodwill and Other Intangible Assets | |||
Expected remaining useful life | 7 years | ||
Capitalized software | Minimum | |||
Goodwill and Other Intangible Assets | |||
Expected remaining useful life | 3 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Accounts Receivable | ||
Total | $ 164,645 | $ 146,341 |
Commercial | ||
Accounts Receivable | ||
Total | 151,565 | 128,952 |
U.S. Government and prime contractors | ||
Accounts Receivable | ||
Total | $ 13,080 | $ 17,389 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Inventories, Net | ||
Finished goods | $ 32,471 | $ 32,998 |
Work in process | 38,492 | 34,201 |
Raw materials | 91,440 | 79,949 |
Total | $ 162,403 | $ 147,148 |
Income Tax Expense - Total Inco
Income Tax Expense - Total Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Expense | |||
Income tax expense from continuing operations | $ 24,115 | $ 17,175 | $ 13,510 |
Income tax expense from discontinued operations | 0 | 23,501 | |
Total income tax expense (benefit) | $ 24,115 | $ 17,175 | $ 37,011 |
Income Tax Expense - Components
Income Tax Expense - Components Of Income From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Expense | |||
United States | $ 90,674 | $ 70,214 | $ 23,951 |
Foreign | 15,761 | 10,457 | 12,455 |
Total income before income taxes | $ 106,435 | $ 80,671 | $ 36,406 |
Income Tax Expense - Principal
Income Tax Expense - Principal Components Of Income Tax Expense (Benefit) From Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Federal: | |||
Current | $ 7,248 | $ 14,807 | $ 10,495 |
Deferred | 9,752 | (1,598) | 1,311 |
State and local: | |||
Current | 1,635 | 2,257 | 1,984 |
Deferred | 1,774 | (786) | (932) |
Foreign: | |||
Current | 4,645 | 2,922 | 2,875 |
Deferred | (939) | (427) | (2,223) |
Total | $ 24,115 | $ 17,175 | $ 13,510 |
Income Tax Expense - Schedule O
Income Tax Expense - Schedule Of Actual Income Tax Expense (Benefit) From Continuing Operations (Details) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Expense | |||
Federal corporate statutory rate | 21% | 21% | 21% |
State and local, net of Federal benefits | 2.90% | 1.90% | 2.30% |
Impact of foreign operations | (0.30%) | (0.40%) | 1.30% |
Federal research credit | (0.30%) | (0.90%) | (3.70%) |
Executive compensation | 0.50% | 0.90% | 1.60% |
Valuation allowance | (0.30%) | 0% | (6.80%) |
U.S. tax on GILTI | 1.80% | 1% | 3.20% |
GILTI foreign tax credits | (1.50%) | (0.60%) | (2.70%) |
FDII deduction | (0.90%) | (1.70%) | (2.60%) |
Pension plan termination charge | 0% | 0% | 23.40% |
Other, net | (0.20%) | 0.10% | 0.10% |
Effective income tax rate | 22.70% | 21.30% | 37.10% |
Income Tax Expense - Tax Effect
Income Tax Expense - Tax Effects Of Temporary Differences That Give Rise To Significant Portions Of The Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Deferred tax assets: | ||
Inventories | $ 4,990 | $ 4,267 |
Pension and other postretirement benefits | 664 | 859 |
Timing differences related to revenue recognition | 61 | 9,365 |
Lease liabilities | 7,073 | 7,614 |
Net operating and capital loss carryforwards-domestic | 575 | 542 |
Net operating loss carryforward - foreign | 3,396 | 4,279 |
Other compensation-related costs and other cost accruals | 9,032 | 8,174 |
State credit carryforward | 1,676 | 2,639 |
Foreign credit carryforward | 203 | 192 |
Total deferred tax assets | 27,670 | 37,931 |
Deferred tax liabilities: | ||
ROU assets | (7,073) | (7,614) |
Goodwill | (11,691) | (13,746) |
Acquisition intangible assets | (62,051) | (62,052) |
Depreciation, software amortization | (24,503) | (22,418) |
Net deferred tax liabilities before valuation allowance | (77,648) | (67,899) |
Less valuation allowance | (1,208) | (2,011) |
Net deferred tax liabilities | $ (78,856) | $ (69,910) |
Income Tax Expense - Additional
Income Tax Expense - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Expense | ||
Operating loss carry forwards, valuation allowance | $ 500 | $ 500 |
Net operating loss carry forward - foreign | 3,396 | 4,279 |
Deferred tax assets, operating loss carry forwards, not subject to expiration | 10,400 | |
Deferred tax assets, operating loss carry forwards, subject to expiration | 1,700 | |
Tax credit carryforward, amount | 200 | |
Deferred tax assets, operating loss carry forwards, state and local | 600 | |
Deferred tax assets, tax credit carry forwards, research | 1,700 | |
State research and other credit carry forwards with expiration date | 900 | |
State research and other credit carry forwards without expiration date | 800 | |
Deferred tax assets, valuation allowance | 1,208 | 2,011 |
Reduction in valuation allowance for excess foreign tax credits | 800 | 100 |
Unrecognized tax benefits | 0 | |
Foreign Valuation Allowance | ||
