ESCO (ESE) 10-Q9 Aug 242024 Q3 Quarterly reportFinancial data

Company Profile

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Jun. 30, 2024	Jul. 31, 2024
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	1-10596
Entity Registrant Name	ESCO TECHNOLOGIES INC.
Entity Incorporation, State or Country Code	MO
Entity Tax Identification Number	43-1554045
Entity Address, Address Line One	9900A CLAYTON ROAD
Entity Address, City or Town	ST. LOUIS
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63124-1186
City Area Code	314
Local Phone Number	213-7200
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ESE
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,752,712
Entity Central Index Key	0000866706
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 260,783	$ 248,749	$ 728,226	$ 683,386
Costs and expenses:
Cost of sales	157,435	147,274	443,933	415,953
Selling, general and administrative expenses	54,955	55,376	164,020	160,555
Amortization of intangible assets	8,145	7,132	24,585	21,023
Interest expense, net	3,335	2,495	9,228	6,422
Other expenses (income), net	(259)	966	613	1,678
Total costs and expenses	223,611	213,243	642,379	605,631
Earnings before income taxes	37,172	35,506	85,847	77,755
Income tax expense	7,942	7,563	18,229	17,207
Net earnings	$ 29,230	$ 27,943	$ 67,618	$ 60,548
Earnings per share:
Basic - Net earnings	$ 1.14	$ 1.08	$ 2.62	$ 2.35
Diluted - Net earnings	$ 1.13	$ 1.08	$ 2.62	$ 2.34

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net earnings	$ 29,230	$ 27,943	$ 67,618	$ 60,548
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(1,001)	(821)	3,668	12,926
Total other comprehensive income (loss), net of tax	(1,001)	(821)	3,668	12,926
Comprehensive income	$ 28,229	$ 27,122	$ 71,286	$ 73,474

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 63,042	$ 41,866
Accounts receivable, net of allowance for credit losses of $2,387 and $2,264, respectively	213,592	198,557
Contract assets	134,637	138,633
Inventories	219,312	184,067
Other current assets	22,312	17,972
Total current assets	652,895	581,095
Property, plant and equipment, net of accumulated depreciation of $190,738 and $174,698, respectively	164,749	155,484
Intangible assets, net of accumulated amortization of $229,467 and $204,881, respectively	408,981	392,124
Goodwill	535,372	503,177
Operating lease assets	37,716	39,839
Other assets	11,342	11,495
Total assets	1,811,055	1,683,214
Current liabilities:
Current maturities of long-term debt	20,000	20,000
Accounts payable	83,411	86,973
Contract liabilities	113,653	112,277
Accrued salaries	42,662	43,814
Accrued other expenses	51,481	51,587
Total current liabilities	311,207	314,651
Deferred tax liabilities	77,570	75,531
Non-current operating lease liabilities	35,148	36,554
Other liabilities	40,444	43,336
Long-term debt	153,000	82,000
Total liabilities	617,369	552,072
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 30,809,483 and 30,781,699 shares, respectively	308	308
Additional paid-in capital	309,982	304,850
Retained earnings	1,050,748	989,315
Accumulated other comprehensive loss, net of tax	(20,301)	(23,969)
Total stockholders' equity before treasury stock	1,340,737	1,270,504
Less treasury stock, at cost: 5,056,771 and 4,995,414 common shares, respectively	(147,051)	(139,362)
Total shareholders' equity	1,193,686	1,131,142
Total liabilities and shareholders' equity	$ 1,811,055	$ 1,683,214

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
CONDENSED CONSOLIDATED BALANCE SHEETS
Net of allowance for credit losses	$ 2,387	$ 2,264
Net of accumulated depreciation	190,738	174,698
Net of accumulated amortization	$ 229,467	$ 204,881
Preferred stock, par value per share	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	30,809,483	30,781,699
Treasury stock, shares	5,056,771	4,995,414

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net earnings	$ 67,618	$ 60,548
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation and amortization	41,358	37,699
Stock compensation expense	6,369	7,007
Changes in assets and liabilities	(53,839)	(72,346)
Effect of deferred taxes	(6,052)	(3,706)
Net cash provided by operating activities	55,454	29,202
Cash flows from investing activities:
Acquisition of business, net of cash acquired	(56,383)	(17,694)
Additions to capitalized software and other	(8,556)	(9,263)
Capital expenditures	(24,949)	(16,993)
Net cash used by investing activities	(89,888)	(43,950)
Cash flows from financing activities:
Proceeds from long-term debt and short-term borrowings	193,000	88,000
Principal payments on long-term debt and short-term borrowings	(122,000)	(93,000)
Purchases of common stock into treasury	(7,998)	(12,401)
Dividends paid	(6,185)	(6,189)
Other	(1,516)	(2,557)
Net cash provided (used) by financing activities	55,301	(26,147)
Effect of exchange rate changes on cash and cash equivalents	309	(777)
Net increase (decrease) in cash and cash equivalents	21,176	(41,672)
Cash and cash equivalents, beginning of period	41,866	97,724
Cash and cash equivalents, end of period	63,042	56,052
Supplemental cash flow information:
Interest paid	8,430	5,564
Income taxes paid (including state and foreign)	$ 25,952	$ 18,313

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Jun. 30, 2024
BASIS OF PRESENTATION
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements, in the opinion of management, include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim periods presented. The unaudited condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures required for annual financial statements by accounting principles generally accepted in the United States of America (GAAP) and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as filed with the SEC on November 29, 2023. The Company’s results for the three-month period ended June 30, 2024 are not necessarily indicative of the results for the entire 2024 fiscal year. References to the third quarters of 2024 and 2023 represent the fiscal quarters ended June 30, 2024 and 2023, respectively. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period presentation.

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)	9 Months Ended
EARNINGS PER SHARE (EPS)	Jun. 30, 2024
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS)	2. EARNINGS PER SHARE (EPS) Basic EPS is calculated using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive common share options and vesting of restricted and performance shares by using the treasury stock method. The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands): Three Months Nine Months Ended June 30, Ended June 30, 2024 2023 2024 2023 Weighted Average Shares Outstanding — Basic 25,753 25,757 25,781 25,808 Dilutive Restricted and Performance Shares 87 70 63 82 Adjusted Shares — Diluted 25,840 25,827 25,844 25,890

ACQUISITION

ACQUISITION	9 Months Ended
ACQUISITION	Jun. 30, 2024
ACQUISITION
ACQUISITION	3. ACQUISITION On November 9, 2023, the Company acquired MPE Limited (MPE), based in the United Kingdom, for a purchase price of approximately $56.2 million, net of cash acquired. MPE is a leading global manufacturer of high-performance EMC/EMP filters and capacitor products for military, utility, telecommunication, and other critical infrastructure applications. Since the date of acquisition, the operating results for the MPE business have been included as part of ETS-Lindgren in the Test segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.4 million of accounts receivable, $1.1 million of inventory, $1.7 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $7.8 million of deferred tax liabilities, and $31.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $29.1 million. The acquired goodwill of $30.3 million related to excess value associated with opportunities to expand the services and products that the Company can offer to its customers. The Company does not anticipate that the goodwill will be deductible for tax purposes. The Company paid a $0.2 million working capital settlement in the third quarter of fiscal 2024.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	9 Months Ended
SHARE-BASED COMPENSATION	Jun. 30, 2024
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	4. SHARE-BASED COMPENSATION The Company provides compensation benefits to certain key employees under several share-based plans providing for performance-accelerated and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan. Performance-Accelerated Restricted Stock Unit (PARS) Awards and Time-Vested Restricted Stock Unit (RSU) Awards, and Performance Share Unit (PSU) Awards Compensation expense related to these awards was $2.0 million and $5.5 million for the three and nine-month periods ended June 30, 2024, respectively, and $1.4 million and $6.0 million for the corresponding periods in 2023. As of June 30, 2024, there were 221,595 unvested stock units outstanding. Non-Employee Directors Plan Compensation expense related to the non-employee director grants was $0.3 million and $0.9 million for the three and nine-month periods ended June 30, 2024, respectively, and $0.3 million and $1.0 million for the corresponding periods in 2023. The total share-based compensation cost that has been recognized in the results of operations and included within selling, general and administrative expenses (SG&A) was $2.2 million and $6.4 million for the three and nine-month periods ended June 30, 2024, respectively, and $1.7 million and $7.0 million for the corresponding periods in 2023. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $0.5 million and $1.4 million for the three and nine-month periods ended June 30, 2024, respectively, and $0.2 million and $0.9 million for the corresponding periods in 2023. As of June 30, 2024, there was $11.0 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted-average period of 1.5 years.

INVENTORIES

INVENTORIES	9 Months Ended
INVENTORIES	Jun. 30, 2024
INVENTORIES
INVENTORIES	5. INVENTORIES Inventories consist of the following: June 30, September 30, (In thousands) 2024 2023 Finished goods $ 41,955 34,577 Work in process 59,837 42,178 Raw materials 117,520 107,312 Total inventories $ 219,312 184,067

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS	Jun. 30, 2024
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	6. GOODWILL AND OTHER INTANGIBLE ASSETS Included on the Company’s Consolidated Balance Sheets at June 30, 2024 and September 30, 2023 are the following intangible assets gross carrying amounts and accumulated amortization: June 30, September 30, (Dollars in thousands) 2024 2023 Goodwill $ 535,372 503,177 Intangible assets with determinable lives: Patents Gross carrying amount $ 2,551 2,516 Less: accumulated amortization 1,322 1,218 Net $ 1,229 1,298 Capitalized software Gross carrying amount $ 130,648 121,883 Less: accumulated amortization 89,737 80,774 Net $ 40,911 41,109 Customer relationships Gross carrying amount $ 327,537 296,927 Less: accumulated amortization 127,322 113,311 Net $ 200,215 183,616 Other Gross carrying amount $ 15,122 14,232 Less: accumulated amortization 11,085 9,578 Net $ 4,037 4,654 Intangible assets with indefinite lives: Trade names $ 162,589 161,447 The changes in the carrying amount of goodwill attributable to each business segment for the nine months ended June 30, 2024 is as follows: Aerospace (Dollars in millions) USG Test & Defense Total Balance as of September 30, 2023 $ 353.6 34.0 115.6 503.2 Acquisition activity — 30.5 — 30.5 Foreign currency translation 0.9 0.8 — 1.7 Balance as of June 30, 2024 $ 354.5 65.3 115.6 535.4

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION	9 Months Ended
BUSINESS SEGMENT INFORMATION	Jun. 30, 2024
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION	7. BUSINESS SEGMENT INFORMATION The Company is organized based on the products and services that it offers and classifies its continuing business operations in three reportable segments for financial reporting purposes: Aerospace & Defense (A&D), Utility Solutions Group (USG), and RF Test and Measurement (Test). The Aerospace & Defense segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Globe Composite Solutions, LLC (Globe) and Mayday Manufacturing Co. (Mayday). 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 primarily of Doble Engineering Company and related subsidiaries including Morgan Schaffer and Altanova (collectively, Doble), and NRG Systems, Inc. (NRG). Doble is an industry leader in the development, manufacture and delivery of diagnostic testing solutions that enable electric power grid operators to assess the integrity of high voltage power delivery equipment. It combines three core elements for customers – diagnostic test and condition monitoring instruments, expert consulting, and testing services – and provides access to its large reserve of related empirical knowledge. NRG is a global market leader in the design and manufacture of decision support tools for the renewable energy industry, primarily wind and solar. The Test segment’s operations consist primarily of ETS-Lindgren Inc. and related subsidiaries (ETS-Lindgren). ETS-Lindgren is an industry leader in designing and manufacturing products and systems to measure and control RF and acoustic energy. It serves the acoustics, medical, health and safety, electronics, wireless communications, automotive and defense markets, supplying a broad range of turnkey systems, including RF test facilities and measurement systems, acoustic test enclosures, RF and magnetically shielded rooms and secure communication facilities, and providing the design, program management, installation and integration services required to successfully complete these types of facilities. It also provides a broad range of components including RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software and other test accessories required to perform a variety of tests and measurements, and offers a variety of services including calibration and product tests. Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes. Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2024 2023 2024 2023 NET SALES Aerospace & Defense $ 114,450 103,469 323,884 285,434 USG 90,277 89,966 260,570 240,172 Test 56,056 55,314 143,772 157,780 Consolidated totals $ 260,783 248,749 728,226 683,386 EBIT Aerospace & Defense $ 21,356 21,665 61,396 52,996 USG 22,155 20,351 57,355 50,543 Test 9,292 8,643 16,614 21,280 Corporate (loss) (12,296) (12,658) (40,290) (40,642) Consolidated EBIT 40,507 38,001 95,075 84,177 Less: Interest expense (3,335) (2,495) (9,228) (6,422) Earnings before income taxes $ 37,172 35,506 85,847 77,755 Non-GAAP Financial Measures The financial measure “EBIT” is presented in the above table and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Company as well as incentive compensation. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT. The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