Income Tax Expense | ||
Operating loss carry forwards, valuation allowance | 700 | 900 |
State and Local Jurisdiction | ||
Income Tax Expense | ||
Operating loss carry forwards, valuation allowance | 600 | $ 600 |
Net operating loss carry forward - foreign | $ 12,100 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Debt | ||
Total borrowings | $ 153,000 | $ 154,000 |
Current portion of long-term debt | (20,000) | (20,000) |
Total long-term debt, less current portion | $ 133,000 | $ 134,000 |
Debt - Additional information (
Debt - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
DEBT | ||
Available to borrow under the credit facility | $ 339,000 | |
Cash on hand | 97,724 | $ 56,232 |
Current maturities of long-term debt | 20,000 | |
Letters of credit outstanding, amount | 8,000 | 8,500 |
Short-Term debt, maximum month-end outstanding amount | $ 208,000 | 174,000 |
Equity interests in direct and indirect material foreign subsidiaries, pledged as collateral (as a percent) | 100% | |
Short-Term debt, average outstanding amount | $ 189,800 | $ 71,300 |
Debt, weighted average interest rate | 2.11% | 1.20% |
Debt Instrument, Interest Rate | 4.12% | |
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 |
Capital Stock (Detail)
Capital Stock (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Capital Stock | |||
Common shares as presented in the accompanying Consolidated Balance Sheets | 30,707,748 | 30,666,173 | |
Common shares in treasury | 4,854,997 | 4,604,741 | |
Board of Directors authorized an expanded stock repurchase program | $ 200 | ||
Stock repurchases during period, shares | 257,500 | 0 | 0 |
Stock Repurchased During Period, Value | $ 20 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule Of Outstanding Restricted Share Awards (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-Based Compensation | |||
Outstanding restricted share awards, Nonvested at October 1, | 226,705 | 220,300 | 281,004 |
Outstanding restricted share awards, Granted, Shares | 117,045 | 51,476 | 45,723 |
Outstanding restricted share awards, Vested, Shares | (75,327) | (35,753) | (89,822) |
Outstanding restricted share awards, Cancelled, Shares | (3,056) | (9,318) | (16,605) |
Outstanding restricted share awards, Nonvested at September 30, | 265,367 | 226,705 | 220,300 |
Outstanding restricted share awards, Nonvested at October 1, Weighted Avg. Price | $ 76.15 | $ 66.55 | $ 59.72 |
Outstanding restricted share awards, Granted, Weighted Avg. Price | 82.54 | 108.05 | 74.80 |
Outstanding restricted share awards, Vested, Weighted Avg. Price | 56.87 | 64.40 | 50.51 |
Outstanding restricted share awards, Cancelled, Weighted Avg. Price | 89.51 | 70.50 | 60.48 |
Outstanding restricted share awards, Nonvested at September 30, Weighted Avg. Price | $ 84.29 | $ 76.15 | $ 66.55 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
SHARE-BASED COMPENSATION | |||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount | $ 180,000 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 580,437 | ||
Performance-Accelerated Restricted Share (PARS) Awards | |||
SHARE-BASED COMPENSATION | |||
Pretax compensation expense | $ 6,100,000 | $ 5,600,000 | $ 4,300,000 |
Vesting period | 5 years | ||
Compensation Plan for Non-Employee Directors | |||
SHARE-BASED COMPENSATION | |||
Pretax compensation expense | $ 1,200,000 | 1,300,000 | 1,300,000 |
Total share-based compensation cost | 1,500,000 | ||
Total income tax benefit recognized | 1,400,000 | 1,200,000 | |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 11,200,000 | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days | ||
Compensation Plan for Non-Employee Directors | Selling, general and administrative expenses | |||
SHARE-BASED COMPENSATION | |||
Total share-based compensation cost | $ 7,300,000 | $ 6,900,000 | $ 5,600,000 |
RSU | |||
SHARE-BASED COMPENSATION | |||
Vesting period | 3 years 6 months |
Retirement and Other Benefit _2
Retirement and Other Benefit Plans (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2020 USD ($) | |
Retirement and Other Benefit Plans | |
Employer contributions | $ 25,700 |
Plan liabilities settled | 32,400 |
Plan liabilities settled by entering into an agreement to purchase annuities from Massachusetts Mutual Life Insurance Company | 69,100 |
Charges associated with these settlements | $ 40,600 |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | Sep. 30, 2020 USD ($) | |
BUSINESS SEGMENT INFORMATION | |||
NET SALES | $ 857,502 | $ 715,440 | $ 730,471 |
EBIT | 111,300 | 82,900 | 43,100 |
Less: Interest expense | (4,900) | (2,200) | (6,700) |
Earnings before income taxes | $ 106,435 | 80,671 | 36,406 |
Number of reportable segments | segment | 3 | ||
Corporate | |||