DEBT

DEBT	9 Months Ended
DEBT	Jun. 30, 2024
DEBT
DEBT	8. DEBT The Company’s debt is summarized as follows: June 30, September 30, (In thousands) 2024 2023 Total borrowings $ 173,000 102,000 Current portion of long-term debt (20,000) (20,000) Total long-term debt, less current portion $ 153,000 82,000 The Credit Facility includes a $500 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of seven banks led by JP Morgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and Commerce Bank and TD Bank, N.A. as co-documentation agents. The Credit Facility matures August 30, 2028, with balance due by this date. At June 30, 2024, the Company had approximately $321 million available to borrow under the Credit Facility, plus the $250 million increase option subject to the lenders’ consent, in addition to $63.0 million cash on hand. The Company classified $20 million as the current portion of long-term debt as of June 30, 2024, as the Company intends to repay this amount within the next twelve months; however, the Company has no contractual obligation to repay such amount during the next twelve months. The letters of credit issued and outstanding under the Credit Facility totaled $5.5 million at June 30, 2024. Interest on borrowings under the Credit Facility is calculated at a spread over either an Adjusted Term SOFR Rate, Adjusted EURIBOR Rate, Adjusted CDOR Rate, Alternate Base Rate or Daily Simple RFR, at the Company’s election. The Credit Facility also requires a facility fee ranging from 12.5 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 weighted average interest rates were 6.7% and 6.8% for the three and nine-month periods ending June 30, 2024, respectively, and 6.05% and 5.57% for the three and nine-month periods ending June 30, 2023. As of June 30, 2024, the Company was in compliance with all covenants.

INCOME TAX EXPENSE

INCOME TAX EXPENSE	9 Months Ended
INCOME TAX EXPENSE	Jun. 30, 2024
INCOME TAX EXPENSE
INCOME TAX EXPENSE	9. INCOME TAX EXPENSE The third quarter 2024 effective income tax rate was 21.4% compared to 21.3% in the third quarter of 2023. The effective income tax rate in the first nine months of 2024 was 21.2% compared to 22.1% for the first nine months of 2023. Income tax expense in the first nine months of 2024 was favorably impacted by discrete events that occurred during the second quarter of 2024 including the release of a foreign valuation allowance and excess tax benefit related to the vesting of share-based director compensation.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	9 Months Ended
SHAREHOLDERS' EQUITY	Jun. 30, 2024
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY	10. SHAREHOLDERS’ EQUITY The change in shareholders’ equity for the first three and nine months of 2024 and 2023 is shown below (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 Common stock Beginning balance 308 308 308 307 Stock plans — — — 1 Ending balance 308 308 308 308 Additional paid-in-capital Beginning balance 308,065 304,184 304,850 301,553 Stock plans 1,917 1,371 5,132 4,002 Ending balance 309,982 305,555 309,982 305,555 Retained earnings Beginning balance 1,023,578 933,499 989,315 905,022 Net earnings common stockholders 29,230 27,943 67,618 60,548 Dividends paid (2,060) (2,061) (6,185) (6,189) Ending balance 1,050,748 959,381 1,050,748 959,381 Accumulated other comprehensive income (loss) Beginning balance (19,300) (18,018) (23,969) (31,764) Foreign currency translation (1,001) (821) 3,668 12,925 Ending balance (20,301) (18,839) (20,301) (18,839) Treasury stock Beginning balance (146,241) (139,178) (139,362) (126,961) Share repurchases, net (810) (184) (7,689) (12,401) Ending balance (147,051) (139,362) (147,051) (139,362) Total equity 1,193,686 1,107,043 1,193,686 1,107,043

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
FAIR VALUE MEASUREMENTS	Jun. 30, 2024
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	11. FAIR VALUE MEASUREMENTS The accounting guidance establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Financial Assets and Liabilities The Company has estimated the fair value of its financial instruments as of June 30, 2024 and September 30, 2023 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, inventories, payables, and other current assets and liabilities approximate fair value because of the short maturity of those instruments. Fair Value of Financial Instruments The Company’s forward contracts and interest rate swaps are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, and are immaterial. Nonfinancial Assets and Liabilities The Company’s nonfinancial assets such as property, plant and equipment, and other intangible assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. No impairments were recorded during the three and nine-month periods ended June 30, 2024.

REVENUES

REVENUES	9 Months Ended
REVENUES	Jun. 30, 2024
REVENUES
REVENUES	12. REVENUES Disaggregation of Revenues Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2024 are presented in the tables below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The tables below also include a reconciliation of the disaggregated revenue within each reportable segment. Three months ended June 30, 2024 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 45,404 $ 88,076 $ 42,327 $ 175,807 Government 69,046 2,201 13,729 84,976 Total revenues $ 114,450 $ 90,277 $ 56,056 $ 260,783 Geographic location: United States $ 95,265 $ 54,063 $ 32,575 $ 181,903 International 19,185 36,214 23,481 78,880 Total revenues $ 114,450 $ 90,277 $ 56,056 $ 260,783 Revenue recognition method: Point in time $ 53,148 $ 72,985 $ 11,426 $ 137,559 Over time 61,302 17,292 44,630 123,224 Total revenues $ 114,450 $ 90,277 $ 56,056 $ 260,783 Nine months ended June 30, 2024 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 131,993 $ 254,765 $ 111,951 $ 498,709 Government 191,891 5,805 31,821 229,517 Total revenues $ 323,884 $ 260,570 $ 143,772 $ 728,226 Geographic location: United States $ 267,325 $ 165,789 $ 82,370 $ 515,484 International 56,559 94,781 61,402 212,742 Total revenues $ 323,884 $ 260,570 $ 143,772 $ 728,226 Revenue recognition method: Point in time $ 146,076 $ 209,973 $ 29,706 $ 385,755 Over time 177,808 50,597 114,066 342,471 Total revenues $ 323,884 $ 260,570 $ 143,772 $ 728,226 Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2023 are presented in the tables below. Three months ended June 30, 2023 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 45,574 $ 88,442 $ 48,407 $ 182,423 Government 57,895 1,524 6,907 66,326 Total revenues $ 103,469 $ 89,966 $ 55,314 $ 248,749 Geographic location: United States $ 86,031 $ 55,011 $ 32,246 $ 173,288 International 17,438 34,955 23,068 75,461 Total revenues $ 103,469 $ 89,966 $ 55,314 $ 248,749 Revenue recognition method: Point in time $ 48,496 $ 74,128 $ 11,496 $ 134,120 Over time 54,973 15,838 43,818 114,629 Total revenues $ 103,469 $ 89,966 $ 55,314 $ 248,749 Nine months ended June 30, 2023 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 128,016 $ 236,715 $ 137,587 $ 502,318 Government 157,418 3,457 20,193 181,068 Total revenues $ 285,434 $ 240,172 $ 157,780 $ 683,386 Geographic location: United States $ 237,481 $ 154,410 $ 87,253 $ 479,144 International 47,953 85,762 70,527 204,242 Total revenues $ 285,434 $ 240,172 $ 157,780 $ 683,386 Revenue recognition method: Point in time $ 129,355 $ 194,240 $ 32,565 $ 356,160 Over time 156,079 45,932 125,215 327,226 Total revenues $ 285,434 $ 240,172 $ 157,780 $ 683,386 Revenue Recognition Payment terms with our customers vary by the type and location of the customer and the products or services offered. Arrangements with customers that include payment terms extending beyond one year are not significant. The transaction price for these contracts reflects our estimate of returns and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses. For our overtime revenue recognized using the output method of costs incurred, contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. In addition, in the USG segment, we recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for certain of our USG segment contracts. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. In addition, in the Test segment, we use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Remaining Performance Obligations Remaining performance obligations, which is the equivalent of backlog, represent the expected transaction price allocated to contracts that the Company expects to recognize as revenue in future periods when the Company performs under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At June 30, 2024, the Company had $888.7 million in remaining performance obligations of which the Company expects to recognize revenues of approximately 68% in the next twelve months. Contract assets, contract liabilities and accounts receivable Assets and liabilities related to contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At June 30, 2024, contract assets, contract liabilities and accounts receivable totaled $134.6 million, $123.5 million and $213.6 million, respectively. During the first nine months of 2024, the Company recognized approximately $54 million in revenues that were included in the contract liabilities balance at September 30, 2023. At September 30, 2023, contract assets, contract liabilities and accounts receivable totaled $138.6 million, $123.1 million and $198.6 million, respectively.

LEASES

LEASES	9 Months Ended
LEASES	Jun. 30, 2024
LEASES
LEASES	13. LEASES The Company determines at lease inception whether an arrangement that provides control over the use of an asset is a lease. The Company recognizes at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. The Company has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of the Company’s leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that the Company will exercise the option, Management includes the impact of the option in the lease term for purposes of determining total future lease payments. As most of the Company’s lease agreements do not explicitly state the discount rate implicit in the lease, Management uses the Company’s incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement. The Company’s leases for real estate commonly include escalating payments. These variable lease payments are included in the calculation of the ROU asset and lease liability. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. Non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. The Company’s leases are for office space, manufacturing facilities, and machinery and equipment. The components of lease costs are shown below: Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Finance lease cost Amortization of right-of-use assets $ 372 $ 393 Interest on lease liabilities 213 230 Operating lease cost 1,937 1,858 Total lease costs $ 2,522 $ 2,481 Nine Months Ended Nine Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Finance lease cost Amortization of right-of-use assets $ 1,137 $ 1,179 Interest on lease liabilities 652 698 Operating lease cost 5,675 5,356 Total lease costs $ 7,464 $ 7,233 Additional information related to leases are shown below: Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,867 $ 1,792 Operating cash flows from finance leases 213 230 Financing cash flows from finance leases 331 334 Right-of-use assets obtained in exchange for operating lease liabilities 515 402 Nine Months Ended Nine Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,510 $ 5,172 Operating cash flows from finance leases 652 698 Financing cash flows from finance leases 1,013 991 Right-of-use assets obtained in exchange for operating lease liabilities 2,194 14,984 June 30, 2024 June 30, 2023 Weighted-average remaining lease term Operating leases 10.8 years 11.4 years Finance leases 11.1 years 11.3 years Weighted-average discount rate Operating leases 4.56 % 4.42 % Finance leases 4.69 % 4.62 % The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on our condensed Consolidated Balance Sheet on June 30, 2024: (Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2024 (excluding the nine months ended June 30, 2024) $ 1,569 547 2025 6,108 2,233 2026 4,865 2,297 2027 4,620 2,357 2028 and thereafter 33,915 16,470 Total minimum lease payments 51,077 23,904 Less: amounts representing interest 11,334 5,582 Present value of net minimum lease payments $ 39,743 18,322 Less: current portion of lease obligations 4,595 1,403 Non-current portion of lease obligations 35,148 16,919 ROU assets $ 37,716 14,055 Operating lease liabilities are included in the condensed Consolidated Balance Sheet in accrued other expenses (current portion) and as a caption on the condensed Consolidated Balance Sheet Balance Sheet ROU ROU

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS	9 Months Ended
NEW ACCOUNTING PRONOUNCEMENTS	Jun. 30, 2024
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS	14. NEW ACCOUNTING PRONOUNCEMENTS In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures

SUBSEQUENT EVENT

SUBSEQUENT EVENT	9 Months Ended
SUBSEQUENT EVENT	Jun. 30, 2024
SUBSEQUENT EVENT
SUBSEQUENT EVENT	15. SUBSEQUENT EVENT On July 8, 2024, the Company announced that it has agreed to acquire the Signature Management & Power (or the “Business”) business of Ultra Maritime for a purchase price of approximately $550 million. The transaction will be funded through cash on hand and incremental debt, with committed financing in place. Signature Management & Power is a provider of mission-critical signature and power management solutions for submarines and surface ships for the U.S. and UK naval defense markets. The Business is headquartered in Long Island, New York, operates out of employees. Signature Management & Power will become part of ESCO’s Aerospace & Defense segment and is expected to have approximately million of revenue in calendar year 2024. The closing of the transaction is subject to certain conditions, including the (i) expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S. and (ii) receipt of clearance under the UK National Security and Investment Act of 2021. Pursuant to a Commitment Letter entered into on July 8, 2024 between the Company and JPMorgan Chase Bank, N.A., on August 5, 2024 the Registrant and certain of its subsidiaries entered into Amendment No. 1 (the “Amendment”) to its Amended and Restated Credit Agreement dated August 30, 2023 (the “2023 Credit Agreement”) among the Company and certain of its subsidiaries, JPMorgan Chase Bank, N.A., as administrative agent thereunder, the initial lenders party thereto and Citibank, N.A. The Amendment, among other things, (i) implements a senior incremental delayed draw term loan credit facility in an aggregate principal amount of up to $375 million (the “Incremental Facility”), and (ii) permits the direct or indirect acquisition by the Registrant or certain of its subsidiaries of all of the issued and outstanding shares of Ultra PMES Limited, Measurement Systems, Inc., EMS Development Corporation, and DNE Technologies, Inc. (the “Transaction”), pursuant to and in accordance with the terms and conditions of that certain Sale and Purchase Agreement, dated July 8, 2024, among Ultra Electronics Holdings Limited, as parent seller, the Registrant, as guarantor, and certain of the Registrant’s subsidiaries as buyers. The proceeds of the loans drawn under the Incremental Facility will be applied to pay a portion of the cash consideration for the Transaction and other customary fees, premiums, expenses and costs incurred in connection with the Transaction. See further discussion of the transaction and financing arrangements in the Company’s Form 8-K’s filed on July 8, 2024 and August 7, 2024.

EARNINGS PER SHARE (EPS) (Table

EARNINGS PER SHARE (EPS) (Tables)	9 Months Ended
EARNINGS PER SHARE (EPS) (Tables)	Jun. 30, 2024
EARNINGS PER SHARE (EPS)
Schedule of number of shares used in the calculation of earnings per share	Three Months Nine Months Ended June 30, Ended June 30, 2024 2023 2024 2023 Weighted Average Shares Outstanding — Basic 25,753 25,757 25,781 25,808 Dilutive Restricted and Performance Shares 87 70 63 82 Adjusted Shares — Diluted 25,840 25,827 25,844 25,890

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
INVENTORIES (Tables)	Jun. 30, 2024
INVENTORIES
Schedule of inventories	June 30, September 30, (In thousands) 2024 2023 Finished goods $ 41,955 34,577 Work in process 59,837 42,178 Raw materials 117,520 107,312 Total inventories $ 219,312 184,067

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	Jun. 30, 2024
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of intangible assets gross carrying amounts and accumulated amortization	June 30, September 30, (Dollars in thousands) 2024 2023 Goodwill $ 535,372 503,177 Intangible assets with determinable lives: Patents Gross carrying amount $ 2,551 2,516 Less: accumulated amortization 1,322 1,218 Net $ 1,229 1,298 Capitalized software Gross carrying amount $ 130,648 121,883 Less: accumulated amortization 89,737 80,774 Net $ 40,911 41,109 Customer relationships Gross carrying amount $ 327,537 296,927 Less: accumulated amortization 127,322 113,311 Net $ 200,215 183,616 Other Gross carrying amount $ 15,122 14,232 Less: accumulated amortization 11,085 9,578 Net $ 4,037 4,654 Intangible assets with indefinite lives: Trade names $ 162,589 161,447
Schedule of carrying amount of goodwill attributable to each business segment	Aerospace (Dollars in millions) USG Test & Defense Total Balance as of September 30, 2023 $ 353.6 34.0 115.6 503.2 Acquisition activity — 30.5 — 30.5 Foreign currency translation 0.9 0.8 — 1.7 Balance as of June 30, 2024 $ 354.5 65.3 115.6 535.4

BUSINESS SEGMENT INFORMATION (T

BUSINESS SEGMENT INFORMATION (Tables)	9 Months Ended
BUSINESS SEGMENT INFORMATION (Tables)	Jun. 30, 2024
BUSINESS SEGMENT INFORMATION
Schedule of net sales and earnings before income tax	Three Months Nine Months Ended June 30, Ended June 30, (In thousands) 2024 2023 2024 2023 NET SALES Aerospace & Defense $ 114,450 103,469 323,884 285,434 USG 90,277 89,966 260,570 240,172 Test 56,056 55,314 143,772 157,780 Consolidated totals $ 260,783 248,749 728,226 683,386 EBIT Aerospace & Defense $ 21,356 21,665 61,396 52,996 USG 22,155 20,351 57,355 50,543 Test 9,292 8,643 16,614 21,280 Corporate (loss) (12,296) (12,658) (40,290) (40,642) Consolidated EBIT 40,507 38,001 95,075 84,177 Less: Interest expense (3,335) (2,495) (9,228) (6,422) Earnings before income taxes $ 37,172 35,506 85,847 77,755

DEBT (Tables)

DEBT (Tables)	9 Months Ended
DEBT (Tables)	Jun. 30, 2024
DEBT
Schedule of debt	June 30, September 30, (In thousands) 2024 2023 Total borrowings $ 173,000 102,000 Current portion of long-term debt (20,000) (20,000) Total long-term debt, less current portion $ 153,000 82,000

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	9 Months Ended
SHAREHOLDERS' EQUITY (Tables)	Jun. 30, 2024
SHAREHOLDERS' EQUITY
Schedule of change in shareholders' equity	The change in shareholders’ equity for the first three and nine months of 2024 and 2023 is shown below (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 Common stock Beginning balance 308 308 308 307 Stock plans — — — 1 Ending balance 308 308 308 308 Additional paid-in-capital Beginning balance 308,065 304,184 304,850 301,553 Stock plans 1,917 1,371 5,132 4,002 Ending balance 309,982 305,555 309,982 305,555 Retained earnings Beginning balance 1,023,578 933,499 989,315 905,022 Net earnings common stockholders 29,230 27,943 67,618 60,548 Dividends paid (2,060) (2,061) (6,185) (6,189) Ending balance 1,050,748 959,381 1,050,748 959,381 Accumulated other comprehensive income (loss) Beginning balance (19,300) (18,018) (23,969) (31,764) Foreign currency translation (1,001) (821) 3,668 12,925 Ending balance (20,301) (18,839) (20,301) (18,839) Treasury stock Beginning balance (146,241) (139,178) (139,362) (126,961) Share repurchases, net (810) (184) (7,689) (12,401) Ending balance (147,051) (139,362) (147,051) (139,362) Total equity 1,193,686 1,107,043 1,193,686 1,107,043

REVENUES (Tables)