BUSINESS SEGMENT INFORMATION | |||
EBIT | $ (47,300) | (42,100) | (78,400) |
Aerospace & Defense | |||
BUSINESS SEGMENT INFORMATION | |||
NET SALES | 351,413 | 314,824 | 351,900 |
EBIT | 68,400 | 56,500 | 69,900 |
USG | |||
BUSINESS SEGMENT INFORMATION | |||
NET SALES | 278,367 | 202,908 | 191,700 |
EBIT | 57,600 | 40,900 | 24,400 |
Test | |||
BUSINESS SEGMENT INFORMATION | |||
NET SALES | 227,722 | 197,708 | 186,900 |
EBIT | $ 32,600 | $ 27,600 | $ 27,200 |
Business Segment Information -
Business Segment Information - Schedule Of Identifiable Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Identifiable Assets | $ 1,654,456 | $ 1,577,345 |
Aerospace & Defense | ||
Identifiable Assets | 295,200 | 270,000 |
USG | ||
Identifiable Assets | 220,000 | 197,500 |
Test | ||
Identifiable Assets | 174,600 | 153,600 |
Corporate | ||
Other Assets | $ 964,700 | $ 956,200 |
Business Segment Information _2
Business Segment Information - Schedule Of Capital Expenditures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Capital Expenditures | $ 32,101 | $ 26,705 | $ 32,108 |
Goodwill | 492,709 | 504,853 | 408,100 |
Aerospace & Defense | |||
Capital Expenditures | 9,400 | 10,400 | 15,900 |
Goodwill | 110,000 | 104,300 | 102,100 |
USG | |||
Capital Expenditures | 14,400 | 11,600 | 12,400 |
Goodwill | 348,700 | 366,500 | 271,900 |
Test | |||
Capital Expenditures | 8,300 | 4,700 | 3,600 |
Goodwill | 34,000 | 34,100 | 34,100 |
Corporate | |||
Capital Expenditures | $ 0 | $ 0 | $ 200 |
Business Segment Information _3
Business Segment Information - Schedule Of Depreciation And Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Depreciation and Amortization | $ 48,343 | $ 42,049 | $ 41,338 |
Aerospace & Defense | |||
Depreciation and Amortization | 11,100 | 10,400 | 9,400 |
USG | |||
Depreciation and Amortization | 12,600 | 13,500 | 14,400 |
Test | |||
Depreciation and Amortization | 5,400 | 5,200 | 5,000 |
Corporate | |||
Depreciation and Amortization | $ 19,200 | $ 12,900 | $ 12,500 |
Business Segment Information _4
Business Segment Information - Schedule Of Geographic Information Net Sales (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Sales | $ 857,502 | $ 715,440 | $ 730,471 |
United States | |||
Net Sales | 603,172 | 516,959 | 529,400 |
Asia | |||
Net Sales | 122,400 | 92,300 | 96,300 |
Europe | |||
Net Sales | 72,400 | 53,500 | 51,300 |
Canada | |||
Net Sales | 31,200 | 27,000 | 31,700 |
India | |||
Net Sales | 10,300 | 12,400 | 10,300 |
Other | |||
Net Sales | $ 18,000 | $ 13,200 | $ 11,500 |
Business Segment Information _5
Business Segment Information - Schedule Of Geographic Information Long-Lived Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Long-Lived Assets | $ 155,973 | $ 154,265 |
United States | ||
Long-Lived Assets | 141,500 | 141,000 |
Mexico | ||
Long-Lived Assets | 5,800 | 3,800 |
Other | ||
Long-Lived Assets | $ 8,700 | $ 9,500 |
Business Segment Information _6
Business Segment Information - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 USD ($) customer | Sep. 30, 2021 USD ($) customer | Sep. 30, 2020 USD ($) customer | |
Percentage Of Sale Of Customer Maximum | 10% | 10% | 10% |
Capitalized Computer Software, Period Increase (Decrease) | $ 12.9 | $ 8.8 | $ 9 |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | |||
Number of customers who exceeded 10% of sales | customer | 0 | 0 | 1 |
Property, Plant and Equipment | |||
Depreciation | $ 22.4 | $ 21.2 | $ 19.5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 30, 2021 |
Commitments and Contingencies | ||
Letters of credit outstanding, amount | $ 8 | $ 8.5 |
Leases - Components of lease co
Leases - Components of lease costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Option to extend | true | |
Finance lease cost: | ||
Amortization | $ 1,572 | $ 2,413 |
Interest on lease liabilities | 973 | 1,235 |
Operating lease cost | 6,347 | 5,879 |
Total lease cost | $ 8,892 | $ 9,527 |
Maximum | ||
Leases | ||
Lease term | 20 years |
Leases - Additional information
Leases - Additional information related to leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 6,101 | $ 5,504 |
Operating cash flows from finance leases | 973 | 1,228 |
Financing cash flows from finance leases | 1,224 | 1,757 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 4,160 | $ 15,609 |
Weighted-average remaining lease term: | ||
Operating leases | 9 years 3 months 18 days | 10 years 3 months 18 days |
Finance leases | 12 years | 11 years 8 months 12 days |
Weighted-average discount rate: | ||
Operating leases | 3.20% | 3.10% |
Finance leases | 4.60% | 4.20% |
Leases - Reconciliation of futu
Leases - Reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Operating leases | ||
Year 1 | $ 5,953 | $ 5,448 |
Year 2 | 5,132 | 4,679 |
Year 3 | 3,790 | 4,032 |
Year 4 | 2,881 | 3,654 |
Year 5 and thereafter | 17,029 | 20,453 |
Total minimum lease payments | 34,785 | 38,266 |
Less: amounts representing interest | 4,760 | 5,691 |
Present value of net minimum lease payments | $ 30,025 | $ 32,575 |
Location of operating lease liabilities included on Consolidated Balance Sheets | Less: current portion of lease obligations, Non-current portion of lease obligations | Less: current portion of lease obligations, Non-current portion of lease obligations |
Less: current portion of lease obligations | $ 5,172 | $ 4,543 |
Non-current portion of lease obligations | 24,853 | 28,032 |
ROU assets | $ 29,150 | $ 31,846 |
Location of operating lease ROU assets included on Consolidated Balance Sheets | ROU assets | ROU assets |
Finance leases | ||
Year 1 | $ 2,256 | $ 3,153 |
Year 2 | 2,315 | 3,235 |
Year 3 | 2,370 | 3,319 |
Year 4 | 2,434 | 3,399 |
Year 5 and thereafter | 18,997 | 25,516 |
Total minimum lease payments | 28,372 | 38,622 |
Less: amounts representing interest | 7,189 | 9,092 |
Present value of net minimum lease payments | $ 21,183 | $ 29,530 |
Location of finance lease liabilities included on Consolidated Balance Sheets | Accrued other expenses, Other liabilities | Accrued other expenses, Other liabilities |
Less: current portion of lease obligations | $ 1,331 | $ 2,180 |
Non-current portion of lease obligations | 19,852 | 27,350 |
ROU assets | $ 17,343 | $ 24,964 |
Location of finance lease ROU assets included on Consolidated Balance Sheets | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | $ 857,502 | $ 715,440 | $ 730,471 |
Point in time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 427,063 | 330,221 | |
Over time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 430,439 | 385,219 | |
United States | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 603,172 | 516,959 | 529,400 |
International | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 254,330 | 198,481 | |
Commercial | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 625,753 | 506,929 | |
Government | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 231,749 | 208,511 | |
A&D | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 351,413 | 314,824 | 351,900 |
A&D | Point in time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 144,039 | 136,449 | |
A&D | Over time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 207,374 | 178,375 | |
A&D | United States | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 299,158 | 275,976 | |
A&D | International | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 52,255 | 38,848 | |
A&D | Commercial | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 144,305 | 130,217 | |
A&D | Government | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 207,108 | 184,607 | |
USG | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 278,367 | 202,908 | 191,700 |
USG | Point in time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 224,502 | 153,163 | |
USG | Over time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 53,865 | 49,745 | |
USG | United States | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 180,586 | 140,545 | |
USG | International | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 97,781 | 62,363 | |
USG | Commercial | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 272,432 | 199,111 | |
USG | Government | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 5,935 | 3,797 | |
Test | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 227,722 | 197,708 | $ 186,900 |
Test | Point in time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 58,522 | 40,609 | |
Test | Over time | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 169,200 | 157,099 | |
Test | United States | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 123,428 | 100,438 | |
Test | International | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 104,294 | 97,270 | |
Test | Commercial | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | 209,016 | 177,601 | |
Test | Government | |||
Disaggregation of revenues | |||
Revenue from contract with customer excluding assessed tax | $ 18,706 | $ 20,107 |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Remaining Performance Obligations | ||
Revenue Recognized | $ 83.8 | |
Contract assets | 125.2 | $ 93.8 |
Contract liabilities | 137.6 | $ 108.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||
Remaining Performance Obligations | ||
Remaining performance obligations amount | $ 695 | |
Percentage of remaining performance obligation expected to be recognized | 80% | |
Revenue remaining performance obligation expected timing of satisfaction, Period | 12 months |