REVENUES (Tables)	9 Months Ended
REVENUES (Tables)	Jun. 30, 2024
REVENUES
Schedule of disaggregation of revenue by reportable segment	Three months ended June 30, 2024 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 45,404 $ 88,076 $ 42,327 $ 175,807 Government 69,046 2,201 13,729 84,976 Total revenues $ 114,450 $ 90,277 $ 56,056 $ 260,783 Geographic location: United States $ 95,265 $ 54,063 $ 32,575 $ 181,903 International 19,185 36,214 23,481 78,880 Total revenues $ 114,450 $ 90,277 $ 56,056 $ 260,783 Revenue recognition method: Point in time $ 53,148 $ 72,985 $ 11,426 $ 137,559 Over time 61,302 17,292 44,630 123,224 Total revenues $ 114,450 $ 90,277 $ 56,056 $ 260,783 Nine months ended June 30, 2024 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 131,993 $ 254,765 $ 111,951 $ 498,709 Government 191,891 5,805 31,821 229,517 Total revenues $ 323,884 $ 260,570 $ 143,772 $ 728,226 Geographic location: United States $ 267,325 $ 165,789 $ 82,370 $ 515,484 International 56,559 94,781 61,402 212,742 Total revenues $ 323,884 $ 260,570 $ 143,772 $ 728,226 Revenue recognition method: Point in time $ 146,076 $ 209,973 $ 29,706 $ 385,755 Over time 177,808 50,597 114,066 342,471 Total revenues $ 323,884 $ 260,570 $ 143,772 $ 728,226 Three months ended June 30, 2023 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 45,574 $ 88,442 $ 48,407 $ 182,423 Government 57,895 1,524 6,907 66,326 Total revenues $ 103,469 $ 89,966 $ 55,314 $ 248,749 Geographic location: United States $ 86,031 $ 55,011 $ 32,246 $ 173,288 International 17,438 34,955 23,068 75,461 Total revenues $ 103,469 $ 89,966 $ 55,314 $ 248,749 Revenue recognition method: Point in time $ 48,496 $ 74,128 $ 11,496 $ 134,120 Over time 54,973 15,838 43,818 114,629 Total revenues $ 103,469 $ 89,966 $ 55,314 $ 248,749 Nine months ended June 30, 2023 Aerospace (In thousands) & Defense USG Test Total Customer type: Commercial $ 128,016 $ 236,715 $ 137,587 $ 502,318 Government 157,418 3,457 20,193 181,068 Total revenues $ 285,434 $ 240,172 $ 157,780 $ 683,386 Geographic location: United States $ 237,481 $ 154,410 $ 87,253 $ 479,144 International 47,953 85,762 70,527 204,242 Total revenues $ 285,434 $ 240,172 $ 157,780 $ 683,386 Revenue recognition method: Point in time $ 129,355 $ 194,240 $ 32,565 $ 356,160 Over time 156,079 45,932 125,215 327,226 Total revenues $ 285,434 $ 240,172 $ 157,780 $ 683,386

LEASES (Tables)

LEASES (Tables)	9 Months Ended
LEASES (Tables)	Jun. 30, 2024
LEASES
Schedule of components of lease costs	Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Finance lease cost Amortization of right-of-use assets $ 372 $ 393 Interest on lease liabilities 213 230 Operating lease cost 1,937 1,858 Total lease costs $ 2,522 $ 2,481 Nine Months Ended Nine Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Finance lease cost Amortization of right-of-use assets $ 1,137 $ 1,179 Interest on lease liabilities 652 698 Operating lease cost 5,675 5,356 Total lease costs $ 7,464 $ 7,233
Schedule of additional information related to leases	Three Months Ended Three Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,867 $ 1,792 Operating cash flows from finance leases 213 230 Financing cash flows from finance leases 331 334 Right-of-use assets obtained in exchange for operating lease liabilities 515 402 Nine Months Ended Nine Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,510 $ 5,172 Operating cash flows from finance leases 652 698 Financing cash flows from finance leases 1,013 991 Right-of-use assets obtained in exchange for operating lease liabilities 2,194 14,984 June 30, 2024 June 30, 2023 Weighted-average remaining lease term Operating leases 10.8 years 11.4 years Finance leases 11.1 years 11.3 years Weighted-average discount rate Operating leases 4.56 % 4.42 % Finance leases 4.69 % 4.62 %
Schedule of reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets	(Dollars in thousands) Operating Finance Years Ending September 30: Leases Leases 2024 (excluding the nine months ended June 30, 2024) $ 1,569 547 2025 6,108 2,233 2026 4,865 2,297 2027 4,620 2,357 2028 and thereafter 33,915 16,470 Total minimum lease payments 51,077 23,904 Less: amounts representing interest 11,334 5,582 Present value of net minimum lease payments $ 39,743 18,322 Less: current portion of lease obligations 4,595 1,403 Non-current portion of lease obligations 35,148 16,919 ROU assets $ 37,716 14,055

EARNINGS PER SHARE (EPS) (Detai

EARNINGS PER SHARE (EPS) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
EARNINGS PER SHARE (EPS)
Weighted Average Shares Outstanding - Basic	25,753	25,757	25,781	25,808
Dilutive Restricted and Performance Shares	87	70	63	82
Adjusted Shares - Diluted	25,840	25,827	25,844	25,890

ACQUISITION (Details)

ACQUISITION (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
ACQUISITION (Details) - USD ($) $ in Thousands	Nov. 09, 2023	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023
ACQUISITION
Payments to acquire businesses net of cash acquired			$ 56,383	$ 17,694
Goodwill		$ 30,300	$ 30,300
MPE Limited (MPE)
ACQUISITION
Payments to acquire businesses net of cash acquired	$ 56,200
Fair value of accounts receivable acquired	400
Fair value of inventory acquired	1,100
Fair value of property, plant and equipment acquired	1,700
Fair value of accounts payable and accrued expenses acquired	700
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities	7,800
Business combination recognized identifiable assets acquired and liabilities assumed finite-lived intangibles	29,100
Working capital settlement paid		$ 200
Customer Relationships \| MPE Limited (MPE)
ACQUISITION
Fair value of identifiable intangible assets acquired	$ 31,100

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
SHARE-BASED COMPENSATION
Non-vested shares	221,595		221,595
Selling, general and administrative expenses
SHARE-BASED COMPENSATION
Total share-based compensation cost	$ 2.2	$ 1.7	$ 6.4	$ 7
Total income tax benefit recognized	0.5	0.2	1.4	0.9
Performance-Accelerated Restricted Share (PARS) Awards
SHARE-BASED COMPENSATION
Pretax compensation expense	2	1.4	5.5	6
Compensation Plan for Non-Employee Directors
SHARE-BASED COMPENSATION
Pretax compensation expense	0.3	$ 0.3	0.9	$ 1
Total unrecognized compensation cost related to share-based compensation arrangements	$ 11		$ 11
Weighted average period			1 year 6 months

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
INVENTORIES
Finished goods	$ 41,955	$ 34,577
Work in process	59,837	42,178
Raw materials	117,520	107,312
Total inventories	$ 219,312	$ 184,067

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible assets gross carrying amounts and accumulated amortization (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill	$ 535,372	$ 503,177
Less: accumulated amortization	229,467	204,881
Patents
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	2,551	2,516
Less: accumulated amortization	1,322	1,218
Net	1,229	1,298
Capitalized software
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	130,648	121,883
Less: accumulated amortization	89,737	80,774
Net	40,911	41,109
Customer relationships
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	327,537	296,927
Less: accumulated amortization	127,322	113,311
Net	200,215	183,616
Other
GOODWILL AND OTHER INTANGIBLE ASSETS
Gross carrying amount	15,122	14,232
Less: accumulated amortization	11,085	9,578
Net	4,037	4,654
Trade names
GOODWILL AND OTHER INTANGIBLE ASSETS
Trade names	$ 162,589	$ 161,447

GOODWILL AND OTHER INTANGIBLE_4

GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2024 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
Beginning Balance	$ 503,177
Acquisition activity	30,500
Foreign currency translation	1,700
Ending Balance	535,372
USG
GOODWILL AND OTHER INTANGIBLE ASSETS
Beginning Balance	353,600
Foreign currency translation	900
Ending Balance	354,500
Test
GOODWILL AND OTHER INTANGIBLE ASSETS
Beginning Balance	34,000
Acquisition activity	30,500
Foreign currency translation	800
Ending Balance	65,300
Aerospace & Defense
GOODWILL AND OTHER INTANGIBLE ASSETS
Beginning Balance	115,600
Ending Balance	$ 115,600

BUSINESS SEGMENT INFORMATION (D

BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
BUSINESS SEGMENT INFORMATION
Net sales	$ 260,783	$ 248,749	$ 728,226	$ 683,386
Consolidated EBIT	40,507	38,001	95,075	84,177
Less: Interest expense	(3,335)	(2,495)	(9,228)	(6,422)
Earnings before income taxes	37,172	35,506	85,847	77,755
Aerospace & Defense
BUSINESS SEGMENT INFORMATION
Net sales	114,450	103,469	323,884	285,434
Consolidated EBIT	21,356	21,665	61,396	52,996
USG
BUSINESS SEGMENT INFORMATION
Net sales	90,277	89,966	260,570	240,172
Consolidated EBIT	22,155	20,351	57,355	50,543
Test
BUSINESS SEGMENT INFORMATION
Net sales	56,056	55,314	143,772	157,780
Consolidated EBIT	9,292	8,643	16,614	21,280
Corporate (loss)
BUSINESS SEGMENT INFORMATION
Consolidated EBIT	$ (12,296)	$ (12,658)	$ (40,290)	$ (40,642)

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
DEBT
Total borrowings	$ 173,000	$ 102,000
Current portion of long-term debt	(20,000)	(20,000)
Total long-term debt, less current portion	$ 153,000	$ 82,000

DEBT - Additional information (

DEBT - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Sep. 30, 2023
DEBT
Cash on hand	$ 63,042		$ 63,042		$ 41,866
Revolving Credit Facility
DEBT
Line of credit facility, amount outstanding	500,000		500,000
Line of credit facility, commitment fee amount			250,000
Line of credit facility, remaining borrowing capacity	321,000		321,000
Cash on hand	63,000		63,000
Current maturities of long-term debt	20,000		20,000
Letters of credit outstanding, amount	$ 5,500		$ 5,500
Debt weighted average interest rate	6.70%	6.05%	6.80%	5.57%
Minimum \| Revolving Credit Facility
DEBT
Facility fee			0.125%
Maximum \| Revolving Credit Facility
DEBT
Line of credit facility, remaining borrowing capacity	$ 250,000		$ 250,000
Facility fee			0.25%

INCOME TAX EXPENSE (Details)

INCOME TAX EXPENSE (Details)	3 Months Ended		9 Months Ended
INCOME TAX EXPENSE (Details)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
INCOME TAX EXPENSE
Effective income tax rate	21.40%	21.30%	21.20%	22.10%

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Changes in shareholder's equity
Beginning balance			$ 1,131,142
Net earnings common stockholders	$ 29,230	$ 27,943	67,618	$ 60,548
Ending balance	1,193,686	1,107,043	1,193,686	1,107,043
Common stock
Changes in shareholder's equity
Beginning balance	308	308	308	307
Stock plans				1
Ending balance	308	308	308	308
Additional paid-in-capital
Changes in shareholder's equity
Beginning balance	308,065	304,184	304,850	301,553
Stock plans	1,917	1,371	5,132	4,002
Ending balance	309,982	305,555	309,982	305,555
Retained earnings
Changes in shareholder's equity
Beginning balance	1,023,578	933,499	989,315	905,022
Net earnings common stockholders	29,230	27,943	67,618	60,548
Dividends paid	(2,060)	(2,061)	(6,185)	(6,189)
Ending balance	1,050,748	959,381	1,050,748	959,381
Accumulated other comprehensive income (loss)
Changes in shareholder's equity
Beginning balance	(19,300)	(18,018)	(23,969)	(31,764)
Foreign currency translation	(1,001)	(821)	3,668	12,925
Ending balance	(20,301)	(18,839)	(20,301)	(18,839)
Treasury stock
Changes in shareholder's equity
Beginning balance	(146,241)	(139,178)	(139,362)	(126,961)
Share repurchases, net	(810)	(184)	(7,689)	(12,401)
Ending balance	$ (147,051)	$ (139,362)	$ (147,051)	$ (139,362)

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2024
FAIR VALUE MEASUREMENTS
Fair value impairments	$ 0	$ 0

REVENUES - Disaggregation of Re

REVENUES - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of revenues
Revenues	$ 260,783	$ 248,749	$ 728,226	$ 683,386
Point in time
Disaggregation of revenues
Revenues	137,559	134,120	385,755	356,160
Over time
Disaggregation of revenues
Revenues	123,224	114,629	342,471	327,226
United States
Disaggregation of revenues
Revenues	181,903	173,288	515,484	479,144
International
Disaggregation of revenues
Revenues	78,880	75,461	212,742	204,242
Commercial
Disaggregation of revenues
Revenues	175,807	182,423	498,709	502,318
Government
Disaggregation of revenues
Revenues	84,976	66,326	229,517	181,068
A&D
Disaggregation of revenues
Revenues	114,450	103,469	323,884	285,434
A&D \| Point in time
Disaggregation of revenues
Revenues	53,148	48,496	146,076	129,355
A&D \| Over time
Disaggregation of revenues
Revenues	61,302	54,973	177,808	156,079
A&D \| United States
Disaggregation of revenues
Revenues	95,265	86,031	267,325	237,481
A&D \| International
Disaggregation of revenues
Revenues	19,185	17,438	56,559	47,953
A&D \| Commercial
Disaggregation of revenues
Revenues	45,404	45,574	131,993	128,016
A&D \| Government
Disaggregation of revenues
Revenues	69,046	57,895	191,891	157,418
USG
Disaggregation of revenues
Revenues	90,277	89,966	260,570	240,172
USG \| Point in time
Disaggregation of revenues
Revenues	72,985	74,128	209,973	194,240
USG \| Over time
Disaggregation of revenues
Revenues	17,292	15,838	50,597	45,932
USG \| United States
Disaggregation of revenues
Revenues	54,063	55,011	165,789	154,410
USG \| International
Disaggregation of revenues
Revenues	36,214	34,955	94,781	85,762
USG \| Commercial
Disaggregation of revenues
Revenues	88,076	88,442	254,765	236,715
USG \| Government
Disaggregation of revenues
Revenues	2,201	1,524	5,805	3,457
Test
Disaggregation of revenues
Revenues	56,056	55,314	143,772	157,780
Test \| Point in time
Disaggregation of revenues
Revenues	11,426	11,496	29,706	32,565
Test \| Over time
Disaggregation of revenues
Revenues	44,630	43,818	114,066	125,215
Test \| United States
Disaggregation of revenues
Revenues	32,575	32,246	82,370	87,253
Test \| International
Disaggregation of revenues
Revenues	23,481	23,068	61,402	70,527
Test \| Commercial
Disaggregation of revenues
Revenues	42,327	48,407	111,951	137,587
Test \| Government
Disaggregation of revenues
Revenues	$ 13,729	$ 6,907	$ 31,821	$ 20,193

REVENUES - Remaining Performanc

REVENUES - Remaining Performance Obligations (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Sep. 30, 2023
Remaining Performance Obligations
Contract assets	$ 134,600	$ 138,600
Contract liabilities	123,500	123,100
Accounts receivable	213,592	$ 198,557
Revenue recognized	54,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Remaining Performance Obligations
Remaining performance obligations amount	$ 888,700
Revenue remaining performance obligation expected timing of satisfaction, Period	12 months
Percentage of remaining performance obligation expected to be recognized	68%

LEASES - Components of lease co

LEASES - Components of lease costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases
Option to extend			true
Finance lease cost
Amortization of right-of-use assets	$ 372	$ 393	$ 1,137	$ 1,179
Interest on lease liabilities	213	230	652	698
Operating lease cost	1,937	1,858	5,675	5,356
Total lease costs	$ 2,522	$ 2,481	$ 7,464	$ 7,233
Maximum
Leases
Lease term	20 years		20 years

LEASES - Additional information

LEASES - Additional information related to leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 1,867	$ 1,792	$ 5,510	$ 5,172
Operating cash flows from finance leases	213	230	652	698
Financing cash flows from finance leases	331	334	1,013	991
Right-of-use assets obtained in exchange for operating lease liabilities
Operating leases	$ 515	$ 402	$ 2,194	$ 14,984
Weighted-average remaining lease term
Operating leases	10 years 9 months 18 days	11 years 4 months 24 days	10 years 9 months 18 days	11 years 4 months 24 days
Finance leases	11 years 1 month 6 days	11 years 3 months 18 days	11 years 1 month 6 days	11 years 3 months 18 days
Weighted-average discount rate
Operating leases	4.56%	4.42%	4.56%	4.42%
Finance leases	4.69%	4.62%	4.69%	4.62%

LEASES - Reconciliation of futu

LEASES - Reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Operating leases
2024 (excluding the nine months ended June 30, 2024)	$ 1,569
2025	6,108
2026	4,865
2027	4,620
2028 and thereafter	33,915
Total minimum lease payments	51,077
Less: amounts representing interest	11,334
Present value of net minimum lease payments	39,743
Less: current portion of lease obligations	4,595
Non-current portion of lease obligations	35,148	$ 36,554
ROU assets	$ 37,716	$ 39,839
Location of operating lease liabilities included on Consolidated Balance Sheets	Non-current portion of lease obligations, Accrued other expenses
Location of operating lease ROU assets included on Consolidated Balance Sheets	ROU assets
Finance leases
2024 (excluding the nine months ended June 30, 2024)	$ 547
2025	2,233
2026	2,297
2027	2,357
2028 and thereafter	16,470
Total minimum lease payments	23,904
Less: amounts representing interest	5,582
Present value of net minimum lease payments	18,322
Less: current portion of lease obligations	1,403
Non-current portion of lease obligations	16,919
ROU assets	$ 14,055
Location of finance lease liabilities included on Consolidated Balance Sheets	Accrued other expenses, Other liabilities
Location of finance lease ROU assets included on Consolidated Balance Sheets	Property, Plant and Equipment, Net

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) $ in Thousands		3 Months Ended		9 Months Ended
SUBSEQUENT EVENT (Details) $ in Thousands	Jul. 08, 2024 USD ($) employee facility	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)
SUBSEQUENT EVENT
Revenues		$ 260,783	$ 248,749	$ 728,226	$ 683,386
Subsequent Event \| Incremental Facility
SUBSEQUENT EVENT
Borrowing capacity	$ 375,000
Subsequent Event \| Signature Management & Power
SUBSEQUENT EVENT
Purchase Price	$ 550,000
Number of facilities \| facility	4
Number of employees \| employee	410
Subsequent Event \| Signature Management & Power \| Expected
SUBSEQUENT EVENT
Revenues	$ 175,000